Good morning & happy Monday!
The ability to discipline yourself to delay gratification in the short term in order to enjoy greater rewards in the long term, is the indispensable prerequisite for success.
Brian Tracy, motivational speaker & author
Last week I mentioned I would spend the upcoming weeks addressing lessons I have learned in my quarter of a century in this financial planning industry.
When young people ask me about financial success, I always start with one key principal: the ability and willingness to delay gratification. In my observation, those who can say “no” today in order to have more “yeses” tomorrow stand a dramatically higher probability of success than those who can’t / don’t say “no” today.
Sure, there are exceptions, but this is a pretty solid rule.
Throughout the years I have lead many financial classes at my church and in the community and I love sharing this 3 ½ minute clip to illustrate this principal: The Marshmallow Test | Igniter Media | Church Video – YouTube
The concept is most certainly simple enough, but it can be very difficult to actually implement. Saying “yes” is usually way more fun than saying “no.”
My dad would often times say when growing up “a ‘yes’ to one thing is a ‘no’ to something else, and a ‘no’ to something is a ‘yes’ to something else.” Truly wise words; thanks dad 😊.
The potentially frustrating thing about this exceptionally critical component is this concept is way easier for some than others. Naturally some of us are spenders and some of us are savers. I have been a saver my entire life … the idea of saying ‘no’ now so I can have many more ‘yeses’ down the road is not a difficult decision for me … of course I would rather have 2 marshmallows a few minutes later than 1 right now 😊 (a reference to the video link). But I fully understand this is beyond challenging for many people.
Many of the things I do professionally as a financial planner are technical in nature: portfolio construction, tax strategies, diversification, etc., but my observation is that behavior is WAY more important than all those technical factors combined.
Everything starts with behavior.
Plato stated “Human behavior flows from three main sources: desire, emotion, and knowledge.” My hope is that I can add some knowledge to help make sense of some of this financial world … managing the emotions and desires is way above my pay grade 😉.
If you are directly receiving this email you have behaved your way into financial success, but this might be an email worth forwarding to some young people in your life who are setting a financial foundation. My observations (and countless studies) tell me that behavior patterns around financial matters are established early in life. The more I can pound this drum in the minds of young people the better. Save. Save. Save. (Next week I am planning on discussing compound interest which is an AMAZING thing to share with young people).
Everyone wants an amazing future, but there are steps that must be taken to get there … and the sacrifice of saving is one of those necessary steps … I know no other way.
I know it’s countercultural, but it’s the truth … save today and your tomorrow will be better and more secure.
Thanks for listening to my little rant. I’m passionate about this topic as I know where disciplined, intentional savings leads … and I know the destination that those who don’t save too. The destination of the saver is a much better place 😊. This is a foundational building block on which all other financial planning builds upon.
Please let us know any way we can support you along your journey. It is an honor to serve you!