In the classic book, Economics in One Lesson, Henry Hazlitt argues a lucid point. In the absence of strong voices bold enough to contradict bad theory, bad theory eventually argues against itself. Hazlitt points out how economic fallacies are self-expiring. And how the potentially clarifying nuances of the original idea, over time, fall off as the sexier erroneous pieces of the idea grow in popularity. In wealth management one such fallacy fits squarely into Hazlitt’s description; it’s simply called the future.
When you think about it, money management is largely built around one thing, planning for tomorrow. Many clients have rightly given up on the past, but then stretch over the now and reach towards the future. But today is powerful because today can change now. I advise wealthy clients to enjoy life now. Not just plan for future enjoyment. The problem with future enjoyment is it assumes you’ll be physically fit to enjoy, that your money will be around to allow you to enjoy it in peace, and that what ever you’re waiting on will still exit when you’re ready for it. But doesn’t this sound like short-term gratification? Doesn’t everybody know that approach is an unwise concept to live by? My question is, says who?
Of course we look decades out and make prudent plans, but not at the exception of enjoying what life has to offer today, right here, right now. A little known diamond of proper wealth management is not only managing your money such that it stays around, but enjoying it while you’re around.