2019: How can kids develop the delayed-gratification skill?
AUDIENCE MEMBER: Hey, Warren and Charlie. I’m Neel Noronha. I’m 13 years old and from San Francisco.
I feel like I see you in our living room a lot. My dad is constantly playing these videos of you at these meetings. And he teaches me a lot of lessons about you guys. But many of them require the delayed gratification skill. (Laughter)
I want to know, is there any way that kids can develop the delayed gratification skill? (Laughter and applause)
CHARLIE MUNGER: I’ll take it, if you want me to, Warren.
WARREN BUFFETT: Go to it.
CHARLIE MUNGER: I’ll take that, because I’m a specialist in delayed gratification. I’ve had a lot of time to delay it. (Laughter)
And my answer is that they sort of come out of the womb with the delayed gratification thing, or they come out of the womb where they have to have everything right now. And I’ve never been able to change them at all. So, we identify it. We don’t train it in.
WARREN BUFFETT: Charlie’s had eight children, so he’s become more and more of a believer in nature versus nurture. (Laughter)
CHARLIE MUNGER: You’ll probably see some nice, old woman of about 95 out there, in threadbare clothing. And she’s delaying gratification right to the end and probably has 4,000 A shares. (Laughter)
It’s just these second- and third-generation types that are buying all the jewelry.
WARREN BUFFETT: It’s interesting. If you think about — we’ll take it to a broader point. But if you think of a 30-year government bond paying 3 percent, and you allow for, as an individual, paying some taxes on the 3 percent you’ll receive, and you’ll have the Federal Reserve Board saying that their objective is to have 2 percent inflation, you’ll really see that delayed gratification, if you own a long government bond, is that, you know, you get to go to Disneyland and ride the same number of rides 30 years from now that you would if you did it now.
The low interest rates, for people who invest in fixed-dollar investments, really mean that you really aren’t going to eat steak later on if you eat hamburgers now, which is what I used to preach to my wife and children and anybody else that would listen, many years ago. (Laughs)
So, it’s — I don’t necessarily think that, for all families, in all circumstances, that saving money is necessarily the best thing to do in life. I mean, you know, if you really tell your kids they can —whatever it may be — they never go to the movies, or we’ll never go to Disneyland or something of the sort, because if I save this money, 30 years from now, you know, well, we’ll be able to stay a week instead of two days.
I think there’s a lot to be said for doing things that bring you and your family enjoyment, rather than trying to save every dime.
So, I — delayed gratification is not necessarily an unqualified course of action under all circumstances. I always believed in spending two or three cents out of every dollar I earn and saving the rest. (Laughter)
But I’ve always had everything I wanted. I mean, one thing you should understand, if you aren’t happy having $50,000 or a hundred-thousand dollars, you’re not going to be happy if you have 50 million or a hundred million.
I mean, a certain amount of money does make you feel — and those around you — feel better, just in terms of being more secure, in some cases.
But loads and loads of money — I probably know as many rich people as just about anybody. And I do not — I don’t think they’re happier because they get super rich. I think they are happier when they don’t have to worry about money.
But you don’t see a correlation between happiness and money, beyond a certain place. So, don’t go overboard on delayed gratification. (Applause)