How to Stay Curious Without Getting Burned

I was talking with my colleague Sadie this week about what it actually means to get good at this job, and the conversation really started with curiosity itself. Not curiosity in the abstract, but the kind of curiosity that shows up when someone is early in their career and still assumes there is always a better explanation, a deeper reason, or a more complete way of understanding something than what is immediately in front of them.

Sadie is a very bright young financial planner, but what stands out even more than her technical ability is the way she approaches problems with genuine curiosity about how things actually work. She wants to help people, but she also wants to understand the reasoning behind the advice we give, and she is not particularly interested in learning something just well enough to check a box and move on. Instead, she tends to linger on questions a little longer than most people would, which is often where the real learning happens.

Those are traits I think matter a lot in this profession, because one of the uncomfortable realities of financial planning is that you never really get to finish learning it. There is no point in your career where you collect enough credentials, read enough tax code, sit through enough meetings, and finally get to announce that you are done learning and now simply know financial planning. The profession does not allow for that kind of completion, and in many ways, it actively resists it.

Tax laws change, estate rules change, Social Security rules evolve, new financial products get introduced, and old strategies that once made sense slowly become obsolete. At the same time, new planning ideas emerge, and occasionally an old idea gets repackaged in a new form and presented as something innovative when it is really just a variation of something that has been around for years. The result is that the walls around our profession are constantly moving, and the only way to keep up is to stay engaged with that movement rather than assume stability.

So part of our conversation was really about how you stay sharp in an environment like that, where the ground is always shifting and where yesterday’s certainty can quietly become today’s outdated assumption. My answer was fairly simple, but not necessarily easy in practice, which is that you have to build learning into the job itself rather than treating it as something separate from the job.

That means not just relying on continuing education credits or the standard financial industry publications that tend to recycle the same conversations among the same group of people. Those things have value, but they are not enough on their own. You also need to deliberately look outside your normal lane and expose yourself to information that does not always come pre-filtered through the same professional echo chamber.

We talked about maintaining a weekly reading list that includes tax publications, legal developments, academic research, economic writing, and broader industry commentary, along with anything else that might help us understand what is changing around the people we advise. The point is not to become an expert in every adjacent field, but to stay close enough to the edges of those fields that you can recognize when something important is shifting.

Which is how I found myself reading fresh IRS guidance on a Saturday morning.

I know how to party.

The IRS had just finalized rules targeting certain aggressive transactions involving charitable remainder annuity trusts. The mechanics are not especially important for this discussion, but the basic idea was that promoters were combining legitimate planning tools with interpretations of the tax code that, in some cases, could make a substantial amount of taxable income or capital gain appear to disappear on paper.

The IRS, unsurprisingly, disagreed rather strongly with that interpretation.

The reason the article caught my attention was not just the content itself, but the timing, because my colleague Brian Colan and I had recently been involved in a completely unrelated conversation about another aggressive tax strategy that had come across our desk. I will intentionally spare you most of the details, but the pitch involved putting a relatively small amount of money into an arrangement involving gift cards and an NDA, somehow leveraging that amount several times over through a series of steps, and ultimately arriving at a tax deduction that was many times larger than the original cash committed.

There were attorneys involved in structuring it, there were CPAs involved in reviewing it, and there were assurances that the strategy had been thoroughly vetted from a technical standpoint. There was also plenty of documentation explaining why it worked, along with a very large tax benefit at the end that understandably made it sound attractive on the surface.

Maybe it worked exactly as advertised, and maybe it did not, but either way it certainly earned a closer look, because whenever the outcome seems disproportionately large relative to the input, it is worth slowing down and understanding where that difference is coming from.

And that is really what I want to talk about, because this is where curiosity becomes either a strength or a liability depending on how it is used.

Curiosity is a feature, not a bug

I never want clients to stop being curious, because curiosity is one of the primary ways better ideas enter the system in the first place. It is how businesses improve over time, how investors learn to see opportunities they might otherwise miss, how people adapt to changing circumstances, and frankly how life stays interesting rather than static. Without curiosity, most progress simply does not happen.

The problem is not curiosity itself, but rather what we sometimes do with it, which is to treat curiosity as if it were validation. In other words, we assume that because something is interesting, it must also be credible, or because something is compelling, it must also be correct. Those are very different things, and confusing them is where people tend to get into trouble.

We see this pattern everywhere once you start looking for it. A contractor tells you that your air conditioner needs to be replaced for $18,000, and you do not necessarily assume he is lying, but before you write the check you might ask another HVAC company to take a look, just to make sure the diagnosis holds up under a second opinion. The curiosity is still there, but it is paired with verification rather than acceptance.

The same thing happens when you are shopping for a used car and you find one priced 30 percent below every comparable car within 200 miles. Your first reaction is not necessarily excitement about market efficiency, but rather a question about what might be different about this particular vehicle. Maybe it is a motivated seller, or maybe it has three previous accidents and a transmission that has seen better days. Either way, the curiosity leads you to investigate rather than immediately conclude.

Even something as simple as a hotel room follows the same pattern. If a hotel you have been watching suddenly shows up online for half the normal price, your first thought is probably not that you have discovered a rare moment of pricing efficiency in the hospitality market. It is more likely to be a version of, “What is the catch here?” because experience has taught you that unusually good deals often come with details that are not immediately obvious.

In all of these cases, we are performing small credibility checks without even thinking about it. The interesting part is that we do it automatically in everyday life, but we sometimes forget to apply the same discipline when the stakes are financial, technical, or tax related, where the consequences of being wrong are significantly higher.

That is the mental model I want to use when an interesting financial or tax strategy comes across my desk, because curiosity should be the starting point, not the conclusion.

The Curiosity Filter

When something sounds interesting, I think there are five progressively deeper questions worth asking, and the value is not just in the questions themselves but in the order in which you ask them, because each layer is designed to slow down premature certainty and replace it with structured understanding.

The first question is whether the basic story actually makes sense when you strip away all of the technical language and explain it in plain terms, as if you were sitting at a kitchen table trying to describe it to someone who has no background in tax law or financial engineering. At that level, you are really asking where the economic benefit is coming from, because if I invest $50,000 and somehow receive a $250,000 tax deduction, I need to understand what changed in the middle to create that additional $200,000 of value. Similarly, if a highly appreciated asset is sold but very little tax is ultimately paid, I want to understand where the gain actually went, because it did not simply disappear, it was either deferred, recharacterized, or offset in some way that should be explainable in simple terms. Complexity is not automatically a red flag, because many legitimate strategies are complex, but complexity should still be explainable if it is real.

The second question is about incentives, and specifically why you are being offered this opportunity in the first place. That means asking who created the strategy, who is selling it, who gets paid if you participate, and who is providing the attorneys and accountants who are telling you it works. None of those people need to be dishonest for incentives to matter, because good people can sincerely believe in something that they also happen to benefit from financially, which is exactly why understanding the incentive structure is so important in evaluating credibility.

The third question is whether someone outside the ecosystem can validate the idea independently, because this is often where the quality of due diligence becomes most visible. In the situation I mentioned earlier, the person involved did something very important, which was not simply accepting the materials she was given, but instead running the idea through her own professionals and asking people who were not part of the transaction to pressure test it. That distinction matters a great deal, because the attorney who helped design a strategy saying it is legal is useful information, but your own independent tax attorney reaching the same conclusion carries much more weight, even though the strategy is identical on paper.

The fourth question is what happens if the conclusion is wrong, because this is the part that tends to get minimized when something is being sold or presented in an optimistic light. I want to understand what the exposure looks like if the IRS challenges the deduction five years from now, including whether you owe the original tax, whether interest and penalties apply, whether legal costs are likely, and whether prior returns might need to be amended. If the upside is saving $300,000 but the realistic downside is a multi-year dispute with the IRS along with penalties and professional fees, then that tradeoff needs to be part of the decision regardless of whether it is emphasized in the marketing materials.

The final question is whether the strategy is still worth doing if you remove the extraordinary benefit entirely, because this is often where the clearest thinking emerges. A legitimate charitable trust, for example, can make sense because someone genuinely wants to support charity, diversify a concentrated position, and create an income stream, and the tax benefits simply improve an already reasonable decision. That is very different from constructing a complex structure that only makes sense because of an unusually large tax outcome, because in that case you are no longer evaluating planning, you are evaluating whether the tax result alone is strong enough to justify everything else that comes with it.

Curiosity should lead to investigation, not urgency

One of the patterns I have noticed over time is that aggressive strategies are often presented with a sense of urgency, where the message is that the law could change, the window could close, availability is limited, or you need to act before year-end in order to preserve the benefit. Sometimes those claims are true, but often they are used to compress the decision-making timeline in a way that discourages deeper evaluation.

My experience, however, is that good financial planning tends to survive additional questions rather than collapse under them. That is part of what I try to remind myself of whenever something interesting comes across our desk, because the goal is not to dismiss new ideas simply because they are unfamiliar, but also not to accept them simply because they are compelling or well packaged.

There are absolutely times when I am comfortable saying I do not know yet, and that is not a failure in the process, it is actually the beginning of a more honest one. From there, we investigate, we break down where the benefit is coming from, we understand the incentives involved, we bring in independent professionals, we examine the downside scenarios, and only then do we decide whether the economics still make sense once the initial excitement has worn off.

In the situation Brian and I were discussing, that is essentially what happened. The person asking the question remained curious throughout the process, but she did not allow curiosity to harden into conviction before the evidence supported it. Instead, she gathered information, asked for independent opinions, explored what could go wrong, and ultimately made a decision with a much clearer understanding of the tradeoffs involved.