They say a picture is worth a thousand words; in my case, it may be closer to two thousand. That’s one of the reasons I find the work of Carl Richards, a.k.a. The Sketch Guy, to be so outstanding. Last week, Will Goodson and I attended the Financial Planning Association’s annual symposium here in Houston. When Will told me several weeks back that Carl would deliver the opening keynote I made sure to reserve my spot. If you have never seen Carl’s sketches, I can’t recommend highly enough that you spend some time on his website, behaviorgap.com.
I was first turned on to Carl’s sketches by a client who forwarded a link to one of his blogs. As so often happens in life, Carl explained that his sketches started “as a pure act of desperation.” Carl is a financial advisor in Park City, Utah, and one day found himself scratching a sketch out on a legal pad as he attempted to explain a difficult concept to a client. He went on to make a t-shirt which displayed one of his sketches, and an editor for the New York Times happened to see it. Soon thereafter Carl got an email asking him to contribute his sketches on a regular basis.
The brilliance of Carl’s approach lies is its simplicity. Communicating about investments, retirement planning, income taxes and the like can take on a level of complexity that really isn’t necessary. Carl explains, “Investing is an amazing mix of spreadsheets and calculators and emotions, fears, and worries.” But at the end of the day, “There are spreadsheet answers and there are human answers.” These sketches help people to arrive at the human answers – the ones we can actually relate to.
We all have a tendency to think that simple equates with easy. As Carl pointed out in an article last month, simple financial solutions are often preferable to complex ones, but that doesn’t make them easy to implement. Why? “Simple solutions put the weight on us to act.” As an example, we all know we should save more and spend less. Pretty simple, right? But there are difficult trade-offs involved in actually implementing this simple concept.
Perhaps that’s why Carl’s sketches continue to gain in popularity: we need constant reminders about the simple truths. Here are a few he noted in his presentation:
– “Many investors create rigorous ways to buy high and sell low.”
– “Investments don’t make mistakes. Investors who misuse investments make mistakes.”
– “I can own a mediocre investment and just behave and outperform 99% of investors.”
and my favorite,
– “Building long-term wealth is probably inversely related to knowing what the market did today.”
Lastly, Carl asked us not to confuse “simplistic” with “elegant simplicity.” The latter takes into account that we have gone through the complexity of a problem and have arrived at a simple solution that works elegantly. I believe the inspiration for the sketch above may have been a quote Carl mentioned by Oliver Wendell Holmes: “I would not give a fig for the simplicity this side of complexity, but I would give my right arm for the simplicity on the other side of complexity.”
At Financial Synergies, our mission is to help our clients simplify their financial lives. If we can help you arrive at a simple, elegant solution to a complex problem, please let us know.
Image Credit: Behavior Gap. © 2013. Elegant Simplicity. Retrieved from http://www.behaviorgap.com/shop/elegant-simplicity/