Time Competence

The first important parts of financial planning are deciding who you are, what you want and when you want it.   The how you get it will come later.

You should be careful about anything you want if it relies on the future. Things change and some things will evolve. 

There is a time line that automatically comes with life.  It will fix up many of your problems and it will point out the error of your ways in other circumstances. Time is crucial. Not everything need happen immediately. Knowing and understanding how a person goes through life is vital to success. Patience and understanding add value. Doing things out of order hurts. 

Margaret Atwood has pointed out:

“For years I wanted to be older, and now I am.”

Something poignant about that. Wanting to be older? 

Time incompetence hurts planning. It encourages error.  The wrong priorities are addressed and things that are out of time usually fail or at least provide little benefit. In the early parts, knowing about a thing is all you need.  Details of pension plans matter when you are 55, not so much when you are 25. Knowing you have one is good and you cannot change the rules even if you wanted to do so. The only time details will matter is when the pension plan is the deciding factor between two otherwise okay job offers.  Has that ever happened to a young person?

Debt problems usually come from time incompetence.  I can spend it now because I can get the money now. Debt is like a pay cut for the future. That would be harder to accept. The essential thought is you can get money with debt, but you have to earn money to pay it back. Very early on, learn the difference between getting and earning.

Young people especially have no experience, very little instruction and no intuitive feel for how financial planning works. They cannot learn everything they need in an afternoon, but they can avoid serious error if they understand how the time factor works.  

Commitments of any kind are a promise to use future resources to meet the commitment. Some commitments are money. Some are people. Some are just stuff. Like agreeing to be the fund raising director for the local symphony orchestra. In the present there is nearly no cost and some positive feelings.  It is like a loan. No cost now, cost later. When you decide, hold the idea of how small distant elephants look. As they get closer they get much larger and more intrusive. Just like future commitments.

In business, over-promising is easy because it has no cost and immediate payback.  Under-delivering has costs much greater than the value received in the beginning. Finding customers is harder than serving existing customers.  Over promising tends to mean you can sell a given customer only once.  You become lead needy and that gets harder as your reputation spreads.

Learn to think of consequences beyond the present. It is easier to stay out of trouble than get out of trouble. 

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.  don@moneyfyi.com  866-285-7772

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