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The lowdown on a leading wealth hazard
As humans, we have wonderfully good intentions of what we’re going to do in the future. Projects such as eating less, exercising more, completing a will, taking out insurance or investing for retirement are always planned for next week, next month or next year. The problem is when the “now” arrives, it may be too late, cost you a lot more to implement – which means the procrastination cycle begins again.
So what is the reason for this cycle? Generally there’s no instant gratification, people don’t understand what’s involved, it’s perceived as too costly – so we call in a range of excuses that will justify putting these tasks off.
Our customers have told us the main reasons for their initial procrastination for speaking with us included:
“It’s too hard”:
Maybe. Maybe not. You’ll never know unless you do something about it. Remember, millions of others have been able to do it.
Everything appears to be communicated from the institution’s point of view. The language doesn’t sound like it came from a human. Plus there is a lot of legal jargon to wade through. This is common with financial planning.
“There’s no pressure. I can always wait. I can put it off”: Of course you can, unless tomorrow is the day you have a major accident, die or lose your job.
“I can do it myself cheaper”: When it comes to organising your financial affairs, investments, retirement planning or life protection, some people believe they may save costs by undertaking all the research, themself. So they say that one day they’ll compare policies, search the internet for information and contact different organisations directly – on the misguided premises that this will save them money. It won’t. There is no discount for waiting.
No matter what your age – procrastination can cost you. 21 year olds do it, 40 year olds do it, even 55 year olds do it. Here’s how procrastination can cost you – no matter what your age:
A 20 year old starts with $5000.00 invests $100 per week – at age 50 he’d have $1,000,000 [in today’s terms]
If the same 20 year old procrastinated for only 1 year, the same equation would see him miss out on over $100,000! Ouch.
Asumptions is there will be a 10% return every year. These are the projected savings over 30 years.
If you are sitting on a financial decision today, there is likely to be a real cost for putting it off.
TODAY IS THE DAY TO MAKE DECISIONS: [yes, we’re shouting!]
1) Insurance: The older you are, the greater the cost of annual premiums. The older you are, the greater the chance of getting an illness that might make you uninsurable.
2) Setting up a will: This process is left “on hold” for a number of reasons. Some can’t decide on who gets what. If you die without a will, others will determine how your assets are split, when children will have access to funds, and will not allow for any tax-efficient planning.
3) Retirement planning: Retirement usually doesn’t start until you’re in your 60’s but here’s a good reason to start saving sooner. The earlier you contribute to your nest egg, the more time your portfolio will have to grow in value. The more money you’ll have to enjoy when you retire.
Q: How can we overcome procrastination? A: Commit to a deadline.
Set yourself a goal and drag someone else into your plan. Get them to help keep you focused, on track and eliminate procrastination. It may be a matter of telling your spouse to clear a night so you can discuss your needs and requirements and research suitable organisations that can help. Set deadlines for contact, interviews and to review their information. Ensure you both keep track of your plan and soon, you’ll be able to cross financial planning/insurance/writing a will/organising your superannuation and establishing an effective retirement savings plan off your list.
Procrastination is hazardous to your wealth. A check up with us can reduce the effects of your daily procrastination habit. Its easy- click here!
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