Salespeople often use “FOMO” or fear of missing out as a strategy to get someone to sign on the dotted line. Not much is at stake when they’re trying to sell the latest “must have” phone. But it can be incredibly dangerous and consequential when they’re trying to sell you an investment product and your retirement savings are on the line. (Cryptocurrency, anyone?)

I just finished reading an interesting article that Morningstar put out on cryptocurrencies and how the FOMO mentality has played into people’s decision to buy it. It got me thinking.

So many people believe that they are going to miss out on some great opportunity if they don’t invest in the latest thing, whether its Pets.com or Enron or Dogecoin. We all believe that there are smarter people than us out there and we want to join their club and by investing in the latest, greatest thing we’ll be able to do so. I’m not here to bash the people who fall for the FOMO sales strategy because, well, glass houses and all…

Instead, I want to let those people know that I absolutely believe that no one needs to invest in anything “fancy” or “complex” in order to reach their financial goals.

A good rule of thumb for investing is if you don’t understand the thing you’re being asked to invest in, it’s probably something you should stay away from. No, it’s not because you’re not a “numbers person” or you’re “just not as smart as the salesperson”. The reason you don’t understand it is most likely because it doesn’t make sense! Whether it’s cryptocurrencies or some esoteric insurance product (I’m looking at you Mr. Annuity) if the person is trying their best to explain why you should buy their fantastic product, but you just can’t quite understand how its going to make you money/save you taxes—RUN AWAY!

For the majority of investors, the only items they need in their financial toolbox are:

1. A retirement account invested in stock and bond index funds. Examples of retirement accounts include company 401ks, 403bs, IRAs, and Roth IRAs.
2. A bank checking account. And possibly a bank savings account to hold extra cash as their “emergency fund”.
3. A taxable/brokerage account for long-term investing made up of stock and bond index funds.
4. A 529 college savings plan. (This only applies to those who have minor children.)
5. Term life insurance if they have dependents.
6. Long-term disability insurance for singles or those who have a spouse who is dependent on their paycheck.
7. An estate plan that includes a will, powers of attorney, and healthcare directives.

If anyone tries to sell you something that isn’t on my list, please have them explain to you why you should own it. If you don’t understand their reasoning, then please have the confidence to walk away.