As we look forward to the remainder of the year, it can be a valuable time to reassess our goals. What did we seek out to do at the start of the year and how is our progress? It is likely that the goals we set out at the beginning of the year were relatively short term in focus. How many of us are assessing our long term goals on a regular basis? A few, I suspect, but likely not many.
One reason that short term goals are easier to set our sights on is the concept of Temporal Myopia*. The definition of Temporal Myopia is the inability to consider the long term outcomes of an action when making a choice. It reduces the importance of the future in our decision making. Put into the context of goal setting and planning, when making these decisions we are likely to place a higher value on those goals with short term outcomes. The further into the future a goal is, the lower the value we tend to place on it. We often will favor a smaller payoff today rather than a larger payoff later.
This concept of temporal myopia ties into a more common concept of delayed gratification. In our fast paced society and often being confronted with the “keeping up with the Jones’” mentality, delaying gratification can be challenging.
Let’s take a simple example of being faced with a choice of buying the flashy new car or funding a permanent life insurance policy.
Option A - The New Car: Satisfies a short term outcome of getting your hands on the new wheels in the very near future and an immediate desire for gratification.
Option B - The Life Insurance Policy: Little sense of immediate gratification and is likely tied to a longer term vs. short term goal (a permanent life policy may have be established, for example, as a way to fund a long term tax liability or towards creating a charitable legacy at death).
Which action is the easier one to take when faced with this either/or scenario? Option A is fairly clear.
In 10 years, which action would you look back on that helped you achieve a longer term vision? Option B likely wins out this time.
This exercise is not meant to say that buying the new car is always an inferior choice. There is always a time and place for rewarding our success or satisfying a short term need. However, when faced with the tougher decisions of long term planning, consider this question:
Looking back 10 years, what decisions did you make that brought you to some success or goal achievement today? Looking forward 10 years down the road, what decisions should you make today to help achieve your vision for the future?
Funding insurance policies, putting more money back into your business or into investments, or spending money on wills may not be the most glamorous choice today…but chances are in the long run you’ll be pretty happy you did.