When I was young, I had no patience. I wanted everything, and I wanted it now. No wonder, then, that I found myself with over $20,000 in credit-card debt just a few years out of college. I was spending to obtain a lifestyle that I wouldn’t be able to afford until I was older. Much older.
I’m not the only one with this problem. Many young adults graduate from college or leave home, and suddenly find themselves in reduced circumstances. They’re used to the standard of living they enjoyed at home with their parents. Rather than wait until they can afford similar luxuries, they buy them on credit. They forget that their parents had to work twenty or thirty years to be able to afford the things they have.
This impatience is costly. It leads to debt, and it starts a cycle of excessive consumption and lifestyle inflation.
The power of patience
I’m entering middle age now, and so are most of my friends. As we get older, an interesting thing has happened. Suddenly, we’re able to afford the things we used to want so badly. Sometimes we buy them; sometimes we don’t.
It’s fun to watch the choices people make. I see folks who were willing to live in cheap apartments for a decade or more now buying houses. But they’re paying cash for the entire thing instead of carrying a mortgage. Their patience has paid off.
I’m seeing people who have toiled for years at tough jobs finally getting big breaks. Others quietly saved and invested while everyone around them was spending (or abandoning the stock market); they’re now poised to retire early — if they want to.
Not all who wait reap the rewards, of course, but many do. Patience doesn’t guarantee success, but it dramatically increases the odds. Here are just a few of the ways patience can help you achieve your financial goals:
- Patience lets your money grow. The longer you hold onto your money, the more you have of it. But more than that, time is the magic ingredient in the power of compounding, which lets your pool of money expand every year.
- Patience teaches you discipline. When I first learned to use the 30-day rule, it revolutionized my shopping habits. Instead of buying what I wanted now, I waited 30 days. Most of the time, I realized I could live without whatever seemed so urgent. But even when I did end up buying what was on the list, I felt better about my decision. Why? Because I’d exercised discipline. Patience helps prevent mistakes.
- Patience allows you to seize opportunities. If you’re willing to wait instead of buying today, you’re able to spend time comparison shopping or looking for free and cheap alternatives. If you’re in no rush, you can even practice predatory shopping — waiting for bargains and extreme markdowns that let you save big bucks.
- Patience lets you discover what’s important. As you age, your values change. If you’re willing to wait, you learn what truly matters to you. Patience helps you practice conscious spending.
- Patience keeps you sane. Patience means opting out of the relentless drive for the new. It means not caring about fashion. It means not giving in to fads and trends. It means buying last year’s model — and keeping it until it dies. Because you don’t have to worry about keeping up with the Joneses, you quietly live a contented life.
Patience leads to wealth and happiness. (It leads to each independently, not as a package.) But it can be tough to practice patience if you’re plugged into television, radio, and the internet. Our society doesn’t believe in patience. Our society is all about Now.
The Culture of Now
We live in a Culture of Now. We’re constantly bombarded by messages trying to convince us to buy now, to spend now, to have what we want this very moment. Nobody preaches patience. Nobody explains that the cost of Now is a loss of your future. (That is, it’s generally more expensive — in time and money — to buy something now than it is to wait until you can afford it. For more on this, see our recent discussion of the time-value of money and last fall’s article about Present Me and Future Me.)
But if you can learn to be patient, the world opens up to you.
I’m not talking about waiting until you’re 80 to enjoy life — I want to enjoy life today — I’m talking about taking things as they come in their proper time. Relish the moment you’re in, and accept it for what it is. If you’re 25 and burdened with student loans, accept that. Set a goal, make a plan to meet that goal, and then work hard to achieve it. Be patient along the way. You will get out of debt, you will buy a house, you will save enough for retirement. But you’re not going to do all of that today. It’ll take time, which is something you have plenty of.
Be patient, and that patience will be rewarded.
Update! While browsing other blogs this morning, I saw that my friend Brett over at The Art of Manliness (a great blog, by the way) posted a similar story yesterday: The Power and Pleasure of Delayed Gratification. Great minds think alike!
This article is about Planning, Psychology, Self-Improvement
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Everyone thinks that its impossible to make ends meet and to be financially successful, but patience is a virtue!
The problem with many young kids these days is that they want it all and they want it NOW! It took our parents years to save up, buy a house, cars, and have a comfortable middle class lifestyle.
College graduates need a reality check these days and they must accept the truth about paying your dues: FROM A FINANCIAL PERSPECTIVE, YOU CAN’T START YOUR CAREER FROM THE SAME POINT WHERE YOUR PARENTS ENDED UP!
You will get the house, cars, comfortable lifestyle down the hill, but you have to have patience! It didn’t happen overnight for our parents, and it won’t happen overnight for us!
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Patience doesn’t always pay off. I lived my parents until I saved for a 20% down payment on my condo, while my friends rented in trendy parts of town. Spent all their money. I saved. Bought my place in 05. My friends are still broke. But me the prudent one bought at top of market, even doing a 15 year mortgage for the past 4 years, I am still way under water. So sometimes you are better of just spending it all, cause so much of life is just about timing.
Bob
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OK, since no one else has, I’ll speak up for those of us who *didn’t* grow up with parents who had achieved a high standard of living. I found the comments to this article even more interesting than the post itself.
I have always been frugal and patient with money, and I assumed it was because of watching the bad example of my parents. They have never been good with money, and I have trained myself (obsessively) to be so in response. But the comments make me wonder if perhaps it was something else, too.
When I graduated from college, there was no “high standard of living” that I wanted to copy from my parents. When I got a job, I was just grateful — so, so grateful — that I didn’t have to panic when I ran out of deodorant or needed new shoes. So I never thought about it that way, but maybe the fact that I didn’t grow up with all the luxuries is the reason why I’ve never been impatient to live the high life.
Glad you posted this and launched an interesting, thought-provoking discussion, JD.
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Just don’t let being patient devolve into total risk-aversion.
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@ Nicole
Not sure if it’s too late to post you this, but thank you for the link to that wonderful New Yorker article. Your comments are always smart and thoughtful, and you’re probably my favorite poster here.
Anyway, per the article, turns out it the ability to delay gratification rests on the capacity to *think of something else* instead of obsessing about the unattainable thing. Which is not what we usually assume when we think about patience. We usually think of patience as “willpower”, but the science proves that our common-sense assumptions are wrong. That is great and powerful knowledge, and yet so simple. So I put it into practice yesterday.
While I have no problem driving in fast places like New York, I always get infuriated at Albuquerque drivers (they are a special breed of slow). And I live in Albuquerque… So, yesterday I had to run a lot of errands, which meant hitting the dreaded roads. Whenever I was blocked by a cellphone driver, by a slowpoke, by someone asleep at the traffic light, by a smoke-oozing hooptie, etc, I would just consciously divert my thoughts elsewhere. Soon my blood pressure was back to its usual low, and I was laughing at my new superpower.
Thank you!
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We have been saving for the big stuff more and more. Last year we saved $100/month for one year to buy a Nikon D90. Actually towards the end, we “contributed” $300 so we don’t have to wait another 2 months.
We felt good about the purchase like it was a reward. During the time we were waiting we researched to make sure that’s what we wanted.
-Charlotte
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Im one of those people who suffers from a lack of patience. Like you said, those who live in small apartments for a decade have been able to pay for a house in cash…I can only imagine the free cash flow I would have if I didnt have a mortgage payment. Unfortunately most of us fall victim to this in one way or another. Although as I look back at all the vacations and trips I took with friends in my 20′s, thinking “im only young once”, I can safely say that at 30 years old I do not regret a single moment of any of them. Some of those trips cost me quite a bit of money too, and sometimes it was to the same places and doing the same things.
Also, I noticed “compounding interest” in your article, couldnt be more important, and as many articles that talk about it, there can never be enough emphasis put on this!
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