Do you know what is the central element of good decision-making?
It is actually one’s ability to manage delay.
Yes, our ability to think about delay is a central part of the human condition and it’s a gift, a tool that we can—and should—use to examine our lives.
Life might be a race against time—at least that’s how it’s perceived by many—but it’s enriched when we rise above our instincts and stop the clock to process—and understand what we are doing and the reasons behind them.
Because, like it or not, it would seem that the essence of intelligence is knowing when to think and act quickly, and when to think and act slowly.
For centuries, leading thinkers have advised against jumping to firm conclusions regarding the unknown and yet, not only do we jump faster to firm conclusions nowadays, we also do it more frequently.
We like to believe that there is wisdom in our quick decisions, and sometimes there is. Still, true wisdom and judgment come from understanding our limitations when it comes to thinking about the future.
In investing, fast thinking can hurt the growth of our nest egg—if we lose our capacity for reflection and for deferring gratification—and our penchant for investing in the future.
An age-experienced (= older) friend of mine once shared that money resources can be wasted, used, or invested.
The last option is of course the best; nevertheless, it’s often the most difficult since it requires long-term thinking and willpower for delayed gratification in the face of short-term “demands”.
But are those really “demands” or just “choices”?
We might be aware of our choices, but not delaying them might bring about more excitement to the one, or the other.
Underlying all investment decisions are what economists call “rates of time preference”, and what non-economists call patience; the willingness to defer gratification today for the benefit of tomorrow, to save rather than to spend.
Well, numerous studies have confirmed that introverts think longer before they act; consider information more thoroughly; stay with a challenging task longer; and work more diligently generally. Extroverts, on the other hand, tend towards a short and painless decision making process, a trade-off between diligence and speed.
Moreover, one of the outcomes of those inert differences is that introverts save more for retirement than extroverts.
So, are you introverted enough to stick to your plan for building up an abundant retirement nest egg?
And fret not. As an introvert, you are in great company: Steven Spielberg, Larry Page (Google Founder), J. K. Rowling (Harry Potter Creator), Warren Buffett and Albert Einstein.
How do you personally go about delaying gratification? Are there any methods that have worked well for you and that you would like to share with us?
“It’s not that I’m so smart, it’s just that I stay with problems longer.” — Albert Einstein
“Think like a man of action, act like a man of thought.” — Henri Bergson
“Lots of companies don’t succeed over time. What do they fundamentally do wrong? They usually miss the future.” — Larry Page
“I don’t dream at night, I dream at day, I dream all day; I’m dreaming for living.” — Steven Spielberg
“All good ideas start out as bad ideas, that’s why it takes so long.” — Steven Spielberg