Recycled, reused and worn to the bone is the K.I.S.S. Principle. ‘Keep It Simple, Smarty’

Albert Einsteins’s version “everything should be made as simple as possible, but no simpler. ”

We all know what it means in a vacuum but how can we apply this principle to our lives? Should we?

I contend that ’simplicity’ is a valuable goal unto itself. Every problem has many solutions and often the best solution is one of the most simple.

For example, lets look at living within a Budget.

Most of us have a fixed amount of money upon which to live each month and this total can be divided into need (basic necessities) and want (discretionary) piles. Some people are able to track each and every dollar day in and day out but for us mere mortals this task is too daunting and let’s face it pretty boring! Still, it is important enough to have control over our finances so we do need to expend some energy on this aspect of our financial lives.

How to do this while keeping the K.I.S.S. principle in mind?

1. Write down your total income

2. Subtract your regular savings/investment money (target 10-20%) - pick your number based on your Retirement Plan and Goals

3. Spend a little time working your fixed expenses (your needs). I have just finished doing this and it’s actually quite easy - it took about 1 hour to track down these expenses. Subtract your fixed expenses.

4. What is left is your discretionary income. It’s this money with which you have the pleasure of deciding how and when to spend it.

*What if the numbers don’t quite work out? Decision time: you can either earn more either as Active Income or Passive Income OR you can figure out how to cut your fixed expenses.

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