If you start 5 years later it will only be $273,000.
$83,000 less - pretty costly – that’s 3 trips to Europe, or about 5 to 10 years of nice topping- up-your- national- super in retirement .
But gone, never to be had, unless you get started, so;
- any saving is good saving
- when you start saving, you are building up some cash reserves in case you run into an emergency such as illness , redundancy , credit crunch and so on
- the sooner you start saving, the sooner you get peace of mind which comes from watching your savings grow, a nice feeling of growing financial security, and that you are getting somewhere
However we know that tens of thousands of Kiwis aged anywhere from 20 to 65 have not paid attention to, or started, a savings and retirement savings plan or program (over and above Kiwisaver, as that alone won’t be enough for most people).
Why are kiwis procrastinating ?
Throughout history there has been much discussion on this topic – the negative and positive consequences. In today’s chaotic and challenging environment it is almost impossible not to procrastinate, as we have so many things on our plate, and too little time to deal with them.
There are three versions of procrastination - what you actually do - instead of getting on with the tasks you need to do;
2/ something less important
3/ something more important
The third option is arguably good procrastination. Everyone procrastinates to some degree, but the difference between high performers and low performers is largely determined by what they choose to procrastinate on. In this article we acknowledge Paul Graham who has written extensively on the subject . He argues that - number 2 – to do something less important is the most dangerous among the three types.
Number three is of course something more important which can also be interpreted by some people as a big problem and maybe offers no immediate reward. More than that, sometimes the big problem / something more important can be a huge worry, physically painful, or even terrifying.
A suggested solution is not to look at a big problem directly in the eye, rather approach it from an angle so that some of the issues radiating from it are quite attractive (day dream instead of the 3 trips to Europe) so it does not paralyse you.
Sometimes if you work on small things that can grow into big things (saving fits this one perfectly) , you will succeed - very often this is the way that we do our very best work in life. e.g. they got rich overnight, after 25 years of diligent savings.
The better off have small TVs and big libraries, and less-well-off have big TVs and small libraries - Zig Ziglar, renowned speaker & author
The better off get ahead by spending a little more time reading and thinking, and a little less time watching TV – Alan Clarke, with apologies to Zig.
Procrastination has everything to do with retirement savings, since It is pretty well known that Kiwis are not good at getting started;
- it may be because investments are scary, or it may be fear of losing money
- it may be that No 2 dominates, when No 3 matters
- it may be that they don’t know that compound interest + time is really “good business “
Procrastination is too costly when it comes to retirement savings and planning !
Don’t pay the penalty – get started
- Find an experienced and qualified adviser who is independent
- Give him/her the full picture of who you are and what you want
- Let him/her design a plan for you that meets your requirements
- Take a couple of weeks digesting it, using a common sense approach, rocket science not needed
- The long term outcome and gains might be quite dramatic
- The cost of procrastination is usually far too painful
- Fail to plan – plan to fail.