Wealth is Good
Cash Flow Is Better

In an earlier post, drawing from Thomas Stanley and Willaim Danko’s “The Millionaire Next Door”, Daniel Goleman’s “Emotional Intelligence”, Carl Jung and the Myers-Briggs personality type model, and also from my own experiences and observations, I listed eight behaviors the financially successful tend to have in common. They are…

1. Goal-oriented
2. Organized
3. Open-minded
4. Action-oriented
5. Frugal
6. Self-disciplined
7. Team-oriented
8. Persistent

Each behavior is important but which do you think is most important?

At the risk of being politically incorrect I will go out on a limb and pick one behavior that appears to play more of a leading role in influencing financial success than the others. That behavior is #6, self-discipline.

Setting savings goals – and consistently achieving them – requires self-discipline. Making extra principal payments every month to repay a loan two years early also requires self-discipline. So does resisting the urge to make a large impulsive purchase.

Each of these examples of self-discipline involves delaying gratification in one way or another. Studies have shown that delayed gratification is strongly associated with not just financial success but success in life generally.

For example, in 1972 Dr. Walter Mischel of Stanford University conducted a “marshmallow test” among six hundred children, aged four to six. In the experiment the children were given a choice of receiving one marshmallow now or two marshmallows after waiting twenty minutes. In 1988 Mischel reconnected with the participants and found that those who could wait longer for the reward tended to be more successful at school, with diet, and in other measures of success.

In his book The Future of the Mind, Michio Kaku goes on to say, “a study done in 2011 indicated that this characteristic continued throughout a person’s life….The children who exhibited delayed gratification scored higher on almost every measure of success in life: higher paying jobs, lower rates of drug addiction, higher test scores, higher educational attainment, better social integration, etc.”

So the next time the lure of immediate gratification threatens your financial routine, resist the urge. Choose two marshmallows instead of one.

Keith Whelan is Cashflownavigator's founder and author of the "Wealth is Good, Cash Flow is Better" e-booklet. He is a graduate of Columbia University Business School, teaches at Rutgers University, and has over 30 years experience in the banking and financial services industry. Keith, his wife Cindy, and their two sons live in New Jersey.