THE MARSHMALLOW CONUNDRUM

Who knew marshmallows could be so scary??

My favorite marketer blogger let me down today.

They discussed why some people are wealthy. It’s because they made a decision to purchase stock in a new company 20 years ago, instead of spending the money on eating out at a restaurant. As in, wisdom and foresight vs. random self-indulgence. Long-term value over short-term amusement.

They compared to to getting a grilled cheese sandwich today, or being able to get two grilled cheese sandwiches next week. As if the people who invested in Google in 2004 are smarter/better than the people who chose to go out to dinner instead. Twenty years later, the dinner is forgotten, but the shares are worth thousands of dollars.

I get the point (I think.) It takes time for money to grow, and not much time at all to spend it on worthless/useless/petty things instead. The people who are willing to wait, gain more.

Or is it?

It sounds like the Stanford Marshmallow Experiment in the 1970’s, when 32 children were given a marshmallow, but told they would get TWO marshmallows if they didn’t eat the first one. The study declared that the children who could wait, were more successful in life, their SAT scores were higher, etc. Repeated studies seemed to support the power of delayed gratification.

This is the simplified version, of course, but the one we’re most familiar with: People who have self-discipline do better in life.

Until newer studies found the major flaw in these results:

Children of “lower” social class, who were more vulnerable to food insecurity, whose families were struggling, were the ones who “couldn’t” wait for that second marshmallow.

Not because they aren’t as smart, not because they had no self-discipline, or because they were less patient.

It was because they had already learned to grab what was available when it was offered. Because that second “reward” might NEVER come.

I never truly believed in the original findings. Something just felt wrong. It felt more like an issue of trust in the people running the experiment than the ability to “go without”. In fact, these kids that “failed” were probably already “going without”. Without the same support, advantages, opportunities that wealthier families offer.

And about stock options vs. a dinner out….

Yeah, we might forget the dinner out, twenty years later. It might be a better choice to invest in our future.

And yet….

What if that dinner is the first date with a person who became our partner? Or the one where our partner asked us to marry them?

What if that dinner was a celebration? A birthday, a milestone reached, a graduation?

What if it was the last time we were able to spend time with a loved one or a dear friend?

What if it was the dinner where you had a huge fight, and realized that was NOT the person you wanted to be with for the rest of your life? A decision you would never regret?

The article probably has a valid point, and maybe it just landed wrong for me today. We’ve all made poor financial decisions we wish we could do over.

And yet…

Investing money has always been a gamble. Some people make good investment decisions, yes. But a lot of those decisions aren’t. We never really know which ones will pay off, and anyone who says otherwise is either very very lucky in theirs, or they’re full of bullshit.

Sorry, I don’t know where I’m going here. Except even gentle criticism about people not making smart decisions about the future drives me crazy. I still remember a coworker 40 years ago. She and her parter had the perfect investment/retirement plan in place with her husband.

But her husband died suddenly way, way before they got there. And she had to keep working long past her retirement years to support herself.

Her greatest regret? That they had put off all their travels and good times, so they would have a rich, perfect retirement.

And then they never had the chance to enjoy it, together.

My own favorite “predicting the future” story is the year where the price of oil skyrocketed (our heating fuel in New Hampshire), and we had to decide whether to prebuy at the current prices, or hope that they would fall before winter. My husband said, “If only I knew what the price of oil was going to be in six months!” And I said, “You and ten billion other people.”

Yes, it’s good to be frugal, and set aside money. Yes, it’s good to have hope in our hearts that things will work out, that everything will be okay, that we will always be safe, that we have everything under control. It’s good to wait, and get that second marshmallow as a reward.

But it’s bad to blame people who have less, who strugle more, who battle discrimination, ridicule, distrust, disgust, and who are never seen for anything more than their gender, skin color, nationality, religion choices.

Only when ALL people have money to invest, when ALL people don’t have to worry about where the next paycheck will come from, when ALL people can have an income, health care, respect, love, when ALL people can feel safe and cared for….

Then, and only then, will I take that investment advice seriously.

Er….pass me that marshmallow, please?