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The thief inside.

In school, we were taught that thieves have a bad habit called stealing. That's why the majority of us grew up wary of thieves. Encountering them is such a nerve-wracking experience. Several years ago, I was walking on my way to work when riding-in-tandem robbers tried to snatch my laptop bag. Sensing it was too light to have a laptop, they let go of my bag and sped away. I was lucky that they did not hurt me. That experience sent shivers down my spine.

Encountering robbers at any point time gives us fear because of the danger associated with it. However, unknowingly, a lot of people tag along a thief wherever they go. Since they are unaware, they don't feel any threat. They do not realize that they are being robbed every second by someone known only to them: their own selves. They unconsciously rob themselves of opportunities through procrastination.

Procrastination is the habit of putting off for tomorrow what needs to be done today. By doing that, the work to be done for tomorrow has to be delayed for the day after tomorrow and so on.

In the management of money, procrastination plays a very big factor in the deterioration of a person's financial situation. This is because, in growing our money, time is the most essential component.

The more time we have, the better the chance of catching opportunities for growth. Procrastinators always want instant gratification and leave their fate to chance. They do not realize that they can still enjoy life now and in the future by making some sacrifices today. By delaying the saving/investing decision, they are, in effect, robbing their own self of future wealth. When the day of reckoning arrives, no amount of regret can correct the mistakes they did during their younger years. Time wasted is just similar to a robber getting your valuables, where there is no chance of recovery.

What are the effects of procrastination in our personal financial lives?

Lost opportunity. When an opportunity knocks and we never respond, it will just pass us by, and we can never buy it back anymore no matter how much money we infuse. Time moves forward and never comes back. Remember the Global crisis in 2008? That was a perfect opportunity to buy investments at a bargain price.

The index dropped 50 percent to 1872. After the recovery, the market never looked back and the index is now at 8600. Had we invested, for example, P10,000 back then, it would have become almost P46,000 today. If a procrastinator invests P10,000 today, how sure are we that he can gain the same? And in 10 years, the procrastinator would still lag behind the first investor. He can never match the profit made by the first, unless the market tumbles back to 1872. By delaying, one loses a lot.

Limited time. As the person procrastinates, he is diminishing his allotted time to make more money. As he has less time, he needs to catch up the lost time by investing a bigger amount of money just to reach his future financial goal. He has to work harder to earn more, as his expenses are growing. With time getting shorter by the day, coupled with increasing responsibilities, this will make life more stressful. Worse, the procrastinator might find it too difficult to achieve his goals and brace for a disastrous future. What started as a dream will turn into a nightmare.

Desperation. There are people who delay investing to time the market. A lot often erroneously enter high and sell at panic prices when the market reverses. In desperation, they resort to high risk investment in the hope of recovering their loss. Unfortunately, the instrument is a scam and, instead of a recovery, they lose all their money. This explains why haste makes waste.

Respect time, and it will respect you back. Lost time can never be brought back. Always remember, time is money. If you want the older you to thank the younger you, eliminate your internal robber, start saving/investing early and let the power of compounding interest grow your money.
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Publication:Business Mirror (Makati City, Philippines)
Date:Apr 24, 2018
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