Technology buffs and science fiction fans have long been captivated by futurists. For those new to the topic, futurists include scientists and inventors like Ray Kurzweil and Faith Popcorn, who make predicting the future (including the future of the human race) their life’s work. Through their inventions and technical writing, these forward thinkers peer centuries into the future and attempt to tell us all what lies ahead long before it arrives.
While it remains to be seen how accurate all of their predictions are, the futurists – with their focus on anticipation and study of the past – have personal finance lessons to teach us all:
Study The Past
Most futurists do not simply sit back in armchairs and theorize about the future off the top of their heads. Their predictions of what lies ahead rely greatly on what has happened already.
In his 1990 book The Age Of The Machines, Ray Kurzweil successfully predicted that the Internet would see explosive growth in the years to come. Had it not been for Kurzweil’s intense, life-long study of technology, his 1990 prediction about the web would not have carried nearly so much weight.
Consumers would benefit from a similar appreciation for the past. A few weekends spent reading books or articles on various personal finance topics (from debt management strategies to types of mortgages, for example) can go a long way toward helping you make smarter financial decisions. Learning from your past mistakes, and those of others, is also critical to financial success.
Think Several Steps Ahead
Popular futurist Faith Popcorn earned fame for her 1992 book The Popcorn Report: Faith Popcorn on the Future of Your Company, Your World, Your Life. Popcorn used this book to express her many expectations of the future, including the rise of electronic shopping from home by “cocooned” shoppers, higher environmental consciousness and fears about healthcare.
Relatively few people discussed these topics in 1992. In order to predict how big they would become, Popcorn had to think several steps ahead of the general public at the time.
Anticipation and forward-thinking is invaluable to the everyday consumer. When renting an apartment or taking out a home mortgage, for instance, ask yourself:
- Will my income stabilize, rise, or fall three months, six months, and a year from now?
- Do I foresee needing to move in the near future?
- What happens if my adjustable-rate mortgage adjusts upward? (What if it adjusts all the way to its cap?)
Someone thinking of doing a credit card balance transfer, on the other hand, might ask himself “what happens when the promo period is over and this 0% teaser rate shoots to 22%?”
The key is that you think over future scenarios and potential problems now instead of hoping to never encounter them.
Be Open To Constructive Criticism
Many futurists are also scientists. Others are not, but do have scientific interests and backgrounds of some kind. As science-minded people, they know how valuable criticism is to the advancement of knowledge. Instead of walling themselves off from scrutiny, they embrace it – knowing that the key to their next breakthrough could lie outside their own work.
Consumers are usually much less welcoming of constructive criticism. Suggestions to change this or that aspect of their financial lives are often ignored, resented or even rejected. But as in science, what matters far more than who criticizes you is the merit of their criticism. In other words: if your Uncle Bob gives you a stern lecture about making sure you don’t overdraft your checking account again, ignore his tone and the fact that he’s your uncle and think honestly about whether he might have a point.
Be Humble If You Succeed
No futurist gets every prediction right. For all of Faith Popcorn’s correct forecasts, her incorrect ones still caused Ed Chung of St. Norbert College to write a scathingly critical scholarly paper called “Burned Popcorn And Broken Crystal Balls: Beware of False Prophets Bearing Food.” In it, Chung denounced Popcorn as a “fortune teller” rather than a scientist. It was no doubt a humbling experience for Popcorn to be portrayed in this unflattering way. Yet humility is another key virtue of science – you are only as good as your last correct discovery, experiment, or prediction.
The same applies to financial success. If you dedicate yourself to studying money and practicing correct behavior, you will probably succeed – maybe more so than your friends or family. If this occurs, do not gloat, brag or otherwise rub it in anyone’s face. Besides the fact that it’s impolite and ungraceful, you are not guaranteed to stay financially successful forever.
Keep Breaking New Ground
The loudest impulse in every futurist’s mind is to keep breaking new ground. They are never content with their most recent discovery or theory being proven right. As soon as this occurs (and often before) they are off and running on their next big hunch. By constantly pushing back the frontiers of their ignorance, these theorists help add to the growing store of human knowledge and thought.
Here, again, consumers do not always follow the same approach. Many of us are okay with reading about personal finance and calling it a day without actually implementing anything we learned. Others execute some of what they learn (such as paying more than the minimum on credit card balances) but stop short of the total overhaul that their finances need. Set your sights higher than that. Instead of being happy with marginal improvements, try to manage all of your money as intelligently as possible.