How to Win the Financial Waiting Game

Long-term goals are notoriously difficult to adhere to. The key is providing rewards along the way and breaking the goal into shorter, more easily measurable increments.

One of the reasons New Year’s resolutions are appealing is that they’re immediate. A few weeks ago, you may have resolved, right now, to start eating healthier, go to the gym more often, or stick to some saving and investing goals. That feeling of immediate progress gives a little rush.

The challenge is that all three of the potential resolutions in the previous paragraph do not consistently provide immediate awards. As a physician, you know the long-term health benefits of being healthier, but those are less immediate than the taste reward of that delicious sausage, egg, and cheese on a bagel. This is the “instant gratification trap” in its essence.

Investing for retirement is no different. It is a decidedly long-term goal. Once you’ve established your investing goals, implemented your strategy, and set the money aside, the next steps are to stick to that plan and...wait. Ho hum. Here, then, are a few ways to make the waiting seem a little less mundane.

Set some intermediate goals. Years ago, Fidelity ran an advertising campaign that depicted people walking around, hauling huge numbers like 1,500,000. The idea behind the campaign was to “find your retirement number,” which wasn’t a bad concept. The ads were quickly discontinued, though, likely due in part to the idea that the people hauling those numbers around looked like they were dealing with an albatross--not exactly an appealing plea for saving. Thinking about a huge end number of multiple millions can make the day-to-day investment seem pointless and the long-term goal overwhelming. Break it down into smaller increments. Instead of resolving to be a billionaire on your retirement day, resolve to max out your retirement investments this year.

Check your progress. Eating healthier and working out, if done right, yield promising evidence as that number on the scale begins to creep down. Saving for retirement yields promising evidence as the value of your investments begins to creep up. But many of us receive our retirement statements, glance at them to make sure nothing catastrophic has happened, and move on with our day. Take a closer look, and you may find those incremental rewards that will help you keep on track.

Reevaluate and rededicate. I’ve written previously on rebalancing your portfolio, an often forgotten but necessary step for all investors. Investments change all the time with market swings, stock values, bond values, and the like--which can shift the value and allocation of your portfolio. Getting things back in line is important, but it can also give you something active to do while you’re waiting for your savings to add up.

Long-term goals are notoriously difficult to adhere to. The key is providing rewards along the way and breaking the goal into shorter, more easily measurable increments.