Global View Investment Blog

The Power of Delayed Gratification

As Americans, we want everything now! But there’s a cost to this way of thinking.

Unfortunately, we see a lot retirement financial horror stories, and often times, it starts with having too much debt in retirement, preventing retirees from living the life they had hoped.

The good news is there’s something you can do about it. It’s called delayed gratification.


Wait Before You Buy on Credit

Today’s society has adapted to getting everything now. There is no reason to wait when financing is so easy. Because of this attitude, many are in bad financial shape. We steal from the future, which is very uncertain, to get what we want now.

This has become a greater problem over the years. Research shows that auto debt and student loans are up a staggering 81 percent and 113 percent over the last 10 years, while mortgage loans have increased a modest 14 percent.


Why You Should Reconsider Buying Today and Paying for it in the Future

It’s Risky

Buying now and paying later is a risky strategy. The income used to make our payments is not certain. We could lose our job or our income could be reduced, as many have seen recently with the economic shutdown of the Coronavirus.

It’s Emotionally Taxing

Knowing that you have a commitment to make payments in the many years ahead is emotionally taxing and a huge burden that can weigh you down. It can create stress in a household budget and tension in a marriage. This can all lead to the retirement financial horror stories we fear.

It’s Expensive!

The financial impact of debt is astronomical. It is extremely costly! The interest expense alone is worth trying to find an alternative to borrowing money. Some will look to see if the payment will fit into their monthly budget, and it might. But just because you can afford the payments does not mean you are being prudent with your money. The more important part is the interest expense.

Outside of a house, the most common large item financed is an automobile. According to Lending Tree, in 2019, the average auto loan’s interest rate was 8.06 percent, and the average new car payment was $550.

Instead of buying a car today, what if you wait for five years?

Let’s say you purchase a car for $30,000 and buy a new one of equivalent value every five years. Assume the interest rate is 5 percent.

Option 1 – Buy now and finance:

If you purchased the first car today and finance it, you pay $17,900 in total interest over 20 years. This only leaves you with a depreciated car at the end of 20 years. This includes four cars over 20 years and financing it each time. This puts you in the negative by $17,900.

Option 2 – Save and purchase:

Now, what if you delayed the first purchase for five years. You could start saving monthly and pay cash for each car. Assume the funds are invested, earning 5 percent per year. At the end of the 20 years, your remaining savings is $29,500. You will also avoid paying the interest cost of $17,900. This puts you in the positive by $47,400.

Borrowing to buy the car versus saving the funds is a double whammy. If you save the funds earning 5 percent and avoid paying the interest of 5 percent, the net benefit to you is 10 percent.

In this example, why should you delay purchasing the car for five years? Because of the $47,400 that you forgo by buying now! This is huge! People don’t get it! They miss the power of delayed gratification – the financial impact, the emotional impact and the risk exposure.


It’s never too early to start planning for the future. Contact Global View to see how we can help.



Saving for a purchase gives you a sense of accomplishment. To be able to pay cash is a huge accomplishment. Through disciplined budgeting and sacrificing, you will have a much higher level of appreciation for the car or whatever the funds were used for.


The 7 Day Test

Before making major financial decisions, give yourself seven days to think through whether you need the item now, to think about the alternatives and to pray about it. This gives you enough time to let your emotions settle down and to seek wise counsel.

Do not underestimate the power of delayed gratification! Remember, it will all rot and rust away in the end.


How Global View Can Help

Global View is a fee-only, fiduciary financial advisory firm headquartered in Greenville, South Carolina and serving investors nationwide. Our mission is to be our client’s advocate. We provide truly independent, conflict-free advice and complete wealth management services, so our clients can protect and maximize the wealth they’ve built.

As a full-service financial firm, we help clients at every step of their financial planning journey. We don’t want anyone to be the retirement financial horror stories we fear.

If you’re looking for a financial advisor in the Carolinas, contact us. We’re here to help.


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Joe Hines

Written by Joe Hines

Joey's primary focus is working with clients in the goals setting and financial planning process. He has extensive experience is in helping clients facilitate the decision making process, leading them through the implementation of their financial plan and contributing to their peace of mind. This includes helping clients gain an understanding of estate planning, charitable giving, and helping them implement these plans by working closely with estate planning attorneys.

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