Welcome to Under 2, an email series delivering short insights to empower your money life – in 2 minutes or less.
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When you’re going through a tough season, financial or otherwise, lengthening your perspective can be a strong antidote. Because time is powerful.
First, the compounding effect of time alone has exponential effects on transforming your circumstances.
Did you know that 95% of Warren Buffet’s fortune was amassed after the age of 65? Give any sound investment enough time, and it will grow to surprising heights.
The same goes for your life experience and knowledge; your personal toolkit of wisdom will grow and compound with time, making difficult problems easier to solve. And there’s no way to shortcut that evolution.
Second, a longer time horizon allows for greater flexibility.
Urgently needing $10,000 is very different than needing $10,000 eventually. Being flexible to absorb losses, delay improvements, and lay down foundations that won’t pay off until later are all possible when you give yourself time to see results.
Third, long term thinking directs your attention to intrinsic motivation towards big picture priorities – capital “P” Priorities & Purpose.
In contrast, short term goals and rewards often short-circuit our motivation, needing to be reset over and over. Think “cue, craving, response, reward,” a cycle relentlessly driven by our insatiable dopamine pathway.
In fact, research has shown that publicly held companies that prioritize quarterly earnings (those all-important results to keep shareholders on board) have significantly lower growth rates, because the short-term thinking overshadows long term priorities that keep a business successful past the next quarter.
But working towards big picture Priorities, the things that matter most and will never stop mattering, provides a steady source of motivational fuel to keep us saving, investing, budgeting, etc., which allows that compounding effect we talked about first to work its magic.
Are you in a tough season? Are you ruminating on the right now? Try thinking ahead and how you might make choices to get you to a better point 1, 5, or 10 years down the road. It may not always be the easiest thing to do, but thinking ahead, combined with patience and diligence, pays dividends.
Long term is harder than most people imagine, which is why it’s more lucrative than many people assume.
Morgan Housel in Same as Ever
Short-term pain leads to long-term gain.
Charles F. Glassman in Brain Drain
I hope you enjoyed this edition of Under 2, an email series designed to share quick bites of wisdom to empower your financial journey (while keeping it short). Be sure to sign-up below to get these messages in your inbox.
All for now,
Lindsey