By now, you've probably heard of the famous Stanford marshmallow experiment. Most folks are familiar with this fifty-year-old study and its conclusions. In case this is the first you've learned of it, however, I'll give a quick review.
During the late 1960s, psychologist Walter Mischel tested the willpower of young children (roughly four years old). A researcher would bring the children — one at a time — into a room where they had access to a selection of treats, including marshmallows. The children were told that they could eat have one treat right away or, if they waited fifteen minutes, they could have two. Then the researcher left the room.
While this study gave researchers an immediate glimpse at how children handle delayed gratification, it also yielded some interesting long-term results. In 1990, Mischel (and colleagues) reconnected with some of the kids from the marshmallow test to see how life had turned out for them.
This second study revealed that the children with the best self-discipline at four years old grew up to be more popular, more successful in school, and better able to handle stress. The kids with patience and willpower were less likely to turn to drugs and they were more physically fit. In short, the ability to wait fifteen minutes to earn an extra marshmallow as a preschooler seemed to be an excellent predictor of how well a child would be able to delay short-term gratification later in life in order to pursue long-term goals.
That's it. That's the marshmallow test. Seems simple, right? Yet this simple experiment has become one of the most oft-cited studies in the world of pop psychology. You'll find it in books about entrepreneurship, habit formation, decision making, and — yes — personal finance.
There's just one problem. [Read more…]