…and the importance of ‘doing’
Many of us enjoy spending money, but when it comes to organising our spending and savings, our enthusiasm quickly evaporates. Financial administration is widely regarded as dull, and people will go to remarkable lengths to postpone putting their affairs in order. This might include paying a bill, contributing to a pension, updating insurance or wills, or making use of tax-free allowances.
The Oxford academic and humourist F. M. Cornford, who wrote about human procrastination, observed that there are people who act promptly and people that are idle – but they are very few. The great majority of us, he argued, would like to act promptly but do not. The reason we fail to follow our natural preference is that we are waiting for others to make up their minds, while they, in turn, are waiting for us. Thus, stalemate triumphs.
There is one very good reason for sorting out our financial affairs and many bad reasons for not filling in those forms, sending that cheque, replying to that email, or making that phone call. The good reason, of course, is our family’s long-term financial well-being. Yet time and again, any number of poor excuses manages to trump one good reason. To help you recognise these excuses, and perhaps retire them, we outline below some of our favourites.
If you enjoy a cordial relationship with your financial adviser, this presents an excellent opportunity to avoid doing the right thing. You might ask detailed questions about their latest portfolio update or test the limits of their patience by probing developments in an obscure but very specific emerging market. Alternatively, you could mention that most of your wealth is “really tied up in the house” or ask for a tip on a “hot stock” – ideally one with an overnight 200% upside.
These conversations can resemble blood sports. There is a certain pleasure in baiting one’s adviser, like old fashioned bearbaiting, and observing their blood pressure rise. Bears, we warn you however, like Scotsmen, can be difficult to provoke and may require repeated prodding.
While speaking to your adviser, you might also adopt a religious tone and say, with great piety, “Can I just play the Devil’s advocate for one moment?” For the committed procrastinator, this “one moment” can easily stretch into weeks or even months. Better still, if you possess the happy ability to use six words where one will do, then you can delay that final cheque or payment indefinitely.
If blood sports are not to your taste, Cornford suggests another pastime: “comma hunting”, known today as hair-splitting. If you discover one missing comma or one split hair, experience suggests there will be a whole family of them nearby. This sport is particularly popular among those with arts degrees and provides ample justification for doing absolutely nothing.
One emotion we can be trueful about is fear. One of the few excuses a procrastinator can express while keeping a perfectly straight face. “I would invest,” you might say, “but I’m worried about…” The next budget. The government. The conflict. The US president. Markets being over or under valued. Markets having risen too much. Markets have fallen. The list is inexhaustible.
Despite all the conflicts, the market continues to rise.
Source: Callanish Compass, Real Investment Advice, Robert Shiller Data
If you are on the verge of investing and have exhausted all other excuses, you can always fall back on one that has been in use “since the stone axe fell into disuse at the close of the Neolithic age”: you will invest when the outlook is clearer. This assumes that predictions – particularly predictions about the future – are sometimes easy and sometimes hard, and that clarity is just around the corner. A close cousin of this excuse is “when the time is right”, in which you agree in principle but reject the present as ‘un-right’ for the moment for reasons too subtle (or too vague) to explain.
The greater number of bad reasons one can generate, the less time will be spent wondering whether they are justified. We therefore recommend, to stay on the safe side, that you settle on just one. After all, the “safe side” is a comforting place – it is close to the last ditch, near where your metaphorical dead body is buried, in its spinning grave.
Cornford also observed that we waste most of our time – except around teatime, which is sacred. One solution, therefore, is to do the boring tasks you have been avoiding fifteen minutes before teatime. This ensures you act decisively and do not imperil the enjoyment of your scones and cakes. We hope you do not recognise yourself in any of this. Nevertheless, we urge you to ensure that you have dealt with the financial tasks you have been avoiding. You may have a small voice in the back of your mind reminding you to act – and once the task is done, you will be faintly surprised by how little time it took. Putting your affairs in order can be not only sensible but quietly satisfying – and even a little cathartic. Procrastination may be a strong human tendency, but it remains a poor financial strategy.
Please be aware that the value of investments may go up or down and you may receive back less than you invested originally. Past performance is not a guide to the future.
This document contains general information only and does not provide any advice or guidance specific to your personal circumstances.
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Callanish Capital Ltd is a Discretionary Fund Manager, directly authorised and regulated by the Financial Conduct Authority (“FCA”) under registration number 955992.