Deferred Gratification

Talk about a downer. Having to defer gratification is as un-American as the Taliban.

We spent the better part of two decades buying stuff we didn't need on time. We bought on time because we never had the money at the moment we wanted the stuff. Houses, boats, vacation airfare, big screens, Polk speakers, cocktail dresses, wireless electronics...on and on.

70% of our economy is buying shit, and when credit was loose we never once had to defer gratification. "There's never been a better time to buy that Yukon," said the salesman in 2003; if you gotta pulse, here's the keys. You didn't have to work a single day beforehand to start driving it. And the salesman was right -- six years later you cashed it in with a government clunker subsidy to buy another one. Here's the keys to your gorgeous new home, too, and you didn't have to work a single day beforehand to start living in it. No down? No problem!

Now here it is in 2009 and I'm suffering from having to defer gratification -- I heard a very convincing argument yesterday not to cash out any retirement to pay off my mortgage. It's financial stupidity. While I though I'd lose perhaps 20%, it's closer to 45-50%. What I need to do is hunker down and live within my means for the next year and a half and pay it off like a grown man, not like an impetuous child demanding a new toy now.

I have seen, literally, scores of people around me cash out their retirements as they leave their old jobs. $4,000 here, $7,000 there...people get into the mindset that you can't retire on $4,000 and it's so damn far away anyway that in the grand scheme of things if it's cashed out now it won't really matter. This is nothing more than an unwillingness to defer gratification. It's a hard thing for me, for sure.


My financial advisor suggested that for a 40 year old to have 300k saved along with virtually no mortgage I shouldn't piss on my last 20 years of frugality just for the one-time junkie-fix of owning my house free and clear. Wait, live correctly, and it will come.

How hard that was to hear! How hard it was on my American ears! I WANT IT NOW. I DESERVE IT NOW. I'M ENTITLED TO IT NOW. I feel like I'm back in third grade again, with Mrs. Wilson scolding me to wait my turn on the swing.