I found this little animated video about “time orientation” – how our behaviour is influenced by how we relate to past, present, and imaginary future events.
It turned out to be a compressed version of the following 40 min presentation by psychology prof. Philip Zimbardo:
The Marshmallow experiment
In it Zimbardo, among other things, shows an experiment that checks if children are future oriented, meaning that they are apt at planning for and achievement of future goals, often at the expense of present enjoyment, delaying gratification, and avoiding time-wasting temptations. A 4-year-old child is offered a marshmallow, the experimenter then says he has to leave the room for a while and tells the child that it will get two marshmallows if he/she can wait. (This part is just in the beginning of the video above, the ways the children try to avoid eating the marshmallow are a must see!)
It turned out that 14 years later, the children that managed to delay gratification and didn’t eat the marshmallow, scored significantly better results at exams, and were described by the psychologists who made the experiment as confident and self-reliant, cooperative and work well under pressure, whereas the other children labelled “present-oriented” were described as moody, overreact to frustration, prone to jealousy and envy.
It should be said that it’s not as easy as future oriented equals good, and present oriented equals bad. Zimbardo talks about a so called balanced personality type scoring high on future orientation as well as orientations called “present hedonistic” and “past positive”, saying that having only one of these three orientations can be trouble. Those being very future oriented and not much else can have problems with anxiety, worry, social isolation, and over-competitiveness.
Delayed gratification and passive income
Still, the future orientation is important, and I’d say being future oriented is a bit of a precondition to start dabbling in passive income and lifestyle design. One has to start by planning, working hard and delaying gratification – essentially staying away from the marshmallow.
Today I made an excel spreadsheet for my real estate investments in the Ivory Coast assuming an average 16% return, and some debt financing at 10%. The result was that if I reinvest all the returns and add quite a bit of my own savings every year until the end of 2013, after that I can take out enough money to live comfortably without any other source of income, reinvest the rest and still see the returns continue growing relatively rapidly.