Why Do We Have Problems Investing If We Pre-Order Stuff?
I saw a trailer for the new Batman moving coming out not too long ago, and at the end of the trailer was a bizarre call to action that said: You can pre-order tickets now. But when I saw this trailer, the movie wasn’t coming out for another couple of months. Yet, I 100% know there is somebody out there who will buy that damn movie ticket months in advance.
What else do you buy in advance? I could think of a few possible things:
- Video Games
- Latest Fashion drops
- Movies soon available for streaming
It appears that we don’t mind buying things in advance. So, I’m bewildered by our retirement and savings problem. I’m trying to figure out why we can’t pre-order our financial freedom by saving for our futures.
Reason: We See Our Future Selves As Strangers.
Can you admit that you tend to be less in tune, less empathetic, and less attached to things you’re unfamiliar with? I know, I can admit. Except, I feel familiar with my future self, which is not as common. Many people do not embrace age; it’s taboo for many.
According to Hal Hershfield, Assistant Professor of Marketing at UCLA’s Anderson School of Management and former Assistant Professor of Marketing at New York University’s Stern School of Business, we struggle to see ourselves as getting old primarily because we view our future older selves as strangers, not as who we actually are. Unfortunately, this disconnection from our future selves can also lead us to postpone or even avoid entirely making important financial choices that will ultimately benefit us in the future, such as saving and investing enough money during our younger working years. Temporal discounting also plays a role, which is our tendency to place more value on choices and experiences that give us more immediate gratification, rather than waiting or investing for a future outcome that we have difficulty visualizing as a potential reality (Mark Dennis).
Delayed gratification is a crucial element that must be executed by harboring enough discipline to plan for the future instead of only the present moment. But this is still challenging to do if we can’t seem to relate to or understand the financial needs of our future selves.
Action: How Can I Become More Familiar With My Future Self?
The next step is to ask ourselves: how can I become more familiar and more empathetic to my future self?
For some, it’s seeing a potential image of themselves older. But there are also additional actions you can do that have helped me become more familiar with my future self:
- Set goals for your future self.
- Become friends and build relationships with older people.
- Think about what you want to do with your life when you hit 30, 40, 50, 60, 70, 80, 90, 100, and beyond. Plan for each decade. It will change dramatically as the years go by, but it will keep you in tune more in tune with your future self.
Your Future Self Will Want More Than An iPhone.
You don’t have to be a genius to realize that you’re going to need money in the future. You also may not want to work the job you’re in now 20 to 50 years from now. So, what can you do?
- Start investing in passive income streams.
- Find work that you enjoy and would do for free.
- Continue to explore your likes and dislikes. Your passions may change over time, but an entrepreneur never stops exploring new opportunities that interest them.
- Invest in your future through saving and investing. What amount do you think you’ll need to live on in the future? Whether you’re working or not working, it’s a legendary feeling knowing you don’t have to work. Many people in their 50s and beyond are working jobs they aren’t interested in because they didn’t take the time to build up other streams of income nor invest in their financial futures.
This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions.