I was sitting in the lobby of the Hyatt Regency in San Antonio last weekend; my flight wasn’t until later and I was basking in the glow of a successful Bogleheads conference. (Bogleheads are investors who believe in minimalist index-based investing as espoused by Vanguard founder Jack Bogle.) Conference attendees were streaming out of the hotel to catch their flights, and I was in a prime spot to gather feedback. We send out a survey that we use to improve the conference and build out the lineup of future speakers and topics, but there’s nothing like unvarnished human input.

In my moments of downtime between conversations, I tried to make sense of the comments that were coming my way. But here’s what was making me crazy: Attendees kept giving completely contradictory feedback. The same sessions and speakers that some people loved bugged other people. I found myself thinking: “What are we supposed to do with this?”

Are you an optimizer or a satisficer?

But as I pondered all of those comments on my flight home, I realized they were contradictory because our conference is trying to serve two completely different audiences.

The first group is what has historically been the Bogleheads’ bread and butter: the portfolio maximizers, or optimizers. These conference attendees were telling me they wanted more sessions about building laddered portfolio of inflation protected bonds bonds and setting allocations to categories like small-cap value and real estate. More “deep dives.” They love steeping themselves in the research about how best to create a financial plan and manage a portfolio, and they love debating the finer points on the Bogleheads forum. When author Jackie Cummings Koski jokingly asked the question, “How many engineers do we have in the audience?” at least a third of the audience raised their hands.

The second group doesn’t want to spend a lot of time on those smaller-bore issues. They’re more of what psychologists call “satisficers,” a term coined by economist Herbert Simon to be a hybrid of “satisfy” and “suffice.” When making choices, satisficers are looking for an option that’s acceptable rather than the best possible one.

The satisficers that I heard from at the conference told me they were more interested in big-picture topics: finding “enough” (Brian Portnoy’s talk about “funded contentment” was a big hit), retirement lifestyle considerations, and leaving a legacy for their kids, for example. They’ve set their asset allocations, populated them with low-cost index funds, and moved on to other things. We’ve been expanding the conference sessions beyond traditional Bogleheads topics like investing and managing the portfolio, which is how we ended up with more satisficers. (Or that’s my hunch, at least.)

I’ve been thinking that we don’t spend enough time urging people to place themselves on the maximizer/satisficer continuum. At our Bogleheads conference, we ask attendees to select tracks based on life stage and knowledge level. But a more important question might be: “Are you looking for perfect or will ‘good enough’ do?” Prompting people to answer that question, and perhaps giving them a little data-supported nudge to go in the satisficer direction, has the potential to save people a lot of time and money.

My journey to satisfice-ment

As you’ve probably guessed if you read my columns or any of my books, I’m on “Team Satisficer,” at least with respect to money matters. (If I’m picking a restaurant or plants at the garden store, now that’s another story.) My bias is toward simple, low-maintenance solutions.

But it took me awhile to get there. When I was a fund analyst, I spent a lot of time thinking and writing about the “best” large-cap growth or REIT funds, or the best interval for rebalancing. And the fact is, maximizers are often incredibly smart people who ground their conclusions in data and genuinely love this stuff; they may even get paid to develop portfolios and plans for their clients. In many aspects of investing and financial planning, these maximizers rule the debate. Listening to them, you think that you probably should use budgeting software, build that inflation protected bond ladder for retirement income, or finely calibrate your retirement plan to get every tax concession.

The catch is that maximizing can take time, and not everyone is cut out for it. If I had realized that I wasn’t really a maximizer earlier, for example, I wouldn’t have wasted any time trying to track our household’s spending to the penny in an effort to figure out our budget. I would have moved straight to the method we use today, reverse budgeting, which simply means that you set up automatic savings contributions and any money left over is yours to spend. Do I know exactly how we’re spending our money? No. Does it matter? Also no.

The same goes for portfolio allocation and investment selection. Inertia is a common theme running through my major investment and portfolio mistakes: I’ve been slow to tackle jobs and problem areas. If only I had decided to “settle” for indexing earlier, my portfolio would have performed better and it would have also required less oversight. (The funny thing about indexing is that it’s a strategy that both satisficers and maximizers can agree on. The data support the effectiveness of indexing, pleasing maximizers, and satisficers see indexing as an acceptable option that’s also hands-off.) And in any case, having a reasonable savings rate and asset allocation have more than made up for any portfolio problem spots. Satisficers know that if you get the big things right, they more than offset any smaller issues.

And while I know many happy maximizers, the data support that we satisficers are generally happier overall. The reason is that satisficers make what they think are reasonably well-informed choices and then move on, whereas maximizers are more likely to second-guess their decisions. Maximizers are also more likely than satisficers to engage in social comparisons.

Finally, author Mike Piper pointed out at the Bogleheads conference that it’s impossible to truly maximize without a crystal ball. The “right” answer to a lot of financial questions, including the best asset allocation, the highest safe withdrawal rate, or how to pay the least taxes over your lifetime, will only be apparent in hindsight. In the meantime, it’s all a bit of a guess.

So here’s my advice: Before you go down the maximizer rabbit hole, take a step back and ask yourself: Am I cut out for this? Do I enjoy spending time this way? Or will “good enough” decisions achieve a similar result with much less time and hassle? With respect to money and investing, my hunch is that Team Satisficer has growth potential.

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