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World’s Greatest Hedge Fund Manager Says You’ll Have a Better Experience With Money if You Save
Once you save, you experience something different with your money to the person who spends it immediately.
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After getting rowdy at a Christmas party, Ray Dalio punched his boss in the face.
As a result, he started the World’s Largest Hedge Fund.
Now he’s considered one of the best investors of all time.
Dalio is a sharp intellect.
And a billionaire who amassed his wealth by being a deep thinker and a brilliant communicator.
Recently in a video on his Instagram page, he quoted the Stanford Marshmallow Experiment conducted by Walter Mischel.
In the Marshmallow Experiment on delayed gratification, a researcher offers a child a choice between a small but immediate reward or two rewards if they waited for a while.
During this time, the researcher left the room for about 15 minutes and then returned. The reward was a marshmallow or pretzel stick, depending on the child’s preference.
In follow-up studies, the researchers found that children who could delay their gratification and wait for the second marshmallow had higher SAT scores, were less likely to abuse substances, had a lower likelihood of becoming obese, had better responses to stress, were reported to have better social skills by their parents, and generally scored better in a range of other life measures.
Dalio related this study to your finances and said that when two people have the same opportunities, the one who can delay gratification and not spend their money immediately is more likely to become wealthy.
By counting how long you can live without spending, you can develop the discipline to save and grow money.
Saving your money means you’re delaying instant gratification.
According to Dalio, after saving, the next step is to decide where to hold and keep it. Once you save, you experience something different with your money to the person who spends it immediately.
