You’ve heard that the best return on investment comes when you invest over the long term. In fact, there’s a graph that best illustrates that.

The reality is that investing your money in any plan, with the mindset of keeping it there for decades something that’s done for fun. It’s a difficult task. We either end up not doing it or we break the cycle. And frankly, there’s no quick fix for that, it’s human nature.

However, there are some things that others have done to help them navigate such long term goals that are difficult to achieve.

In this article, I’ll be uncovering 3 things you can do to help you navigate your long term investing goals.

Narrowing your focus

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Joan Benoit Samuelson was the first women’s Olympic marathon champion, winning the Gold Medal at the 1984 Summer Olympics in Los Angeles. She ran for 26 miles in 3:02:53. Before that time, women were not allowed to run the marathon. Joan Benoit Samuelson’s landmark victory was the beginning of a changed narrative. Since then and till now, a lot more people have run the miles well under 3 hours.

When asked how she was able to run that long miles in the time she did and with much energy remaining, her answer was instructive. She said something like ”what she does is to use some kind of narrowed focus, she chooses a target ahead of her and pursues that target alone per time. It could be the pink short of somebody running ahead or a visual beacon she can see in a distance. And then she narrows down on those as the target. She reaches that and sets another and another until she reaches the finish line.”

So she takes the 26 miles and breaks it down to smaller nearby competitions. 

The same effect of narrowed focus has been seen to help when pursuing long term financial goals. 10 years is a very long time to keep your money invested but 1 year is not long nor is 6 months. What you can do to help you achieve a 10 years financial goal is to:

  1. Forget about the 10 years
  2. Focus on a shorter time frame eg. 6 months or 1 year.
  3. Set target savings and investment that can be achieved within a year. Then work towards achieving that alone.
  4. When you achieved the 1-year goal, set another 1-year goal. 

Doing this, you will realize that all you have before you is just a 1-year goal repeated 10 times. Oftentimes, this approach has worked for a lot of people and it may work for you if you try it as well. 

A Recommendation: Rise makes implementing this approach very easy for you through an Auto Invest option and the period is created for the Fixed Income and Real Estate plan. You can easily set a target investment for a year in a plan and automate the debit to remove the hurdles of doing it yourself.

Materialize the long term 

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In an experiment conducted by Prof. Emily Balcetis of New York University, she asked her students whether they’ve started saving for retirement or not. 92% of them said, ”They have not thought about retirement.” This was despite the fact that they had jobs and the advantages of starting early far outweigh starting tomorrow when to start investing.

When Prof. Emily Balcetis asked why they weren’t thinking about retirement, their common answer was that ”it was too far off” considering they were just entering the real world (first-year work).

Then she took their photographs and used photo morphing software to try and create what they are likely to look like at old age. Then she printed it and handed it over to them so they could see what they are likely to look like at retirement. Then she gave them time to look at it and to jot down what they would be doing at retirement, what hobbies they will have and who they will be with among other things.

After the activities, she turned to each of them again and asked if they will start saving for retirement immediately from their next paycheck. A vast majority of them replied yes this time around.

What happened to the students in this class is a common phenomenon among humans and that includes you. 30 years from now is very far but when we materialize what we will like to be doing in 30 years and what our condition might look like, in a way the period will seem not too far away anymore.

That’s why this second point comes in as a handy strategy to help you focus on the long term.

It is much easier to save and invest towards your dream home even if it takes 15 years than it is to just save and invest for no clear material benefits for 15 years.

In light of the above, we encourage you to attempt putting a material goal towards all the plans that you are creating.

Instead of naming your plans ”savings” or ”investment”, give it names like ”graduate education”, ”children college education”, ”$20,000 house project” and the likes. That way, you tend to be committed to your plan and be disciplined enough to not interrupt the cycle. We think you should try this.

Your future self is still you

This last point lends itself to groundbreaking research by Hal Hershfield, a psychologist at the UCLA Anderson School of Management. He wanted to know why people weren’t saving for retirement. So he did something uncharacteristic.

Hershfield and his team scanned the brain of the participants in their research and found something interesting.

The same reaction that the brain has when confronted by some unknown person asking you for money is what it has when you are told to save and invest for the future. In other words, the longer the term of investment, the stranger you appear to yourself. So you tend to make decisions that benefit you today more easily than you would make decisions that will benefit you tomorrow but hurt you a bit today.

Just like you wouldn’t go hungry or inconvenience yourself to put food on the table of a stranger, you will also not endure such to benefit your future self whom your brain equates to a stranger.

What’s the way out?

Solving a problem starts by identifying it and that’s what we’ve done. One of the most effective ways to reverse this working of the brain to constantly remind yourself that your future self is in all ways still you. You literally have to do that. 

Other things you can do are

  1. Making it easy for your Future Self to do whatever it is your Present Self doesn’t want to do – instead of saving 50% of your income for the sake of some 10 years goal, save just 5%. Instead of saving for 10 years, save for 1 year 10 times.
  1. Employ the tactic of instant gratification – instead of postponing the benefits of achieving your 10-year goal to 10 years from now, set some reward metrics that you can benefit from immediately. For example, when you save with Rise, tweet about it. Another thing you can do is join the Rise affiliate program and take pleasure in helping others to achieve their financial goal.

Long-term investing is hard and we recognize that. All the stories and strategies that we’ve shared so far confirms that and proves that it is not a one-person problem but a humanity problem. Our hope for sharing these 3 strategies is that if one doesn’t work for you, the other will work or a combination of others will work.

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