Wednesday, August 12, 2009

Delayed Gratification

Have you ever heard of the terms "Good thing comes to those who wait"?

So what is delayed gratification? According to Wikipedia

"Deferred gratification
or delayed gratification is the ability to wait in order to obtain something that one wants. This ability is usually considered to be a personality trait which is important for life success. Daniel Goleman has suggested that it is an important component of emotional intelligence. People who lack this trait are said to need instant gratification and may suffer from poor impulse control."
Read more at wikipedia.

How does it works? It is just an emotional stuff which if you can conquere the skills, it will benefit you a lot. Studies have shown that a person ability of delayed gratification can cause a huge success in one's life. The famous experiment done by Walter Mischel, who invented the testing of marshmallow test. A group of kids were given a marshmallow and they offer another marshmallow if they can wait to eat them at a period of time. Some of the kids just can't resist and ate them while some others can wait, and be rewarded by a double amount of marshmallow. So what happened next, they keep track on this kids a few years later and find out that the person who can wait achieve a significant success in their life.

read more at mindhacks
More on the marshmallow experiment, you can read the secret of self-control.

This is how emotions and motivation affect a person. Most of the time people who wanted something in a short period of time will always lose more. Take the 'get rich quick', ah long borrower and briber. They always wanted a short cut to make more profit. But at the end of the day, they are the losers.

On the other hand, people who can wait especially on sure things will always rewarded more. Simple example is the unit trust or ASB. We know the guaranteed return of ASB, but most of us rather withdraw the cash and spend on some good unnecessary stuff (which is immediate gratification) immediately after we receive the pay-check.

People can make more money from this natural human habit in stocks and bond. When price goes up, many people with immediate gratification will bought all the stuff expecting quick return and later losing money. But wise people like Warren Buffet, they prefer invest during slow economy, because it take time for the economy to recover. But it is surely after the economy going on track, they will make a lot of money.

So why do you think people are spending more stuff when they received their bonus or PTPTN when they know a guarenteed return waiting them at ASB?
Why most people don't want to involve in business or become an investor?
One word... delayed gratification.