Success 201 – Delayed Gratification

In my earlier posts, I discussed the idea the secrets of success are available to all of us, and not just the fortunate few in life. I mentioned best-selling author Robert Kiyosaki and his Cash Flow book series, and the clues he shares in it. In this post, we’ll discuss clue #2, Delayed Gratification.

What is Delayed Gratification? If you ask some people, you might get a blank stare of confusion. It is unusual to find people who actually understand it today.

However, prior to the 1960’s, Delayed Gratification was common in Western culture. Previous generations understood it very well. Credit was almost unknown to them. Purchases were made with cash or barter. Some of the only parts of society that had credit were businesses (though most operated on a cash basis) and the few who had mortgages for their homes or farms.

Today we have a credit driven culture. We often hear of young people graduating college many thousands of dollars in debt, not just in their student loans, but also because of credit cards, overspending and a failure to practice Delayed Gratification. We often hear of coworkers and relatives struggling with their finances because they got mortgages they couldn’t really afford or credit card debt due to not practicing Delayed Gratification. Some of this debt is due to life circumstances, such as job loss or catastrophic medical bills, but much more is due to a failure to practice Delayed Gratification than for other reasons.

We use Delayed Gratification when we see something we want, but don’t buy it immediately. We use the Long Term Thinking we discussed in my last post and set a goal to reach toward, understanding after we do the work to meet the goal, we can reward ourselves with the desired item.

To practice Delayed Gratification like that produces self-discipline as we do it over and over. Instead of acting on our impulses like small children, we grow into ourselves maturity and self-respect. We know we can see something we want, set goals, practice Delayed Gratification, apply some hard work and see the fruits of our rewards become manifest in our lives.

Toward this means, another purpose of Delayed Gratification is to teach us the stuff we set goals to acquire is just that, stuff. We learn the process and growth within the process is more important than the reward. By learning these things, we also learn some of the proper place in our lives of stuff, below invaluable things like relationships and undefinable things like life lessons.

I didn’t understand Delayed Gratification early in my adult life. I was a college student, paying for my needs with student loans and part-time jobs. A bit later, we got married. He’s a bit older than I am, and came equipped with credit cards, savings and cash to buy whatever we wanted and needed. A long series of financially unwise choices, including a failure to live frugally, and emergencies led to a crushing load of debt. Almost all this was debt we could have otherwise avoided, had we practiced Delayed Gratification.

It took us several years and information from our mentors and what we learned through the materials (particularly the best-selling Financial Fitness package) from LIFE Leadership to straighten out our financial mess caused by our own personal failure to practice Delayed Gratification. Now, we look at things we want, and if it’s not an immediate need we cannot live without (like necessary car repairs or medical bills), we look at our list of goals, decide where it would be appropriate on that list to reward ourselves with it, and put it on there.

Delayed Gratification is why our relatives think we’re out of touch with reality because we have smart phones but don’t use our data plan (as they do), and don’t have tablet computers (as they do). Do we have the money? Most folks have the money for something they really want, and if we looked, we could probably get a tablet. But practicing Delayed Gratification is teaching us discipline, self-denial and is an undeniable cure for the instant gratification culture in which we live today.

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Let’s Tax Rich People!! – A Fallacy of Taxation

Why is it people who should know better say ridiculous stuff sometimes?  Recently,

Warren Buffett speaking to a group of students...

Warren Buffet

Warren Buffett came out in favor of Washington taxing the ultra-rich at much higher rates than the rest of the U.S. population.  As an ultra-rich person himself, he should know a few things.

If the rich are taxed at increasingly higher rates, all they will do is find legal ways to hide their incomes in tax shelters, overseas funds and other places where it will do no one but them any good.  Then, how will the government tax it?  Who will they go after next, the already overburdened middle class??

Respectfully, Mr. Buffett, is your memory so short?? It’s all happened before, and not

Official White House portrait of Jimmy Carter

President Carter

all that distantly.  Do you remember when President Carter tried it?  He attempted to tax “luxuries” rich people buy, like yachts, cars, planes and the like.  They responded by buying them used and/or presented to the IRS legitimately documented business reasons for owning and using them.

I have a wealthy friend, an entrepreneur, who did that with his yacht.  He bought used during the Carter administration, then proved its usefulness to his business ventures to the IRS.  He won his case with them, to the tune of 80% of his yearly depreciation and operating expenses.  He also shared how he did it with fellow entrepreneurs, so they could get the same tax breaks on

Cruise Ship Boat Fishing for Yachts

their own “luxuries.”  So, other than thousands of jobs lost and American companies bankrupt in yacht building and other “luxury” industries, who won that tax battle?  My wealthy friend and his friends!!

Official Portrait of President Ronald Reagan.

President Reagan

President Reagan abolished many of the high taxes of his predecessors, and the U.S. economy was starting to rebound by the start of his second term.  Why?  Because the rich had the money that was no longer being taxed to invest, and invest they did.  They created businesses, expanded businesses and created jobs over every sector of the American economy.  The boom in the economy enjoyed by President Clinton was not of his making.  An economy takes years to adjust, whether it be in recoiling from something foolish, or recovering because of the decisions such as

President Bill Clinton 2007

President Clinton

Reagan undertook.

The government doesn’t create jobs, people do.  More specifically and most often,

rich people do.  Who owns corporations?  Rich people.  They are the people who can afford to invest huge sums of cash to do it.  Rich people won’t invest their money to create jobs when they believe the income they earn for their investing and taking the risks to create said jobs will be taxed away.

Everyone, even the ultra-rich, operates on a WIIFM (What’s In It For Me?) basis.  Of all people, Mr. Buffett, you should know this!

So, what do we do?  Instead of trying to raise taxes, why don’t we look at the other end of the budget spectrum, and close the gap the way President Reagan did it, by lowering what the government spends??  Why don’t we abandon the “gimmie” mentality that so

Seal of the Internal Revenue Service

IRS Seal

pervades our culture???  Why don’t we take the budget to the chopping block and go at it until it balances???  Have we no people of courage in Washington and our state houses???

I am not saying there are not real people with real needs who need to be helped, and should be helped.  But for every real person, with their real needs, there are at least 1 to 3 more who could work, and don’t chose to.  I know some of them, too.  Instead of looking for work, they make excuses and live off the government dole.  It’s easier and more convenient to them.  I also know others who could live off the government, and don’t chose to.  They make their own way, depending on no one but their own efforts to make it in this world.  Do they have it easy?  No, and they tell me they have something of even greater value than ready government cash — their dignity and worth as contributing citizens, instead of feeling like human leeches on our society.

Cutting the wastefulness is something we could do.  Why don’t we run our

Coat of Arms of the Commonwealth of Puerto Rico

Coat of Arms of the Commonwealth of Puerto Rico

governments, both at the state and national levels, the way Puerto Rico does?  They do it as if they expect to have a surplus and turn a profit back to their taxpayers within the next 5 years.  It looks from all the evidence that they are on track to do it!  They did it by severely cutting back and eliminating waste.  Was and is it popular?  Heck, no!!  Is it working??  Heck, YES!!!