Timelines

Keith Cameron Smith discovered one of the significant differences between the rich and the poor is their sense of time. We all plan, but our timescales are different. Smith makes the following observations concerning different groups.

“The very poor think day to day.” At the extreme end of the scale drug addicts have a time horizon limited to the distance to the next fix, but many of the world’s poor are forced by circumstance to think on a day to day basis. If they are unable to obtain food today, they will die. Making it to sundown is an accomplishment in this world.

“Poor people think week to week.” I have seen this in the factories of South Carolina during the 1970s, people literally living paycheck to paycheck. If they had money they spent it, sometimes irresponsibly and extravagantly. The idea of deferred gratification only appeared when Christmas was drawing near. Starting sometime around November 1 everyone, especially the moms, wanted overtime. Their time horizon jumped from a week to a couple of months.

“The middle class thinks month to month.” Smith believes the middle class focus is on comfort. What can they buy today to make their life comfortable? If they think they can make the monthly payments, “It’s all good, bruda.”

“The rich think year to year.” Smith believes one of the key strengths of the rich is an ability to defer gratification in order to achieve freedom. This long term thinking gives them an edge over time.

“The very rich think decade to decade.” If you want to be rich starting thinking in terms of decades.

Ask questions and begin planning:

If I go to night school for five years then I can get a MSRN that will allow me to get a job in geriatric nursing. Given the aging Baby Boomers, I will have job security for the rest of working life.

If I pay off my mortgage in 10 years rather than 30 years, I can save $250,000 that I can then invest in dividend paying stocks and investment grade bonds. (do the math you will be shocked)

As you grow older, building wealth will lead to other questions such as:

How can I best shelter my investments from taxes and structure my estate so that my grandchildren and their children can be blessed long after I have passed from this world to the next?

It all has to start somewhere. If you are living the kind of life described in the song, Same Old Same Old by Doctor John, “Gotta’ make enough bread to buy the bread to have enough strength to come back and work another day.” Don’t despair. Look up. Think about tomorrow, and then about the next week, and some day you will discover that your mind will be focused on blessing the next generation.

Proverbs 13:22

A good man leaveth an inheritance to his children's children: and the wealth of the sinner is laid up for the just.