What’s time got to with it, anyway?
In the realm of time, living in the moment also means preparing. Preparing means for the future. We don’t wait until we are hungry to plant seeds. We don’t wait until we smell smoke to organize a fire department.
The same should be true for us when we save and invest. I say “should” because it is so easy to avoid thinking about investing for one’s future. But in reality, it is a must.
What If
What if we never save any money? What if we spend every cent we earn, never open a savings account, never open a 401k account or an IRA, never invest… then what? We may think we are having fun because we are using all our money, but sooner or later things will be different. We will eventually probably retire, get Social Security, and find out that we are in dire circumstances. Poverty at that time in no fun. (Never is in any context, but that’s another point.)
It will be at that time, that we will find that our future has passed us by. There may be things we can do, but the upshot is that things by then will become limited. Most of the opportunities we had to provide for ourselves will be gone. The times to prepare for our future was all in the past.
So it is a contradiction that as we live in the present, we must prepare for our future at the same time. Unfortunately, some may interpret this as a need to avoid the present, and focus only on the future (or the past), but that is as counterproductive as living only in the present.
What Are The Ways?
It is simple to describe. The common ways to prepare are to:
[1] Spend Less Than You Earn.
[2] Save funds in an emergency fund.
[3] Invest a portion of one’s savings.
Some Other Points
Contributing to an IRA or in a 401k automatically initiates investments (Step 3). So if we participate in an IRA or 401k, don’t forget Steps 1 and 2; they are also important. (It is my contention that contributing to an IRA or 401k is not enough, but it is a start. Investing outside of IRA and 401k is also beneficial.)
Why Invest?
While savings are important, savings are not enough. It is impossible to save enough to retire. One must also invest.
Are you remembering you have a future? Tell me about it here.
The illustration of tree named “The Great Tortworth Chesnut,” in Gloucestershire, England, is from the 1830 book by Jacob George Strutt, entitled “Sylva Britannica, or Portraits of Forest Trees, Distinguished for their Antiquity, Magnitude, or Beauty.” The tree has been considered the oldest tree now standing in England. By some calculations, it existed back to the beginning of the reign of Egbert, in the year 800. Courtesy University of California Libraries.
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