Thursday, August 21, 2014

Pushing the Delay of Gratification to its logical extreme.

I'll start with a personal update.

I'm almost with my first week of school in SMU's Doctor of Jurisprudence or JD program.

This is, by far, the hardest course I've ever taken in my life considering that I have done NUS engineering school, NUS's Masters in Applied Finance and passed all three CFA exams.

Prior to the start of the semester, we would have already completed reading about 30 cases, done two online quizzes, and even attempted to tackle a few problems. SMU places a large emphasis on classroom participation, this means that going to a seminar with a vague understanding is not enough - I have to ensure that I make at least one intelligent ( high quality/ mind-blowing ) contribution every seminar or it will affect my grades. Every seminar is a mini-exam.

The differences in the way Universities conduct lessons has caused me and my friends to come up with this joke...

NUS students can think.
NTU students can do.
SMU students can... talk.

( For political correctness sake, I can't complete this joke. A philosopher friend added a fourth line which made the joke highly elitist.  )

In my past life as an Engineering undergrad, the joke was as follow:

Electrical engineers design the circuits.
Mechanical engineers design the casing.
Civil engineers carry it to the site.

Anyway I digress, I was so caught up, I could'nt blog for a while.

Ok, onto my main topic.

There exist a problem with the delay of gratification.

I call this the "What if you die?" problem.

I started re-examining the problem after a gruesome week in Law School. My life schedule is like clockwork, I wake up at 7am, crunched cases and read textbooks for the upcoming week, then attend school. After that, I spend about 2 hours with my daughter, swim and then I go home to do even more mugging.

This is also an issue faced by many investors. If all you do is keep saving, when would you actually enjoy the fruits of your labor? If you are dividends investor, the answer is obvious - you enjoy spending your dividend income so you are not completely delaying gratification if you buy stuff or travel with dividend income.

But that's not really a comfortable answer for me because I reinvest all excess dividends and spend only what is necessary to upkeep my family and living expenses. Spending my savings is my wife and daughter's problem long after I am gone.

Yes, I do get a kick when I get to study cases involving some of my investments or current affairs. My motivation is knowledge beyond what other engineer-investors have. Nothing feels better than when I read about a landlord who takes his tenant to court. These are issues which can potentially affect me. At least now I know how the local courts view such cases.

So why does a financially independent guy subject himself to an almost 15 hour-day just for the sake of knowledge and another roll of a die to have significant career ?

Now I have a possible answer.

When an investor farms his assets into a dividend yielding portfolio, he might not feel that cashing out to buy something is the reward. The reward is the security and confidence of having an asset which generates income for you.

A start-up founder enjoys building his company beyond the need for a secure income. If he cashes out, he will continue to support or build more companies. This is not delay of gratification. This is gratification.

The only way to delay gratification indefinitely is to enjoy it and view the act itself as an act of gratification.

There are interesting applications of this insight.

When you do something something unexpectedly heroic, like plunge into a risky business venture or engage in a new relationship or take on a new direction in your career, you will inevitably experience some pain. What if there is a way to reframe this as a pleasurable thing?

Anyway, that's all I have for the reader today.

Hope that I can do an update again over the weekend.


  1. Believe it or not, i also wonder if the route i take to go to melbourne is right thing to do at this point in time. Maybe my gratification is to be able to work overseas for a different perspective in life.

  2. I guess we can only know on hindsight.

  3. The joy is in the journey, not the destination. I guess most of us enjoy analysing and making investments, not just enjoying the fruit of our labour.

  4. Hi Chris,

    I guess delaying gratification is never about sacrifice.

    Few, if any, can spend less than half of their $5k income to accumulate a million if their ultimate goal is to lead a tai tai lifestyle.

    My 15HWW

  5. Christopher/Desmond, I guess all decision that we take (or didn't take) comes with its fair share of challenges.. Just keep going and do whatever you can to enjoy it (while you are still in it) is the most important thing. Ultimately, wherever we are (country or career/status), nothing much really changes except our experience...