GOLDEN RULES

Central Leader - - FRONT PAGE -

Let me tell you a story about an an­cient Greek hero who can help you get richer.

It’s Ulysses, a kind of Greek Maui, though with­out Maui’s am­bi­tion, and with a much worse sense of di­rec­tion.

Ulysses was one of the Greeks who de­stroyed the an­cient city of Troy, and then got hope­lessly lost sail­ing home.

On his jour­ney, Ulysses had many ad­ven­tures, one of which in­spired a set of Yale be­havioural economists to set up a web­site to help peo­ple achieve their dreams, in­clud­ing their money dreams.

It’s called StickK.com, and it al­lows peo­ple to set up what are known as Ulysses con­tracts.

These are con­tracts be­tween your present self, and your fu­ture self, where present you pledges to do some­thing good for fu­ture you.

They are named af­ter Ulysses in hon­our of his cun­ning plan to hear the Sirens sing.

Sirens were evil mer­maids, and once a man heard the Sirens’ beau­ti­ful song, he would dash Love your fu­ture self De­velop your wealth plan Try a Ulysses con­tract

him­self into the sea, and drown.

But Ulysses really, really wanted to hear them, and not die.

So he or­dered his crew to tie him to the mast, and not to re­lease him, un­der any cir­cum­stances.

They then put wax in their ears, and rowed up to the Sirens.

In bind­ing him­self to the mast, Ulysses’ present self was do­ing some­thing great for his fu­ture self.

Un­like Ulysses, peo­ple are of­ten pretty bad at do­ing the things that are good for their fu­ture selves.

It’s why so many of us eat so badly, don’t ex­er­cise, and save a pit­tance.

But the Yale economists know peo­ple are more likely to do the good things, if they bind them­selves with a Ulysses con­tract, es­pe­cially if they have a ‘‘ref­eree’’ watch­ing their progress, be­fore whom they will be shamed, if they fail.

Through StickK, peo­ple can even set fi­nan­cial penalties to in­cen­tive them­selves not to fail, by pledg­ing to give money to some­one, or thing they hate if they fail.

A cat lover might give money to Gareth Mor­gan for in­stance. A com­muter might give money to Wil­son Park­ing.

I learnt about Ulysses con­tracts from TV pyschol­o­gist Nigel Latta’s Mind Over Money show, but then I re­alised how many of us use two Ulysses-type con­tracts to get ahead and don’t even re­alise.

The first is Ki­wiSaver.

In­stead of spend­ing all your money on yummy and shiny things, present you sticks some into Ki­wiSaver for the ben­e­fit of fu­ture you.

The penalty for not do­ing so is los­ing the em­ployer/gov­ern­ment con­tri­bu­tions, which are the clos­est thing to free money any­one gets.

The other Ulysses con­tract is the mort­gage. Present you takes on debt to en­rich fu­ture you.

The penalty for non-pay­ment is a mort­gagee sale.

But an in­creas­ing num­ber of peo­ple don’t just make the min­i­mum re­pay­ments the banks ask for.

They set their mort­gage pay­ments higher in a su­perUlysses con­tract which will leave their fu­ture selves far richer.

BNZ says in the past year alone, cus­tomers opt­ing for higher vol­un­tary re­pay­ments wiped 20,000 years of their com­bined mort­gages.

That’s some­thing their fu­ture selves will one day thank them for.

SUPPLIED

Pain­ter Her­bert James Draper showed Ulysses tied to his mast, be­set by Sirens.

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