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If You Can’t Master This Principle, You’ll Never Be Financially Free

“And I’m convinced
I made sacrifices, I been ballin’ ever since
We seein’ so many blessings, shit don’t make no sense
Someone watchin’ over us, so shout goes out to Him” — Drake (Sacrifices)

TL;DR: If you hope to accomplish anything notable in life, you have to exercise delayed gratification.

The World That We Live In

Technology has gifted the world with instantaneous access to a wealth of information, products, and services. It’s like the internet gave everybody a discount rate to the VIP section. Millennials have grown up in an era where they expect things to work well, work fast, and work now.

Millennials are jumping jobs more frequently than previous generations. What’s more, Millennials, also known as Generation Y, are also renting more and buying homes less. In a society where our predecessors worked the same job for decades to enjoy a plush retirement and probably took on a mortgage earlier on in their adult life, where does Gen Y stand?

Some statistics on the web contribute to painting a picture of millennials that portraits the lot as folks with less commitment. Maybe a bit of FOMO (fear of missing out). Too many choices, too little time.

These judgments may be true in some ways and false in others.The fact of the matter is, millennials are coming into a completely different world than our parents, so we shouldn’t act the same. But in a rapidly changing environment, what principles should stay true through the test of time?

Ignore the Noise; Practice Delayed Gratification

Delayed gratification can be characterized as the ability to resist the temptation of an immediate reward to wait for a later and presumably larger reward. Think about your diet and waiting until your “cheat day” to eat your favorite snack. That’s a simple example. But in the world of wealth, it sounds more like investing your cash into assets that take decades to accumulate notable value. Being blind to the fruits of your labor for years and years.

Call it patience. Call it discipline. Call it self-restraint. The bible and other religious works talk about it, and the world is run by it. Think of your mom forcing you to eat your broccoli before having dessert. Think about that piece of paper that you wait around four years to get (college). It’s an overwhelming force that’s inescapable.

Now let’s dial this topic back and think about money.

“Come up, run up
All my young ones on the come up
Bunch of young niggas on the come up
Look, all my niggas ‘bout that action
Livin’ the life we imagined
I cut off all my distractions, and started attackin’” — Big Sean (On the Come Up)

The “time value of money” explains that a dollar invested today is worth more than a dollar invested tomorrow because the dollar today will earn interest or returns. Sounds a lot like delayed gratification to me. The process of letting go of a dollar that you could buy a McFry with today to potentially make a return on your investment.

I spoke about different tools to use to invest, such as Stash, Acorns, Betterment, and more. None of these tools will make you rich over the near-term. However, historically, the returns will aggregate and create wealth over time. The average annual stock market return adjusted for inflation is 7%. Over time, this adds up. Why? Compound interest.

Compound interest can be considered “interest on interest”. When you invest $100 with a 10% annual return, at the end of Year 1, you have a value of $110 (10% of $100 is $10). At the end of Year 2, you don’t simply just have $120. You have $121. You gain 10% interest on $110 dollars instead of $100. That’s the whole principle of compound interest. Interest accumulated on your original investment and on the accumulated interest from previous periods.

That extra dollar from Year 1 to Year 2 won’t make much of a difference, but in Year 15, you’ll see the power of compound interest. But why am I talking about this?

As you see with these examples, delayed gratification is a universal law of the land. The kurinji shrub, native to southern India, only blooms every twelve years. But when the shrub is in bloom, it’s a beautiful sight.

This is a call to action for millennials to continue to pour into the principle of delayed gratification. The concept is not exclusive to investing or Indian shrubs. This is a principle that can and should be applied to everything.

This may mean dedicating your hours after work to create a side hustle that takes years to effloresce. Spending those extra hours at work to become a leader in your industry years from now. Creating a technology business that takes at least 5–7 years of time commitment with a high chance of failure. Or simply choosing to save to invest, instead of saving to save or saving to spend. It may just as fundamental as remaining fully committed to your significant other to reap the full benefits of a successful relationship.

Think about what you’re at right now and where you want to be in five years. Invest your time in actions today that will help you be the person that you want to be at the end of the five-year period. Thinking about investing in Apple stock isn’t the same as actually putting your money on the line. Put in the time. The compound interest is working in your favor. It’s the law of the land.

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