Many of us would like to be rich, I think that’s safe to say. Most of don’t want to do what it is that it takes to be richâ”I think that’s equally safe to say. We tend to think of richâ as either having rich parents (read: inheritance) or lightening strikingâ”think a hit record, a stock rising by a factor of 50 or having the winning lottery ticket.
What most of us miss, I think, is that becoming rich isn’t so much an event as much as a lifestyle. The earlier it’s adopted, the more likely it is to work it’s magic.
That lifestyle requires a great big helping of delayed gratification, which is the process of making sacrifices now for a better tomorrow. Even if it never makes you richâ”or if you’re starting it a bit late in the gameâ”it can still move you from where you are to being very comfortable, financially speaking.
What does delayed gratification look like in practice?
Let’s NOT keep up with the Joneses
Millions of people want nothing more than to have what everyone else has. That’s a costly lifestyle, not the least of which because you tend to build up an inventory of stuff that’s mostly good for other people but not necessarily for you. That consumption pattern turns your spending priorities over to others.
The richâ”the self-made ones at leastâ”break from the human herd and establish their own spending priorities. Those priorities have little to do with keeping up with others. They don’t need the latest entertainment gadget, the latest car or the most house they can afford.
They’re willing to let those preferences go for the time being, and that creates other financial opportunities.
Avoiding the debt trap
When you aren’t busy trying to keep up with the consumption patterns of others, you not only have fewer toys, but you also have less debt. If you’re trying to keep up with others early in life when your income is relatively low, the only way you’ll be able to afford to buy all that others tell you that you need or must have is by borrowing. Once the debt pattern is established, it’ll be tough enough just to get out of it, let alone to get rich.
Delayed gratification means avoiding debt and the trap it creates. You only buy what you can afford, and only then if you absolutely need to.
The aspiring rich win the money race almost by default when they avoid debt. It keeps their money free for other, more important pursuits, likeâ¦
Investing for the future
If it’s one characteristic that separates the soon-to-be-rich from most other people it’s their commitment to invest for the future. They’re willing to give up the toys and adventures others are pursuing in order create a more prosperous future.
This strategy is especially effective if you can do it in your 20s. By avoiding the good lifeâ early on and investing for the future, it’s possible to have a six figure bankroll by age 30, and when that’s attained in combination with not having any debt the future potential becomes almost limitless. From there reaching your first million is just a matter of time.
You also have to start investing smart and using strategies such as dividend investing.
Buying value at every turn
Delayed gratification doesn’t mean being cheap, it means buying value. Whether it’s buying a car or a TV set, you’re looking for the best value for the money. That might mean buying a second hand car, or even shopping at thrift stores, but the idea is to get the best products for the least amount of money.
That attitude extends to investing. You buy assets that have an above average chance of providing reliable cash flows in the future, as opposed to those that have been the best performers in the last few quarters.
Ultimately, delayed gratification gets you to the point where you can have the things that you want, when you want them. And all because you put off getting them until just such a time that you don’t need to make trade offs.
Try implementing delayed gratification for yourself right now, what ever your financial situation is. Live on less, ignore your friends and neighbors when it comes to consumption, save all that you can, and keep yourself focused on a better tomorrow.
Powered By DT Author Box
Written by Kevin
With backgrounds in both accounting and the mortgage industry, Kevin Mercadante is professional personal finance blogger, and the owner of OutOfYourRut.com, a website about careers, business ideas, money and more. A committed Christian, he lives in Atlanta with his wife and two teenage kids.
