I was chatting with a new client this week and they mentioned that they just weren’t bothered about saving for the future. They said that they wanted to live in the here and now and that they would worry about the future when it actually happened. It’s an interesting perspective and it got me thinking about WHY it is so difficult to concern ourselves about the future.
We all know if we started saving at 25 that we’d have a lot more money when we retire, than if we start saving at 35. However, I know that this motivates very few of us to start saving at a young age, including myself. I didn’t get really serious about my savings and investments until I was almost 30.
Things Are Stacked Against Us
We all want immediate gratification. We want things now. There is no instant reward in putting aside £200 a month for 60-year old you, especially if you have just got going in your career and really want to upgrade your car. Keeping up with the Jones is alive and well – more so than ever in our social media age. And don’t think it’s just the young millennials that are over-sharing new purchases and flash holidays on Instagram and Facebook – 61% of Facebook users in the UK are over 30.
Plus YOLO – you only live once. Surely it’s better to make the most of what you have now as you can’t be sure you will be around in the future. What’s the point in saving for a future that you cannot guarantee will happen? All of these are valid and understandable points but we should plan optimistically for living a long and healthy life!
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Making Friends With Future You
It’s hard to identify with our future selves if we haven’t really thought about the kind of person we will be and the lifestyle we will have in 10, 20, 30+ years time. It’s very hard to imagine yourself as an older person after all. In his eye-opening TEDTalk about the battle between our current and future selves, psychologist Dan Gilbert describes this as “the ease of remembering vs the difficulty of imagining”. The talk is definitely worth watching to understand how much can change in decade of your life and how little you think you are going to change.
Your present and future selves are strangers to each other unless you can construct a very vivid vision of your future. If you feel disconnected to your future self then saving for your retirement might make you feel like you are simply handing out £100 a month to a random stranger in the street.
In 2009 psychologist Hal Ersner-Hershfield conducted a study which looked at how connected people felt to their future. American Scientific summarised the results as:
Among the people in the study, those who most identified with their future selves planned their life with longer-term payoffs in mind: they saved more money and as a consequence had amassed more wealth than others.
So it’s worth putting the time in now to build a vivid vision of your future – one that motivates and inspires you to work hard and put money away now – even though the payoff is not immediate. Once you feel more connected with Future You, only then you will want to work hard to support your new best friend. After all, if you want Future You to be able to quit the rat race at 45 and buy a vineyard in the South of France, then Current You needs to lay the groundwork now.
So How Do You Go About Getting To Know Future You?
As we have seen, it’s easier to make good financial decisions when you feel connected to your future self and a good way to do this is to vividly visualise the future. Here are some ideas to get you going:
- Use a photo app to ‘age’ a current photo for you and your family. What do you all look like at 50 and 60 and 70? This can help you imagine what you all might be doing in the future.
- Build a mood-board of whatever you are saving for – a sabbatical, retirement, finishing work 5 years earlier. Find images of the exact dream house you would like to live in, the kind of holidays you would take, the car you would drive. Even if you just want to maintain what you have then you will need to update your car from time to time and repair and refresh your home. Pinterest can help you do this.
- Get Future You to email you to check on your progress and remind you of your goals. Futureme.org allows you to send yourself emails from the future.
Read this article published in The Business Times as a recognition for our ethical practices on financial planning and strict adherence to the fee-only model.
The Power Of Visualisation
We now know your future vision has to be in 3D 4K quality to trick your brain into caring. One of the most important steps I take my clients through is ‘Vision Building’ – this is usually the point where my clients start to get excited about finances. A rarity, I know! I get my clients to ask themselves some pretty big questions about:
- Where you want to live
- What kind of lifestyle you want
- What standard of travel you want to enjoy
- What holidays you will take
- What kind of home you want to live in
Why don’t you document your dream future today based on the question above today? Send it to me – I’m always interested to see what people dream of doing in the future!
This is an original article written by Max Keeling, Head of Expat Advisory Division at Providend, Singapore’s Fee-only Wealth Advisory Firm.
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