In management there are only three numbers that matter
None, few, and many.
It is not that these are so sacred by themselves, but as with much of life, transitions matter. A change from no employees to one is a massive change. A change from one to two is relatively trivial. A later transition from few to many is quite problematic too. All sorts of new regulations appear. Ethnic and gender mix, accommodation for disabilities, unions maybe, the list is long.
In financial planning there are just two times that matter
Now and then
As with businesses the transitions matter. You don’t get to move back and forth, but some of the things you do now affect then.
Ones not near are easy to ignore.
The trick to know is they are the same thing in one way.
Lifestyle, which is what most people want to preserve, is about spending money. Spending money now; spending money in the future, is pretty much the same task. Understand value. Shop. Enjoy.
The future is different in another way
All income arises in the present. You get a paycheck today or a dividend check today. You collect rents once a month. All income is dependent on time. Your task is to recognize where the money comes from.
In the early years of your career it will come form the application of your skill and your time to some task. Later it will come from money working instead of you working. You must take some of the money you earn today and push it to then so it will earn money you can spend, then.
No so much of a problem. Except
Most of us are not good at treating the future as urgent. It is somehow a different space. Strange, a little scary. A change, and as we know, all change is difficult.
How do we motivate ourselves to overcome the transition? It will always be there. Truth is, we cannot.
We can recognize there are things in the future we can best control from the present. That is the key. Control the future from the present.
Investments, insurance, exercise, flossing, stress management and more will pay back in the future, but cost something in the present. Thus, the problem.
Businesses have solved the problem
They implement processes. People are good at habits and those are just about all a process is. So start a habit. Monthly saving, insurance premiums, trips to the gym, eat better, meditate. None difficult, all effective.
By creating a process the transition is not long. You don’t have to be motivated forever. Just long enough for the habit to become the new normal in the present.
You already know how to do this. Then, the past, comes to you this way. A series of payments on the house, the car, the education. Once they are a habit, they are no longer a problem.
When you have a problem, attach a process to it and it goes away.
Don Shaughnessy arranges life insurance for people who understand the value of a life insured estate. He can be reached at The Protectors Group, a large insurance, employee benefits, and investment agency in Peterborough, Ontario.
In previous careers, he has been a partner in a large international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business.
Please be in touch if I can help you. email@example.com 866-285-7772