Deferred Gratification

“Waiting helps you as an investor and a lot of people just can't stand to wait. If you didn't get the deferred-gratification gene, you've got to work very hard to overcome that.” - Charlie Munger

Charlie Munger refers to his inclination towards deferred gratification as one of the key factors that helped him succeed. Investing, by nature, is an act of deferring gratification. When you are investing, you are forgoing current consumption. If you can’t overcome the lure of instant dopamine hit from spending, it will be tough for you to save and invest. Most good things come from practicing things that have delayed reward (reading books, working hard for the exam or on a project, investing for the long term, etc). Most harmful things result from seeking instant reward (junk food, mindless scrolling, investment in junk assets with no edge, etc). If you can train your mind to be comfortable with deferred gratification instead of craving instant gratification, you will do a favor to yourself.

Success in investing depends a lot on deferring gratification. When you are seeking to buy assets at a cheap and waiting for them to grow, you are practicing deferred gratification. And when you are following the trend, buying assets even when they are expensive in the hope of making a quick return, you are falling for instant gratification. Deferring gratification helps you to keep the odds in your favor.