Plat Forms

Start training yourself to understand not just what your money is worth today, but what that same money will be worth in the future. Like a slide projected on a screen, your money becomes much larger over time. Consider the “big picture”—that compounded future value—when you are looking at the money you could save or spend today. Whenever I have a client come to my office who wants to do something today that will cost a lot of money, I always calculate what it will really cost by looking into the future. That’s the true cost of today’s desire.
I had a client come in not long ago to say, “Suze, I want to take a year off work, and $20,000 out of my savings, to go live in Europe for a year.” No problem, I said, as long as she could understand what that meant for her future. That $20,000, if left invested at, say, 10 percent, would, in twenty years’ time, when my client turned sixty-five, be worth $135,000. Did she feel comfortable spending $135,000 to take a year off, not to mention the money she’d lose by giving up a year’s salary? “But Suze,” she said, “in twenty years $135,000 won’t even be $135,000, because of inflation.” But using a 3 percent inflation adjuster, in twenty years that $135,000 would still be worth $75,000. The trip would cost her $75,000.
It is so important to see what things are really costing you, and the way to see this is to see money over time. It is when you start looking at money like this—finding out how what you do today affects your future before making your decisions, which must be based on reality and not just on hope—that you will really begin to understand money. Desire the trip, understand what it will really cost, decide whether you can afford it, and if you can, then take it by all means. Or scale it back, if that makes more sense. Or wait a year. If not this year, then the right actions with your money will still get you to Italy next year or when the time comes.
And when you’re doing the right things with your money, when you’re being respectful, the right time will always come.