Today’s guest post is courtesy of Brad, who writes on the excellent Triaging My Way to Financial Success blog. You can subscribe to the feed here.

My father always taught me that there are three ways to do things in life: the Easy Way, the Hard Way and the Smart Way.

Investing based on this principle has provided me with more consistent success than I would expect if I had strictly stuck to the traditional two ways of doing something. Whenever I encountered failure early in my life my father would repeat these three methods and often later in reflection the best path to correcting my mistake would become evident. Often the Smart Way was a combination of the Easy Way and Hard Way found through collaboration, teamwork and looking at the bigger picture of interpreting my surroundings differently.

The Smart Way is a different interpretation of how things come together to make better sense and achieve higher efficiencies. My investment motto of “allow money and debt to work for you instead of against you” is based on this principle. When you invest you want to do things that make sense, are fundamentally sound and require very little effort or energy to maintain.

My interpretation of value investing is much more than simply looking at a stock’s quantitative value, underlying fundamentals and financial position. To me it’s about assessing all aspects of a business and asking myself if the intrinsic value of that company is more or less than the market price. Often there are times when I don’t need a massive stack of financial statements, insights into global operations or a tour of a manufacturing plant to get a sense within the first hour or two whether an investment is something that fits my style or requirements to own.

Based on the Smart Way principle I want to highlight some introductory areas that many individuals get caught up in when investing. A De-Value Investor is an individual investor who de-values their investments and opportunities for creating wealth by ignoring basic fundamentals and avoiding the bigger picture or Smart Way.

After each quote and explanation ask yourself if you are a Value Investor or De-Value Investor in each situation based on what you might do or already do. Each of the following statements I have heard in person within the last year.

“I’m going to borrow money this year to invest in my RSP.”

Any money you borrow to invest in your RSP will not be tax deductible in comparison to borrowing to invest in a non-registered account. While this may appear to be a great idea proposed by your bank or financial advisor any loan taken to borrow money to invest in your RSP will have no tax savings on the interest. Receiving a tax rebate for your RSP contribution to pay down onto the loan may make sense, but ask yourself how far ahead you might be if you are in the highest marginal tax bracket and paying full interest on your loan. Examining this situation the Smart Way could show you how you might save almost half your interest cost.

“An extra mortgage payment? I’ve got 25 years to pay off my mortgage. I need a new TV instead.”