Everything You Need To Know
- Examples of waiting until.
- We’ll wait until ‘things settle down’ before we invest or reinvest.
- I’ll wait until I get a promotion before starting to invest/taking out life insurance.
- I’ll wait until I turn 40 before getting serious about saving for retirement.
- I’m far too young yet, so I’ll wait until I’m “older” before I set up a Will/Power of Attorney.
- I know I’ve just received a pay rise, but I want to enjoy the extra for a while, so I’ll wait for a couple of months before I increase my monthly savings/pension/Investment standing orders.
- I’ll wait until that fund which stands me in at a loss reaches the purchase price ie I’ll hold on until it recovers fully,, before I make a switch to that “better” fund I’ve been considering.
- Reasons for waiting until. One of our many cognitive biases as humans is present bias – valuing immediate rewards more than future benefits. Often we just don’t want to face up to financial reality, so we prefer a head-in-the-sand approach.
- Don’t worry – you’re normal! We stay in a kind of limbo, waiting for conditions to be perfect before we take action. So if we wait for things to be perfect, we lose time and opportunity. Whereas if we just get going, we’ll likely make our own opportunities.
Everything You Need To Do
- Set specific measurable goals. Make the goal specific enough, so it isn’t vague, and measurable so that you can determine success or otherwise. Example: Save £1000 in six months.
- Break things down into smaller chunks. So if your goal is to save £1,000 in six months, decide where the first £100 is coming from and make that happen.
- Automate to win. Easiest example is to pay into a savings or investment plans regularly the day after payday. Automation takes decision making away from you. Or rather, you make it once and thereafter it happens automatically.
- Seek advice. Doesn’t have to be regulated advice. One of the reasons I’m so excited about the rise of the financial coaching profession is that they are uniquely placed to help people with these kinds of difficulties in making decisions.
Waiting to take action until some arbitrary set of factors come to be, will rob you of progress towards your goals and potentially tens or hundreds of thousands of pounds. If you find yourself saying “I’ll just wait until X happens before I take a decision on Y” then maybe you’ll remember this episode and move things forward in some way, rather than continuing to wait.
The post Big Mistakes: Waiting Until… appeared first on Meaningful Money – Making sense of Money with Pete Matthew | Financial FAQ.
* This article was originally published here
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