An intriguing theme that ran through the Mayo Clinic’s Transform Conference in Rochester this month involved the push for patients to take greater control over their care. It’s a healthy development (pun intended), although I’m skeptical how far the movement can go until medical bills are easily comprehensible.

Still, I couldn’t help but wonder at times if the patient power advocates considered how busy we are these days. We work hard at our jobs. We have partners and raise families. We try to eat a healthy diet, and we have to figure out what that means. We try to keep up with the latest technologies. We’re expected to manage our own retirement accounts.

The list of “literacies” is long and getting longer. Time is the truly scarce commodity.

The time-scarcity takeaway from the conference reinforced an underappreciated personal finance lesson: The importance of “keeping it simple” with money. The risks and rewards of simple investments are easier to grasp. The expenses associated with plain vanilla offerings are typically low. It takes less time to monitor simpler investments and finance strategies, leaving time for other things that matter more to you.

Financial trouble looms when we buy complex financial products and complex money strategies. Whether it’s an insurance policy loaded up with all kinds of bells and whistles (think variable universal life) or a mortgage with several payment options (like the option adjustable-rate mortgage), the pros pocket steep fees selling sophistication, but the customer is often left disappointed with the result.

Yes, we live in a complex world. But investing in financial complexity in a complex environment isn’t the right way to go. “As you do not fight fire with fire, you do not fight complexity with complexity,” write economists Andrew Haldane and Vasileios Madouros in their 2012 paper, “The Dog and the Frisbee.”

The economists note that understanding the underlying physics of catching a Frisbee takes Ph.D.-level calculations. But the act of catching a Frisbee is relatively easy — even dogs do it well.

These scholars tapped into the example of the dog and the Frisbee in an effort to convince financial regulators to embrace fewer, simpler rules. But for me, the dog’s simple rule of thumb approach is worth remembering when managing money. Sometimes, less is more.


Chris Farrell is senior economics contributor for “Marketplace” and economics commentator at Minnesota Public Radio.