Personal Finance
Delaying gratification – how hard can it be?
By Five Cents Ten Cents  •  February 15, 2009
[caption id="attachment_1773" align="alignright" width="210" caption="Photo taken from Five Cents Ten Cents"]Photo taken from Five Cents Ten Cents[/caption] What does that mean to your daily living habits? It means you spend only when you have money. You buy things after you have worn out your existing things. Buy new shoes when your old are worn out or torn. Buy new shirt/dress when your existing one starts getting flayed and holes start appearing. Buy that new handphone long after your old handphone has gone way out of fashion. In today’s world of instant gratification, fast-food, online, real-time, now-now-I-want-it-now culture, it’s getting increasingly difficult to put into practice in our daily lives. Is delayed gratification being extremely stingy and having no life? Well, yes and no. Yes in the sense that if you delay gratification indefinitely, then you basically are saying I won’t enjoy life even this one bit while I’m alive but I sure want to bequeath it all to my next of kin. No, in the sense that if you manage to balance between delaying gratification and matching it with new incoming cash flows, then you are able to enjoy a little now but save more for future. I’d like to use my 10-90% rule for bonuses to show how this works. This rule is simple, I use my bonuses to pay for life’s luxuries. But I cap myself to about 10% of the bonuses. So if I make some investment returns from investing, or get some money from blog monetisation, I set aside 10% for play. It funds my next gadget, a nice meal or an accessory. Of course, 10% is just a gauge, sometimes the amount could be 50% or more if the windfall or bonus is small or it could be less than 10% if the windfall is bigger. So one way to delay gratification is to tie it to actual cashflows coming in from year-end bonuses, capital gains from investments, dividends or income from investments or interest from deposits and savings. The other way is not to spend ALL of your cashflows from investment gains/ income / dividends but limit to a portion. How hard is it to delay gratification? Read more...
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By Five Cents Ten Cents
PanzerGrenadier is a 30-something accountant who finally grasped the concept of financial freedom at the ripe old age of 32. Ever since, he has been travelling on his journey towards financial freedom and documenting his adventures through his blog "fivecentstencents". PanzerGrenadier allocates his non-work time in between living within his means, saving and investing as well as spending quality time with family. He is an avid toastmaster and has completed 10 years of being a reservist conscript in the Lion City.
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