When it Comes to Money, There are Always More than Two Choices

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“Keep it simple, stupid” (KISS). It’s a catchy phrase, but what does “simple” mean? Does it mean to make complex topics understandable, or to not make simple communications overly complex, or to not oversimplify complex topics?

Tim Mauer, CFP, author of Simple Money, wrote in a recent issue of his FLIP newsletter that oversimplification often takes the form of dualism.

We can define duality as splitting something into two opposed or contrasted aspects. In essence, it is the state of being divided or polarized, which is rampant in our society at every level of politics, religion, and money. Duality in making financial decisions can often produce costly mistakes.

One reason for this is that our brains love oversimplification. Daniel Kahneman’s Nobel Prize-winning research found that we make most of our decisions in our brain’s limbic system, which is all about the speed and ease of a decision. It loves keeping things simple with duality and loathes complexity, which requires laborious thinking, hard work that happens primarily in the cerebral cortex of our brains.

Mauer explained, “One of the chief methods of oversimplification is seen in our addiction to duality. This or that. One or the other. My way or the highway.”