One of the key discipline that is needed to build wealth over time is delay gratification. I find that this is one commodity that is lacking, judging what some of my wealth building friends told me.
The millennials are a bunch that exemplify YOLO (you only live once) mentality.
Well I happen to be the oldest millennial around, so it proves that ones perception of a prevailing trend can be rather flawed. I can also cite some Gen Xer who couldn’t delay gratify.
If you want to build wealth, you got to start doing the stuff that matter the most to building wealth, paying yourself first and taking actions in life.
When we are talking about putting money away, people give up initially when they are trying to make ends meet. They have spent so much that they don’t have much to squeeze out to save.
I was going through this personal finance accounting with a good friend of mine. He has the desire to work within his constraints to allocate money better. So when we review his cable subscription, handphone bills, VPN services for overseas video streaming, changing the plans and cancelling some services that the family have stopped using would save him $40 per month.
In this world that we lived in, most folks would feel that is peanuts. To some of my good friends, they would tell me to give in, just get a fiber broadband at $50 per month as saving $20 is not so much .
The last example comes during pay raise. We have some of the absurd pay raises as juniors. Suppose you earned $3000 and you get a pay raise of 3%. That doesn’t look so bad percentage wise, but in absolute amount its depressing. Its $90. Not even 3 digits. When its not three digits, the colleagues reaction is that the management would rather look after themselves and don’t value them at all. After CPF the take home amount its even worse at $72.
I agree. In today’s world, these amount look like peanuts. It won’t amount to much if you save them for 10, 20 years.
But you know what, if you start saving these amount, it shows a lot about your character.
It shows that you are willing to see that the future is determined by the past and the present. By carrying out recurring steps in a small cycle, you will see small successes and do the small cycle again,which eventually aggregates to momentum in a larger cycle.
You view things with harsh realism instead of forecasting to the future. This aligns more to a stoic philosophy.
Saving $40, $20 or $72 per month, creates that small cycle, which aggregates to a bigger cycle. It is measurable the end result which is achievable and realistic.
Most of all, you learn that if you can do this, given a bigger amount, the results are much more meaningful, achievable and realistic.
If you don’t start, given a bigger amount next time, you won’t be able to create a system for it, you won’t know why you want to save it, and even if you save for 12 or 15 months, you run a good chance of falling off the band wagon.
If you don’t start with a small amount, you won’t even have anything at all in the future.
So start with a small amount, just like how you would teach your children. Teach yourself to create a system of small saving successes so that when you move on to another job and get more income, you can make the results more meaningful.