3 scarcity and opportunity cost
Spending what appears to be a fixed pool of non-fulfilling resources can create a sense of stress and make you worry about “opportunity costs” — other ways you might be using your money or those today. The trade-off of spending resources can make a difference. This is when you find yourself saying, if I spend $10,000 on this, I won’t have it to spend on anything else that I want or need down the line.”
Naturally, you would expect this to be of greater concern to investors with insufficient savings. But as mentioned above, even visionary investors with enough money can be affected, as their natural tendency is to focus on the future and exercise too much self-control.
Some of my clients who grew up during the Great Depression know what an uncertain future looks like or worry about where their next meal will come from. His experiences have strengthened the value of the dollar and inspired him to work hard and make sacrifices to build a secure retirement. They have grown up very frugal and some feel that they do not need more than they need. As a result, they sometimes find it difficult to indulge. For example, one of my clients wanted to take his family on vacation to make memories, but he feared he might need the money for future health care costs.
We overcame these concerns by employing some of the strategies outlined above. We revisited why she invested in the first place, discussed how she might feel later if she didn’t travel, and reviewed the implications of her financial plan – taking into account 10,000 market scenarios. keeping in At the end of the day, she just needed to find peace of mind by reminding her of her goals and seeing the bottom line – could she afford this journey without jeopardizing her other long-term goals.
Long-term focus and a disciplined approach to investing are part of our core investment principles. But if you’re in a sound financial position, there comes a time when it’s okay to live the retirement you’ve planned for.
Memories are priceless. That’s why one of the most rewarding parts of my job is getting the clarity for my clients to take that dream vacation or pursue another retirement goal.
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