(2012-06-21) Richards Prioritizing Best Investment

Carl Richards challenges how most people approach Personal Finance. the specific investments you choose probably won’t determine your financial prospects. I often run into folks who spend a lot of time hunting for great investments even as they ignore more fundamental issues (Simplest Thing) in their financial situation.

Someone might come in looking for the next hot stock. I ask a few questions, and find out that they have no life or disability insurance. Or a new client will come into my office looking for the highest-yielding savings account, while carrying a credit card balance at 18% interest. That’s my cue to say something like this: What are we doing scraping around for an extra half-a-percent in CD yields? How about if we use some of your savings to pay off some credit card debt—which is pretty much like earning an 18% yield?

Searching for the perfect investment can distract you from more important things. Prioritize!