Your ability to delay gratification might be one of the most powerful determinants of your success in finance… heck, in all of life.
Don’t believe me? Well, have you ever heard of the marshmallow experiment? Sure you have: some gentlemen at Stanford, back in the late 60s, offered over 600 children a choice. They were sat down at a table and a marshmallow (or similar treat) was placed in front of them. They were told they could eat the marshmallow as soon as the researcher left the room – no problem – OR they could wait 15 minutes and receive a second marshmallow to enjoy. Some kids chomped the treat immediately, others waited and saw a 100% return on their investment.
Every time this experiment is reproduced, it puts on full display who’s got self control and who goes for the gusto of the moment.
Enough with the cute kids; why do I care about this experiment? Well, Walter Mischel and Ebbe B. Ebbesen (What a name! Who were this guy’s heroes?!), the two gents who were running this experiment, followed up on each group over the next several decades and found some fascinating correlations. Those who delayed gratification ended up winning at almost every stage of life in significant ways. They were described by their parents as significantly more competent as adolescents. They had higher SAT scores, faster reaction times in an emergency situation, and were better as adults at controlling their response to alluring temptations.
Fascinating.
What does that have to do with you? Well, in our luxury addled culture, the marshmallow test has become a feature of daily life. It’s nigh impossible to go 3 hours without an opportunity to instantly gratify oneself with all manner of (some good, many destructive) stuff. And, I propose, that your ability to pass this test has big implications for your suitability as a steward of the King’s resources.
Let me tell you about how this has been knocking on my own door lately. I’ve been very hot this summer on all drives that last for longer than 15 minutes, because my Subaru’s A/C compressor has gone bad. Because this is a very expensive fix, I decided to see if I could make it to the fall without A/C (because once fall arrives, I’m golden until next summer!). Lest you praise my moderation, know that this isn’t a minimalist decision for me. I just have the sinking suspicion that as soon as I replace that compressor, that will be the day my car gets crunched, stolen or otherwise jacked up in some way. Irrational fear? Definitely. But there it is. (I’ll get it fixed, eventually, get over it.) Bear with me, here:
Each time I hop into my rolling sauna, I hear a little voice saying “a new Toyota Tundra comes with a working A/C”. This voice… it’s utterly reasonable at times. It reminds me that, as a small business owner, I could expense a 6500+ lb. vehicle as a tax code Section 179 write off! This voice (let’s call it Tad) points out all of the internet ads (that I’ve caused to flood my workspace by visiting Toyota.com too frequently) offering huge incentives to me on new trucks! Tad reminds me that I have cash in the bank that could easily cover this purchase.
Tad: It’s all lining up for you, big daddy. You, sunglasses, rock and roll blaring, that boss Tundra, driving it through a shallow creek with water splashing up in slo-mo… LES DO IT
Me:
Tad: Yeah. You could take your dog with you into the backcountry…
Me: “Backcountry?” …I don’t really WANT my dog with me in the car-
Tad: Ok forget that. The ability to haul SO MUCH STUFF…
Me: I’m not sure I need to ‘haul’ anything, really…
Tad: Back to what I was saying before: sunglasses! Rock and roll!
And this is what I mean by the daily marshmallow test. For me, at the moment, I can eat the Toyota marshmallow now, or wait. For my wife, it’s usually a home renovation project that sings a siren song to her every time she walks by the honey oak trim on our staircase. All of these ‘alluring temptations’ are made even more tempting by the fact that we could choose to have them right now, debt-free. It’s right there! We could do it!
Good planning and hard work lead to prosperity, but hasty shortcuts lead to poverty.
Proverbs 21:5
For many of you guys, my comparison with the marshmallow test is spot on, and you know it. For almost any purchase you want (think of treats at the gas station, think of stopping into a coffee shop when free coffee sits at home or at work, think of the nonsense we throw into the Amazon cart just because we’re clicking! It’s buy time!), you can find a way to sell away your future wealth for instant gratification. That’s how credit card debt works: you trade in a secure future for an insecure but more indulgent present.
It works exactly like the marshmallows.
Almost every day of your adult life, you’ll be given opportunities to trade future wealth for consumption today (or fitness or belly satiation, or time with God for sleep, or a date with your wife for laziness that says it’s too much trouble to plan, etc. etc.). And just like the kids who waited to eat their marshmallow, if you can run that gauntlet without giving in to the tempting offer of instant gratification, odds are that you’re also the type of man who will be adept at long term thinking.
Did you catch that? Let me repeat:
If you will put off some of your instant gratification today, you WILL GROW in your ability to think long term (because you’re exercising those muscles)! Odds are also likely that you’ll end up in a new situation – wealth (which some would say, is inevitable for a guy like you).
Those who love pleasure become poor; those who love wine and luxury will never be rich.
Proverbs 21:17
Let’s say you’re kind of a self-denying machine, and you’ve learned to NOT love pleasure, wine, and luxury. You’ve said ‘no’ for enough years that you’ve accumulated a bit of wealth. First thing I want to say is NICE WORK BRO. NOT MANY MAKE IT THAT FAR. The whole culture tells you “you deserve it” and “you’re worth it” and all that blather that makes us more selfish and fat and poor. You’ve dodged a lot of bullets, and that’s no small achievement! So now you say, “in the marshmallow test, the kids get a 100% return for waiting, so now that I can afford to eat the marshmallow – what’s my return?” Ok I see you. Great question.
And here is where I point you back to the idea of stewardship. While I have mostly moved past the phase in life where small and medium-sized purchases are going to derail my own personal financial future, I have not come remotely close to killing off the thing inside of me that always begs for MORE, BIGGER, BETTER. (Read: Tad.) If the only return I get by putting off, even for just for a season, something I really want, is that I am able to chop away at that nasty thing (“Chop off Tad’s nads” will be a future AW t-shirt)–that’s a really good deal for me. So it’s not about money. (Or it’s not ONLY about money.) It’s about stewarding my character and keeping that self-control muscle taut. Unlike Tad’s nads.
Evil people get rich for the moment, but the reward of the godly will last.
Proverbs 11:18
Of course, that’s not the only return. See, the promises of conspicuous consumption are mostly empty. And, more often than not, by saying “no” to whatever it is that has caught my eye for the moment, I end up seeing those temptations for what they are. I would have a hard time counting all of the junk that I’ve ogled and thought about buying that lost its luster entirely after just a short period of time of saying no to Tad. All the money that I would have converted into home gyms, high powered rifles, rare whisky and the aforementioned pickup trucks over the past few years (sorry… those are all real examples for me) – that money is all growing and productive today! Instead of losing interest right after acquiring whatever the item de jour might be, I said no, realized that I didn’t actually want the thing, and kept focused on faithfully deploying resources in places where they could grow, bless others and expand my family’s influence.
So my good men, stare that marshmallow down. And if you need some tips to steel up your jaw for the fight, here’s my quick reminders:
- The hedonic treadmill is very real. As soon as you acquire the thing that is currently calling your name, there will be a replacement thing. Step off the treadmill by intentionally saying ’not now’ to purchases whenever possible.
- Getting everything you want is a big time curse. Let’s say you could acquire every single item on your wish list, where would that leave you? Thankfully – we have an example from the Bible of a guy who got just that! King Solomon very intentionally set out of acquire everything that caught his eye, and he was arguably the richest man ever to live. So he bought it all, and at the end he said it was completely bankrupt of meaning. Learn to be at peace with less; my Hero said life isn’t about accumulation.
- There is no finish line. This may be another place where we depart from dear Dave Ramsey, who is famous for saying that by living like no one else now (frugally), you’ll be able to live like no one else later (kicking it in the super yacht, Cristal in hand). As I said before, purchase delay is much more about refining our hearts and proving our mettle to a demanding master than it is about building our 401(k) accounts. I’ll still be employing this valuable tool in my old age, regardless of my account balances.
- Delay doesn’t always mean no! I might buy the dang pickup truck, after all–but I’ve decided to wait at least a year. By then, I’ve found that the novelty of an idea has usually worn off and I can make a great decision about the stewardship of resources at my disposal. Because this is true, coming up with a great story also doesn’t lead to an automatic ‘yes’. I can sit on that story for a while and if it still seems good to me after a time, move forward with my purchase. Trust me, I’ve told myself plenty of very convincing stories about why the next purchase makes perfect sense for our family. Just put those on ice for a bit and then move forward in confidence with the ones that survive a bit of delay.
You are stronger than a marshmallow fellas. Do things that prove it:
Put emergency money aside, into your thought-through buckets.
Invest so that you can expand your family’s capital and influence.
Rule your own heart, and set yourself up for ruling more in the future.
*Mark Parrett is one of the founders of Abraham’s Wallet. When not blogging for you here, he’s raising a family in Salt Lake City, UT and working as a financial planner at Outpost Advisors.
