The Long Game: Mastering Delayed Gratification for Lasting Happiness and Wealth
The habitat of the modern human living in the first world is one where nearly everything is available in short order, if not on-demand. Cell phones are gateways to instant information, entertainment, and communication. At our fingertips, we can immerse ourselves in bingeable television shows, enter the endless rabbit holes of social media, and risk money in high-stakes poker or meme stocks.
According to Rescue Time, the average American picks up their phone over 50 times a day and spends more than three hours a day staring at the screen. This environment makes delayed gratification a tricky skill to master.
I feel it’s important to clarify my position on cell phones. I’m an avid user of my phone and am still blown away by the impressive technology we carry with us all day. I have high hopes for future tech concepts such as the metaverse and don’t mean to sound like an aging curmudgeon. But, it’s undeniable that cell phones have changed habits and undoubtedly altered our minds.
I recently read the book “Richer, Wiser, Happier” by William Green and had the delight of interviewing him on my podcast Bulls, Bears, and Bourbon. His book brilliantly combines lessons and wisdom from many of the greatest investors of all time like Sir John Templeton, Charlie Munger, Joel Greenblatt, Bill Miller, Tom Gayner, and others. Despite being found in bookstores' business and investing section, it’s packed with straightforward advice that goes beyond markets and money. Notably, the book provides numerous lessons on delayed gratification, one of the fundamental skills I want to teach my daughter.
One of my favorite bits of the book comes from a chapter titled “Nick and Zak’s Excellent Adventure,” which examines the unconventional investment business built by unlikely partners Nick Sleep and Qais Zakaria (Zak). Green writes, “in a world that’s increasingly geared to short-termism and instant gratification, a tremendous advantage can be gained by those who move in the opposite direction. This applies not only to business and investing, but to our relationships, health, careers, and everything else that matters.”
If delaying gratification produces superior outcomes in everything that matters, why then is it so difficult?
Uncertainty — by investing today, we know we can build wealth for the future. But that future is not guaranteed. The media constantly reminds us of the fragility of life, so delaying a reward for an uncertain future may seem irrational at that moment.
Trust — it’s hard to delay a reward if we don’t trust the prize will ever arrive. This is especially true when considering investing in the markets, especially after the global financial crisis of 2008. We trusted institutions that took excessive risks and engaged in predatory lending, leading to the international banking crisis and the Great Recession. Governments intervened to bail out the banking system and implemented regulations designed to restore public trust. Still, many remain skeptical after witnessing the carnage that destroyed a lot of wealth.
Social Pressure — we used to say “peer pressure is a bitch” as we succumbed to our friends’ encouragement to do something stupid. And while the language isn’t very mature, the fact remains. Doing the right thing is difficult when surrounded by those who engage in behaviors that counter long-term success.
How can we get better at delaying gratification?
Set Time-Specific Goals —“become rich one day” is not a particularly effective goal. It’s based on non-specific subjective outcomes. What defines rich? When is one day? Resisting long-term destructive behaviors is more manageable when working towards well-defined goals with specific time horizons. When we have a deadline, we’re less likely to kick the can down the road.
Build on marginal gains— we tend to aim for lofty goals and quick results, but minor improvements can have significant long-lasting impacts. British cycling coach Dave Brailsford popularized the phrase “aggregation of marginal gains.” The idea was simple. Find a one percent improvement in every area of track cycling. His team looked at seemingly insignificant areas of their routines, equipment, and training regiments. Many minor enhancements, when combined, resulted in seven gold medals in the 2008 Bejing Olympics. This approach works in every area of life. Small improvements can have profound impacts, whether building stronger relationships, living a healthier lifestyle, or achieving financial success.
Surround yourself with those who make you better — one of the most important decisions we make is who we choose to be around. When we seek the company of those who embrace healthy habits, continued education, and delayed gratification, we find ourselves making progress towards our goals. On the other hand, spending time with destructive, short-sighted, and close-minded people will leave you lagging. After all, misery loves company.
Delaying gratification doesn't equate to accepting agony now to avoid suffering later. It might conjure images of pinching pennies to save for retirement or eating only salads to become healthier, but that’s not the point.
Delayed gratification is about resisting impulses for immediate rewards in return for more worthwhile rewards later. It doesn't make sense to delay a reward today for an equal one in the future. The decisions you make today should increase the prospects for a greater reward.
Fortunately, we know simple, though not necessarily easy, steps can yield significant returns. Eating a healthy diet and staying active will make you healthier. Investing over long periods will help you retire better. Adequate sleep will boost your mental state. These actions may require you to forgo the immediate pleasure of a sugar rush from soda or buying the latest gadget when it’s outside your budget, but your future will thank you for it.
As we strive to become better, find meaning, and live happily, delaying gratification is a tool that can guide us to positive decisions. Even better, it’s free and available for minor decisions or life-altering ones. Eventually, one can enjoy delayed gratification for its own sake. As the benefits of better long-term decision-making become clearer, instant enjoyment can be had by simply delaying gratification.
Disclaimer: This article is provided for general information and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. I encourage you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from James Vermillion, and all rights are reserved.
