Don’t think you can live for the moment and have long-term success.

Teenagers often have a problem with keeping a long-term perspective. In a recent online post, Paul Tripp wrote an article titled “How to Love a Teenager.” One of the sections started with “Teens lack a long-term investment perspective.” They live for the moment and they tend to put off things that they don’t want to do. Sadly, many adults are just as short-sighted when it comes to their finances, relationships, goals and investments. As a result, they fail to understand the implications of short-term live-for-now thinking.

This is the case for many regarding investing. Some don’t do it at all. Some hope to do it next year or in a couple of years. They procrastinate indefinitely. Others start down the road and then see dangers around every corner. They become so conservative that their investments go nowhere. Others stay invested until a huge downturn in the market and then they sell everything, usually at the worst time.

The S&P 500 and the Dow Jones Industrial Average five-year chart is instructive after two weeks of serious market upheaval. At various points in the past five years there have been some minor and major corrections. At each of those points in time I know that many jumped out of the market. They went to cash. But did they know when to get back in? How many weeks went by before they realized they were missing opportunities? At the end of 2018 it looked like the long bull market was finally coming to an end. Account balances dropped significantly in December. But notice what happened during the balance of 2019.

This doesn’t mean the market will continue to march upward. Rather, it means good investors must continue to maintain a long-term perspective. This means you should have an emergency fund in cash. It also means it is wise to keep at least six months of your living expenses in cash in a savings account or other FDIC insured accounts. You don’t want to have to sell good investments to raise cash, so you should be thoughtful about this. But don’t be overly conservative either.

Here is the bottom line: If the last two weeks of market volatility make you nervous, then you may not have a very good plan, you might have poor investments and you probably aren’t thinking long-term. Look again at the graph. Hindsight tells you where the market dropped and how it recovered. Because you and I don’t know about tomorrow, think about five or ten years from now and make decisions based on a longer flight plan. You aren’t driving to the grocery store; you are flying around the world. The former can be done on the spur of the moment. I doubt you would do the later without thoughtful planning.

I cannot help but end with something that has even longer-term implications. It is something Jesus said in Matthew 16:26. “For what will it profit a man if he gains the whole world and forfeits his soul? Or what shall a man give in return for his soul?” Don’t plan for five years or ten years and neglect to plan for your soul. That would be tragic.

You might want to read Paul Tripp’s piece I mentioned earlier. Here is the link: