Tools Are Distilled Experience

People evolve answers to difficult problems, and we see the result of their efforts as tools. Tools are things that have been improved and refined over the centuries. No one would doubt that the wheels on a Formula-1 racecar differ from those first invented. Something I have wondered about over the years. What was the better invention, the wheel or the axle?

Financial products are tools.

Whether it is insurance, investment funds or banking, the products we see are vastly different from those just a century ago. Banking is much different. Our grandparents might be fascinated by digital banking and cashing a cheque by taking a picture of it with a cellphone. Banking,  insurance, and investment funds are still evolving from their beginnings eight centuries and more ago.

There was fire insurance available in Rome more than two millennia ago.

A refined tool solves a problem with minimal effort and much lower costs than any other way.

The fundamental issue

You value tools for what they do and not for what they are. Many tools that you can see that way are not fashionable. Unexciting even. Have you ever seen a designer electric drill? Probably not. People don’t want a drill; they want holes on demand. Financial tools should be like that too.

But they are not always designed that way. Financial engineering often leads to products that are created, not so much for what they do but for how easy they are to sell. The sizzle, not the steak. People who look at what it is usually haven’t fully understood their situation and what should be done about it

You may recall the meltdown in 2008 and 2009. There were financial products that sold well but were flawed. Tools that are useful and not flashy are usually older.

A way to think about these things.

Ask yourself two questions:

  1. Is this offering being sold based on what it does, its novelty, its rarity, or is it sold based on what it does? If not based on what it does, how can you evaluate it?
  2. If it is presented based on what it does, is that something you need to do at all?

You will find most successful people say no a lot. It is usually because they get the wrong answer to at least one of those questions.

Try to decide to buy cryptocurrency after thinking about those questions. If you get bad answers to one or both, you are speculating using the bigger fool theory to validate your investment.

I build strategic, fact-based estate and income plans. The plans identify alternate and effective ways to achieve spending and estate distribution goals.

Be in touch at 705-927-4770 or by email at

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