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.
Why do I care about this experiment? Well, 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.
