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You Don’t Have To Be The Best

Do you play a sport? My favorite sport to play is basketball. There’s something about hearing the ball swish through the net that brings a smile to my face. There’s something about threading that perfect pass that makes me just a little bit giddy. Oh and setting a good solid pick to get my guy free? Love that too. While I love all the other aspects of the game, I love winning the game above all else. I don’t care how many points I score or how many assists I get, the point of the game is to win and if you don’t win, none of that other stuff matters.

It’s not like that in life. In life, you don’t always have to be the best. In this Devil’s Advocate post, I talk about how in personal finance, you don’t have to always get the best offer, sometimes good enough is good enough.

I think that, as Americans, we’ve become conditioned to try to be the best, try to get the best returns on our investments, and try to get the best deal on something. There’s nothing wrong with wanting and trying to get the best you can, in fact you’re doing yourself a disservice if you don’t at least try. However, you shouldn’t let your pursuit of the best investment prevent you from acting. You must avoid paralysis because you’ll be left behind.

The Best Investment Returns

The funny thing about making money is that the truly successful people ignore the glitz and the glamor and focus on the fundamentals. The proverb about the tortoise and the hare rings true. Think about the recent explosion in popularity with poker. People fall in love with the idea of working on their own, on living in casinos where you can get free drinks and flashy lights, on making tons of money sitting around player cards. What people don’t see is how much of a grind it is. You might hit a payday or two in your life but poker is strictly about probabilities and pot odds, to be successful you have to do a lot of math and make smart bets.

Investing for most people is the same way. It’s about doing a lot of analysis and picking your spots, you won’t get rich over night and it’s better if you don’t try to get the best investment returns possible. You don’t need rock star returns on your investments, you simply need pretty good returns year in and year out. Over the course of decades, your investments will grow and grow.

The Second-Best Deal

I recently bought Frontline [3] for our new beagle Toby and opted to buy the slightly more expensive 6-month package, instead of the 12 month package. The price difference? Only a few dollars. I didn’t get the best possible deal because I didn’t want to have to store an extra six months of a drug that I knew I wouldn’t be using for six months! The premium I paid to avoid the storage was a few dollars I could’ve saved but I knew I wasn’t going to use that Frontline for a long period of time. I didn’t get the best deal I could’ve because who knows what I could’ve done with the Frontline while I stored it somewhere. I could’ve lost it, I could’ve stepped on it and broke the package, I could’ve done a lot of things in six months.

Pursuit of Perfection

Finally, you don’t have to be the best at something, or even good at something, to start doing it. The great achievements in life are the ones where we must work the hardest. Very few people can just up and run a marathon, that’s why it’s considered a tremendous achievement. Some achievements are never mastered, like golf, and the joy is in constantly trying to improve your performance. And some skills can’t be measured quantitatively and there is never a “best,” like playing an instrument.

In life, it’s about the pursuit of perfection, not about perfection itself.