Future who?

The concept of money is so ubiquitous in our daily lives that we often do not stop to think why we actually ascribe value to it in and of itself. Whether we have zillions or zilch the money we know today is relatively new. The majority of us* are old enough to remember when the euro first entered circulation, the dollar was introduced ‘only’ 230 years ago and, by comparison, the oldest currency that is still in use is the Pound. The Pound, ‘backed’ by the Bank of England when it was founded in 1694, has been in use for more than a millennium (mainly in the form of Sterling coins). 

Talking about pennies; 

‘Money is Money, lan!’ 

— East London Shopkeeper to a debt enforcement officer, popularised in a Turkish/Dutch/German rap song — ‘lan’= slang 

In reality money only holds the value that our collective imagination ascribes to it, the same holds true for gold and indeed the currently much discussed cryptocurrencies. A great short read on the topic from an historical and anthropological point of view is ‘Money’? by Harari. The topic of money tends to become confusing for many once we move into the world of finance, an industry that ‘helps’?? run much of the world. The industry facilities different forms of capital exchange and storage on many different levels, be it sending ￡10 to your friend for a meal to facilitating the issuing of debt by governments and anything in between.

Yadiyadiya— how is this all connected to the future me? 

Well for centuries now life has gone where money has flown. And although I too believe the saying ‘money can’t buy happiness’, as many of us will know this is only true to some extent. With money being a means to an end for achieving almost anything in modern life, the fact your IQ can drop several points having to deal with poverty or by not having any of it potentially endangering your perceived dignity, having enough of it does actually allow for a degree of happiness.? 

The first step to our financial freedom is having access to money management tools, and something as simple as a proper bank account is yet to be a given for all of us. In this post I will not address the topic of global financial inclusivity, though highly important to bear in mind when we talk about; pensions. 

[Can I end blog posts like I do zoom calls….] 

Boring? Hell no! 

With many of us being increasingly passionate about making sustainability the norm across anything we do, buy and use, we thus tend to consider our collective future on this planet. Yet until FaceApp came with a tool to show you the older you, I reckon many thought of the future you in a very distant manner. In fact, research has shown that we tend to categorise our future selves in the same category as strangers. No wonder that thinking of the role of ‘our’ money for these future selves is not top of mind. 

So when I say pension, I want you to think ‘future me’. And the ‘future us’ aren’t happy looking at the ‘now us’, not least because of the prediction that there will be a $400 trillion (yes, that’s another 12 ‘0’s) pensions savings gap. As in we will lack this amount globally to have ‘acceptable’ living standards by the time we retire. 

Although I have not seen the diversity details of this gap at the macro level, I do not believe that picture will be very rosy either. We do know that there is a stark difference in pension savings between men and women, with young women having to ‘work 40 years longer’ to make up for this gap. Before things become depressing beyond what is bearable, what is clear is that those who can need to collectively consider their future selves a lot more. Perhaps the pandemic has been a financial eye opener for many and it might well provide an inflection point for many. In fact, a recent study in the UK conducted by Ipsos for Nationwide shows that those who were lucky enough to save during the pandemic plan to hold onto to their surpluses. 

Think future; you and us 

Although there is more to it than just being aware, the awareness in and of itself is a great starting point. Being conscious of the emotional disconnect that exists between you and your future self. Aware that for the future you, and the future us which include your and/or your family members’ children, we need to engage with our pensions. Our combined pensions, beyond potentially being a massive force for good (see tumelo and watch this short video), are important in many ways. 

A great first step if you’re enrolled in a workplace pension is to see what fund(s) you are invested in, do they match your risk appetite and are your contributions sufficient to have a pension you’re comfortable with by the age you would like to retire? Secondly, if you’re in the UK there are other options available, such as Self Invested Pension Plans and Lifetime ISAs, to provide extra pots of money. Heck, you might well decide to retire earlier than originally planned making the right (small) steps now! Sipping whatever it is you enjoy on a beach that will still exist because you were invested in entities that took the planet’s future to heart. 

*= Assuming the my audience here is older than 25 ??

?= A mini-book that contains excerpts from Harari’s bestsellers ‘Sapiens’ and ‘Homo Deus’

??= A much debated topic in the public domain, do not wish to exert an opinion in this post. 

?= Several research projects have been conducted on this correlation; from Princeton to others in academia. This WEF article is sweet and short.