The Single Financial Goal That Will Transform Your 2025
Simplifying your finances now and for the future should be your number one priority.
In the world of personal finance, complexity often masquerades as sophistication and can be very alluring. Sometimes it feels like much of my job is stopping clients from engaging in costly and sometimes harmful financial strategies that sound ever-so enticing and exclusive enough they might be the industry’s most well-kept secret finally revealed!
These strategies are wrapped in impressive jargon and backed by compelling success stories. Often, they are presented by an “expert” and promise outsized returns and insider advantages. But here's the truth: a complex approach to finances is not just unnecessarily costly in both time and resources—in some cases it may actively damage your financial and/or mental health.
To help you identify these strategies, I will show how they are marketed and give you the most important strategy of them all—simplicity, and what you should be doing this year to make your finances more manageable, straightforward, and ultimately successful.
How these strategies are pitched.
There are several ways these financial strategies are pitched, alluding to things like exclusivity, tax mitigation, or (ironically) simplicity.
Emphasizing Exclusivity
They emphasize their exclusivity with phrases like:
"Proven strategies for high-net-worth individuals."
"Unlock strategies usually reserved for the ultra-wealthy."
"Access strategies typically reserved for institutional investors."
Phrasing hinting at some sort of exclusivity that somehow only the wealthy can participate in gives the regular investor pause in a number of ways. First, it makes you feel like you’re missing out, or that you’re going to learn the strategy even if you aren’t “ultra-wealthy.” Or possibly, depending on the positioning, perhaps you’re now thinking that you’ve passed into that exclusive club of high-net-worth individuals and should be participating in those strategies reserved for such cases.
Reality Check: Most high-net-worth investors built their wealth in one of three ways: 1) they were involved in a very successful company from the early stages, 2) they saved a noticeable portion of their income and invested it into the equities market, and/or 3) they invested in real estate over a significant period of time. Much of their wealth was built through hard work and use of a few simple strategies that anyone can implement; it did not rely on some secret plan (unless the secret is hard work).
Sure, there are ways that very wealthy people plan to protect their money, particularly from taxes—either now or upon passing. However, many of the strategies used to mitigate taxes are things like, establishing a foundation or a business enterprise and are administratively costly to establish and maintain. These strategies are less about organizing your finances and more legally driven, and really are not worth considering until you’re in the hundreds of millions of dollars net-worth level.
Accentuating Tax Mitigation
Another method often used to sell a complex and costly financial strategy is to hint at tax “mitigation.” There is a society-wide belief that how one builds wealth is dodging taxes, but legally.
Reality: It is true that taxes and tax planning is a huge driver of building wealth successfully. Things like, deciding whether to contribute to a Roth or Traditional IRA, how to pay your employees, or engaging in certain real estate transactions are all part of legitimate tax strategies that may help mitigate your taxes as much as reasonably and legally possible. But these things are all relatively straightforward financial strategies that financial planners, accountants, and investors of all net worth levels can engage in—and do so regularly.
There is not some superior strategy that suddenly mitigates taxes that ultimately you will need to pay—those do not exist and never will as long as we have a government.
Claims to “Simplify Complexity”
Another strategy is to pretend that financial strategies are very complicated and hard to understand for investors, so the experts’ strategy will “make the complex simple."
Want to simplify the complexity? Do the boring things that work over a long period of time and avoid complexity to begin with.
Simplicity is priority.
Here is the best strategy of them all—everything you do when it comes to your finances should be something you understand and does not require a huge amount of time or emotional resources.
When it comes to your finances, boring is better. Less is more. The point of successful financial planning is to remove that concern from your life as much as possible. Engaging in complex strategies is the exact opposite of what you should be doing. It may not be exciting to hear, but saving and investing in things like the equities market, real estate, your business, and other investments that are accessible to everyone and done in a straightforward manner is the successful way to build your wealth and reduce anxiety.
If your finances feel out of control, out of order, or take up a lot of your mental space, I encourage you to make your number one financial priority for 2025 be to get them simplified.
Here are some ways to begin simplifying your finances in 2025:
Set up a time each week to pay your bills, organize, and complete your financial tasks. This should not take hours of your time or be done ad hoc; when you sit down to do your finances, get them completed in that sitting. Weekly is a tempo to check in with your credit cards and spending, confirm charges are correct and your spending is on pace.
Get your regular monthly bills on a schedule of the same due date (e.g., the 1st or the 15th). This way, when you are in your weekly financial session you can anticipate these things and plan your cashflow. Caution: do not use this weekly time for checking your investments obsessively. Sure, you can confirm contributions are being done, and other administrative pieces, but I encourage you to avoid obsessing about your returns on a weekly basis.
Automate as much as you can with your bills and investing. Over the coming weeks as you monitor your spending, you should start having a good idea of your cashflow peaks and valleys—and begin automating as many of your bills as possible based on that information. For example, automate your mortgage payment when you know you are paid and cashflow is available. Remember, each login to pay a bill requires time and coordination; eliminate this as much as possible to keep things easy and straightforward.
Along those same lines, your investing should be automatic as much as possible. Automate your monthly savings and make sure you automate the investment purchase as well (dollar cost averaging). Reducing the amount of things you have to think about will go a long way in making your weekly money review streamlined.
Consolidate your bank accounts, credit cards, and investments as much as possible and close any unnecessary accounts. I highly encourage you to pare down your cash holdings into as few accounts as possible. That will look different for each household, but navigating multiple institutions and accounts just adds friction and time to your plate.
This also goes for credit cards. I recommend one main card, a backup card, and possibly a card for one or maybe two stores you regularly shop at and make large purchases. You do not need a credit card for every place you go—I don’t care what their rewards are. It’s unnecessary in time and effort. Pick one card with benefits you like and move on—nobody is building wealth based on credit card benefits!
Finally, be sure to consolidate your investments as much as possible. Any old 401(k)s should be rolled into an IRA or your current 401(k). Non-retirement accounts should be consolidated as well, pick an institution that offers you the stocks and funds you want and use them, avoid small amounts all over the place.
This advice sounds simple because it is. However, I am constantly reminded how much people overcomplicate their finances at the very basic level and wonder why the task of paying the bills is so difficult to navigate. Advanced financial planning strategies are just doing the basics well, so I encourage you, drill down on these very foundations this year, get things administered well and in processes and the next steps of building wealth will be a lot smoother.