Another You

Stop and take a moment to contemplate your future self, close your eyes and think of who you want to be when you retire. Picture what a typical day would be for you. Would you get up and go golfing with your friends? Spend the day gardening or playing with your grandchildren? Explore the latest exotic city’s attractions you are planning on visiting next. Or will you wake up having to decide which medication you can afford to take today and if you will have to put on another sweater and turn down the furnace again to be able to pay your energy bill this month. You really have no clue who you will be or what you will be doing in 10, 15 or 40 years from now.

People struggle to think in the longer term.  Short term goals are easy but the long view is difficult. Long range game plans are not something people excel at doing. Sure a 4 or 5 year goal is great and achievable: college, saving for a down payment on a house, marriage, children… but then life happens each and every day. People become reactive instead of proactive. They spend their days responding to things that happen to them instead of planning for things they want to do.

However in the case of retirement planning you have no choice but to formulate a plan, and the immediacy of the short term world we live in, flies in the face of what is required for a successful long term retirement plan.

In youth young people tend to relate to sayings such as:

“Life is uncertain. Eat dessert first.”

“Eat drink and be merry for tomorrow you may die.”

The cavalier attitude about life expressed by youth serves a very useful purpose in the short term and drives societal advancements as youth tends to buck the trend and develop innovations but this attitude does not excuse youth from the need to plan for the long game.

By far the easiest way to a financially secure retirement is to begin saving early. Albert Einstein has been credited with saying “compounding interest is the eighth wonder of the world.” By starting early and habitually saving a reasonable amount of your paycheck one can build a fortune to help finance the dreams of the person you will become.

A savings account will never do the heavy lifting that compounding interest requires to amass a substantial portfolio. Historically, only a mix of stocks and bonds have generated the necessary returns for compounding interest to work it’s magic over time, and time is what is needed. Time is the critical component. A decent return makes the job that much easier and we can help you with that.

Much in the same way that the hoopla afforded the high school quarterback and the prom queen fades quickly after graduation so does the “live for today” mentality fade as the years pass. The truly wise take the boring but sensible route of getting good grades in preparation for college and habitually saving for retirement beginning with their first paycheck. These are the kids willing to wait for the second cupcake. The ones that understood, early, the benefit of delayed gratification.

One of the best habits you could cultivate is percentage based savings from each and EVERY paycheck. Develop the habit of pay yourself first and teach your children this lesson too.

And remember your retirement may not be just about you. Your spouse, children, grand children may very well benefit from your vision for the long term.

As time passes your taste in quotes will change as will your attitude towards life and money. Here are a few of my favorites.

“Hope is not a strategy.”

“A goal without a plan is just a wish.”

“Success doesn’t just happen it is planned for.”

“Plan for your future because that is where you are going to spend the rest of your life.”

If you don’t build your own dream, someone will hire you to build theirs.