invest for future

It’s funny how the human mind can conceive of just about everything except our older selves. We can easily imagine a pink dragon that farts rainbow bubbles, but if you ask us to imagine ourselves as old, we can’t do it. No matter how much information we have that we will get old, decrepit, and die, we just cannot imagine it for ourselves. We see our parents, grandparents, and friends age and die and yet we still think it won’t happen to us. If you want to be successful financially, though, research shows that you have to find a way to make friends with your older self. And the younger you are when this happens, the better.

Researchers in the field of virtual reality at Stanford did some experiments where they showed young adults virtual reality images of themselves as senior citizens and allowed the participants to interact with their older selves. Before the study began each person was asked how much they would save for retirement. They were asked again upon exiting the virtual reality facility. Those who were shown images of themselves as older increased their savings numbers, sometimes by a large amount, upon exiting the experiment. Those who were shown only images of themselves at their current age did not change their numbers.

The researchers concluded that making “friends” with the virtual, older selves increased savings levels (whether the effect lasted long term or not wasn’t studied) among participants. In other words, if you can see yourself as older and accept that this is your fate, you’ll be more inclined to protect this older person that you regard as a friend and as part of you. This makes sense. If you don’t think old age will ever apply to you, if you approach it with fear and hostility, or if it is so far in the future as to be inconceivable to you, then where is your motivation to save?

And this is exactly the state that most twenty-somethings find themselves in, yet the twenties is the best time to save because you have all that time and compounding on your side. Instead, most young people would rather use the money to buy stuff for the person they are today, not the person they can’t even conceive of being forty years from now.

Unfortunately, most people who eventually make friends with their older self do so too late. It may happen once their own kids are gone and they realize how much time has passed. It may happen after a health scare. Or it happens when they reach retirement age and are not-so-subtly pressured out of the workforce. By the time these things happen, you’re usually in your forties or fifties and you’ve wasted a lot of years and money. It’s almost impossible to bring your retirement savings up to a decent level without slashing and burning your budget to the bone. Had you only started earlier…

Most of us don’t have access to a virtual reality lab where we can see and interact with our older selves. Absent that, how can you make your older self real to you? How can you make your unwilling mind accept the idea that you will one day be old, retired, and in need of money?

Age a photograph of yourself

There are lots of free tools on the internet that can age a photo so you can get a rough idea of what your older self will look like (even Merrill Lynch offers one). Print out a copy and keep it near your bill paying station, or even in your wallet. Think about this older self before making purchases that benefit only your younger self like fancy cars, DVD’s, unnecessary clothes and shoes, and dinners out.

Make a list of what your older self will want to do

Of course this will change through the years as your interests change, but give some serious thought to what you want to do in your older years. Travel? Hobbies? Spend time with family? Try to see yourself living and doing all these things you want to do and write them all down. You can even write a “Day in the life” piece where you describe your ideal day as an older person. Writing all of this down makes it more real than just saying, “Someday I’ll…” Refer to this list when you need motivation to save for those far off goals.

Study yourself in the mirror

Most of us get up in the morning, get dressed, maybe put on some makeup and do our hair, but we don’t really see the person looking back at us. We see what we expect to see or want to see. We don’t want to see the wrinkles, so we don’t. We tend to see ourselves as we remember ourselves at our best. If you really study yourself, though, the signs of aging will be there. Spend some time really looking at yourself. Note the wrinkles, the gray hairs, the sagging, the subtle changes in your skin, etc. You’re not doing this to scare yourself off to the plastic surgeon. You’re doing this so you can really see that stranger in the mirror and make peace with him or her.

Really study your elders

We tend to turn a blind eye to our parents’ and grandparents’ aging process. We just don’t want to see it because it means they are getting older and will die. We tend to see the parents of our youth until something awful happens and we can no longer ignore it. But take some time and really look at your relatives. They are the closest you’ll get to seeing yourself as older without aging your own photo. Watch them move, view their appearance, pay attention to their medical issues, and look at their circumstances, too. If this person who looks a lot like you is having a hard time making ends meet it’s not too hard to see yourself in that position and want to do something different. And if they’re doing well that’s a form of motivation, too. You could be just like these people in the future so pay attention.

Study aging

You don’t have to make a huge study of aging, but there are plenty of general interest books, websites, and forums where you can learn about the common progression and issues of aging. Again, you’re not doing this to scare yourself senseless, but to get beyond denial. If you know what waits for you, you’re more likely to deal with it proactively and that means saving money (and staying healthy, etc.).

Stop fighting it

I’m not saying you have to let yourself go and give up. But the sooner you accept the fact that you are aging and that no amount of makeup or Botox is going to stop that, the sooner you can make peace with the person who is going to need a large retirement nest egg. By all means do what you can to remain healthy (eat right, exercise, etc.), but give up on preserving your 20-year old looks because nothing you do will stop aging. You’ll save money and make friends with the older self you are becoming.

It’s hard to see yourself as older, even when you are older. But seeing your older self and accepting that this is your future is one key to saving money while you’re young. Don’t wait until you can no longer ignore your age. Go ahead and accept that you will be old one day and that person will need money just as much as, if not more than, your current self needs it. You don’t want to squander all of your money while you’re young and leave that older person out in the cold, eating dog food, and depending on others for care, do you? Since he or she is you, I hope not.

(Photo courtesy of Charline Tetiyevsky)