Sweeter Rewards of Delaying Gratification

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Post last modified:March 9, 2021
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Lots of advice have been said about the importance of delaying gratification especially in handling our own finances. While this is true, I believe that this principle is not entirely new to us. In fact, I think this is inherent within us.

In my own experience, while I’d definitely want to enjoy the present, I’d naturally choose and yearn more to enjoy the last stages down the road. For me, it’s simply illogical to enjoy now knowing I’d suffer later on. I’d rather do the opposite and delay gratification now and have the enjoyment in its fullest sense at the end. The gospel yesterday seems to have something related to say:

Which of you wishing to construct a tower does not first sit down and calculate the cost to see if there is enough for its completion? Otherwise, after laying the foundation and finding himself unable to finish the work the onlookers should laugh at him and say, ‘This one began to build but did not have the resources to finish.’ (Luke 14: 28-30).

I remember one time when I celebrated my birthday with some officemates. We’ve decided to celebrate it at Vikings( whow bigtime!)

We’ve got two options: to do the lunch-out during (an extended) office lunchtime or do it after office time and have a dinner buffet instead.

And I recall naturally pushing for the second choice for the main reason that it simply didn’t appeal to me to enjoy the buffet when I knew I’d go back to my desk and finish a job. I’d rather finish the job and have the celebration later on (without thinking when it should end) then go straight home for a good rest.

Investing is actually a concrete example of delaying gratification. While we can readily spend the money we have now and experience the joy it brings, we’re delaying that experience to have a much better version of it in the future (hopefully giving it a better meaning and fulfillment for us).

Below is another excerpt from Truly Rich Club‘s Wealth Strategy acticle discussing another good point about this value. For those thinking to buy your own house someday (I do!), let this help you see that decision more objectively.

Photo credit: Investing is actually a concrete example of delaying gratification.

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The Price of Delaying Gratification (Lyndon Malanog)

When my wife and I started our life together, our first goal was to have our very own house to raise our family. In our culture, having your very own house is a major dream of every young couple.

For many of us, a house is not just an investment but a symbol of success and security. But in reality, a new house is only a facility for you to be tied up with a 20-year loan. And because the title of the house is still with the bank, SSS, or Pag-ibig, this only means that you are actually staying in a house you never own for 15 or 20 years. On the other hand, your house depreciates in value and only the lot where your house is located is actually appreciating. In short, unless your house is rented and is putting money into your pocket more than what you are paying the bank monthly, then it is not an asset but a liability.

The bigger the house, the bigger the need for maintenance.

Now let me share to you my first real estate venture.

Getting a Loan for a House

Last 1994, right after our wedding, we decided to buy our own home. It’s a simple home built on a 240-square-meter lot in the area of Rizal with a total price of P300,000. One hundred fifty thousand pesos was the amount that we needed to pay in cash to the first owner and the remaining half will be an assumed SSS Housing Loan.

The P150,000 SSS Housing loan was to be payable in 15 years at a fixed monthly amortization of P3,800 per month. To stress the point, this means that the original amount that I owed SSS was only P150,000.

Let’s do some simple math:

P3,800/month x 12 months/year x 15 years = P684,000

Which means that I am paying 4.5 times the original amount that I owe from SSS.

Here’s the surprising thing: If we opted to start our life together by renting a house and invested our cash-out money of P150,000 in an equity fund for 15 years, then today I could have an amount close to P5 million. This means that our money could have grown 32 times vs. my debt, which have also grown 4.8 times. With P5 million, I could have bought an upscale house and lot in an exclusive subdivision plus some extra cash to fund my business plans.

Now or Wait a Bit?

Now you decide if it pays to wait and delay gratification. Don’t make the same mistakes I did. This is the very common problem of people today. “We want something fast and soon” and that’s why we result in debt.

We are living in a culture of consumerism. We earn then we spend. This is a cycle that goes on and on until a person realizes that he will be retiring very soon without sufficient savings because all his savings is used up to pay the monthly amortization in the bank.

Make time to learn by reading books and attending seminars. It’s your greatest leverage during this Information Age.

See you very soon and God bless you abundantly.

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Have fun investing (for a better and greater joy),

Omeng

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This Post Has One Comment

Arnold C Alcid September 11, 2013 Reply
nice article Sir , with regards for "the house loan " , I think the property value will also be higher after 15 years , and then the monthly rent , pataas din ng pataas ang rent sa bahay , while the 3,800 is fixed ? or probably mapa rent mo yung house and use that as your monthly "hulog" sa bahay plus extra . Hopefully maka attend sana nang makapagtanong 🙂 thanks