Delayed Gratification — Would you pass the marshmallow test?
In the 1960s, a Stanford professor named Walter Mischel conducted a series of studies (Google “Stanford marshmallow experiment”) that would lay the foundation for one of the most important indicators of success in health, work and life. Delayed gratification is the ability to resist the temptation for a smaller but more immediate reward in order to receive a larger or more enduring reward later.
Examples of failure to delay gratification in everyday life include:
- Skipping gym in the morning for a bit more sleep.
- Watching TV instead of finishing an assignment.
- Going out drinking instead of going to bed early and taking full advantage of the next day.
What is a very common repercussion of not being able to delay gratification? Not being able to save, or worse, getting yourself into unmanageable debt. Rather than waiting until you can afford to buy something, you put it on the credit card and worry about it later. The problem is that it feels good in the moment, but this feeling quickly subsides. Then, to make yourself feel “good” again, you repeat the action. At the very least, this is counterproductive to your wealth creation. At worst, it can become a dangerous cycle leading to bankruptcy. Without taking a step back and objectively assessing your spending habits, it’s tough to spot. This is because it isn’t one big event that rocks your finances, it’s a “death by a thousand cuts”.
The good news — you can train yourself to be better at this. The idea is simple, but most people find it challenging to break the cycle, especially in the beginning. So come up with a plan and stick to it.
Be impatient to act, but patient for the result.
The sooner you start, the less you’ll need to sacrifice later. Most people are patient to act but impatient for the result. The classic example is the new year’s resolution to “start working out and eating healthy”, then quitting after four weeks because the results aren’t visible yet. This is the opposite of what you should be doing. To achieve results, you have to be impatient to act but patient for the result i.e. go to the gym and start eating healthy today without expectation of significant physical changes for a few months at least.
Act now and focus on your long-term objectives.
Practical application — common advice for my clients
Even if you don’t want to invest or buy a home right now, start saving. Set yourself a target to save at least 10% of your income and put it into a high-interest savings account. Even better, have your employer pay 10% of your income directly into the savings account so that you don’t have to actively transfer it yourself (the path of least resistance is usually the best option). This will get you into the habit of saving a portion of your income for investing in your future, a rainy day or just a well-earned holiday!
Remind yourself — what do you ultimately want out of your life?
Originally published at https://www.linkedin.com on July 18, 2017.