The Whole Delayed Gratification Thing

[Sailesh Channan]

Having goals and achieving them is a great buzz. It is important to keep revisiting your goals and making adjustments as your situation or aspirations change.

In order to turn your goals to reality however you need to also follow a budget. Your budget will give you a reality check as well allow you to plan for expenses such as cars, holidays etc.

As a result of achieving my income goal as well as a successful development project we were able to reward ourselves with a brand new Mazda RX 8, an overseas holiday and sent the kids to private school.

We have just signed up for another development project and the planned rewards are a bigger home, 4wd and another overseas trip.

I love rewards

 

[LucasK]

Recently I spent some time with friends, just one night at a club talking, laughing about stupid things, picking up, etc.

Had the most fun in a month.

Total cost: $10

I don't believe spending is necessary to be happy. Most of my best moments in life were free or on a low budget. Personally I think most people who overspend do so for the ego - they want the big plasma TV so they can tell their friends "I have a big plasma TV!", rather than because they actually enjoy watching TV.

 

[kissfan]

Recently I spent some time with friends, just one night at a club talking, laughing about stupid things, picking up, etc.

Had the most fun in a month.

Total cost: $10

I don't believe spending is necessary to be happy. Most of my best moments in life were free or on a low budget.

Makes sense to me Lucas. It's just nice every now and then to spend money on something you have desired for a while.

Regards
Marty

 

[XBenX]

Went for a paddle last night (two in one day!)

In the middle of urban sprawl but with not a single person around - only the sound my paddling partners blades hitting the water

The water was glass...a truely magical experience

Didnt cost a cent.

(If you ignore the opportunity cost and purchase price of the kayaks and depreciation and )

 

[Kathie]

Hi all, I have been away for a while and have spent all day catching up on relevant posts.

This one is fascinating and I feel that it is quite relevant for my husband and I at the moment.

My husband and I have always been of the delayed gratification mindset. We both comes from families where whims and impulses have put family members in severe financial hardship and we are determined never to to that. So at the start of last year when we first read Jan's book we were hooked! After spending eight months saving for the software, deposit, expenses etc we bought our first IP, and a couple of months later our second and our third.

We had already bought our PPOR five years ago but deliberately chose to buy on the outskirts of the city where we could afford a decent house, rather than continue to rent in the centre like so many of our peers. Over the years we have patted ourselves on the backs many times at our self-control and delay of gratification. It has been a bit of a hassle living so far away from friends and family but we have put hard work into the property and it has enabled us to own four houses when so many of our friends are still renting five years later. One day we want to own a palatial mansion with all the mod-cons but we know we need to live in our three bedroom bungalow 45 minutes drive away from all our friends and family in order to get there.

But now we are faced with a new challenge to our delayed gratification approach.

Over the last few years I have been very ill with recurrent miscarriages and subsequent infections and complications. In Feburary it all came to a head and we realised that I needed more support and companionship than I was getting so far away from friends and family.

Problem is that the area where they live is hugely more expensive - our $240k house would cost $420k+. It seemed insurmountable but then we realised that by buying IPs we were investing for a better future for ourselves and our family. Yes, delayed gratification is part of that, but when real circumstances arise that change things drastically then it is time to examine whether delaying things will actually be harmful and stand in the ways of your goals. For us right now, a better future for our family means moving.

So we decided to go ahead with the move, even though we knew it would set us back in our investment plans, simply because it meets a greater need. We are just so grateful that we have the IPs as they have given us many more options than we might have had otherwise!

Fortunately, we have found that there is a good chance that we will be able to eat our marshmallow and lick it too! We are selling our PPOR into our LAQC so that means we add an IP. We are also getting the others revalued and squeezing every last cent we can out of them for a 20% deposit. We have found a house not far from friends and family that is huge, with lovely views and recently redecorated. It is one and a half times the price we were looking at spending but it has a downstairs unit that can be rented out at just under half what we will pay in the mortgage - so effectively we add yet another IP plus a PPOR all without increasing our personal monthly mortgage payments by more than a few hundred dollars. Plus, the house is in an area with a greater rate of capital growth than any of our other properties and it is by far the most expensive. So that means that it will grow in value and create equity for us to secure future investments.

If we hadn't decided that the time to stop delaying gratification was now then we would never have explored the options that have led us to this new and exciting opportunity to have what we want and still grow our investment portfolio.

 

[Bricks & Mortar]

In the blood?

Well put Bill. If you're an investor and bing here (forum) means you could be, then you may wish to continue indefinitely ... doing what you like doing. In this case perhaps we can't use the word delayed ?
It changes the whole perspective.

Possible.

We recently adventured into a European trip.
Having sold a two blocks of land we decided to use some of the fund to take a bite into that marshmallow you've all been talking about.
Three days into the trip my lung collapsed and I spent the rest of the holiday in a Venice hospital. I left OZ healthy too!
It really took the stuffing out of both of us.
It's now about six months down the track, we did have our son's wedding and helped with purchase of his PPR but it's only been the last few weeks where we are beginning to be active in investing again.
But we looking, not cashing in.............. so Bill, & Patosan I guess you may be onto something there.

I'm guessing it has a lot to do with the different way everyone invests and how they perceive it works for them

However let's not forget to enjoy ourselves throughout journey.

cheers
Timm

 

[Les]

G'day Kathie and hubby,

You said a mouthful with this gem:-

Yes, delayed gratification is part of that, but when real circumstances arise that change things drastically then it is time to examine whether delaying things will actually be harmful and stand in the ways of your goals. For us right now, a better future for our family means moving.

And good for you !! You've set yourselves up to be able to make that move, and (from the later part of the post) it sounds like this move will only ADD to your security too. So, well done!!!

I wonder if you have consdered where you might've been if you HADN'T done the "delayed gratification" thing??? Would it have been different? Maybe you wouldn't have been so far away, but you also wouldn't have been so well positioned to ACT (perhaps??? I don't know, as I don't know you..)

But, in the end, we make our sacrifices with the best info we have available at the time. And, it sounds to me like you have been able to make the best of a bad situation. Kudos to you,

Regards,

 

[gniks]

I may have posted this already but can't see it....we have over-delayed gratification and I realised it late last year. We seriously do not spend on anything, other than investments. I've had budgets since I was 18 and started work - I deferred uni and wanted to earn an income, a desire borne out of poor economic circumstances through childhood.

However we did position ourselves 6 years ago by selling the house we renovated ourselves in a working class suburb and buying into an upmarket suburb (yes, one of the "lower-end" houses in the upmarket suburb) and the capital growth has been staggering, but we still need to extend it to cater for 2 growing kids, we still have the TV given to me when I moved out of home at 18 and a half (a Healing - still a great picture, never had any trouble), we still have all 2nd hand furniture.

Late last year a friend from my property investing group who was only in his 40's died suddenly, within about 6 weeks, from complications with pancreatic cancer. It rocked me, and made me re-assess all the time spent away from the family at weekends looking at houses, and the wealth I had grown for the future but we weren't dipping into now.

So - this September we are all off to Europe for a month, the catalyst being the event described above, and a wedding to attend. Normally we would have saved the money and not gone to the wedding but not now. I have sourced a great bird-dogger and worked a little seam of RE gold producing good profits and returns but I pay someone else to organise it all and have delegated it, and spend time with the kids at the library pulling books on Italy, France and Britain instead. We're going to Disneyland Paris.

So when I should have licked that marshmallow I didn't, but now am biting into one, and it feels great, because there's a whole bag of marshmallows still left.

Cheers
gniks

 

[alwayscurious]

liking the lick

Here's my marshmellow...

Here's my wife's

Seriously!!

We also believe in balance - and reading these posts, and the natsakashi-neh post by chrispy reinforces it all.

it's not just the destination, it's enjoying the journey!

Now I am looking at buying some more time.

Anyway want to do some painting? Brisbane?

 

[kissfan]

I may have posted this already but can't see it....we have over-delayed gratification and I realised it late last year. We seriously do not spend on anything, other than investments. I've had budgets since I was 18 and started work - I deferred uni and wanted to earn an income, a desire borne out of poor economic circumstances through childhood.

However we did position ourselves 6 years ago by selling the house we renovated ourselves in a working class suburb and buying into an upmarket suburb (yes, one of the "lower-end" houses in the upmarket suburb) and the capital growth has been staggering, but we still need to extend it to cater for 2 growing kids, we still have the TV given to me when I moved out of home at 18 and a half (a Healing - still a great picture, never had any trouble), we still have all 2nd hand furniture.

Late last year a friend from my property investing group who was only in his 40's died suddenly, within about 6 weeks, from complications with pancreatic cancer. It rocked me, and made me re-assess all the time spent away from the family at weekends looking at houses, and the wealth I had grown for the future but we weren't dipping into now.

So - this September we are all off to Europe for a month, the catalyst being the event described above, and a wedding to attend. Normally we would have saved the money and not gone to the wedding but not now. I have sourced a great bird-dogger and worked a little seam of RE gold producing good profits and returns but I pay someone else to organise it all and have delegated it, and spend time with the kids at the library pulling books on Italy, France and Britain instead. We're going to Disneyland Paris.

So when I should have licked that marshmallow I didn't, but now am biting into one, and it feels great, because there's a whole bag of marshmallows still left.

Cheers
gniks

Hi gniks.

Sounds like you've accidently stumbled onto a "meaning of life" (I say "a" as I believe there are more than one). Only unfortunate thing was that it took your friends death to make you realise.

Loved reading your post (the positive side of it), and it was stories like this that prompted me to initially post this thread.

GO GRAB THAT LIFE YOU DESERVE WITH BOTH HANDS.

Regards
Marty

 

[sue78]

I think it's all about balance but I am definately a firm believer in enjoying life, being happy and being generous with our $.

This property thing is my job. I love what I do, I love interior design, landscape design, financials etc The perks of working for yourself and the financial rewards are a huge bonus on top of job satisfaction. Yes, sometimes very stressful and quite risky as with every business. We don't work 9 to 5, sometimes don't work for weeks but other times we are up all night, weeks in a row. It's unbelievable how many of my friends think I have it easy, and ask why don't I get a job because they don't recognise this as a business/job!!

Our goal is to earn enough money so that cashflow/passive income is greater than expenses and we can be financially free. We try to re-invest 50% into the business, 40% into amortization of loans and 10% into our savings for whatever we want. With our next 'windfall', we are going to use some of the 10% to upgrade my mum's car for her!! I can't wait!

But we know that money is not everything. It doesn't buy happiness. It can even be the root of all evil. We're dedicated Christians and we give tidings for the blessings we've received.
Giving is just as important as receiving and it's very gratifying too.

End of FY is coming up....if you're up for tax, please make chritable tax donations. It's better than giving your hard earned cash to the tax man.

 

[madmurf]

"It can even be the root of all evil."

I love the way people miss quote this verse.
Its the LOVE of money that is the root of all evil not money it self.

Madmurf

 

[voigtstr]

any updates on people gratification experiences, delayed or otherwise?

 

[Melbear]

Yep, after 5 years of writing it on my goals list, I was able to buy both Mum and Dad a new car each as I have achieved the cash flow to pay for the loan!

Now my new goals are to pay off those two loans

 

[BayView]

any updates on people gratification experiences, delayed or otherwise?

I've been delaying gratification for so long that it's just not as important as I thought it was. My delayed gratification these days is buying another investment.

I used to want a new porsche, a big boat, overseas holiday every year, never work, jet ski, plasma etc and I did that sort of thing for a while (not the porsche yet).

But now, I find that I can wait that little bit longer, and I can always buy those items second hand for far less, which gives me more cash for investments.

I seem to get more fun out of that sort of thinking, and having been through the time of having a few toys, but with too much week left at the end of the money, I'm glad to say that having more wealth and not necessarily spending it on trash is more satisfying. The whole toys thing was about posing anyway, and these days I couldn't care less what my image is to other people. I don't need or want to impress Mr.Jones anymore.

I prefer to spend money on more "experience" related activities such as get togethers with friends and relatives, travelling away for extended long w'ends camping, or staying in cheap-ar$ed cabins, going for a kayak on the river, playing golf, skiing etc.

Most of these things are relatively inexpensive and provide good times, and don't really impact on the wealth creation plans. My financial head won't allow me to splash out on brand new "big ticket" items either these days.

My last big ticket item was my friend's (the one with the boat) 5 year old second hand 4wd SSangyong Musso back in 2004. It was at the trade-in price, and our tax return paid for it.

I can always rent a porsche or a jet ski, and I have a friend with a big boat, another has an apartment at the snow, so those two are covered.

I just supply the grog, food and bad jokes.

 

[MichaelW]

I can always rent a porsche or a jet ski, and I have a friend with a big boat, another has an apartment at the snow, so those two are covered.

I just supply the grog, food and bad jokes.

LAAussie,

Can I be your friend too! Big boat and an apartment at the snow. Now we're talking!

Cheers,
Michael

 

[The Y-man]

I've been delaying gratification for so long that it's just not as important as I thought it was..... .

Great post L.A.Aussie

The cheap ar$e cabin thing got me thinking - I used to want to stay in 4-5 star hotels when away from home. The last 2 interstate trips have been in 3 star or no star (unrated) joints - and they have been great! I never have the time to use the facilities in the top notch joints anyway. As long as the bed is comfy and room temp is good, there doesn't seem to be a huge difference....

Cheers,

The Y-man

 

[Ausprop]

the trouble is, even when you can afford this stuff do you really want it? whilst a ferrari would be nice, your friends would think you are a right ponce and probably wouldnt talk to you, every bogan on the strip would hate you, you would be scared stiff to leave it in the car park and would you really want to go for a gym session and come out and sit in there? can just imagine the first bingle too... even a little trolley scrape would leave you awake at night

 

[wylie]

People we know buy new cars regularly, but have the "school run and shopping" car and the "never been to the shopping centre" car. That car is purely a status sympol for them, and something they enjoy, but I just don't see the point.

Wylie

 

[murtagh]

transcendental money!

I can always rent a porsche or a jet ski, and I have a friend with a big boat, another has an apartment at the snow, so those two are covered.

I just supply the grog, food and bad jokes.

Exactly!

Dave Winer (a reasonably well know Tech guy) has a great little post about exactly this .. http://www.scripting.com/davenet/2000/10/19/transcendentalMoney.html#3

"And try as hard as you can, one person can't actually spend all that much money with the constraint that you actually have to use what you buy."

I love doing Dave's thought experiment from time-to-time .. turns out that I don't need that much cash on hand to live really well.