The Importance of Patience in Achieving Financial Success

moving fastWe live in a world where life moves quickly. Whether it’s rushing along the road to get to work on time, getting the kids to sports activities or attending meetings, everything seems to move us along quickly. There’s nothing wrong with living life quickly. Unfortunately, we’ve developed the poor habit of expecting quick results from all that speed. Unfortunately quick results are the exception to the rule, especially when investing. That is where the age old value of patience is needed.

Patience vs. Instant Gratification

credit card debtPatience is the polar opposite to the idea of instant gratification. If you absolutely have to have something there’s a price to pay for avoiding the wait and applying patience. The “price” is interest charges. As anybody who carries a balance on their credit card knows full well it’s a steep price to pay.

Could you plan to save up the money to purchase a needed item without using credit? Absolutely, and that’s the concept of patience in motion.

Managing Unavoidable Debt

Some debt is unavoidable. Most average people simply can’t save enough money to purchase a home without a mortgage. However with patience and diligent savings goals you can certainly save up a solid down payment on your mortgage and reduce your overall debt.

There was a time when most people saved up the money needed to purchase a vehicle but those days appear to be long gone. It worked in the past and can work for you as well. All that’s needed is the patience and discipline to set aside a monthly amount to reach your car purchase goal. Why settle for paying interest on a car loan or lease so you can have that shiny new vehicle instantly? Who wins in that transaction?

Patience in Investing

Investing is another area where patience is continually tested. Even with well diversified low fee funds the results in the short term are often disappointing. Sadly when short term results are less than satisfying many react adversely and end up selling; yes they commit the cardinal sin of buying high and selling low. The solution is patience. Easier said than done of course, but over a lifetime one can learn that downturns often result in large future gains if one simply has the patience to wait it out.

Saving for Retirement: The Ultimate Test of Patience

patienceIt’s been said that saving for retirement is the ultimate test of patience. Since the average person struggles with saving for short term goals like an emergency fund, reliable transportation, and a home down payment, can you imagine the huge struggle in saving for something that’s thirty to forty years in your future?

We all struggle with patience and I’m no exception. When the markets decline drastically such as in 2008 and 2020 I needed superhuman patience. I had to convince myself the economy would recover and my investments would grow in the long run.

When using the principle of compound growth I must constantly remind myself that the growth takes time, often measured in decades. That’s the cruel reality of compound growth; the growth begins slowly and gradually increases over time. Unfortunately, like most average people, I failed miserably at starting to save early. Because of this, I had to apply huge discipline and patience to get to my retirement goal.

The Wisdom of Starting Early

Since patience is intimately tied to time there’s a gem of knowledge we can all learn. Remember the sage advice of financial experts who repeatedly say “the earlier you start saving for retirement the easier it will be to get there” and “start saving at a young age and let compound interest work it’s magic”.

It takes huge willpower to save for a lifetime to achieve your goal of a secure, and possibly even early, retirement. The only path to success is discipline and a healthy dose of patience.

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