You begin to move yourself upward in society the day you begin to take the long view in your own life. The man or woman who consistently saves 10%
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of his or her income, and puts it away towards financial independence, is a person who is virtually guaranteeing a higher quality of life for him or herself, and their children. They have long time perspective.
Plan Your Life for the Long Term
Ask yourself, “What time period do I take into consideration when I set my goals and make important decisions for my life?” Your answer to this question largely shapes your entire future.
How far into the future do you look when you make decisions on how to allocate your time and your resources? There is a rule that says, “Long time perspective improves short term decision making.” The further ahead you look when contemplating a current decision, the better decisions you will make. Your long term success will be determined by the quality of all the decisions you make in the short term. The cumulative result of good decisions is the assurance that your long term goals will materialize exactly as you had planned.
Many years ago, I worked for a wealthy man who started with nothing and built a fortune worth more than $500 million dollars in real estate. He taught me to think always of owning a piece of property for twenty years when I was considering buying it. He said that if you think about owning the property for twenty years, you will be much more alert to the strengths and weaknesses of the investment in the moment.
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Keep Your Eye on the Summit
The long view sharpens the short view. This is one of the most valuable pieces of advice I ever received. In your life, think as if you were on a long hike climbing a mountain. Stop regularly and look up at the summit, your eventual goal, and then adjust your footsteps to assure that every step is still taking you in that direction.
One-way of determining your priorities in the short term is to analyze the future impact of present decisions. An important choice or activity is one that has a potential long-term impact on some part of your life. An action or decision that is unimportant is something that can have little or no effect on your life or future.
For example, reading a book, listening to an audio program or taking a course that teaches you something valuable, giving you additional knowledge or skills that you can use for many months or years, if not for the rest of your life, is an activity with a high potential future impact on your career. On the other hand, watching television, reading the sports page, or taking a coffee break, no matter how well or how often you do it, will have no effect on your future. And you are always free to choose.
Your Choices Determine Your Future
You see examples of this confusion over time perspective all around you. On the same street living in two houses of similar value will be two different families. Each family earns approximately the same amount of money. But 338
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one family has a twenty-year 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 the same amount of money, perhaps even doing the same kind of work, but with no 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 toward your money? What would you do differently in your work and financial life with such a possibility hanging over your head? Well, the truth is that unless you begin to do something different with your money today, that is very likely the way you will end up. Because of limited time perspective, fully 95% of people working today will end up either broke, dependent upon pensions or still working when they reach the age of 65. Don’t let this happen to you.
Develop Your Own Character
The practice of thinking with long time perspective not only requires character, but it also develops character in the person who does it. Character is always the result of practicing self-discipline. Developing the habit of taking the long view in decisions concerning health, wealth, relationships and reputations requires self discipline at a high level.
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Character comes from thinking continually of living with each of your decisions for the long term. Economists and sociologists generally agree that the primary reason for economic failure and underachievement is the inability to delay gratification. This is the tendency to spend everything you make, and a little bit more, with little thought for the future. It is a lack of time perspective with a regard to money. It virtually guarantees that you will have financial problems throughout your life, and end up unable to retire when you reach the age of 65.
Decide today to plan and act for the long term. Practice short term pain for long-term gain. Be willing to pay the price of success in advance, in terms of hard work, sacrifice and delayed gratification. Be prepared to sow before you reap, and often you will have to sow for a long time before you can bring in the harvest. Nowhere is this truer than in financial matters.
If you save and invest 10% of your income from the age of 21 to the age of 65 you will become a millionaire over the course of your working lifetime.
Most self made millionaires save 15% to 20% of their income and learn to live comfortably on the balance. You should resolve to do the same. Think long term. The quality of character that you will develop as a result of the self-discipline you impose on yourself to become financially independent will make you a truly exceptional human being.
Think Short Term as Well as Long Term
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If the first part of developing a philosophy of time management is to take the long view, the second part is to take the short view. Treat your time like your life. Measure out your time in minutes rather than in hours or days.
In a recent article in Fortune magazine, several of the most successful and highest paid executives in America were interviewed about their attitudes and practices toward time. Their average incomes were $1,380,000, and all of them had worked themselves up from entry level positions in business and industry.
It turned out that each one of these highly paid, top performers treated their time as a scarce resource. They saw it as an indispensable ingredient of achievement. They looked upon it as an essential tool of accomplishment.
They allocated their time very carefully.
They were very jealous of their time. They did not spend it, give it away or use it thoughtlessly. While average employees and junior managers thought in terms of days and weeks, they planned out their days in terms of minutes and fractions of hours.
It turns out that the smaller the unit of time in which you think when planning your day, the more successful you are likely to be. Unsuccessful people think in terms of whole days, or mornings and afternoons. Successful people think in terms of ten-minute blocks of time, like lawyers or accountants. They make every minute count.
Time Is Your Most Valuable Resource
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Because time if your scarcest resource, you must use your intelligence to preserve it in every way possible, and to acquire more time whenever you can. Whenever possible, you should trade money for time. The money is replaceable, but the time is not.
This brings us back to David Ricardo’s law of comparative advantage, which was discussed in an earlier chapter. Whenever you can, you should hire people to do tasks of lower value so that you can create more time for yourself, your family and your work.
If you aspire to earn $50,000 per year, which translates into about $25.00
per hour, you must never do work that does not pay $25.00 per hour or more. You should hire other people to do anything that they will do for less than $25.00 per hour. If you can hire someone for $5.00 or $6.00 per hour to mow your lawn or clean your house, you should pay the money willingly to free up your time for higher value activities.
Apply this same principle to your spouse. Many of the successful executives and entrepreneurs who come through our Advanced Coaching and Mentoring Program go home and change their spouse’s lifestyle. They encourage them to hire housekeepers, gardeners and personal assistants to do errands and go shopping. They “buy their freedom” so that they can enjoy a higher quality of life, and spend more time with the family and in personal pursuits. The payoff for both parties is often extraordinary.