Iterate your way to Financial Mastery

By | 2016-11-17

I push for people to take action on their personal finances, it says it in fancy letters right under the name on this site (look up). One of the my favorite lines  is “Knowledge without action is worthless” and I 100% percent believe that.

But…. one thing I haven’t spent any time on is, what if you don’t have the knowledge? Should you sit idle until you can carve out the hours to become a Financial Master?


If there is one thing I have learned in my short project management career:

Delivering early and iterating is better than seeking perfection and never delivering

The same thing applies to personal finance, doing something, even if it is not the 100% best, blue ribbon choice – is better than doing nothing. Money is surrounded by a lot of complicated terms and theories that no one understands right out of the gate. It takes time to absorb, and even more time to trust your knowledge enough to put it to use.

Don’t feel like you need to be an expert to start making improvements. It has taken us years to put our current approach to personal finance together and it will continue to iterate for the foreseeable future.

I still don’t consider myself a pro, more like Chris Farley in Beverly Hills Ninja. Am I a Ninja? Sure.  But there is still a lot of room for improvement. (I got a Dumb and Dumber quote in a few weeks ago, people said they loved it, riding the awesome old movie train)

Starting the Iteration

If you don’t if know you should invest or pay down debt, pick the one with the lowest barrier to entry until you create a financial plan or set financial goals.

Making it simple:

  • Paying down debt is better than increasing it
  • Investing is better than not investing
  • Either one is better than doing nothing 

There are fewer barriers to debt dominance, all you need to do is pick some debt you want to tackle and increase the payment. There are a few debt payoff strategies you can investigate in the mean time and adjust if necessary (Debt Snowball or Debt Avalanche).

If you have an employer sponsored 401K, it takes a few finger taps on the keyboard. Pick one of the pre-packaged solutions (you know the Low, Moderate, Aggressive check box) and get it started. Worry about optimizing or adjusting later.

An example of Iteration

Our 401K approach has changed at least 8 times in the last 4 years. We have slowly increased the percentage, and tweaked the funds that we invest in.

  • 2013: 3% Contributed
  • 2014: 6% Contributed
  • 2015: 10% Contributed
  • 2016: 13% Contributed

Set small incremental goals to increase investment amount over time:

  • In 2014 we realized we were leaving company match $ on the table and corrected immediately
  • In 2015 we had a qual to increase our contribution by 1% a quarter (Missed it by 1% on my side)
  • 2016 we wanted to get to 12% (Goal Complete and surpassed!)

On top of just investing more we started tweaking the funds from the “out of the box” approach to a custom one based on fund performance and expense ratios.

While these criteria are super important and can materially alter your returns – you need a lot more knowledge to make these decisions.  Even though I was confident in my research, I didn’t make a big bang switch and completely change everything in one day. It took 4 changes over 9 months to completely switch over to my new allocations.

Invest first, and optimize through iteration.

Take Aways

As you enhance and increase your knowledge, you can implement new strategies and sunset ones that no longer fit your ideology. A few things to remember:

  • You will make mistakes
  • Your decisions may not be “right”
  • Chasing perfection will waste time

Most importantly – Start Now, and even if you don’t want to be a Financial Master, paying off your debt and investing in pre-packaged portfolios will drastically improve your financial situation.


Disclosure Policy

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15 thoughts on “Iterate your way to Financial Mastery

  1. F
    Full Time Finance

    So much in life is defined by setting a direction and sticking to it. Minor tweaks to the path slowly get you to success so long as you just keep moving. Mistakes can occur as learning opportunities. Don’t let the fear of failure keep you from starting down the path. That last bit is really the largest problem, whether investing, starting a business, or even a project. Once you get past that initial fear though you chances improve exponentially, since without starting your chances are 0.

    1. Apathy Ends Post author

      I agree that fear is the largest barrier, the unknown is feared and people don’t like to fail. But like you said, if you don’t try the chances of success are 0.

      Appreciate the comment

  2. Matt @ Optimize Your Life

    This is a great point and something that took me far too long to learn. I was always the perfectionist that would wait until I knew I could completely nail something before starting. This ended up with me never starting a lot of things. It took a lot of conscious effort to retrain myself to get something done, anything, and then make it better later.

    Thanks for the reminder!

    1. Amanda @ centsiblyrich

      I am with Matt on this one! You make an excellent point that “chasing perfection will waste time”. I can’t tell you how much time I’ve wasted waiting for the perfect moment to start something and then procrastinating on actually starting in the first place. In fact, I needed this reminder today…I’ve been procrastinating on something out of the fear it’s not the “right time”, but no time like the present, right!? I’ll take your advice and start today (really it’ll be tomorrow…’cause it’s late).

    2. Apathy Ends Post author

      Thanks Matt

      Building out the “just start it habit” takes some work – doesn’t mean you have to sacrifice quality but getting something out there is important.

  3. Mrs Groovy

    I am so with you on this one. But the psychology is tough for those who have not resolved to get out of debt or invest.The biggest barrier to debt dominance for many is their desire for shiny objects. The biggest barrier to investing for many is fear, as you mentioned. Getting people past their “stuck” point is difficult. Perhaps fear is easier to overcome than shiny object syndrome?

    1. Apathy Ends Post author

      That is an interesting question, Personally I think investing is easier (provided you have a way to automatically take it before spending) debt payments seem to come with the “what’s left?” Attitude and to often there isn’t anything

  4. S

    You’re spot on with this. No one makes perfect decisions. I wish I’d started investing sooner. But at least while I dilly dallied over that, I was overpaying the mortgage. I think it’s fair that most of us start small and as adaptations become habits, new adaptations are made.

    1. Apathy Ends Post author

      Thanks – at least you were improving your financial situation along the way! That’s more than most people.

      Appreciate the comment!

  5. ChooseBetterLife

    Great point. Getting moving is more than half the battle. It’s hard to battle inertia to get started, but once you’re moving it’s much easier to adjust your course.
    In addition, once you start you develop questions and you can learn the next steps. Before you start you don’t even know what you don’t know so you don’t know where or how to research the answers.

    1. Apathy Ends Post author

      That’s a really good point, creating a constant question/answer cycle breeds iteration

      Thanks for the comment!

  6. Daniel Palmer

    If at first you don’t succeeed… suceede… suxeed… never mind.

    Great post! Great reminders! And I think you nailed it with your example of retirement contributions. You don’t have to get a hole in one- as long as you keep moving towards the hole. Personal finance is mostly learning by doing.

  7. D
    Diligent Dividend

    I love how you summarize that doing something is better then doing nothing. I think a lot of people are fearful of the stock market or even investing in general. I hear a lot from people that have the thought that they will suddenly lose all their money. Keep up the great work!

  8. AustralianDividendInvestor

    I’m a huge fan of incremental change in anything. I’ve always tried to be 2% better at anything I’m focusing on, and my experience is that 2% compounded over the course of the year can have an incredible effect. Over five or ten years, the effect is barely believable.

    I love the idea of just getting started. I see so many people that use excuses for not doing anything – a friend of mine calls it analysis paralysis. Worse still are those that know that they should be doing something, but substitute learning for action.

    Just do it!

    Great post.

  9. [email protected]

    I love this line – “It takes time to absorb, and even more time to trust your knowledge enough to put it to use.” I was making incremental changes for years and it made a huge difference. I’m pretty risk averse, but we acted on SOMETHING each year. And I read, looked to mentors, read some more and asked questions. And still do…. Great post!


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