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Every morning, I walk into a clean kitchen. Dry dishes sit on the rack next to an empty sink. The countertops are clear of clutter. And my ritual begins.

I cook and eat the same thing every breakfast. Eggs, toast, and coffee. I try to keep things clean, but…

  • I crack some eggs. A splash of egg white gets on the counter. It’s inevitable.
  • I wash out yesterday’s coffee grounds from the basket. A few grounds end up in the sink.
  • I toast some bread and crumbs fall.
  • And then, of course, dirty dishes abound afterward.

No kitchen ever stays clean. If you cook, you know this truth. It takes time and effort can maintain a clean kitchen. It’s work.

This, nerd friends, is an example of the second law of thermodynamics: the entropy of any isolated system always increases.

Entropy is a fancy word for disorder, randomness, chaos, etc. And an “isolated system” means a system left to its own devices. The only way to reduce entropy in a system is to act on it. We call this “work**.” It takes work to reduce the entropy of a system.

**In physics parlance, work literally means “the energy transferred to or from an object via the application of force along a displacement.” It takes work, literally, to fight the creep of entropy.

So in layman’s terms, the second law states the messiness of any kitchen (or house, for that matter) always increases, unless you put in the work to keep in clean.

The common science-y example of entropy involves two gasses in a split volume. See below. If you remove the partition between the gasses, they go from orderly separation to disorderly mixture. And the mixture stays that way. It never goes the other direction.

Humans know this inherently. We observe it in the world every day. If you add food dye to water, it disperses and dilutes. If you return later to find a concentrated drop of dye sitting in otherwise clear water, you’d think you’d gone crazy. Food dye doesn’t “unmix” itself.

The second law of thermodynamics surrounds us.

  • Cars break down over time…unless we maintain (“work”) them.
  • My neighbor’s backyard is a verifiable jungle. They haven’t mowed in two summers (seriously…ugh). No work = more disorder.
  • Roads crumble. Buildings crumble. People crumble. Time and entropy lead to ruination.

And I believe that personal finance and investing are, in short, the “work” that combats financial disorder. Call it the second law of financialdynamics.

  • Budgeting is “work” that brings order to your income and spending.
  • Rebalancing is “work” that resets your asset allocation
  • Financial literacy is “work” that prevents psychological chaos (a.k.a. “stress”)
  • Investing hitches a ride on the “work” that everyone else is doing. Every business on Earth is trying to bring a little more order to their customers (sometimes by literally fulfilling customer orders.)
  • Financial planning is “work” that prevents chaos while you’re alive
  • And estate planning is “work” that prevents chaos after you die

Without proper financial knowledge and practice, you’ll fall into financial chaos.

You won’t know where your money is. You won’t know where you spend it. You won’t know if, or how, it’s growing. You won’t know where you’ll stand in the future. Financial chaos surrounds us.

And it takes work to get things right. But here’s the great thing:

It’s not that much work. It’s not impossible. It doesn’t take special knowledge. I promise you.

It’s like cleaning the kitchen. It takes a small effort, repeated every day.

Spend a few minutes a day to learn and implement best practices. In a year, you’ll feel so much better. It’s as simple as cooking breakfast. Add it to your morning routine. Eat some eggs. Clean the dishes. And brush up on your favorite finance blog.

It works.

Order up.

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