Skip to main content

The Misunderstood Marshmallow Losers - What's wrong with instant gratification?

The famous marshmallow test has been a classic experiment to refer to when it comes to educating someone about delaying gratification even though the recent replication revealed more details which most people don't follow up with, just like many other behaviourial experiments.

Being someone who has been spoilt with instant gratification since young (my parents used to buy toys for me every Sunday before I entered primary school :)), there's no way I will pass the marshmallow test as a kid.

But is instant gratification really a bad thing? I beg to differ.

One of the goals that motivate me to start saving aggressively and be more financially responsible is to own a property and achieve financial independence. 

When I was still studying in poly, I wanted to buy a house and realised that not only do I need to save up for downpayment, I definitely can't afford the mortgage without a proper job. So when I realised that buying a house is not something I can save up over a couple of years (pardon me I was really ignorant and naive), I was motivated to earn a lot of money to save at least for the downpayment and capital for investments. 

I think this is one of the pros of being a marshmallow loser. Even though this group of people tends to be mocked at for their inability to resist temptations, they have been deeply misunderstood. 

Marshmallow losers are surprisingly good savers. 

Indeed they are impatient beings who can't appreciate the idea of 'wait a little longer to get something better', but that doesn't mean they are bad with saving money. 

They have the mindset 'I like this thing and I want it now. If I can't have it now, I want to have it as soon as possible' How else do you think those Millenials kids are able to afford branded goods from head to toe without asking money from their parents (they will get a harsh scolding) and taking it on credit (they are not eligible for it). 

They find all sorts of ways to earn money and save up for that one item that they want to get, and they are determined because they are stubborn people who hate compromises. Accepting something that is more affordable or value for money upsets them.

So instant gratification is not a problem, the problem arises when they start to buy things they cannot afford on credit and roll into a compounding debt trap.

Those who spend everything they earned habitually tend to become higher spender once they become higher earners and the availability of credit accelerates their chance of getting into debt if they can't be disciplined to follow the golden rule of 'spend less than you earn'. We all have heard of stories of how 5-digit earners landed in 6-digit consumer debt.

The second problem is when the marshmallow losers indulged so much that they had to rely on others for support when they no longer have the ability to generate income, either due to retrenchment, illness, or old age.

If they have been instant gratifying themselves and didn't bother to save up for rainy days or prepare for retirement, they will be passing the cost to others, be it their children, relatives, or even the government. It is not fair to let others shoulder the cost of your own mismanagement.

I'm not encouraging the readers to spend everything they have and give in to their instant gratifying devil all the time. I'm just acknowledging the fact that just because you want something really quick doesn't mean that this is an entirely bad trait as long as you aren't stirring trouble.

Before the circuit breaker, I was browsing in Kinokuniya and set my eyes on a new book by one of my favourite author priced at around $20. I took a picture and send it to a friend who has connections to books at much cheaper rates to check for availability. He replied that he could get it at almost 40% lower for me but I may have to wait for a few months so I decided to buy the book off the shelf without any discount (I don't have a membership) because I was excited to read the book and it wasn't available in the local library.

This is an example of my indulgence in instant gratification. Does this cause me to be in debt? No. Will I be so broke after buying the book that I need a free meal from a friend? No. Indeed it may have set back my savings by $8 but it's a price I'm willing to pay for the value of enjoying it immediately.

On the other hand, if you know how to work instant gratification to your advantage, it may even be a desirable trait.

For instance, one of my ex-schoolmates who spent two months working event gigs on weekends just to blow it up on a new iPhone during the school days has now bought a property (albeit on a mortgage) in Australia. He wanted to own a house by 25 (he achieved it at 24) so he worked and saved really hard for the downpayment on a house in a good location and rent the rooms out to the international students in Australia.

He joked that he's a typical marshmallow loser because he could have waited till he's married or turned 35 when he can get a HDB in Singapore with lots of grants but he really didn't want to wait for that long and he won't be able to afford a private property in Singapore within his budget, so he looked elsewhere although that shot his chance to purchase a HDB in Singapore, which is more financially sound, unless he sold his overseas properties.

He didn't find it too much of a challenge to save money because he's already used to saving up over a few months to spend it on branded shoes and the latest gadgets since our school days. So even though he has been 'wasting money', the process of saving up to waste money turns out to be a good fundamental block for his finance.

Because unless you are turning to leverage, saving money is the foundation of financial independence. You need to save money for your rainy day funds, for your investment capital, and for your retirement.

And the only way to save money is to spend less than you earn.

There's one last thing I really want to add about the marshmallow experiment. A second marshmallow isn't exactly attractive, may I suggest a bag of marshmallows with a warm chocolate fondue tower? I'm pretty sure most kids will be able to wait for it.

Many thanks for reading.

Comments

Popular posts from this blog

How I Saved $200,000 in 3.5 years Without A Degree

Yes. I have finally hit the momentous milestone of achieving 200K! It's actually a surprise for me because I have been busy with work for the past 2 weeks and wasn't keeping a tab on the whole picture of my assets. I decided to reconcile my assets today because the STI was inching towards the 2,500 support level so I wanted to figure out how much I can afford to invest in the market in case it is going to present another opportunity in near future. When I finally get the calculations done, I was taken aback by the overall figure.  At the point of writing, my net worth, which consists of cash savings, investment portfolio, CPF, and a loan to a friend, adds up to a total of $201,074.97 Net Worth = Assets - Liabilities.  As a side note, I don't have any debt, so my liability is zero. CPF is included as assets because I actively pump money into it and money in CPF can be utilised in many areas. The loan is to help a friend with his university's tuition fees and he has been ...

Am I being Filial or Manipulative? A Weekend Discussion with My Parents on Housing and Retirement

Over the weekend I had a more serious conversation with my parents on the topic of money, in particular in the area of investing and properties. My parents and I currently live in a 41-year-old 3-room HDB flat in a matured estate, one which is very close to many amenities and convenient for my dad and me to get to work. As my parents are approaching 55 in a couple of years time, and my dad seriously considers to retire in a few years after that, they are considering to apply for a BTO flat around the region, in view that the HDB is already middle-aged and they want a bigger unit with 3 bedrooms, hoping to sublet one of the rooms for rent, and maybe two of them if I moved out of the house. This will not only fund for their retirement income but also serves as a means to preserve the value of their assets, as while it's unlikely that they will outlive the HDB lease, they didn't appreciate the idea that the value of the property coming close to zero by the time they part and there...

Thoughts on CPF, Housing, and How Long Does It Take For Me to Reach FRS

I have been transferring the money in the Ordinary Account (OA) to Special Account (SA) every month and actively topping-up money in SA. The $7,000 tax relief and the 5% interest rate is really attractive. In fact, my CPF interest last year was already more than the bread I bring home in my first month of work. Another popular way to look at it is by treating it as a long-term AAA-rated bond that you can redeem in your retirement. The money in the Ordinary Account is commonly used for education and housing, which for education, I intend to use cash savings, and for housing, I plan to use as much cash as possible for a downpayment so that I don't have to touch the money in my CPF, and if I really need to take up a mortgage loan, I won't have to borrow too much money beyond my means. This also helps me to limit my options to housing that I can really afford.  If I were to get married, I'm open to the option of staying with my parents or in-laws until my partner and I are fina...