029: Methods for Money in Maturity
Listen Here and Now for How to Have Money in Maturity
In this episode we share three ways to help yourself get motivated to save for your future self. Will you have enough money in maturity?
Quotable of the Week
“Retirement is not in my vocabulary. They aren’t going to get rid of me that way.” -Betty White
It’s no secret that we’re living longer and spending more years in “retirement.” As entrepreneurs, “retirement” can mean a lot of different things. Some entrepreneurs still plan to make passive income from their business while someone else manages the day-to-day. Other entrepreneurs plan to sell their business and use the proceeds to fund their retirement. Many entrepreneurs, especially younger ones, haven’t even thought that far in advance.
Highlights from the Money in Maturity Episode
One thing is for certain, as an entrepreneur, you have to figure out your plan for when you’re 65 or 70 for yourself. You don’t have an employer matching a contribution to a 401k.
Before you even start figuring out which financial vehicle to use, you have to find the motivation to save money aside for your future self rather than use it to meet today’s needs and wants. I did some digging into some psychological research about how we view our future selves.
First of all, we tend to view our future selves more like totally different people that like ourselves. The future self is an “other” and it’s hard to put the needs of the “other” above the needs of the self. (this psychology research info has even infiltrated the Simpsons…
I went on from there to find some useful research in how to counterbalance seeing the future self as “other” and how we can get a better handle on our motivation to take our future selves seriously and start saving for that time. Here is a link to the original research.
Do you imagine yourself at 65 or 70 being the same or different from who you are today? If you think you likes, beliefs, values, ideals, etc. will be the same as they are now, you’re more likely to put future needs as a priority and do things like save more for retirement.
Vivid visualization of yourself and your situation at age 65 or 70 can help you feel more connected and empathetic toward your future self. Spend some time daydreaming or journalling what you want life to look like then and how you’ll think and feel about it when you get there.
There was some cool research done here where they showed college students images of themselves in a mirror via Virtual Reality. Then they were given a hypothetical monetary allocation task. The ones who saw themselves in a mirror with age-progression at 68 allocated more toward retirement savings than those who saw their current age in the VR mirror. Pretty cool, right?
Do you see aging as a positive phenomenon? If so, according to research, you’re likely to have better physical health – especially cardiovascular health – than those who see aging as a negative process. Positivity about the aging process could also impact your saving for when you’re older. If you see your future self as still having energy for the things you enjoy most, you’re more likely to save money for that future self than if you imagine your future self as decrepid and unable to be active.
An exercise they used in research that you could replicate would be this: Take a photo of any elderly person. Write a short narrative of what his or her day is like.
Similarity, vividness, and positivity. Those are 3 ways you can prepare emotionally and mentally for “retirement” whatever that means to you.
Time to take action
But how do you prepare financially? That’s the key question after you’ve prepped your head and your heart to take your future self seriously.
If you’re currently living within your means and interested in learning about a strategy that is based on a financial asset that has increased in value every year for more than 160 years, we’d love to talk and hear more about your financial goals and concerns.