Time Horizons

Time horizons are the periods of time over which we analyze a particular situation or outcome. Every decision we make is done in the context of some time horizon. The choice whether or not to enjoy takeaway food as opposed to a healthier alternative is largely determined by the frame of time in which we take our perspective. In the short term, one would be more likely to take the takeaway option for convenience and comfort. However, in the longer term, one would be more likely to choose the healthier option in to improve their future self.

Similarly,

the decision to pursue tertiary education is one determined on the basis of a long time horizon. Years spent attaining qualifications at the expense of working immediately and earning money is done so in the belief that in the future, one’s life outlook and earning potential will be improved. However, viewed only from a shorter time horizon, this decision often appears irrational and an enormous opportunity cost.

In investing, time horizons are the durations over which an investment is intended to be held, before being sold for a capital gain. In crypto-markets, time horizons are incredibly short, whilst in the traditional share markets, investors often opt for far longer time horizons. With shorter time horizons comes greater risk, and greater volatility, with the potential for far higher returns relative to the time for which the investment is held.

High achievers are often criticized of pursuing a ‘deferred life plan’, falling victim to a culture of workism in order to one day enjoy a life of prosperity. A wave of Millennials would propose that individuals ‘live for the moment’, enjoying the feel of the sun on one’s face and the wind in one’s hair.

So which time horizons should we attempt to give preference to? Shorter or longer ones.

The truth lies somewhere in between.

If a doctor told you that you had only two years left to live, what would do in that period of time. Over a shorter time horizon, endless hours spent at work would be difficult to justify. One would likely priorities strengthening relationships with friends and families, pursuing passion projects and enjoying novel sensory experiences.

However, if your doctor told you that you had five years left to live, perhaps your answer would be slightly different. It is possible you would continue working in your current job at least for another few years, perhaps an additional year of education could seem more reasonable in this context.

What if your doctor told you that you had approximately sixty five years to live? What then.

This is the reality that many teenagers face although they may not realise it. Decisions that may seem difficult in a shorter time horizon are often more than justifiable over the long run. I think the youth has lost touch with the sense of perspective needed to live a meaningful and rewarding life. For it is all well and good to drop out of school in order to pursue the California dream, but over what time horizon will this decision be rewarding. Ten years at most?

If your time left on this earth is fleeting, then I would encourage you to make the most of it, strengthen your relationships, travel the world, seek out new experiences and leave no stone unturned.

But to the disillusioned youth, your life is long and your time is yet to come. Remember that.