How to raise a future millionaire


The lottery, inheritance, dumb luck. These are some ways millionaires can be made. But most of us won’t hit the jackpot, so let’s talk about the next best thing - marshmallows. Why? Because no matter how you feel about marshmallows, they teach us important lessons about the value of goal-setting and delayed gratification, the more common paths that lead to financial success. Want s’more? 

Think about the last time you practiced restraint in order to get a better reward down the road. Did it come easily or did it challenge you? Your experience may reflect what you saw and learned as a child. For some people, delaying gratification during childhood begins in small ways, like eating all your vegetables to earn a dessert later. Other children may receive everything they want, whenever they want it. As it turns out, the skill of delayed gratification can determine life-changing outcomes and make a significant impact on one’s personal finances.   

That’s where marshmallows come in. In the famous Stanford Marshmallow Experiment of the 1960s and 1970s, Dr. Walter Mischel ran a series of experiments where he would put a single treat, like a marshmallow, in front of a child. He then told the child they were welcome to eat the marshmallow, with the twist that they could have two marshmallows if they waited 15 minutes. Researchers tracked the original participants and found that those who are able to delay their gratification as children achieved better life outcomes (measured by standardized tests, BMI, whether they got a college degree, and more. Note: there is some controversy over replicating the same results, which we’ll get into!).


Teaching our children delayed gratification is critical for their ability to build long-term wealth, because real versions of the marshmallow experiment are everywhere. The stock market, for instance, doubles your investment every 7.2 years or so (assuming a 10% historical annual return). Will our children grow up with the patience to double their money or will they have to buy what they are fixated on at the moment? In the modern digital age, kids are increasingly demanding instant gratification and it is becoming more and more important to help them practice self control. Beyond building wealth, delaying gratification can define lasting character traits; it can be what gets kids through lessons to eventually master an instrument, or can be the relentless studying needed to ace a class. The point is, the need for delayed gratification is everywhere.    

Guardian Savings instills delayed gratification in a couple different ways. First, we help parents establish an opportunity cost through an artificially high interest rate for their children’s savings. With a high interest rate, spending money on an impulse purchase hurts even more because your child loses future income. What this does is sweeten the deal for saving. You can challenge your children when they are making a spending decision and help them think through their decisions: “Is that really worth $100? $100 earns you $15 every year!” Your children will gradually start thinking about opportunity cost every time they make a purchase. 

Guardian Savings also provides a forum for goal setting. Without a goal, it can be tough for kids to save if they don’t know what they’re saving for. With an aspirational goal, you can coach your children to consider whether a short-term spending decision is worth delaying the achievement of their long-term goal. “If you buy that game now, you won’t be able to buy the bike that you wanted before school is done.” 

Beyond using Guardian Savings, here are a few tips to help your child learn delayed gratification:

  1. Be a good role model. Kids learn a lot through imitation! Share your thought process when making decisions, especially ones that feel automatic, like buying something in bulk that you use often or waiting to buy something until the price comes down.

  2. Create delayed gratification scenarios. Give your kids practice making delayed gratification decisions. If your children tend towards prioritizing the short term, you can try decreasing the time horizon of the reward and slowly build up to longer timelines.

  3. Consistently reward self-control. Research that disputes the marshmallow experiment conclusion suggests that the decision to delay gratification is actually influenced by the history of the child’s reward experiences. If children are in an environment where adults do not consistently fulfill their promises of eventual reward, the children are more likely to choose instant gratification. Subconsciously they don’t trust that the greater reward will come.This conclusion makes it imperative to reward self control consistently. 

  4. Practice SMART goal setting. Working toward a goal over time is a great way to teach self control. The satisfaction one gets from achieving a goal can reinforce a positive feedback loop and lead to incremental improvement. However, it is important that goals are actually achievable. Too often children shoot for the stars with lofty goals that they never achieve, which can lead to a negative spiral. Preach goals that are ambitious but realistic. 

  5. Celebrate smart decisions. Express enthusiasm and give your children kudos for being wise when they deserve it. High-fives can go a long way! 

What other techniques work for your family? Share how you help teach delayed gratification in the comments below!

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