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Hindsight is 20… Okay, we know that saying so let’s skip the crap. Today is the last day of the year decade. Is there anything you wish you did this decade that you didn’t? If you could turn back time, how will your goals be different?

I read somewhere before that most of us overestimate our short term goals but severely underestimate what we can achieve long term (long term being five years or more).

Today marks the end of another decade. If you could restart year 2000, is there anything significant that you could have done to make your life a little better in 2010?

Sometimes when I talk about long term money matters like retirement and long term investing, I bet many of you are finding the concepts quite hard to grasp. 10, 20, 30 years into the future? Who can make a commitment for that long?

I know it’s hard, but yet, those of us who made sacrifices in 2000 are SO MUCH better off now. It’s no secret that the last decade for the stock market down right sucked, but did you know that:

  • The S&P 500 actually had a negative annualized return in the past 10 years, but having $100,000 at the start of 2000 in a S&P 500 index fund and putting $1,000 a month towards it still gave you $214,000?
  • If you had a diversified 80% stock / 20% bond portfolio rebalanced annually, it equaled to an annualized return of just 3.6%. Yet, with the same $100,000, your portfolio could have been $290,000 with the same $1,000 monthly contribution.

(Data: Jan/Feb Issue of Money Magazine)

$190,000 extra since 2000 in the worst investing environment since the great depression isn’t bad at all, and amount is certainly much more money than most people have. Yet, all of us could have had that much money by now.

If only we made that commitment, instead of buying all that stuff we can’t even remember now.

If $1,000 is too much, then start with less and increase it slowly. The more you save, the more you will have. It sounds obvious, because it’s hard to imagine results so far away. Instead, think backwards. Venturing out ten years into the future might be tough, but what if you look back and tried to see yourself making that commitment ten years ago? All of a sudden, the goal isn’t so far fetched.

A decade is a long time, but we already have a couple of those under our belts and will live many more. Find some long term goals and stick to it. Not just because it’s the right thing to do, but because you absolutely need to. If you need some help, your past could help.

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