Watching today’s investors is like watching an old “Beat the Clock” game-show rerun. Thinking that time is short, people scurry around looking for the “best” investment options since every day that passes is one less day available for wealth accumulation. Too often, such anxiety-driven decisions turn out to be poor ones. Harrison is a dermatologist I know. The short-term mind-set that once drove him to buy a big house, join an expensive country club, and generally go for life’s “gusto” has come back to haunt him. Burdened by debt and with no preparations made for his children’s education or his retirement, Harrison is in a race against time. He waited too long to start investing for the future, and like those who allow themselves to be pressured into hasty and ill-considered decisions, he now sees time as an enemy.
Had Harrison adopted a long-term outlook, time would have become his ally. Time is a tool-and the more you have of it, the better. It does not matter whether you have a lot of money to invest or just a little as long as you are willing to let time work on your behalf. For example, both a ten-thousand-dollar one-time investment and a one-hundred-dollar-per-month savings effort can yield significant rewards, thanks to the “magic” of compounding over time.
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