Wednesday, December 07, 2005

We're the "I want now" generation... and proud too?

Flexo over at Consumerism Commentary has just put up a post entitled "Getting Rich is Simple" where he links to this MSN article explaining how you can turn Discipline + Time into $1 Million.

The line that struck me was the same one flexo centered on:
If you count yourself a member of the “I want it now” generation, the idea of waiting 20 or 30 years to get rich probably sounds like a dumb idea.
The value of $1 Million in 30 years aside (as flexo points out its around $500,000 after inflation), what really struck me is that my generation is the "I want now" generation. This got me thinking, if my generation is fueled by the credo "I want now," is my investment plan "I want now" as well? I mean, $1.43 Million in 7 years is only about 2,500 days different from overnight, right?

Of course I want $1 Million tomorrow, but I think the insidious nature of the "I want now" generation is not our lack of patience but in our general lack of planning. If out of impatience we are taking more risks starting internet companies investing in the most volitile parts of the stock market and staying up nights working on building our net worth, then I think that a little impatience is good. According to Adam Smith, intelligent laziness is the driver of innovation; innovation is the driver of productivity; and productivity is the driver of prosperity.

But, what is really dangerous is not that we are impatient and lazy, but that many among us are not intelligently lazy or are lazy in the wrong way. Everybody would like $1 Million tomorrow, but how many people look at the world around them and ask what problems they could fix to create $1 Million in value? Instead many of us in our 20s are going out running up $200 bar bills (guilty myself on occasion) and racking up huge credit card debts. We have developed as a generation a convenient approach to financial planning: dont. We don't plan because we're going to get a great job, a killer raise, our stock options are going to be worth $1,000,000 alone, the $1,000 a year we do manage to save is going to return 35% a year like it did in the late 90's, we'll be the next brad pit, we're going to write the great american novel, our blog is going to bring in 6 figures a year (laughing). We don't have to work for it, no. It is our birthright.

Our generation has the oddest combination of unbridled optimism plus a complete lack of direction in how we're going to achieve our birthright of greatness and wealth. The problem is not our optimism, it is our lack of a plan or any active forward motion.

There are two kinds of lazy people in this world: The dumb lazy, and the intelligent lazy. The dumb lazy are too lazy to even figure out how they could be even lazier in the future. They get by doing the minimum amount of work to get by. The smart lazy look at hard work as the greatest producer of the ability to be lazy that exists. What the smart lazy have figured out is that by working hard now they can be lazy latter, and that over their lifetime they are going to have to do less work as a result.

The problem as I see it is not that people are being lazy, but that they aren't fully committed to being lazy. If they were, they would work hard.

If you are reading this blog, chances are you are already financially quite savvy or on your way to becoming so. So I present an open question to my readers: How do you encourage people who aren't already working on a plan to do so?


Loi Tran said...

How do you encourage people who aren't already working on a plan to do so?

I think some people can't be helped or do not want to be helped. They're too "dumb lazy" to do anything about it.

For others, you just got to show them why it is important to have a plan to save for their future instead of working for the rest of their life.

For some, it's not hard to set up a plan, just difficult to stick to their plan once they start. Goals set during new year. How many people keep New Year's resolutions?

People who want to start but don't know how are the easiest to help. They'd figure out how themselves if they really wanted to learn. If they are lazy, they just need to pointed in the right direction.

I like to think of myself as efficiently lazy.

elvira black said...

This is a very interesting and thought-provoking post. I think your point about being dumb lazy or intelligently lazy is provocative. However, I tend to think that people who are hard-working and disciplined enough to gain wealth are not likely to be content with being "lazy" after the fact.

One example that comes to mind is NYC mayor Michael Bloomberg. He is a billionaire, but rather than resting on his laurels he not only got elected, but in my opinion is doing a bang-up job.

On the other hand, I intuitively think that poor people who win the lottery, for example, are more likely to blow the money quickly (and dumbly) rather than invest and spend it wisely. If you don't have to work for it, you're not likely to value it when you get it.

So what's my point? I think that once you've developed (or inherited) the habit of frugality, hard work, and discipline, it's not likely that you will be content to sit back in a hammock on a beach sipping pina coladas forevermore.

On the other hand, I think the prototype you are referring to is the "work hard, play hard" type of person. Their problem is mainly, as you say, an inability to plan and save.

Sorry for rambling. You just got me thinking there.