One reason we delay investing

Two seconds before reading this article, you were probably scrolling your phone.

And in the course of scrolling endless feeds, you likely come across plenty of financial advice.

“Earn $500 in an hour with this high-interest savings account”

“Invest now to earn $100k with compounding”

Your eyes gloss over and you move on.

You don’t have the energy to focus on this right now.

And anyway, you’ve got more important things to spend your time on.

A story of two software engineers

Decisions about money can take years to play out.

Bob and Alice have just graduated from college and they’ve both landed well paying jobs at GoogBook.

Their futures have so much potential.

But there’s one big difference. 

Bob lives entirely for the moment, while Alice thinks about her future.

Bob’s friends go out a lot, so he rents an expensive apartment downtown.

Alice wants to save money to give herself more options in the future, so she decides to rent a house with a friend.

Bob leases a brand new luxury SUV to enjoy his daily commute in style.

While Alice commutes to campus by bus, and bikes when the weather’s nice.

Bob’s stuck with a $250 payment for a parking space in his downtown apartment, something he hadn’t considered. He feels uncomfortable, but tells himself he’ll save more money later.

Alice meanwhile rents out her parking spot, earning $100 a month.

Bob grinds away into the night to secure a bigger bonus, fueled by expensive food delivery services.

Alice tries to avoid overtime. She’s not sure it’s worth the return on investment.

Bob still saves some money, but he keeps it all in cash in case something comes up that he wants to buy.

Alice maxes out her 401k after learning of the free money she’ll get from her employer.

So when Bob decides to move to the suburbs 5 years later, the downpayment on a house wipes out most of his cash savings.

Alice continues renting. She’s likes the options it provides. Her savings keep compounding.

Fast forward another couple of years. 

Bob’s excited about working for a new innovative start-up, but they don’t pay enough to cover his expenses so he’s staying put for now.

Alice is excited for the role and switches to the start-up. Her lower expenses and healthy savings pot give her confidence to take a lower paying role.

Bob and Alice are now in their late 30’s. 

Bob’s children have started private school. He’s struggling to manage his obligation. He feels chained to his desk. He doesn’t allow himself to dream of retirement in his 60’s..

Meanwhile, Alice drops to a four-day work week to be more present with her kids. She’s comfortable dropping to 80% pay with her investment returns. She likes taking her kids to the zoo on Fridays.

“I am not a product of my circumstances. I am a product of my decisions.”

Stephen Covey, The 7 Habits of Highly Effective People.

Alice agrees enthusiastically with this statement. Bob looks at it with unease.

Our investing decisions

And snap back to reality.

We don’t prioritize investing our money for the future.

This might be because we lack the necessary financial literacy and we’re afraid of making the wrong decision.

We feel better making no decision at all than making the wrong decision.

But if we stop to visualize our future, we see our future self.

We can picture the life they live. How our decisions today, or our lack of decisions, shape it. We feel a sense of responsibility to our future self.

Our decisions can lead to a life of abundance, or a life of constraints.

We don’t need to be an investing expert to invest sensibly. But we do need to be willing to put in the time and effort.

And the good news is, it doesn’t have to be dull and stressful. Building the future you want can be one of the most fun and empowering things you can do for yourself! The decisions I’ve made for my personal finances have provided me with great security, and healthy relationship with money, and a comfortable life where I’ve had control over my future, the ability to walk away from an unfulfilling job as a Senior Product Manager at Microsoft and look after myself.

I’m excited to teach you what I’ve learned, and how I think about money. Let’s do it 🙂

If you’re interested, here’s where we are on the journey.

  1. One reason we delay investing ✅ [this post]
  2. Buying index funds isn’t enough
  3. Emergency fund – protect your investments
  4. Short-term savings – plan responsibly
  5. Calculate your savings rate – calculate your FIRE number
  6. Personal finance flowchart – learn how to invest effectively

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