Posted by Dave on September 14, 2010
I have several people in my life that claim to be be unconcerned about their future, because they believe they shouldn’t be concerned about it because it may never come. Generally, I hear about this when there’s something in the news about cancer rates being up or other negative news about the future. This belief manifests itself in unhealthy actions such as excessive drinking, racking up debt or unhealthy eating. These actions are ‘justified’ by saying “might as well do this, I might not see tomorrow” or something along those lines.
The fallacy of living this way is described by Aesop in the fable of “The Ant and the Grasshopper” – what happens when tomorrow does come? All of the crap that was consumed will have had a negative effect on your health. A lack of financial foresight may have lead to significant debt being built up. Neither of these results are desirable, and make the lifestyle of “living for today” very hard to do, because at some point there will be an obstacle. Either there is no money for a purchase, or health problems come up, or retirement come around without any saving and there is debt that still needs to be paid off.
I never know what to say to people who have this kind of mindset. I understand where it comes from as the future isn’t fun to think about, it’s much easier to basically stick your head in the sand and not take responsibility for your actions. It’s really easy to spend everything you earn (and then some) – you get a lot of toys, and have a lot of experiences right now if you’re not worried about tomorrow. If you’re not concerned about your health you can eat whatever you want.
I prefer to live in a different way. I think the perception of most people is that in order to save the amount of money that I do, or maintain the fitness level that I am at, certain sacrifices need to be made. Just because my wife and I are saving around 70% of our paycheques doesn’t mean we don’t have fun. We spend money on things that interest us, some of which could be perceived as a waste by others. We do not spend on things that don’t interest us or something that won’t add enjoyment to our lives.
What my wife and I have achieved is balance. We have minimal “wasteful” spending today and significant savings that will allow us to have minimal spending on frivolous things in the future. The people in my life who don’t think about the future have no balance. These people have decided to stick their head in the sand, pretending that there is no future when in reality there is a pretty high probability there will be a “tomorrow” (the flaw in their logic). At some point in the future they will have to address the decisions they have made, which may mean significant changes in their life.
Do you have people in your life that prefer not to think of the future? Have you seen anyone run into problems due to lack of planning?
Posted by Robert on September 13, 2010
A member of my extended family is approaching retirement in the next three to five years. Lately, I have been working with him to prepare his investments for the time when he will depend on them for his source of income. He works in health services and is able to save large amounts each year. As we work together, I realized that people probably never stop worrying about money. People who have money simply worry about different issues than people who don’t have money.
I sometimes work with people who have just enough money. When I talk with them about their finances, I hear about things they would like to be able to do, but can’t. I often hear about traveling or buying a new car or doing renovations on the house. People who can’t afford to do these things generally understand what the trade-off is. They would rather have enough investments to produce their income without worrying about running out of money. Even people who are at risk of running out of money, who are spending down the capital by age 90, not expecting to live that long, say that it would be nice to have more, but they’re doing okay with what they have.
People who don’t have much money, but wish they did, are simply asking to trade one set of troubles for another set of troubles. People who have money also have troubles. They worry about whether their assets are being managed properly. They worry about how much they are paying for professional investment, tax and legal advice. They worry about minimizing the taxes they owe. They worry about people trying to steal from them or defraud them. They worry about how to help those less fortunate. They worry about false friends asking for handouts. They even worry about spoiling their children.
It’s simply not possible to say: “Of those two sets of troubles, I’d rather have too much money.” Take, for example, lottery winners. It seems that many of them start with too little money, and are suddenly granted an exchange of their troubles. When they suddenly have too much money, they unwittingly trade one set of trouble for another. And it is not uncommon to see newspaper articles describing lottery winners who have slipped back into “too little money” troubles after time.
Envy goes both ways. People who suffer, will suffer no matter their circumstances. Wishing for more money is simply a desire to exchange “poor person’s suffering” for “rich person’s suffering”. I firmly believe that we all have the right amount of money for us, at the time. If it’s important to me to have more money, I’ll dream and think and plan and try and work toward getting more money. And as I do, I will slowly but surely learn to handle and manage the troubles that come along with having that amount of money. As I move up through too little, just right, more than enough and too much, I expect to develop abilities in managing the responsibilities that come along with it.
What money troubles do you have? Do you find having money comes with its own set of troubles? What lessons or skills have you learned from managing money?
Posted by Canadian Dream on September 10, 2010
Due to the long weekend Monday I only had a three day work week (recall I only normally work a four day week). You would think I should be fine, but I was exhausted this morning and slept in by a few extra hours. So a bit later than normal, but here is your Friday link post.
To start, some shameless self promotion. I was interviewed for an article over at the Globe and Mail called Turns Out You Can Buy Happiness After All. (Note: Twitter followers would have seen this earlier this week when it came out.)
Turns out Preet is now writing a column with the Globe and Mail. Read here.
Apparently Squawkfox had enough and wrote ‘The Real Reason You’re Broke‘ which I think every personal finance blogger in the world can mostly agree with. The post basically says: stop whining and fix it already.
Sydney from Retirement: A Full-Time Job went back to work recently on a consulting gig has found out how working is helping her appreciate her retirement.
The Canadian Capitalist points out how Ontario customers can expect their electricity rates to increase this year and for the next several. Since I work in this industry I can say most customers in Canada will be facing similar increases in the long term as a lot of the generation infrastructure needs replacement in this country and the pressure to ‘green up’ the industry keeps piling on.
Brip Blap points out How Kids (Can) Make You Poor. Very true.
While Frugal Dad asks Do Your Kids Have Too Many Toys? In a word: yes, I even have a story book called ‘Too Many Toys’
Larry MacDonald asks is it Time For Fixed-Rate Mortgages? A little late for me as I already went fixed.
Then apparently we all need a reality check on how far our nest eggs will take us in retirement.
