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!