The fancier a financial product looks, the bigger the catch usually is.

Prateek Singh and Zero1 do a nice job explaining this using leasing vs buying a car. A lower monthly payment can make leasing look like an obvious deal, but once you account for upfront costs, restrictions, and what you actually own at the end, the math looks very different.

I think this is true for most financial products. If it takes more than two sentences to explain how a product makes money and where the risk sits, you should probably stay away.

Boring is usually better.🙂

Watch the video.

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