Successful people think differently than unsuccessful people. Wealthy people think differently than poor people. The more you can understand these differences in thinking the more you can move your thinking in the direction of success and wealth.
One area where successful people consistently think differently is the length of time into the future that they think about and plan for. I will call that the planning horizon. The more successful a person is the further out their planning horizon will be.
Long Term vs. Short Term Thinking
The most unsuccessful people in life have a very short planning horizon. Drug addicts have a planning horizon measured in hours and at most a day or two. They plan for their next drug acquisition and use. They have no idea what they will be doing a week from now let alone a month or year or decade away. Consequently they do not save money, they do not have investments, they do not maintain jobs or skill levels, they do not adequately provide for their families.
Moderately successful people usually think and plan with a planning horizon of months. They will plan what they are going to do in the weeks and months ahead with some consistency. They usually do not plan for the long term – more than one year away. This limits their horizon and their ability to plan for the long term future.
More successful people are constantly thinking about and planning for the long term future. They not only have plans for the immediate future (days and weeks ahead) but they also plan for the next year, five years, ten years and more.
The upper classes in Britain for example register their children at Oxford University when the child is born! They wish to assure that their child gets in and they begin setting aside the money as well for tuition. Highly successful American families begin a college fund for their children at their birth. They are working with an 18 year planning horizon.
How to Think and Plan for the Long Term
Whether you are planning a career, a business or anything else that requires a long term commitment you must look as far into the future as possible. As with other things there is a right and wrong way to do this.
Most people plan for the short term future first. They think about what they will eat for their next meal first, then what they will do this evening, this weekend, and then start to plan for next month and next year. The better way to plan is to start with the long term plan first and work your way back. The reason is simply that you should be acting now in ways that further you on your path to accomplishing your long term goals. You should be avoiding now any distractions and detours that take you away from pursuing your long term goals.
Start with the Longest Future View
You want to start by looking as far into the future as you can. To some extent this is defined by your age and stage in life. If you are 90 you may not be thinking seriously about a 20 year plan, though maybe you should. If you are 16 you may feel you have no idea really what you want to do in life and no idea how to think 20 years ahead. For these age extremes, although long term thinking has some real advantages, it may not be as practical as at other times in life.
I would however urge young people to plan as far into the future as they can, not because they necessarily will follow their initial plan, but for the benefits that accrue when you learn to think into the future.
For most people the longest future view is about 20 years. It is very difficult to really plan beyond 20 years. It is not impossible but the relative utility of planning beyond that point begins to rapidly diminish. Our lives tend to pass through generational planning horizons which are about 20 years long. We build families, careers and businesses between the ages of 20 and 40. We build serious wealth and often reach the apex of our productive lives during the 40-60 year period. Most people begin to scale down their productivity and relax a bit more during the 60-80 year period through some form of partial or complete retirement. Each of these segments of one’s life deserves its own long term plan.
The 20 year plan can be as vague as you need it to be. You can think in terms of general career or business goals, personal achievement goals, etc. Examples of a 20 year plan may be to become CEO of your company, learn three languages proficiently, climb the highest mountain peaks in the world, design an entire line of clothing, become an accomplished actor, musician, surgeon, or whatever else you wish to achieve mastery in.
You do not achieve your 20 year goal in one step. It takes many steps which can each be broken down into many more steps.
Short and Medium Term Planning
This is where your short and medium term planning comes in. You plan how you are going to accomplish your 20 year goals by breaking them down into shorter term steps. You look at what you need to accomplish over the next ten years to get to your 20 year goal, and then the next five years, the next year, the next 6 months, the next month and the next week.
Daily Planning with a 20 Year Horizon
Every day you plan that day. You may choose to do so the night before or in the morning. You look at those 20, 10, 5, and 1 year goals and plans and determine what you need to accomplish today that will move you toward them. In effect when you plan your day you are planning it with a 20 year planning horizon. One key decision or action you make today can alter your direction on your 20 year path.
Plans can always change. Life has a habit of throwing all kinds of things in our path as we pursue our plans. Yet the process of looking far ahead and planning for what you wish to accomplish in the most important areas of your life has inestimable value. There is a reason why the richest and most successful people plan for the long term. Think like them and you can more likely act like them, act like them and you will more likely become like them – that is – successful.