"This is a test for Pinterest".


Another key to financial success I think is practising delayed gratification. Delayed gratification is simply the action to resist the temptation of immediate pleasures in life.

People naturally live in the present moment and we have all grown to want things immediately. The world around us is being built around to accommodate our instant needs. Don't get me wrong, I love Amazons' next day delivery but we have become a society to want things now. For example, your Deliveroo order straight to your door faster than you can find the next film to watch on Netflix or your online Amazon order delivered on the same day, super-fast internet connection speeds. However, our expectations sometimes arent met and we get a little dissatisfied so we find the next newest thing that we think will satisfy our needs like when your new phone for example slows down a little and you are already searching for the next new phone because your feel like you are missing out on something. Feeding your instant gratification is an easy way to stay poor. Next time you want to purchase something online, try leave it in the basket overnight and see if you still feel to purchase it the next day. You'll often find the need to purchase it disappears the next day.

Life is happening faster and faster that we forget that good things come to those who wait.

I recently had the temptation to replace my current old 2010 Mazda 3 with an Audi S5. Although it would feel great to drive a beautiful new car I calculated how much financial strain it would cause me and how much financial opportunity I would be missing out on.

Here let me show you:

Feeding into my instant gratification...

I went on Autotrader as if I was purchasing my (used) Audi S5 and as you can see I would be paying £490.73 for 48 months provided I deposited close 20% of the price and part exchange my vehicle.

Representative is APR 8.8% making a total interest payable of £3,637.04 - which is the total interest that I need to pay for financing the balance of £19,928.

Therefore, the total amount payable is £30,137.04!

Now, let's see what would happen if I waited 4 years and instead saved it into an index fund...

If I put my initial deposit of £5000 and made a monthly contribution of my monthly £490.73 (what I would have been paying into my car each month) into an index fund that provided an average of 7% return each year for 4 years I would have gained £5,306.10 from my initial deposit of £5,000 and total contribution of £23,555.04. (Annual returned vary but on average index funds provide 7% returns on investments).

I would have a total of £33,861,14 in my index fund that earns me money versus a depreciating asset that would have cost me £30,137.04 that I still have to pay maintenance for and pay a higher tax and insurance rates!

You can see how powerful delayed gratification is and if practised well could help you on your way to financial freedom. If I still want to purchase a car 4 years later, I would be able to make a bigger deposit, have the newer and better version of my Audi S5 and still have plenty of money left.

I'm curious what kind of benefits you have gained from delayed gratification so leave a comment below :)


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