Tricks To Planning A Secure Financial Future
10/18/2012 (Updated 10/19/2012 2:30:31 AM)Planning a secure financial future doesn't come naturally to most people.
But what if you could trick your brain into doing it? Greg Lesko has some ideas about how to do that.
If you got a $5000 windfall, would you be more likely to spend it on a trip to the Bahamas or an investment for the future? Most people choose the vacation. But some studies show that we can "trick" ourselves into investing more for our financial futures just by re-framing our thinking.
One neat trick is a calculator that shows you how much money can grow over time, through the power of compounding. These calculators are online, and they can be dramatic.
For example: a 30-year old saving $10,000 a year at 6% annually will have $1.2 million at age 65.
A 45-year old doing the same thing ends up with only $390,000.
Waiting 15 years to start cost him $800,000. Feel like saving now?
Or how about time travel? Through "aging software" a group of people were shown what they'd look like at age 65, gray or thinning hair, wrinkles, all those little tricks time plays on us.
That scared them into taking steps to save more for retirement. You might get serious if you could actually visualize it. Can you really end up with a more secure future just by tricking yourself?
These "mind games" are just one more way to re-frame your thinking and bring future financial realities into sharper focus.
If you can actually envision the benefits from investing, or what you lose by procrastinating, you're more likely to give up instant gratification and choose the long term view.
View Related Articles:
NYS or comment on this one below.