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    Wednesday, 14 February 2018

    HOW TO BECOME FINANCIALLY INDEPENDENT 8: TIME PERSPECTIVE

    One of the greatest resources available to humanity is time, and one major thing that distinguishes success stories from failures is what they do with their time. The successful person spends time with greater economy than he would spend money because he realizes that although time is free it is still one of the most perishable commodities available on earth.  Once it’s lost there’s no getting it back.

    The Law of Time Perspective says: The most successful people in any society are those who take the longest time period into consideration when making their day-to-day decisions.  This insight comes from the pioneering work on upward financial mobility in America conducted by Dr. Edward Banfield of Harvard University in the late 1950s and early 1960s. After studying many of the factors that were thought to contribute to individual financial success over the course of a person's lifetime, he concluded that there was one primary factor that took precedence over all the others. He called it "time perspective."

    What Banfield found was that the higher a person rises in any society, the longer the time perspective or time horizon of that person. People at the highest social and economic levels make decisions and sacrifices that may not pay off for many years, sometimes not even in their own lifetimes. They plant trees under which they will never sit.

    People with long time perspectives are willing to pay the price of success for a long, long time before they achieve it. They think about the consequences of their choices and decisions in terms of what they might mean in five, 10, 15 and even 20 years from now.

    Money has a time value. The time value of money is the interest. This is the reason why our friends the bankers are happy to pay you something just for you to leave your money with them for a given time period. It might be peanuts, or way below what you desire or what your appetite would want, but it’s something. If you have a bigger appetite then simply sit with a bank manager and negotiate your interest. Let’s see who will push the other. So, the law of time perspective advises you to plan for the long-term for your money. I’m talking about investment here. Of course there are sometimes short and medium term investment plans and goals, but this thing called money tends to reward you more if you think long-term.

    As you begin thinking longer term and organizing your life and priorities with your future goals and ambitions in mind, the quality of your decisions improves and your life starts to become better almost immediately. Delayed gratification is the key to financial success. Your ability to practice self-mastery, self-control and self-denial, to sacrifice in the short term so you can enjoy greater rewards in the long term, is the starting point of developing a long time perspective. This attitude is essential to financial achievement of any kind.


    Sacrifice in the short term is the price you pay for security in the long term. The key word here is "sacrifice." When you resist the temptation to do things that are fun and easy and instead discipline yourself to do the things that are hard and necessary, you develop in yourself the kind of character that virtually guarantees you a better life in the future. You are putting yourself on the side of the angels. You are virtually guaranteeing your future when you develop long time perspective. 

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