• Matt Morizio

Stop selling yourself short - your retirement isn't the end goal


If you’re investing for yourself, you’ll never create the future you’re capable of. You need to think bigger. And you need to get the focus off you.

What do I mean?

Don’t invest for the future you. Don’t save for your retirement. Invest for the impact you can make in others’ lives. Invest for your why.

And your why, by the way, is either another person(s) or your faith; it’s never you, as explained by Ed Mylett in this interview with Eric Thomas.

I invest because I one day dream of owning a place on the water that I can let others use as a vacation spot, no strings attached, at no cost to them, so they can understand what unselfish love feels like, the same unselfish love my Christian faith teaches me to live out daily.

I look forward to the day when I can place $5,000 in the mailbox of a family I know is struggling around Christmas time but working hard to get out of their rut.

I can’t wait to throw massive holiday parties in my home where I invite others to eat and drink as much as their stomachs allow and enjoy the company of loved ones with no expectation of reciprocity. I genuinely want others to know what unselfish love feels like.

And I am excited for my kids to be part of it, to inspire them to do it, too, only bigger and better. That’s my why. That’s why I invest.

But I didn’t always think this way.

When I was a kid, my grandparents told me to save 20% of the money I earned for my future. If they gave me $100 for Christmas, they told me to put $20 in the bank. “Yeah, yeah, I know. I need to get on that.”

I never did.

I liked having a crisp $100 bill in my pocket, and why in the world did I need to save for the “future me” as an elementary schooler? Or as a middle schooler? Or as a high schooler? Or as a poor college student? Or as a struggling minor leaguer? Or….wait, now I have five kids.

Why couldn’t I pull the trigger?

Allow me to self-diagnose.

According behavioral economics (Thanks to Dollars and Sense for the mini behavioral economics degree and Eric Cressey for the book recommendation.), I was suffering from a combination of present bias and the endowment effect.

Present bias states that we overvalue things in the present and undervalue things in the future.

Think of your favorite guilty pleasure (craft beer, vanilla lattes, chocolates, etc). What if I said you could have one of those guilty pleasures right now, OR, if you waited 6 months, I’d give you two?

I’m willing to bet you’d opt for one right now, even though you could have twice as much by waiting six months. You’re overvaluing the present and undervaluing the future.

The endowment effect works like this: I have something. I like this something. And now that this something is in my possession, it’s harder to part with.

It was hard to part with that crisp $100 once my grandmother gave it to me. She should have put $20 in the bank and gave me $80.

But I admit, until recently, even though I understood behavioral economics, I still struggled to save money. I wasn’t motivated to save for the “future me.” Playing golf all day or sitting in a rocking chair with a lemonade on my front porch reminiscing isn’t attractive to me.

I enjoy working hard. I enjoy earning money. I enjoy challenging myself.

So what changed my mind?

I connected my “why” to my investment philosophy.

I no longer invest for the future me. I invest for my why. I invest for the impact I can make in others’ lives.

Let’s go back to that present bias example. What if I told you that by waiting 6 months, you not only got two guilty pleasures, but your child, or your church, or your spouse, or your best friend, would get a huge reward, too. Does your decision change? Why?

Because you’ve added a greater purpose to your decision making criteria. You’ve effectively hacked behavioral economic theory by thinking bigger, by thinking unselfishly.

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#Retirement #Investing #Yourwhy

Investment advice offered through Beck Bode, LLC, a fee-only Registered Investment Advisor in the Greater Boston area.