I want to talk to you about one of the most important BollitProof philosophies: He or she who has the longest time horizon wins. What does this mean?
This might seem really simple; longer is better, bigger is better, more is better. This is not what I’m referring to.
Think about the poor financial decisions you’ve made. They were probably made thinking about the short term and instant gratification rather than the long term.
I feel so strongly about this philosophy because it affected me personally. So I’m going to use myself as an example.
Back when I started my career, I made my first $1 million at the age of 22. I invested in ZERO pieces of real estate that year. I was thinking like most people, short-term. Instead, I wanted sports cars, the high rise apartment, and suites at football games. I just assumed I would always make seven figures, so I didn’t need to worry about passive income.
This is a horrible way of thinking.
If I had actually thought about the longest time horizon I would’ve thought about what would benefit me ten years into the future. What could I have put off buying so I could have that horizon?
Personally, I wish I had invested in real estate that year so that I would have amassed 150 properties generating extra income.
If you really dig in deep, almost no bad decisions have been made with a long term horizon in mind.
One of the best examples I’ve seen of utilizing this way of thinking is a friend who has built relationships and connections, kind of a political and relational capital, over the last 20 years.
While he could have “cashed in” on these relationships in business, he chose to serve them, add value to those relationships, and gain unique skills and knowledge along the along the way. He has the long term in mind and waited for the right timing. So as everything is coming to fruition, he’s able to knock it out of the park.
Long time horizon is about giving up instant gratification so you can benefit ten-fold in the future.
This is the same thing with taxes. Think about it.
Let’s say you really want to buy this brand new sports car but it’s not Section 179 applicable because of the weight. If you think to yourself, “Whatever, I’ll still deduct the lease payment.” You can totally do that, it’s still a tax strategy but you’re leaving money on the table because of short-term thinking.
Within a year of purchasing that sports car, you’ll likely owe an extra $50,000 (or more) in taxes.
That extra money could’ve been eliminated if you bought the proper car that fits within the Section 179 category.
The instant gratification is the sports car you get now. However, deciding not to buy that sports car and instead choosing to pay the lowest amount of taxes you possibly can with Section 179 is the BollitProof way of thinking.
Think about retirement accounts. People who are 20 don’t often think about their retirement accounts because they’re not thinking about the future 40 years from now. It’s important to change that way of thinking.
All that to say, our BollitProof philosophy, “He or she who has the longest time horizon wins,” is one of the most important philosophies you can implement. If you’re struggling with this way of thinking, keep expanding your time horizon to a time that will connect with your “why”.
If there isn’t anything you want in the next year, think a little further out. Maybe you want a family, a house, or a solid retirement plan. Whatever the case may be, create your timeline to connect with your “why” to ensure success.