Every time I post about how investing over the long term results in building great wealth, I get comments that say things like “but I could be dead then” or “what good is money if you don’t spend it.” Those are fair perspectives. However, I don’t propose we should our lives at poverty levels so we can die with the most money in our bank account. The opposite actually! The whole POINT of money is to maximize your ability to be happy and help people!

But there’s an opportunity cost to spending all of your money today. In fact, you can spend even MORE money in your life if you practice some delayed gratification. In our example, Rebecca isn’t all that extreme. She lives on $60K instead of $70K for just the first ten years of her career. After 10 years, she starts spending her entire salary PLUS selling $10K/year of her investments and spending those. She lets the rest of her investments continue to grow.

The result? After 40 years, Rebecca’s lifetime spending is actually $300,000 HIGHER than Rachel who spent all her money immediately. Plus, Rebecca has a cool $1.2M in investments (which she could spend as well!)

I’ve found that most of the best or treasured things in life require some delayed gratification. Fitness, love, health, education, money. If we’re always doing what satisfies our most immediate wants, it would be easy to end up spending every penny, stuffing our faces with candy, never working out, etc. But that doesn’t result in a very happy life. Spend some of your money today and have some fun! Invest some of your money for even more fun down the road! You’ll be happier today AND later knowing that you’re setting yourself up for a great future 🙂

As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.

-Jeremy