My favorite way to eat sweet potatoes is mashed, with a few marshmallows melting on top of them.

This year, when I eat the marshmallows, I’ll be thinking of one of the greatest psychology experiments of all time, conducted by Walter Mischel at Stanford University in the 1960’s. 

In the experiment, Mischel brought four-year-olds into a room, one at a time, and sat them down in a chair.  On the table in front of them was a marshmallow.  Mischel explained to each child that he was going to leave the room for a few minutes.  While he was away from the room, the child could decide to either (1) eat the marshmallow right away, or (2) wait until Mischel returned and then have two marshmallows.  Then Mischel left the room for 15 minutes. 

It turned out that many of the children could not delay gratification for the entire 15 minutes, and they ate the single marshmallow after Mischel left the room.  But approximately 30% of the children were able to delay gratification and wait for the researcher to return to the room.

Eighteen years later, Mischel gathered data about the same children to find out how they were doing on a number of measures.  Compared to the children who were able to delay gratification for the whole 15 minutes, the children who ate the marshmallow quickly had more behavior problems, struggled in stressful situations, had difficulties with attention, found it hard to maintain friendships, and got S.A.T. scores that were a full 210 points lower than the other group. 

The moral of the story?  The ability to wait, to delay gratification, and to control one’s impulses is an attribute that is important for success in many domains of life.

Of course, this has many applications to our financial behavior.  Think about all of the occasions when we might benefit from waiting: waiting before making a large purchase; gathering all of the data about an investment option before jumping in; waiting for the magic of compound interest to do its thing.

What is the marshmallow that you are waiting for in the financial domain?

Send your ideas!