How To Improve The Picture Of Your Financial Future

Back To The "Financial" Future Have you watched any of the "Back to the Future" movies? If so, you will recall that the two main characters in the movie (Doc and Marty) are continually traveling back and forth from the present to the past and then back to the future. You will also recall that during their travels back in time they often carried pictures from the present. And when Doc or Marty accidentally took an action or inaction that changed the course of their future, people and objects portrayed in the pictures from the present would change, fade or even disappear from the pictures all together. After seeing this, it occurred to me that this is a perfect analogy for how our financial lives work. What Is Happening To The Picture Of Your Financial Future? If you are among the minority of people who know and understand the Time Value of Money (TVM) Principles, you will know that every single action or inaction you take in the present initiates a chain reaction of future financial consequences. Wouldn't it be great if you could somehow obtain a picture of your life from the future? If you could, you would be able to watch what happens to the people and objects portrayed in the picture with every action or inaction you take. Eventually you would learn which actions and inactions cause the picture to change for the better, and which ones cause the picture change for the worse. Unfortunately, most of the people I know are blindly taking present actions and inactions that are creating more negative future consequences than positive future consequences, which in turn is causing the pictures of their financial futures to change for the worse. Why Are So Many People Sabotaging Their Pictures? So why would all of these otherwise intelligent people be taking actions and inactions that are causing the pictures of their financial futures to turn from what might have been pictures of tropical paradises, into pictures that look more like prison camps? I believe it's because they were never taught how to accurately forecast the financial consequences of their actions and inactions. For whatever reason our public education system has chosen to totally ignore the teaching of personal finance. They teach us how to dissect a frog, but leave us to discover personal finance through a painful process of trial and mostly error. Had personal finance been given the same emphasis as reading, writing, and arithmetic, most of us would now be taking actions that would be causing the picture quality of our financial futures to improve. Who Are You Relying On For Financial Advice? If you are like most people, you are probably relying "experts" to advise you as to which financial actions are the best to take. And what do most of these "experts" have in common? They have a vested interest in the outcome of your decisions. In other words, they are dispensing advise that is biased toward taking actions that will serve to upgrade and expand their own future financial picture, not yours. Who are these "experts" I speak of? Sellers, i.e., anyone who is trying to sell you something. Think about it. Nearly everyone who is trying to "help" you is really just trying to sell you something. And what do sellers use to sell you on buying their product or service? They all use expertly designed sales presentations -- some of which go so far as to include professional actors that are paid to expertly pretend they are actually experiencing the benefits of what is being sold. ALL Sales Presentations Are Misleading What do all sales presentations have in common? They all accentuate and exaggerate the positive consequences of what is being sold, while downplaying and ignoring the negative consequences (unless the government steps in and forces them to disclose the negative consequences in unreadable fine print), otherwise referred to as "opportunity costs." So am I saying that sellers are evil? Of course, not. It's not their fault we have been left ill-equipped to calculate and weigh the opportunity costs of buying what they are selling. All I'm saying is that this helps to explain why so many people are taking financial actions that serve the best interests of the sellers instead of their own ... because they are making decisions based solely on exaggerated benefits, with little or no regard for the negative consequences they are likely not even aware of. Comparatively speaking, basing your decisions solely on exaggerated benefits while ignoring the drawbacks will have the same effect on your future financial well-being as not checking traffic in both directions can have on your future physical well-being. Eventually you're going to get blindsided by the negative consequences you didn't see coming. How to Stop Relying On Self-Serving Experts If you want to stop relying on self-serving experts for advise, for the purpose of improving on your financial future instead of their financial futures, then there's only one answer. You need to strap your workboots on and take the necessary steps to become your own financial expert! It won't be easy, but it is doable. Here are the three things you must work on in order to become your own financial expert. 1. Stop blindly taking advice from expert sellers who stand to gain from your decisions. 2. Arm yourself with the personal financial knowledge and tools needed to accurately forecast the net-consequences of your actions and inactions. 3. Become fully and continually aware of the fact that everything you do or don't do today will have an immediate impact on the picture of your financial future.