If we study physics, biology, chemistry or any other subject that deals with the physical world we find one important fact that pervades all. Everything is as simple as it can be and still fulfill its purpose. Necessity dictates that condition because even a slightly greater than necessary energy to sustain a thing is a huge amount of energy on a universe wide basis. Atoms, snowflakes, molecules and body parts are the way they are because they are efficient. Fashion and experiment have no place in the universal view.
So how about complexity? We know it is there.
What we know is a function of what we observe and often the way in which we observe it. If something looks complex it is more likely a question of expectation. If our observations are incomplete or poorly interpreted, complexity is the label we use to describe what we see. Complex is a way to say we don’t understand what we see.
I am willing to believe that there is much more for society to learn about the universe. If we examine the changes over the last 100 years or so, it is safe to say that we are learning as we go. How close we are to the end of that learning is unknown, but the more people learn, the more there seems to be to learn.
The same guidelines apply to structures within our personal ambit. If you think an investment portfolio or a financial plan or an insurance product are complex, it can mean two things:
1) The plan is poorly arranged and therefore inefficient
2) The observer lacks the tools to see the underlying fabric and its efficiency.
Simplicity is a hallmark of well organized plans, but if the simplicity arises by using shortcuts, icons and buzzwords to describe the result, it is certain that the observer will see complexity. It is important to simplify to the point where the essentials are all visible. As Einstein suggests, “A thing should be made as simple as possible, but not simpler.”
An insurance professional might refer to Universal Life as “UL” and talk about its flexibility and its tax efficiency and some of the other tax and investment factors you can turn to your advantage. Confusing for the non-professional and even for some professionals.
Simplicity rules. Life insurance is a conditional option on a future check. You can organize the way you buy that option by selecting product that matches your specific purpose. Sometimes you can integrate it with other purposes in your plan. Sometimes you can control the product even though your purpose has changed.
Complexity arises because of the unknown future. Parts of the necessary understanding is missing. Work at overcoming that.
You can get exactly the right answer, simple too, but under just one condition. Tell me the future and I will tell you exactly what you should do.
Don Shaughnessy arranges life insurance for people who understand the value of a life insured estate. He can be reached at The Protectors Group, a large insurance, employee benefits, and investment agency in Peterborough, Ontario. In previous careers, he has been a partner in a large international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business.
Please be in touch if I can help you. firstname.lastname@example.org 866-285-7772