Sweeter Rewards of Delaying Gratification

Last updated on May 7th, 2014

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Lots of advices 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.

***

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 a 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.

 ***

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

PS: The above piece is a short section of a sample Wealth Strategy article of Truly Rich Club from Lyndon Malanog. 

Lyndon Malanog is an Entrepreneur and the Financial Coach of Bo Sanchez, Inc.. He continuously gives “Financial Discipline and Wealth Management” seminars to companies and groups as part of his noble mission and advocacy of educating people. 

Meet Lyndon (with great speaker Aya Laraya of Pesos & Sense) in person in our Philippine Stock Market Premier Seminar this coming June 28 at Max’s Quezon Avenue, QC!

Know how to avoid many mistakes people commit in their financial lives and learn how to have winning investments in the stock market!

Get more details here.
Discounted rate of
2997  1997 ends this May 24  so reserve your slot now. 

Email pinoyinvesting@gmail.com to reserve your seat now.

https://www.smartpinoyinvestor.com/2013/05/midyearstockmarketseminar2013.html


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One thought on “Sweeter Rewards of Delaying Gratification

  1. Arnold C Alcid

    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

Got questions? Leave your comments below.

Are You Losing Clean Money? – The Price of Delaying Gratification

(If you want a quick guide for beginners how to start investing in the Philippine stock market, you can download your free ebook here.)
Being investors for some time now,  you’re probably already aware of the importance of developing your habit of saving.  (You can read my related post – Your First Step in Investing: Saving).
I would always push for developing that discipline as it paves the way to a better and more secure financial plan.

I’m so happy for myself having that practice now at this point in my life. And I just did again it last Friday (14th is our sweldo day).  I noticed now how it has really become automatic in my system.

Whenever I hear that our salary has been credited to our payroll account, I simply log-in online to BPI ebanking, and TADAAH!
in just matter of clicks, I’m done paying myself. 


I immediately set aside a portion for my investment as my monthly addition to my retirement fund on top of increasing my already enough emergency fund.
Then I adjust myself to what’s left.

The sad thing though is that while we’re clear in our agenda of paying ourselves, we may as well be committing  mistakes on the second part of the equation –  EXPENSES.

Yung maduming pera sa kalsada, pinupulot pa natin, pero ang problema, yung malinis na pera na nasa satin na, parang tinatapon lang din natin.

I hit that realization after reading the very practical books
Kontento ka na ba sa kaPERAhan mo? and Kasu-suweldo pa lang, ubos na written by Vic Garcia  together with his wife Avelynn Garcia.


I suggest you grab your own copy as those two books contain very practical and down to earth tips on how to better manage your finances. I liked very much their style of writing talking to their readers. Lots of humor too. I felt like attending a live seminar with their reality-drawn dialogues. Definitely a must read!


Below is also another sharing from Lyndon that may help you in one big financial decision you’ll ever make – that of buying your house.

Enjoy the rest of the week!

Have fun investing!
Omeng

***
Let me discuss about the BIG BIG BIG Price of delaying gratification. I know that all young couples dream is to have a house of their dream, its an emotional thing. A house for a Filipino is not just Investment but it is also a symbol of Success and Security even though in reality is not. Your house depreciates in value and only the lot is actually appreciating, in short a house is not an asset but a liability. The bigger the house, the bigger the need for maintenance.

I cannot discuss you things in details and I hope you will still make time to attend my seminars. Here’s the thing; getting a loan for 15 years means that you will be paying more than 4x of the original amount you owe from Pag-ibig or SSS. I have tried it with one of my first real estate venture last 1994 for 15 years to pay. I owe 150T payable in 15 years and my monthly amortization is 4T. This is in addition to what I pay to the original owner of the house & lot which is 150T.
Lets do a simple math; 4T x 12 months/year x 15 years = 720,000.00 means I have paid 4.8 times the original amount.
If I have Invested that amount in an Equity Fund for 15 years I could have an amount close to 5 Million as of today, this means my money could have grown to 32 times vs. my debt have grown to 4.8 times.
Now you decide if it pays to wait and delay gratification. Don’t make the same mistakes as I do, before I learn how money works. Make time to attend my seminars and we can guide you in your Financial Journey with us. WE can also offer you 3 Solutions during your Journey with us, namely
1st. FINANCIAL Solutions means you can Invest in all types of Asset Classes (Paper & Real)
2nd. BUSINESS Solution means if you join our Team, you can also earn commissions from your friends, relatives and even from your own Investments.
3rd. COACHING & MENTORING means you will undergo a lot of Trainings thru our 25 Modules of Wealth Academy, Meetings(3x/week) & Conventions(1 local 3 out of the country/year).
See you very soon and GOD Bless you abundantly.
***

Lyndon Malanog is one of the mentors of Bo Sanchez and Truly Rich Club,  and a director of IMG – World Financial Group. He is also an Entrepreneur and the Financial Coach of Bo Sanchez, Inc.. He continuously gives “Financial Discipline and Wealth Management” seminars to companies and groups as part of his noble mission and advocacy of educating people.

Start building your financial foundation by attending IMG’s Wealth Academy Series.
Sign-up here (or below)  to reserve your seat.


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PS. Do you want to learn the basics of MARKET TIMING (When to buy and sell stocks) in a LIVE session?

Join us in our FREE webinar this Tuesday - July 7 @ 4PM!

Click here - A Winning Guide to Trading and Investing with Ricky So for FREE sign-up. Tribe

Do you want to receive stock picks and other lessons on money management & business ideas?

Check out Truly Rich Club and receive 14 incredible gifts for FREE, including the opportunity to earn passive income every month!
Click here to learn more.

Did you like this article?

If you are stilll a new investor, you would not want to miss watching this stocks investing practical guide for newbies.
Make sure to Subscribe to my YouTube channel for more.
Click here.

Get your quick guide for beginners how to start investing in the Philippine stock market and more practical trading tips and tricks. Simply sign-up below (it's FREE!)

Got questions? Leave your comments below.