Think and grow rich

This is the title of one of most popular wealth-building books ever written.  It's an enticing concept isn't it?  And, of course, if I could grow rich simply by dreaming of it, what else might I be capable of, without even stirring from my couch?  There's basic physiology that needs fixing, the home needs decorating and the car needs a good wash.   If I only concentrate hard enough...

Of course, it's not the growing of riches that we're thinking of this week.  No, our thoughts are occupied with the 35%-odd rise in the price of gas, and concerns that we are not going to be able to afford to heat our homes this winter.  And as we watch the inexorable rise in the cost of key utilities, we are not forgetting that nationally house-prices have dipped, leaving us worse off by around -6.3% over the last 12 months.  The FT carried the usual picture of an elderly lady, swathed in woollies and quilts, hunched pathetically over a single-bar electric fire.  One wondered if she was trying to Think Herself Rich - at least she did appear to be thinking very seriously about something.

Against that kind of background, Lord Turner has returned to the fray on the issue of State pension age.  The Government is already proposing to raise it to 68 - Lord Turner expects it to hit 70.  It was not so very long ago (mid-1980's) that we were all looking forward to retiring early, to tinkering in our country gardens and jetting off on another foreign holiday.  How quickly expectations are undermined.

And yet, the reasons for the projected rise in retirement age are clearly understood, aren't they?  It is essentially all about money.  Since we're living longer, we're outliving our retirement capital - irrespective of whether we're looking at State or private provision.  Perhaps we can resolve the problem by thinking about it?

Of course, it's not about thinking.  It's actually all about doing.  Michael Masterson, in his book 'Automatic Wealth' argues (correctly, I think), that filling our heads with positive thoughts will achieve little or nothing.  What matters is following the right behaviour patterns - such as moderating unnecessary expenditure and becoming committed to regular saving.  Get the behaviour right first, and the thinking will follow.

Are we proactively helping our clients to develop these behaviours?