I'll Do It Tomorrow
Why do it today when you can do it tomorrow? Have you ever delayed starting a diet? An exercise program? Yardwork? House cleaning? The list goes on and on; we have all procrastinated about something. As Wimpy says, "I'll gladly pay you Tuesday for a hamburger today."
According to Merriam-Webster, procrastination means to put off intentionally and habitually, putting off something that should be done. The keyword in the definition is intentional because we decide not to act. It's deliberate. For example, I should have mowed the lawn on Saturday, but I put it off until Sunday. I procrastinated.
Procrastinating on certain things is not life-altering. Delaying my lawn mowing by one day will not impact anything in my life. Waiting to wash my car is no big deal. However, habitually delaying dieting, exercising, or investing can have negative consequences.
The best time to start investing was yesterday; the second-best time is today. Starting your investment program is essential if you want to create wealth, regardless of your current situation. If you're waiting for perfect timing, you'll never start.
The Fidelity 500 Index fund (FXAIX) is one of the largest mutual funds in the world, with $343 billion in assets. It is a perennial performer, and since 1990 it's generated an average annual return of 10.4%. A $10,000 investment is now worth $231,000, but if you delayed your purchase until 2000, ten years later, your $10,000 only grew to $44,500, a difference of $186,500.
Becoming a millionaire is still a goal for many - a 25-year old only needs to save $380 per month to reach the milestone by age 65, but a 35-year old must save $819 monthly. If you wait until your 55, you need to save $5,777 per month or more than fifteen times the amount of a 25-year old.
How can you create wealth and avoid procrastination? Let's explore a few ideas.
- If you have access to a 401(k) or 403(b), sign up today. Your investment will automatically deduct from your paycheck, making it easy for you to save and invest. Every pay period, you'll contribute to your retirement account. How much should you invest? At a minimum, match the match. For example, if your company offers a 5% match, you should contribute the same percentage, so your total investment amount is 10% of your pay.
- If you struggle with saving money, open a savings account and set up a monthly draft from your checking account. The automatic savings program will grow over time while allowing you access to your money if you need it.
- Open an IRA. You can automate your IRA investment program as well. The maximum contribution for individuals under 50 is $6,000, and those 50 or older can add another $1,000.
- Invest for growth by opening a brokerage account and dollar cost average into a mutual fund. Investing monthly into a mutual fund or two will grow over time. Investing in a taxable account allows you to access the money at any time, for any reason.
- Set financial goals, write them down, commit them to paper, and review them often. Do you want to retire early? Buy a second home? Travel the world? Your written goals will motivate you to keep moving.
- Work with a Certified Financial Planner™. A financial planner can serve as your accountability partner, gently pushing you towards your goals, like a coach. Sharing your goals with others is another motivating factor.
- Reward yourself. When you achieve a goal, celebrate – enjoy the fruits of your labor. Rewarding yourself for doing well will give you the courage to keep moving forward.
In 2009, I decided to run the Boston Marathon; however, to run the race, I needed to qualify, meaning I had to run another marathon or two before Boston. I committed my goals to paper and set a timeline for my journey. Once I identified my qualifying races (Austin and Los Angeles), I started running. I didn't wait. And, to be clear, when I started running, I was not in marathon race shape, so I set daily, weekly, and monthly goals to improve my performance. I ran the Austin marathon in 2010 and qualified for Boston with a time of 3:25. A month later, I ran the Los Angeles marathon for backup. In 2011, I finished the Boston Marathon with a time of 3:22. If I delayed my training or waited until I was in better shape before running, I never would have run the Boston Marathon.
Don't delay; start today! I know you can do it!
"The miracle isn't that I finished. The miracle is that I had the courage to start." –
July 13, 2021
Bill Parrott, CFP®, is the President and CEO of Parrott Wealth Management in Austin, Texas. Parrott Wealth Management is a fee-only, fiduciary, registered investment advisor firm. Our goal is to remove complexity, confusion, and worry from the investment and financial planning process so our clients can pursue a life of purpose. Our firm does not have an asset or fee minimum, and we work with anybody who needs financial help regardless of age, income, or asset level. PWM's custodian is TD Ameritrade, and our annual fee starts at .5% of your assets and drops depending on the level of your assets.
Note: Investments are not guaranteed and do involve risk. Your returns may differ from those posted in this blog. PWM is not a tax advisor, nor do we give tax advice. Please consult your tax advisor for items that are specific to your situation. Options involve risk and aren't suitable for every investor.