Long term perspective improves short term decision making. Many years ago, I worked for a wealthy man who started with nothing and build a fortune worth more than $500 million in real estate. He taught me to think always of owning a piece of property for 20 years when I was considering buying it. He said that if you think about owning the property for 20 years, you will be much more alert to the strengths and weaknesses of the investment in the moment.
On the same street living in 2 houses of similar value will be 2 different families. Each family earns approximately the same amount of money. But one family has a 20 years time perspective and the other family has little or no time perspective at all.
Over the years, the family with long time perspective will carefully save, invest and accumulate an estate that will eventually enable them to retire in comfort. The other family, earning approximately the same amount of money, perhaps doing the same kind of work, but lacking time perspective will spend everything they make and a little bit more besides. They will end their working days with little or no money put aside.
If you were told today that unless you made some dramatic changes in the way you earn and spend, you were going to be penniless when you reached retirement, how would that affect your attitude towards your money? Because of limited time perspective, 95% of people working today will end up either broke, dependent on pensions or still working when they reach the age of 65. Don’t let this happen to you.
Take your whole life into consideration
Most people have never decided upon exactly how long they intend to live. They say, “I am going to live to be a hundred.” But they are really not serious because they have no definite plans to get to that age.
The formula that insurance companies use to predict your age is to take 2/3 of the number of years between your current age and 100, and then add to your current age. This will estimate your average life expectancy for acturial and insurance purposes. If you are age 40, then 2/3 * (100-40) = 40. Therefore, your calculated age or life expectancy is 80 years. The big insurance companies write insurance policies on these projections all day long, and they are seldom wrong.
People don’t change
You have not changed in your entire life. If is not realistic to expect that others might change, even if they want to, or if they promise to. In fact, not only do people not change, but under pressure, they go from bad to worse. They become even more of what they already are.
One of the marks of the “fully functioning person” is as defined by psychologist Carl Rogers is that he is not unduly influenced by the opinions of others. A fully mature, fully functioning adult takes the likes, dislikes, and the opinions of others into consideration, but then makes his own decisions and goes his own way. If others do not like or approve of his course of action, he ignores it and carries on regardless.