Long-Term Thinking versus Short-Term Reactions

Money is this week's topic and it made me consider the value of long-term thinking in investing but also in other areas of life.


The long-term view is the destination to reach, the vision to fulfill or the goal to achieve. The short-term view includes the little steps needed to make the journey. If you only took little steps without the context of the longer view then you get frustrated and disoriented during times of crisis.

The stock market pushes to new highs, then it falls 300 points. Then it climbs again . . . I no longer cling to the day's news. Hanging your hopes or fears on the day's headlines leads to fear and frazzled emotion. Invest for the long term. Sure, I'm concerned if the markets decline months before I'm ready to start drawing from my retirement funds. But I can't control that. And, if I've relied on wise advice along the way, I'm as protected as possible.


How about business? So many young businesses need cash flow today to meet payroll or pay vendors. But only scurrying about in survival mode doesn't allow you to build a foundation where you can easily operate. Last night, I sat down with two other members of the interactive media company where I've just started working freelance and I'm handling two Web development projects. The company has been in a "crisis" mode during the past several months. But the person who's running it day-to-day shared with me and the chief programmer the current debt, receivables, and the client base.


We took a breath and sighed relief. The next three months look strong. Now's the time to begin selling to gain the next clients since it takes 3 months to 6 months to sell a new project.


An investor sitting on the board believes this interactive company has the ability to bill $1,000,000 per year. Currently, the rate is about $600,000 per year. So we looked at how we could do it and what that would mean for us by the end of 2008 and into 2009.


We agreed that it will take work to build to that level, but if we're satisfied with our incomes at that level then we don't need to keep pushing and stressing to reach $2,000,000 in billings.


Our longer-term view allowed us to believe we could be stable while balancing our lives.


Thinking long-term can even apply to families. Last year, we welcomed into our family a 19-year-old "boy" or young man who grew up in a foster care group home. We had known him for several years and he's the oldest brother by birth to our youngest daughter who came to us at 5 weeks of age. M, as I'll call him, had never lived in a family. But he was going to be homeless and he begged us to let him live in our house. We knew his past erratic behavior and the immediate disruption it was going to bring in the home.

Now, at the age of 20, he's lived with us for 13 months - that's the longest he's stayed in any one place since he turned 18.

The tantrums he threw at different times were horrible. He's gotten a couple of jobs and he's been fired. We've had to call out the sheriff's to our home several times since last October. But he's also beginning to learn consistency. He's now beginning to learn communication with us and to help without complaining terribly.

We've known other families who have taken in tough kids . . . and the kids are usually out within a few months because they haven't changed their behavior. Unfortunately, behaviors are more likely to change over a longer term.

We are looking for another program where he'll have to respond positively to authority, but we have enough experience as adoptive parents of troubled kids to also understand change happens over the long term for a child, or teenager, who grew up traumatized. That doesn't mean it's easy or pleasant to handle the day-by-day, but the long-term view gives you a destination or goal to achieve.

And, that alone, provides hope.