Be Where The Puck Is Going

I skate to where the puck is going, not to where it has been." ~ Wayne Gretzky

Why You Can't Plan for Retirement by Doug Short on The Motley Fool presents some interesting research by the Stanford Institute for Longevity which discovered that when "people are asked to imagine themselves in retirement, the parts of their brains that usually 'light up' when they think about themselves don't light up at all. It's as if they were thinking about a stranger." However, in an experiment where people interacted with a digitally aged picture of themselves, twice as much money was allocated to retirement after being given $1,000 to spend or invest.

For me, this appears to be a good scientific explanation for how "envisioning a future state" benefits an individual. While envisioning doesn't guarantee success, it appears to create a psychological incentive to take action to help oneself. The secret apparently is to be able to see oneself in the future.

Looking back at my experience, I have had several episodes where seeing myself in the future did help. Here are a couple examples:

Career advancement. After a decade of an average career, I realized that while I liked my position, I wouldn't be happy being at the same level a decade later. That epiphany caused me to start thinking about what and where I wanted to be in the next decade. As I began to envision what that might be, it changed how I approached work and helped me achieve my career goals.

Financial freedom. I always saw myself eventually having the financial means to not depend on a company, government or anyone. One outcome was that we were extreme savers, putting away as much money as we could afford, e.g. 20% or more in our paycheck. Another result was avoiding credit card debt and making the personal sacrifice to advance at work. While we never knew if we would achieve our goal, we had psychological incentives to take steps that would help us get there.

In both these cases, I saw myself in a different future than the present, which provided motivation to do what was needed. Based on the study results from the Stanford Institute for Longevity, I understand better why envisioning myself in the future can help. While I will continue to use it in financially related areas, I think I will also apply it in other areas to envision the future I want to create :-)

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

Photo Credit: morgueFile.com, Bianca Meyer geb. Bollmeier

This is not financial advice. Please consult a professional advisor.

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