Many of our problems, financial, social, and governmental, come from a single aspect of how we think. We see the present quite clearly while the future is hazy. Our present self tends to dominate decision making and future self weeps.
A recent story in Investment Executive tells us that 40% of Canadians have no life insurance. Canadians unwilling to give up daily luxuries for life insurance
That is not surprising and the effects appear every day. Families and businesses fail because people could not see the need to address their future. The present need for a latte a day overwhelms the need for future money and consumes the premium money. Undersaving is another symptom of the problem. In general, we have the adage, “Saving pays off in the future. Spending pays off now.”
We live in the now and that seems more compelling. We will catch up later, when the car is paid off, when the kids are a little older, when I get a new job, when the student loan is paid, when ….. Your future self weeps.
People complain the media is biased to the left. That may or may not be true, but the media is biased to presenting things that are simple to understand and emotional. They can test and they know what works for their business model. They are about involvement and attention.
It is easy to interview someone struggling to get by on minimum wage and ask them about what advantage a little more money would provide them. It is impossible to interview someone who could not find any job because they had not yet developed the skills to be valuable enough to earn as much as the new minimum wage.
The news media is a business. What they report and how they report it is a function of what works for their business model. You should not expect them to behave otherwise. Thoughtful readers have choices. Those that just want impressions use mass media.
Governments are like immature people. They want the candy now, even though dinner is just an hour away. In many ways governments behave as the media behaves and for the same reason. They can measure what gets attention. They know people value the present far more highly than the future. Your could look up hyperbolic discounting and the distant elephant problem. The future is far away and we will adjust to it then seems to be the operative thinking.
All of our lives involve three time zones. The past, The present, and the future. Ideally they balance so we learn from the past and present and live a better life in future. That is intellectually compelling but our human response is to live in the present. Life is short. Eat dessert first.
Spend some time deciding what activities in the present will make the future closet o what you wish. Better memories, more security, more knowledge, better skills, and better relationships. Then decide what of those you can afford. Money, time, and energy are all finite. Finally act on what makes sense for you.
That is what balance is about.
I help business owners, professionals, and others understand and manage risk and other financial issues. To help them achieve their goals, I use tax efficiencies and design advantages to acquire more efficient income and larger, more liquid estates.
In previous careers, I have 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.
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