The War Between Delayed and Instant Gratification
“I would rather buy the new Google Pixlebook than invest money in my Roth IRA”
-Peerless Money Mentor
When someone delays gratification, they resist the temptation to purchase something now that will not appreciate in value. In the quest to reach FI, delaying gratification is a powerful tool, especially for those trying to go from Broke Phi Broke to Financially Woke. Someone who has achieve financial independence doesn’t need to use this tool as much. But I have read where a lot of stories where those who have achieved financial independence still use this tool. I guess the Power of Habit keeps them from changing their behavior. Personally, I think they should not hesitate to treat themselves to something nice. They truly deserve it and can afford it. If I had enough money to cover my expenses indefinitely, I would purchase a Tesla!
On the other end of the spectrum, is instant gratification. A quintessential example of instant gratification is my purchase of a brand new Altima five years ago. Immediately after the purchase, I was on cloud nine! My high lasted for about two months and then buyer’s remorse kicked in (Tale of Two Altimas). This foolish decision prevented me from building wealth. Should I have sold it? Yes, but I didn’t. Five more payments to go and I will be free of this debt!
Learning when to use delayed and instant gratification is key to us improving our finances. Unless you have Bill Gates money, you need some delayed gratification in your life!
New Tech Is My Achilles Heel
The war between delayed and instant gratification is a daily battle. I would rather buy the new Google Pixelbook than invest in my Roth IRA. Although I would love to purchase the Pixelbook, choosing the latter option brings me one step closer to achieving financial independence. But choosing the former option just makes an incredibly rich company even richer. Okay, Google, I want to make sure I am taking the necessary steps towards building my wealth and growing my legacy so I choose to invest my money instead.
Power of Resisting Temptation
The Disease of More
By J.Cole J Cole Talks: capitalism and selfishness on Radio Power 105.1 https://www.iheart.com/live/power-1051-1481/
In the video above, 4x platinum artist J. Cole speaks about his realization that materialism can never make one happy. Even though he purchased expensive watches and a Range Rover, he was never satisfied. The interviewer points out that it’s a hamster wheel for most of us. Cole believes that we as a society are placing our importance on the wrong things. In a move that would make Mr. Money Mustache smile, J. Cole sold his Range Rover and now uses his bike to get around Manhattan.
Although he sold his car, he still kept his expensive jewelry. When the interviewer asks him what he does with it, he replies, “I wear it. It’s just that I got it for the wrong reasons. It doesn’t mean anything. Then or now. It was just from being a kid. My cousin had jewelry and I wanted to be like him…” Now that J. Cole has all of these things he says, “I am questioning why I want it. And what did it do for me once I got it.”
He closes by saying that while he is not judgmental (hypocritical maybe?) of others who buy these things, he encourages society to place more value on what he deems important. “It’s just a thing, it ain’t real. To me something real is like a spiritual connection with somebody. Maybe you cannot relate to J. Cole so we will discuss the average Joe in your neighborhood next! Love is real.”
Do you agree with J. Cole’s belief that love is more real than things?
- Yes - 0
- No - 0
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The Hamster Wheel
“1 in 3 Americans cannot come up with $2000 for an emergency. This keeps them on the Hamster Wheel, running in place financially.”
Life or Debt
Victor Antonio visits Pat & Scott from Camden, NJ who are having trouble making ends meet despite boasting a 150k combined annual income. The Range Rover isn’t helping. Subscribe for more Life or Debt: spke.co/1pmVCvW Tune in on Sundays at 10/9c for new episodes of Life or Debt.
On my favorite television show Life or Debt (upset there is no season 2), Victor Antonio, a former Fortune 500 business strategist, challenges families to improve their finances. In the video above, Pat and Scott have done a terrible job managing their finances. They have six kids and they are facing foreclosure on their home. Their monthly income does not cover their expenses; the family isn’t making montage payments and their debt is a whopping $300,000. Their finances seem beyond repair but Victor is here to help guide them in the right direction. He first seeks to understand how they got themselves in this predicament.
Scott informs him that when his wife stopped working, that is when things started spiraling out of control. Without having an emergency fund in place, they ended up missing a mortgage payment. That one mortgage payment missed eventually turned into 19 missed payments. How could this be possible?
Pat and Scott’s Hot Mess
The couple makes a total of $155,000 a year. When Victor first asks them about their expenses, they tell him they have no clue where their money goes. After the initial lie is posited, the truth is revealed! The couple is spending way more than they can afford on material things. $650 a month on a Range Rover + insurance. $12,000 on an engagement ring. On top of all that, their engagement party will cost $2500. Also, Pat reveals that she purchased a Louis V purse in Europe for only $750
While there is nothing wrong with having nice things, when you are buried in debt, one would think those nice things would take a back seat. This couple’s story is a poignant example of what happens when you do not use the power of delayed gratification to achieve your financial goals. Instead of them owning their things, their things own them. I will have to go back and watch the episode to find out if they eventually turned things around.
How to Win the War!
The war between instant and delayed gratification is real my friends. As you have seen, not using the power of delayed gratification can lead you to a very broken place financially. Conversely, if you exercise too much delayed gratification, you end up living a miserable life. The key to living a good life is balance. Enjoy your life, for tomorrow you might not be here. But make sure you store up food for the winter, like the ant!
You don’t have to win every battle between the war between instant and delayed gratification. Sometimes you will fail but keep your eye on the final prize, which is financial independence. Although I cannot guarantee that more money will increase your happiness, I can guarantee that it will increase your options in life!
I chose instant gratification when I purchased Google home and Phillips Hue light bulbs. But it allows me to do cool things! When I want to listen to the latest Mastermind Within Podcast, I just ask my Google Home to play it for me!
What is your Achilles heel?
What would you do if you were in Scott and Pat shoes?
Do you sometimes struggle with delaying gratification?
What is your most recent win in life?
Jerry is a Business Insider Contributing Writer who is obsessed with personal finance. He believes you can improve your financial situation by applying principles taught by the financial independence community to your financial life.
If you are having trouble saving, he recommends that you join the SaverLife Savings program where you can get a $60 reward after six months (no income requirement).
For a fun read, check out his article 10 Signs You’re a Personal Finance Addict to see if you are a personal finance nerd.
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