As we start to emerge from the COVID-19 pandemic, and life shifts back toward “normal” for many, I have a lot of folks telling me they’re struggling with thinking about long-term planning.
And that makes sense, since we’ve seen how quickly our long-term plans and goals can be turned upside down, and we’ve spent the past year or so dealing with a lot of short-term changes.
So how do we bring the long run into focus without getting derailed by the short run?
One way is by thinking of the long term as a series of short-term challenges, rather than one uninterrupted straight line.
Here are three simple strategies that can help you train your mind:
- Create a “future-you” mindset. Who is future you? What do they want? How can you help them get there? Embracing your future self as someone who needs you will help you create a better future with smart choices now.
Sound a little touchy-feely? It’s actually based on the concept of “future-orientation,” or embracing the idea that not only is the future unwritten, but that you can write it — especially for yourself.
And this idea can have real benefits. Studies have shown that future-orientation is a strong predictor for achievement, health, and happiness in life.
- Prioritize flexibility over certainty. As humans, we’re wired to look for certainty. It feels good to think we have everything figured out. Our instincts tell us to act quickly in the short-term to avoid the discomfort we feel with uncertainty.
But in a complex world with complex problems, acting quickly isn’t always the best move. We often get better results in the long term by keeping a flexible mindset and experimenting with different solutions.
- Recognize how emotions affect our decision-making. We’ve all had times when we’ve acted in the heat of the moment. Something makes us unusually happy or upset in the short-term, and we make a snap decision that has long-term consequences.4
One way this plays out in investing is loss aversion, a cognitive bias that causes us to focus so hard on avoiding losses that we often miss out on the big picture, long-term benefits of a strategy.
The reason you pay a professional to look after your financial life is so you can share your worries and have someone help you take action — both in the short term and the long term.
If you have a question about what I’ve discussed with you or you’d like to speak personally about what’s going on, please don’t hesitate to send me a message. I’ll respond personally.
1https://www.entrepreneur.com/article/254921
2https://www.nhh.no/en/nhh-bulletin/article-archive/2017/august/future-oriented-thinking/
3https://hbr.org/2011/07/why-being-certain-means-being
4https://hbr.org/2010/01/column-the-long-term-effects-of-short-term-emotions
5https://www.behavioraleconomics.com/resources/mini-encyclopedia-of-be/myopic-loss-aversion/