Investing is seen as a process of “delayed gratification.” Invest now, get some future benefit. But it can also be a process of “current gratification.” Or close to it, anyway.
Overall
Most exhortations by companies in the financial industry advertise something like the following: “if you invest X dollars a month now, and if things increase Y percentage, then after Z years you will have a lot more.” And there are always a lot of asterisks and footnotes about past performance not being a guarantee of future results. Which comes down to risk.
Of course investing involves risk. Getting out of bed in the morning is a risk. Staying in bed all day is even a greater risk. We feel we must do something. Many commentators remind us that money in savings accounts will lose value because of inflation. So while money in a bank is usually at a very low risk, there is always something to concern ourselves with.
Risk
So while risk is everywhere, it is up to each of us to evaluate the amount of risk we individually accept. Bonds, stocks, gold, real estate, currencies, crypto-currencies are all at varying degrees of risk.
Gratification
Let’s look at gratification. Why do we need gratification? We need gratification to motivate ourselves to do something. If something is not to our benefit, we are reluctant, or otherwise refuse, to consider it. Of course we do many things to avoid the pain refusal might bring (for example, paying taxes). Gratification from avoiding a negative experience does count for something.
With that in mind, let’s look at the distance between delayed and current. Sometimes we do things that will offer no benefit to us immediately, but we do it for a long term benefit. (“Society grows great when old men plant trees whose shade they know they shall never sit in,” according to an anonymous Greek proverb.) Or we do things to benefit our offsprings, or our imagined future generations. So investing can be seen as a payment now for potential future benefit.
Planning for the future is a trait stronger in some cultures than others. We often denigrate the needs of the future in order to reap today’s perks. We have seen so many times where infrastructure and related maintenance is pared back to fund today’s excesses.
Plant Your Future Today
It is possible to begin building a better future. It can be done slowly and without much pain. As mentioned, it is the first step that is hardest. But once begun, it gets easier. That I can tell you for sure.
Which Way
There are many ways. Pick what is right for you. If you don’t know what is your best way, pick one and get going.
One way
My way is buying stock in large dividend-paying companies, letting the dividends reinvest. Over time, my income from these dividends, and my net worth all grow. Almost automatically. I say ‘almost’ because periodically I increase my holdings by buying more shares. More shares means more income which means I am buying more shares with these dividends. And therefore my income and holding increase even more.
Now and Later
So my gratification in the present occurs every quarter when I see my dividends buying more shares. My gratification occurs every moment as I know my income builds into the future. I may someday stop reinvestment and use the dividends. Or maybe I will continue dividend reinvestment. Regardless, my financial future is stronger for it.
What is your way? Let me know here.
The title page from “A New General Atlas, containing a Geographical and Historical Account of all the Empires, Kingdoms and other Dominions of the World … The maps … are all engraven or revised by Mr. Senex, etc.” is shown. Published in 1721 in London for King George III of Britain (1738-1820). Courtesy British Library.
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