There is so much information about people and their financial behaviors. Most of them point to your risk profile and suggest that you invest according to your risk profile. What I have discovered in working with at least four couples a week for the past eight years, is that no two couples are the same and your background and heritage shapes your financial thinking.
There are so many financial jokes about financial behaviours; the Scottish and their ‘tight-fisted’ attitude towards money, and the Greeks with their ‘buy-well; never-sell’ property obsession and the Jewish with their incredible nous for business. But the truth is that most of our financial reasoning was formed by the time we were eight years of age. When you consider this, it is only natural that our heritage and our surroundings play a big role in our financial decision making process.
For most people, wealth creation does not happen overnight. It is a gradual and sometimes slow process that requires fortitude and often delayed gratification. I firmly believe that delayed gratification is the foundation of wealth creation.
A little bit of sacrifice today so that we have a better tomorrow. If you read Scott Peck’s book The Road Less Travelled, he goes so far as to say that learning delayed gratification as a child creates more balanced adults with better life skills.
I have often used the analogy for delayed gratification of the young boy who comes home from school with a school bag full of homework. He also wants to practice football. Does he practice football, which he finds most enjoyable first; or do his homework? If he chooses to do his homework first, he has free time to practice football without the nagging thought of his homework waiting for him.
The reverse can often see the boy practicing football to the point that the homework is not completed. Leaving him in a worse position the next day at school, which may involve him making up a story to the teacher as to why the homework was not completed.
Delayed gratification produces more balanced adults who understand the benefits of sacrifice now for a better long-term outcome. Without exception, every book I have ever read on creating wealth states that it is under pined by the ability to save. The ability to save is being able to distinguish from what we need to spend our money on and what we want to spend our money on.