If I lured you in with a catchy title and expectation of a romantic story my apologies. In this post, I will discuss the KISS or Keep It Simple Stupid principle and why we should follow it. Equipped with KISS you can become a millionaire or a music legend and even save lives.
I learnt from my own painful experience that financial services and investments are a complicated world. Shares are pretty easy to understand. A company creates a document that gives the buyer rights to a piece of the company and sells it on the market to raise capital for expansion. Once in circulation, the price of shares goes up or down depending on the market sentiment.
However, there are a few other financial products that are built on top of shares called derivatives. There are options that give you a right to sell a share at a predetermined price, swaps that allow the exchange of one asset for another, futures, etc etc. Understanding these and trading them will get a newbie head spin. Cryptomarket is even more complicated with a large number of different types of coins in circulation with sophisticated algorithms and purposes. Because it is difficult to understand how these coins work they effectively turned into racehorses with catchy names and logos, celebrity backing and fan followers. Investors often put money into these coins because of the sales pitches, promises of 10X returns and FOMO. Out of 22,932 registered crypto currencies only 8832 are still active with the rest effectively turning into thin digital air, empty bank accounts and regrets.
The legendary Warren Buffett is seen as an investment dinosaur in the crypto community. The principles behind his methodology are pretty simple: find great companies with future potential and buy their shares at a good price. Then wait until your investment grows. The important part is investing only in companies that have a business model that you understand. Buffet turned out to be a formidable never dying fire-breathing Godzilla that proved time again and again that the “Keep It Simple Stupid” principle is still a valid tool.
Similar patterns exist in other places and industries. I recall watching guitar learning courses from virtuosos like Steve Vai in my teenage years. Steve’s guitar skills are from another world. But unless you played the guitar and understood what was happening they were hardly catchy tunes that you will keep whistling after. I was not alone in my feelings with this study proving that simplicity creates music hits. So if you want to become the next Beatles do not complicate your music.
This obsession with sophistication seems natural to humans. In martial arts, for example, fighters progress from white to black belt with techniques that become more complex. Architectural styles developed over time into giant skyscrapers. The human race itself developed from hunter-gatherers wandering around dressed in mammoth hides to a highly organised society with electric cars and nanotechnology.
And yet we recognise that simplicity and not sophistication is a better answer to some of our challenges. The minimalist movement didn’t go unnoticed with documentaries popping up on Netflix and other streaming services. Moving away from a house filled with “stuff” to a space with items of absolute necessity promotes well-being, and saves money and time among other benefits. As houses often represent our internal world making your living space simple also clears the cluttered mind.
This minimalist movement is also responsible for the rebirth of the mobile phone. Remember the days when we used phones to call people rather than scrolling through an Instagram feed with our heads down? Those old-school phones also called dumbphones are growing in popularity. They last for days from one charge, do not suck your time and energy and despite their lack of social networking apps they help to connect with people. I am not ready to jump the ship yet but boy I was tempted more than once.
KISS worked wonders for businesses and not just minimalists. Focusing on 20% of products that generate 80% of revenue can make a company from spreading its resources thin to laser focus on what matters. You can hate or love Mcdonald’s’ but their business model was a stroke of genius. Instead of running a fancy restaurant with many menu items they focused solely on the bestsellers eliminating everything else. They also got rid of cutlery, trays and glasses that would break, get lost or require cleaning. While this added to the environmental issues that we need to deal with KISS made Macdonals the behemoth we know today.
Even fields like medicine can benefit from KISS. Simple routines like washing hands can save as many as 1 million people. Another example is a simple 5-step checklist used by doctors is said to reduce bloodstream infections caused by intravenous lines by two-thirds in Johns Hopkins Hospital in Baltimore. It was estimated that the checklist saved approximately 1500 lives in just three months.
KISS can not only win hearts with music but minds with clarity. The language complexity may be an obstacle for others to understand you. Everybody likes a person who can express their thoughts and ideas in a way that can be easily comprehended. Cluey politicians started appealing to the masses with messages that resonated well and made voters feel that he or she is “one of us”.
So how can you apply this principle in your daily life? There are three main concepts that you can try.
Ask stupid questions. When you hear someone speak and see someone next to you eyes glazing over you are probably not the only one in the room who has no idea what is being said. By asking simple questions you are doing everyone a favour. Yourself, the people in the audience and even the speaker. Ask stupid questions in the meeting, your boss, and even yourself. Because in reality, there are no stupid questions. It is unwise to stay silent when you do not understand. Unless you want to end up walking around a naked king wearing “invisible” clothes.
Be on the lookout for opportunities to optimise and get rid of the unnecessary. For example, after a few holiday trips I realised that is much easy to travel light with a carry-on. It saves me time with picking up the luggage, and choices of transport and spares headaches with lost bags.
I just had to figure out the absolute essentials that I will need to take and the rest can be bought at the place of the destination. The clothing is universally suitable for hikes, exploiting the cities and having a drink at a bar.
Similarly, with clothing, I have my staple items. I wear black t-shirts pretty much everywhere – for my gym workouts, going out or shopping. Not worrying about colours, designs and brands saves me time and creates a particular style. I stole this idea from a book that I read a long time ago.
This can be applied to your investment strategies. Instead of researching individual shares and checking the movement of share prices on a daily basis, you can employ the set-and-forget principle with a focus on simple products like ETFs.
Distil complex issues into two or three main points so you can understand them and take action. While it is not always possible it’s worth trying this approach. Using weight loss as an example weight loss there are many scenarios and variables. But it always boils down to calories in/calories out. It is impossible not to lose weight if someone stops eating. With added exercises as energy expenditure, the process can be sped up.
If you write an article or an email before you hit that send button take a pause. Check if a complex sentence can be replaced with one word that is easily understood but delivers the same meaning. This could also be used for presentations or important conversations. Leave 3-5 main concise points that matter and get rid of the rest.