A few days ago, someone from my tech team showed me a website called boringtechnology.club. This idea, known as the “Boring Technology” principle, was first introduced by Dan McKinley, a software engineer and former Etsy employee. McKinley wrote a popular blog post about choosing boring technology, which means opting for reliable, well-established tech instead of chasing the latest trends.
One key idea from McKinley’s essay is “innovation tokens.” He says companies have a limited capacity for innovation and should use it wisely. If a company uses these tokens on new, untested technologies, it has fewer resources for innovating in other important areas, like serving customers. McKinley argues that sticking to older, well-known tech can be more efficient because it requires less maintenance.
McKinley explains why he uses the term “boring.” He says boring doesn’t mean bad. Some technologies are boring and bad, and you should avoid those. But many are boring and good, or at least good enough. For example, MySQL, Postgres, PHP, Python, Memcached, Squid, and Cron are all boring technologies that work well because their capabilities and failure modes are well understood.
Though I’m not a tech expert, I’ve grown a business that handles its tech in-house. I see how McKinley’s ideas can apply to personal investing too. By focusing on well-established investment options like diversified mutual funds or passive funds, investors can create a stable portfolio. These are boring choices, but they have proven their worth over time and offer predictable outcomes. You can use your limited “innovation tokens” on other carefully chosen alternatives if you understand them well.
The Boring Technology principle also emphasizes reducing cognitive load, which is important in personal finance. McKinley suggests using as few technologies as possible. This idea translates to investing too. To be successful, you need to understand a few boring things: diversification, asset allocation, large cap versus mid cap, and cost averaging. That’s it.
By sticking to simple, well-understood investment strategies, you can avoid the stress and mistakes of chasing the latest fads or trying to time the market. This approach lets you focus on other important aspects of financial health, like budgeting, saving, and long-term planning.
In summary, the Boring Technology concept applied to investing promotes a balanced, thoughtful approach that values consistency and proven methods over chasing the latest trends. For most investors, a mainly boring portfolio, with a few well-chosen innovations, is the best path to long-term financial success.
The Author is CEO, VALUE RESEARCH
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