DENIAL OR DEFERMENT?
Are you tired of struggling to make ends meet? Do you feel like the world’s economic system is stupendously and specifically stacked against you? Would you honestly trade having less “stuff” today if you could guarantee having less stress tomorrow?
If you’ve answered “yes” to all three questions then do note that one of the three core tenets of my financial planning practice is Delayed Gratification. Let me tell you why... loan, which I repaid early, after 19 months, around August 1996.
Then for the ensuing 17 years I never had another car payment to service. (Sometime during that intervening period though, I bought my wife a second-hand Toyota Vios in near mint condition from a close friend. She still drives it today. I also took out a two-year loan on her car and paid it off early — during the height of the Global Financial Crisis of 2008-2009.)
Nonetheless, as I didn’t need to make monthly car payments specifically for myself between August 1996 and August 2013, and because I chose to be happy driving my ageing Proton Saga which I maintained well — with the help of my Serembanbased mechanic friend Raja Kuppusamy (who still services my now 25-year-old Proton!) — and which meant I had 17 years to accumulate savings and investments targeted at paying for my next car.
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Proton around, I occasionally endured snide remarks as well as puzzled looks from friends and family members who knew my financial planning practice was growing in healthy increments.
With each passing year, I grew better at disregarding the judgements of others and felt more comfortable at staying on a path of my own choosing.
When I turned 49 in May 2013, I finally decided to give myself a much appreciated personal present — in the form of a fancier, nicer, safer and bigger vehicle.
With the help of friends, a great deal materialised and I put down a large downpayment on my Mercedes E250 in August 2013. I also took out a four-year car loan, which I was once again able to
repay early. I tell this story to workshop audiences comprising regular people reeling from rising expenses and lower job security. Some attendees appreciate being taught the wisdom of delayed gratification: giving up not something bad but something good so as to be able to afford something great later down the road.
In truth, some individuals are wired from a young age to be better able to exercise delayed gratification; but most people like me, aren’t!
In the 1960s and 1970s a psychologist and Stanford University professor Walter Mischel conducted studies on groups of young children to see if they would choose to gobble up one marshmallow (or cookie or pretzel) immediately or wait a pre-specified 15 minutes in which case they would receive two treats.
Those ground-breaking studies morphed into multi-decade longitudinal research projects which showed that kids who chose to wait the quarter of an hour before eating their treat ended up years later with better scholastic scores, higher educational attainments and even lower body mass index (BMI) readings!
Unsurprisingly, delayed gratification also leads to eventual financial strength. The good news is that even if you have usually opted for immediate gratification up to this point, you’re merely a heartbeat away from selecting a better path into your future.
Sadly, it takes a painful series of financial wake-up calls to force most of us to exercise self-control and opt for near-term and even medium-term sacrifices in the hope of attaining longer term success. (My own bitter “medicine” involved being mired in credit card woes in the UK in the 1980s and then again in Malaysia in the early 1990s.)
So, regardless of your present age and current circumstances, if you believe you are statistically more likely than not to live another decade or longer, then please recognise that delaying some form of gratification today will in all likelihood improve your life tomorrow.
If you opt for the road of sacrifice today then take deep comfort in knowing that delayed gratification is NOT (permanently) denied gratification but only (temporarily) deferred gratification.
Your best is yet to come.