Be Kind to Your Future Self

Saving for retirement is nothing more than postponing spending on the present you for the benefit of the future you. Most of us do not, however, have a strong grasp of the person we will be years from now. That lack of connection between today and a distant tomorrow hinders our ability to save.

 We tend to favor taking care of our current needs. The future is amorphous. A cookie now has a tangible appeal that a cookie decades later does not provide. Saving for the future becomes even more difficult when the person we're saving for is a stranger to us. Most people have a limited ability to connect with who they will be down the road.

"[P]eople who regard the future self as distinct should logically have no more reason to care about that future self than a stranger," writes Brian Knutson, a Professor of Psychology and Neuroscience at Stanford University. "By implication, they should have no reason to save money, maintain their health, or cultivate relationships ....To the extent that someone imagines their future self to be similar to their present self ... [it] might predict their willingness to at least consider the interests of the future self."

How do we connect with the person we'll become? It's not easy. You can have your face digitally rendered to make yourself look older, hopefully creating a bond with the more mature you. An easier, lower-tech approach is to write a letter to your future self, setting forth your goals and dreams. (It probably should be deeper than hoping you get a hole-in-one.)

The hurdle of future self-continuity appears to be more difficult for the younger cohort. An article on Bloomberg Work Wise quotes a young financial advisor: "Saying to a millennial that they need to make their golden years a priority will only show you can't relate ...They need to be told it's okay if they want to focus on short-term goals." The article is titled "The Old Rules for Building Wealth are Obsolete."

I beg to differ. There is only one way to build wealth (beyond starting your own business) -- save money and invest it. It's true that many millennials face burdens such as large student loans. But the path to saving remains the same as it did for their parents and grand-parents, who undoubtedly had their own struggles.

So be nice to yourself at all stages of your life.

Words of Wisdom

When I turned two I was really anxious, because I'd doubled my age in a year. I thought, "If I keep this up, by the time I'm six, I'll be ninety." -- Steven Wright