Too Little Time, Too Many Messages

Personal financial decisions often suffer because of limited time and too many messages. Successful individuals usually have busy lives. Carving out time to plan and make good financial choices is difficult. Sometimes, because of the sheer breadth of choices, decisions are made by default.

 

Analysis Paralysis

Psychologist Barry Schwartz in his book titled The Paradox of Choice, argues that “more is less.” That is, the number of choices can be so overwhelming that we shut down and revert to status quo.

Schwartz takes direct aim at the idea that the way to maximize freedom is by maximizing choice. He believes that many individuals become paralyzed by too many choices and have difficulty making decisions.

Think about something as simple as going to the grocery store to buy salad dressing. If your grocery store is like most, there could be a few hundred different salad dressings. And that doesn’t include the dozens of vinegars and oils for those interested in making their own dressings.

You might think having so many choices is better. But in general, after some modicum of alternatives, our minds start comparing and wondering if there is still a choice out there that is even better than the hundreds of choices before our very eyes.

Too Many Options

According to data from The Investment Company Institute, there are about 20,000 mutual funds and Exchange Traded Funds (ETF’s) available to investors. Add to this number about 5,000 common stocks, another few thousand corporate and municipal bonds, stock options, commodity futures, metals, packaged investment products, investment-oriented insurance products. And the list goes on and on. Too many choices!

One of our key roles in our work with clients is to be an advocate. We help clear a path through the forest of confusing and conflicting messages. Ready for a real conversation?

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2 responses to “Too Little Time, Too Many Messages”

  1. Robert Gignac says:

    Very well said James – make things easier for clients, help them make better decisions, then clients will make better choices.

  2. James E. Wilson, CFP® says:

    Thanks Robert!

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