Delayed Gratification December 7, 2006
Posted by The Probabilist in : [Articles], Business, Doodads, Emotions, Financial Literacy, Goals, Responsibility, Wealth, Assets, Investing , trackbackThe concepts of delayed versus instant gratification are undoubtedly one of the most important choices that separate rich thinking from poor thinking. And it isn’t a choice until you’ve consciously identified it as one. Since it’s too often a matter of unconscious repeating of the pattern that your family or closest friends are instilling in you, it’s very important to think it through for yourself. Does no money down with fixed monthly payments really make more sense to you compared to acquiring assets that pay for what you want? Your answer should address both financial and emotional sensibility.
Financially there’s no doubt about which is a more sound decision. The two alternatives both represent a spiralling result. One is an upward/positive spiral while the other one is a downward/negative spiral. By buying first and paying later the monthly expenses keep building up and it’s increasingly more difficult to set a fixed percentage aside, a.k.a. paying yourself first. Most people don’t even think about this aspect to begin with. So, rather using a portion of any monthly income to invest in assets that add more income, the asset itself can increase in value when invested and maintained properly.
Emotionally delayed gratification also serves a better purpose, since it’s a question of worthiness. When are you worthy of something, before you have the money or when you have the money for it? The answer is simple in logical terms, but since people in general aren’t rational beings the emotional reasoning dwarfs the rationale.
But choosing delayed gratification doesn’t have to mean for you to squash the existence of your emotional expression. In fact, it can be used in advantage to gain the mind-set of delayed gratification. See, sometimes you might have got so accustomed to, lost interest of or completely disposed of something that you’re still paying the bills for and those are the emotionally worst ones to pay for. But in contrast if the money needed to buy something is acquired through hard and smart labor it can serve as a much better outlet of emotional outburst once it’s paid for in cash. It’s simply a smarter way to harness the emotional side of wanting something.
The rich always think in terms of delayed gratification. It doesn’t matter if it’s about creating a business, investing in real estate or simply desiring another doodad, to name a few examples. This is the process they all have in common, whatever they put their mind to. Just trying to answer the question of how you can afford something doesn’t mean any answer is the right answer, as with the case of typical jargon like “low down, easy monthly payments.” That’s the middle class trap. Looking good and going nowhere has never been my path in life. Which one is yours?
(2 votes, average: 5 out of 5)
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It’s amazing how many people never learn this valuable lesson. Even some people who are in their fifties haven’t quite gotten it yet. You hit it dead on. I even feel guilty when I let myself go to McDonalds anymore and spend $5, because in 20 years it could have been $50 in the stock market!
It took me a long time as well — I never really how much I wasted to have “instant gratification” while failing to plan for the most important things in life, such as educations for my children, retirement, etc. Luckily, we have seen that we really don’t “need” so much, and, if something is important, we need to be able to save for it in order to get it. Much better way to live overall even if we sometimes are really cheap lately (after years of being very loose financially, it can be confusing — but it’s absolutely necessary to be frugal right now). It all does get harder if you let it build up, so, I’m with you on this one.
The toughest part about living with this mind-set is that you have to start from the bottom. Additionally, there’s the financial burden of raising a family, buying your own home and acquiring a vehicle or two as well, which cause temptation to arise. As long as those things are considered to be conscious choices that don’t lead to stress and worry, further materialistic cravings don’t surface either. And that’s when you can start focusing on building real wealth on top of all the other challenges life has to offer.
Psychologically, my best guess is that this lesson is toughest for those people who tell themselves that they’re prisoners of their circumstances, work and past decisions. This is why they reason that they ‘deserve’ to get something in return that isn’t rightfully earned. Therefore, focus first on what you really want to have in life and know that those things will require a lot from you in return. Whatever is left can then be the seed growing out to give increased freedom.
[…] The Probabilist explains delayed gratification […]
Ah, but as John Maynard Keynes said,
In the long run we are all dead.
I just posted a new article addressing “the debt police.” I am really confusing myself lately about precisely the issue of living now or living for the future. I have gotten frustrated by the idea that it is “immoral” to spend money when you work to make it (or, even if you are lucky enough to inherit it). I’m not sure that money is a question of morality or just a fact of life. When put in terms of “delayed gratification” though, it is almost immature to use money now; adults should be able to delay their gratification indefinately. Anyway, I’m struggling with this issue and wrote this article, which, if you are interested, can be found at http://www.takingcontrolovermoney.com/taking_control_over_debt/taking_control_over_the_deb.html It was NOT accepted into the Carnival of Debt Reduction, I guess for obvious reasons.
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This is a really Great Article and something I am strugling with at the moment. I honestly think this is a topic not touched on enough in society and it is not just in relation to money. If you are over weight it is because you can not delay the gratification of being thin and healthy over that big mac an fries.
I think you must look at your past and how you were brought up I always got what I wanted with out putting much effort in as a child. I never wanted anything too crazy so it was easy to get. In essence by my parents doing what they thought was best I never learn’t how to delay gratifcation. Which is detremental. I am learning this now and if you know of any general books on the subject I would love to know about them. I strugle to find any.
It’s all about time and money. If you are overweight, it is because you didn’t make the time to plan for healthier alternatives. It either costs more (if you don’t cook) or takes longer (if you do) to make healthier eating choices. The easier choice is the Big Mac - both cheap and fast in the short term but very bad in the long run. But if you are short on both time and money, that’s often the only logical choice to make. People that make minimum wage are short on both since it takes so many hours to get a little bit of money. So I don’t think it is only about delayed gratification. It’s hard to think about the future when there is so much uncertainty about the present. Of course, if you are at that point you could go to school to improve your situation, but that involves more time and money! Only when you have enough of a break in one or the other can you begin to think about delaying gratification.
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