By Michael O’Connor, theislandinvestor.com

January tends to bring its fair share of resolutions. Under the blinding influence of Christmas blues, we vow this will be the year we lose weight, the year we drink less, the year we sort out our finances.

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So for those about to undertake a forensic examination of their finances in a bid to uncover the mystery of where your money has been disappearing to all these years, here is my number one rule.

Don't overcomplicate it.

In psychology there is a term known as 'complexity bias'. This refers to our tendency to levitate toward the more complex solution, ultimately over-complicating a simple problem.

Those with the most complex solutions get resounding recognition, while the obvious answers get discarded.

In investing, this is everywhere, millions of strategies, thousands of different investment options, each one more convoluted than the next.

And people eat it up, paying portfolio managers through the nose for the privilege of complexity.

My advice: if you're starting out, embrace simplicity.

Everyone wants the optimal portfolio. They want to know the name of the next stock that's going to 10x in value. They want maximum returns. This pursuit of the perfect trade often results in people investing in nothing at all.

We operate in extremes: everything or nothing. The absence of the illusive perfect investment means we do nothing with our money; sitting on our hands, waiting for a life-changing investment to come up and slap us in the face.

Now, I hate to be the bearer of bad news here, and this may be stating the obvious, but some people need to hear it. There is no perfect investment, but thankfully, there are plenty of good ones, and that's a start.

This is where you should focus your efforts. Start with the easy wins.

Simplifying the problem instead of chasing perfection allows you to take the necessary steps to get started. From there, you can build out your investments over time.

The general consensus suggests investing is too risky. I get it. A lot of trading activity can be speculative at best.

But the recent rise in interest rates means there are now higher interest rates, low-risk investments out there.

This is a game-changer. Now there are opportunities for even the most risk-averse investor to enter the market.

In 2022, we all felt first-hand the damage that inflation can do to our savings. Now more than ever, you need to be proactive to ensure you are putting your money to work.

Investment options that are backed by the full faith and credit of the US Government are now offering up to 5%.

This is the perfect place to start. Simple.

Yes, 5% a year won't make you a millionaire overnight, but that's not the game we are playing. At least not yet.

Start by improving your current situation, step by step. If you're accepting pennies from your deposit account, improve your returns by investing in short-term bonds.

Risk-free treasuries offer 4.8%, while the savings account rate for all financial institutions insured by the FDIC is 0.24%.

One simple change will almost 20x your return.

Take the easy wins, it doesn't all have to be as complicated as they make it out to be.

For anyone who is needs help, just reach out to me at mike@theislandinvestor.com or scan the QR code. Always happy to help.