Today’s guest post comes from Andrew Syrios over at AndrewSyrios.com. Today, Andrew reminds us of the importance of delayed gratification.
No matter what you’ve heard from get-rich-quick gurus, infomercials or game show hosts, becoming wealthy is not a quick and easy affair.
But alas, it was not to be. That shouldn’t matter though, because the only way to properly approach becoming wealthy is the get-rich-slow method.
To master the get-rich-slow method of gaining wealth, one must learn to defer gratification. I believe it is the single most important skill one can possess. You must live below your means now in order to live above society’s mean (i.e. average) later.
In other words, you must save and invest wisely.
There is nothing better to highlight this concept than the famous Stanford Marshmallow Experiment. The experiment put young children in a room with a marshmallow for fifteen minutes. The kids were told that if they could go the whole fifteen minutes without eating the marshmallow, they would get two marshmallows at the end.
Most of the kids failed. But a handful of them found a way to defer their gratification and get to that second marshmallow.
Years later, they evaluated how the kids did in life and found a marked difference between those who waited for the second marshmallow and those that did not. James Clear sums up the results,
The children who were willing to delay gratification and waited to receive the second marshmallow ended up having higher SAT scores, lower levels of substance abuse, lower likelihood of obesity, better responses to stress, better social skills as reported by their parents, and generally better scores in a range of other life measures.
The same is true for wealth as it is for marshmallows.
Shiny objects are all around us and easy, but expensive credit is offered to virtually anyone with a pulse. But the difference between those with financial freedom, or even just financial security, and those without is the ability to say “no” to such temptations.
Buying consumer goods on credit is the absolute worst thing you can do. In that case you are mortgaging your own financial future for some fleeting good in the present moment. Your approach should be exactly the opposite.
Instead of deferring payments to the future for something you get now, you should put as much of the money you get now as possible into investments (my preference being real estate). That way you use your money now to pay yourself in the future.
As simple as it sounds, the mindset of deferred gratification is the best way to build wealth. There are no shortcuts here folks, at least none that can be relied upon to consistently work. But there is good news for those who are willing to be patient and work hard. There are proven and tested ways to become financially independent. There is no need to reinvent the wheel, just defer gratification and wait for that second marshmallow.
Editorial note: To figure out just how long it will take you to reach financial independence, see this post from Mr. Money Mustache called The Shocking Simply Math Behind Early Retirement.
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