What’s Your Long Con?

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Instant gratification, an emotion or state of being that has come to define the modern (or post-modern for you philosophers and literature students out there) era. We want everything and we want it now, or so the criticism goes.

It’s hard to admit, but there’s truth in these words. DVR, wireless internet, smart phones and all that goes with it are driving our desire for immediate results. It is an attitude that has not only permeated our culture, but every other facet of our lives from government planning to investment strategy.

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Long-Term Planning
Years ago, while working on the campaign trail for a nuclear engineer running for Congress, he floated a pretty wild idea to me. He said he had a 100-year plan for America. 100 years?  At first it sounded absurd. How could you plan so far ahead when you wouldn’t even be alive for nearly three quarters of that time?

However, as he explained it to me it began to click, short-sighted solutions create unintended long-term consequences and when we make decisions we cannot only consider the hear and now, but must incorporate what may happen in the future whether we will be dead or not. It’s macabre to be sure, but if you give it some thought, this type of planning is more generous than it is fatalist.

One of Quizzle’s favorite financial advisers tackles this concept in relation to the precipitous drop in the average holding period for stock portfolios. In 1960, according to the Strategas study he cites, the average time a stockholder held on to his/her shares was more than eight years, now its nearly down to one. You can read Wes Moss’s Six Important Rules for Investing here.

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A Critical Lesson
While your family budget might not require a century’s long financial outlook, planning 25, 30 or even 40 years out for your life and loved ones isn’t such a bad idea. When it comes to personal finance the balance between the instant gratification of short-term goals and the security of long-term planning could be the difference between a comfortable or miserable retirement, owning or not owning a home, and leaving your family with a nest egg or fried debt omelette.