“Calvin: Today at school, I tried to decide whether to cheat on my test or not. I wondered, is it better to do the right thing and fail … or is it better to do the wrong thing and succeed? On the one hand, undeserved success gives no satisfaction … but on the other hand, well-deserved failure gives no satisfaction either. Of course, most everybody cheats some time or other. People always bend the rules if they think they can get away with it. Then again, that doesn’t justify my cheating. Then I thought, look, cheating on one little test isn’t such a big deal. It doesn’t hurt anyone. But then I wondered if I was just rationalizing my unwillingness to accept the consequence of not studying. Still, in the real world, people care about success, not principles. Then again, maybe that’s why the world is such a mess. What a dilemma!
Hobbes: So what did you decide?
Calvin: Nothing. I ran out of time and I had to turn in a blank paper.
― Bill Watterson,
[ Day 46 of 2000 ]
As a new immigrant, I had my concerns about the 401(K) program. First of all, I didn’t know too much about it. With all the other things going on – getting a credit card, getting a license, settling into a new position at work, that was on the back burner. Our plans at that time was to go back in a couple of years (mainly because I thought we would have to work forever in this expensive country to be able to retire here). So if we contributed into the 401(K), and had to pay 10% penalty and taxes on it, was it worth it? But then my employer matched up to 6% of the pay. Did I want to waste that? I wasn’t eligible for the 401(K) program for the first few paychecks, that gave me time to make the decisions.
I wasn’t sure I was asking all the right questions, or thinking the right way. I decided to check with a couple of my friends who had been here for years. Surely they would have worked it out by now. They were going to return back to India too, they just were going to stay longer. So I asked one of my closest friends what he did about 401(K). He grinned sheepishly and admitted that he didn’t find out too much about it and had not started contributing to 401(K). I then asked about 3 or 4 more friends about it, and I got similar responses. A couple of them had started contributing towards it to get the employer match, but the rest hadn’t.
Now about these friends – we went to graduate school together at the top most institution in India. It is very hard to get into that place – we were ranked according to an all India entrance exam, and all of these people scored within the top 20 ranks. Indian population is over 4 times than that of USA. Most of the students who are good at studies try to become doctors or engineers, because those are the highest paying jobs. And it is much harder to make a living as anything else. Things are changing now, but this was the reality when we were studying. To be among the top 20 in a country full of engineers clearly implies that they are intelligent, much better than the average.
I was earning six figures at that time, in Boston. All of these friends were in California, and earned much more than what I did – Anyone familiar with tech salaries know that salaries vary with location and Silicon Valley is at the top. And it is not a case of no-money-to-spare-due-to-high-living-costs – They were all dual income families, both of them earning much more than what I was earning.
It was clearly a case of procrastination – Life happens, and there are things you need to deal with. And there are other things you want to do. And there are things that would be nice to do. 401(k) didn’t make any of those lists and dropped out of their radar. They had all been here for 4-5 years at least, before I asked them the question.
I have seen many instances of procrastination getting in the way of what you want to achieve. Since we talk about money in this blog, the relevant ones I can think of are these –
- Not making investment decisions
- Not atually investing
- Not paying bills and credit card on time
- Not filing taxes on time
The only time I can see when procrastination can help is when the market is going down gradually. This is the S&P 500 plot I just grabbed from Google –
Take a look at that graph. Can you really afford to procrastinate?