21st Century Investing and Occam’s Razor: The Best Investments Are the Simplest


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Freeing up Cash Flow

Stacks of Cash image by 401(K) 2012

Stacks of Cash – Image by 401(K) 2012

A common counter-argument is the claim that there is no cash available to put toward debt, other than the minimum scheduled payment.

Given that this is a financial piece, I’ll use the word fallacy instead of hogwash to characterize my response to that assertion.

Discretionary spending is calculated based upon an existing subset of expenses. If a reasonable sum is applied toward a current debt, it will be subtracted out as if it were just another bill, and discretionary spending will adjust naturally.

As for which obligation to pay against – the greatest investment return comes from paying extra principal toward the debt with the highest interest rate. Having said that, another school of thought is to accelerate the payments of debts that can be retired the most quickly.

In the end, it doesn’t really matter which is paid first, as long as extra is paid against current debt on a consistent, regular basis. If you believe you cannot afford it, think again. You can’t afford not to do it.

Pay Down Debt: Just Do It

In 1988, Nike unveiled their Just do it trademarked slogan, one of the most recognized of its type in the world. The truth be known, the average American consumer is far more likely to plunk $100 down on a pair of Nike running shoes than they are to pay it against the balance owed on a credit card. So, when did you ever aspire to just be average? Resist the urge to pay someone else, and pay yourself instead. Put a significant part of your discretionary income to good use and pay down your debt. The simplest choice is usually the best. Trust me, your wallet will thank you for it.


Irwin, N. It’s Official: The Great Recession Ended Last Summer. (2010). The Washington Post. Accessed on September 30, 2012.

White, M. C. A Huge Number of Americans Have No Financial Safety Net(2012).  Time. Accessed on September 30, 2012.

Beckett, D. Biography. (1994). University of Kent at Canterbury, UK. Accessed on September 30, 2012.

McCarron, J. MARKETING: Just Do It! Turning Slogans into Sales(2007). Pantagraph. Accessed on September 30, 2012.

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