How to Create the Future You Desire

As investors we are trying to make bets on a mysterious future. We make educated guesses on what will happen, based on what has happened, mixed with what is happening. Some strategies lean more toward reacting to what is currently happening and others toward predicting what will happen. We are paid in dollar units of stress regardless of the process. The more stress we are willing to take on, the more dollars we are likely to earn. 

When we think about the future in relation to our investments, there is the side of us that is trying to angle for profit in the near term from guessing market action correctly. The other, more productive future focus, is on the anticipated long-term consequences of current actions. It is making choices now in an attempt to create a future that one desires, emphasizing long term success over short term gains or excitement. Planning and delaying gratification are two pillars of this concept. 

This is so much less fun than watching YouTube videos trying to figure out what the hell blockchain is and how it will impact markets in the future. 

Fortunately, we all have some innate degree of future orientation. When we save for a specific vacation, put money into a 401(k), or skip dessert, we are acting out future orientation. It is our greatest weapon against reckless decision making — for our career, our relationships, and our financial wellbeing. Thinking about potential long-term impact is hard because the future is obviously unknowable, but just the act of trying will build the muscles to fight the impulsiveness that often masquerades as market savvy. 

We can think of each of us as having a past, current and future version of ourselves. Our personal history is a continuum that we learn from, act on, and can attempt to sculpt going forward. Our past self probably made a lot of mistakes that our current self regrets. Our current self has the opportunity to give gifts to our future self. Holding off on buying a new car, letting one’s iPhone croak before buying the year-old model, and investing rather than speculating. Building the blocks of retirement with thick defensive walls and a solid foundation instead of trying to become an overnight NFT expert. 

My wife and I lived in a 384 square foot, 4th floor walkup apartment in New York City for seven years together. This was an intentional choice to save money to buy an apartment (with an elevator) and fund our retirement. Not everyone has to live like a squirrel, but my wife and I both consciously try to be future oriented, sometimes to the extreme.

If you can master this — if you can change your focus to care about your future self more than the desire to indulge current impulses — then the majority of other financial biases that plague us will fall into place. Getting derailed by current events, trusting your intuition on a great bet, paralyzing fear of losing your money, or extrapolating too much from one piece of information can all be defused. The reason this works is because the logical mind has a framework to override emotional impulses. It allows us to veer away from reaction and towards personal, rational choice. This is not to say that I won’t buy that next guitar that I don’t need, or that you won’t buy some Angry Apes, but at least the muscles you are building will hold back some of those choices. 

If you really find the thrill of trading exhilarating and know that you will not be able to leave your investments alone, by all means set up a play bucket. I have one and I allow myself to buy small amounts of stock I find promising. My general rule is I don’t spend more on a stock than I earn in a day. I also only buy when I have strong conviction. The problem is, like most people in this situation, I never have an exit strategy. This is why it is important that you treat this like a bonus outside of your long-term strategy. Share what you are doing with your financial advisor so they know what you are thinking and perhaps they can suggest credible sources of research for you. 

To help consider your future self, visualize your specific financial priorities. Maybe it is nonstop travel in retirement, leaving behind a legacy, or simply setting a last day of work. Top performing athletes, musicians, and executives have used visualization of process and goals to achieve high levels of success. Create a ranked list of what you want the investments to do for yourself. Impulses lose thrust when there are clear directions of what steps need to be taken on the map (your financial plan) of how to reach the destinations. 

Once you have internalized your plan, write out the specific behaviors needed to execute. Always go back to top priorities – the why you are sacrificing in the first place – to supersede the present self’s desire in favor of future self’s needs. If you focus on the why, it will be easier to buy into the plan and the steps needed to reach the goal.