Delayed Gratification: The Core Investment Mindset

Delayed gratification is basically the process of resisting temptation of an immediate reward in preference of a later reward. More often than not, the wait is always worth it.

Think of a farmer who plants an array of cash crops. The process of obtaining his yields is relatively straightforward: Till the ground, plant seeds, provide all the nutrients required for its growth, and when the time is right and the crops have formed, harvest.

Now, imagine if halfway into the process, the farmer prematurely harvests his crops. His spoils will not only be tiny, he will have wasted a good part of his hard work.

This is how many of us handle our finances and, particularly, invest! The concept of sowing and reaping is the same concept that governs the game of investing.

Tilling the ground is the hard work you put in to make money. You could be running a business or working a 9-5 job, but the fact remains that you are putting in a lot of time and effort to earn a living consistently. Because you know you don’t want to work hard forever, you invest – this is how you plant seeds.

You invest your funds in specific securities and leverage economic opportunities, financial analysis, and effective investment strategies to ensure your investments grow. However, for your investment to form into the bountiful harvest you know it can be, you must wait.

This is the very foundation of investing and it is known as delayed gratification.

Delayed gratification is basically the process of resisting temptation of an immediate reward in preference of a later reward. More often than not, the wait is always worth it.

In investment, delaying gratification requires that you make a few financial sacrifices now in order to have the opportunity of a lifetime of dividends. A good reason for this is that to unleash the exponential growth of your finances, interest will need to be compounded and accumulated over a long period of time.

Anything short of this and you’ll be the farmer that didn’t wait for his harvests to mature.

On Managing Expenses

When it comes to managing your expenses, you should be able to make a clear-cut difference between your wants and your needs. Your wants are avoidable and will not cost you so much if you don’t have them and your needs are important.

Your desire for exorbitance and luxury will typically fall under the section of ‘wants.’ Instant gratification typically makes us WANT things even when we cannot afford it and a by-product of this is borrowing.

An example is borrowing against your future income like your salaries because the a iPhone is out. The sooner you take a hold of your expenses, the sooner you can save and invest. Save and invest more now and you will be able to spend more later.

Balancing Now And The Future

The strongest concept anybody will put forward in order to counter the concept of delayed gratification is that “Life is short” or “you only live once.” They’ll probably tell you stories about those who failed to “enjoy their lives” and ended up dying or losing out on life’s fun because they were too busy saving and planning for the future.

This is where balance comes in. Delaying gratification does not mean that you “suffer” today. It, however, requires that you have your eyes set on the objective at all times. This is the only way not to go overboard and sacrifice your future for right now.

Written by Lawretta Egba.