Let’s pretend for a moment that you are a zebra in an African savannah landscape.
Every now and then, you get human visitors on the safari taking photos of you. The biggest difference between you and your zebra peers and the humans taking your picture is that nearly every decision you make provides an immediate benefit to your life:
- When you are hungry, you walk over and munch on the grass.
- When a thunderstorm comes, you take shelter under the trees.
- When you detect a lion stalking you and your friends, you sprint
On any given day, most of your choices as a zebra — like what to eat or where to sleep or when to avoid a predator — has an immediate impact on your life. You live in, what researchers call, an Immediate Return Environment because your actions deliver immediate results.
The Delayed Return Environment
Now, let’s reverse the roles and you are a human vacationing on a safari. Unlike the zebra, you live in what researchers call a Delayed Return Environment. Most of the choices you make today will not benefit you immediately:
- If you do a good job, you’ll meet your KPI and get good salary increments at the end of the year.
- If you save money now, you’ll have enough for retirement later.
- If you don’t exercise, you’ll eventually get fat, and later obese.
Many aspects of modern society are designed to delay rewards or consequences until some point in the future. This is true of our problems as well.
While a zebra is worried about immediate problems like avoiding lions, and seeking shelter from a storm, many of the problems humans worry about are problems of the future.
Unfortunately, living in a Delayed Return Environment tends to lead to chronic stress and anxiety for humans. Why? Because your brain wasn’t designed to solve the problems caused by a Delayed Return Environment.
The Evolution of the Human Brain
The human brain developed into its current form while humans still lived in an Immediate Return Environment. The earliest remains of modern humans — known as Homo sapiens — are approximately 200,000 years old.
These were the first humans to have a brain relatively similar to ours. In particular, the neocortex — the newest part of the brain and the part responsible for higher functions like language — was roughly the same size 200,000 years ago, as it is today.
Compared to the age of the brain, modern society is incredibly new. It is only recently — around the last 500 years or so — that our society has shifted to a predominantly Delayed Return Environment. The pace of change has increased exponentially compared to prehistoric times. In the last 100 years, we have seen the rise of the automobiles, airplanes, television, personal computers, internet, and smartphones. Nearly everything that makes up your daily life has been created in a very small window of time.
A lot can happen in 100 years. From the perspective of evolution, however, 100 years is nothing. The modern human brain spent hundreds of thousands of years evolving into one type of environment (immediate returns) and in the blink of an eye, the entire environment changes (delayed returns). Your brain was designed to value immediate returns.
Why we have failed at delayed gratification
The mismatch between our old brain and our new environment has had a profound effect on the amount of chronic stress and anxiety we experience today. When we cannot handle the stress and anxiety, naturally we say “Screw it!” and drop whatever we are doing.
Thousands of years ago, when humans lived in an Immediate Return Environment, it did not make sense for us to delay action in the face of immediate problems. For example:
- A lion appears across the plain → you feel terrified → you run away → problem solved.
- A storm rumbles in the distance → you worry about finding shelter → you find shelter → problem solved.
- You didn’t drink any water today → you feel stressed and dehydrated → you drink water → problem solved.
This is how your brain was built for solving short-term, acute problems. There were no such thing as delaying actions to solve future problems in an Immediate Return Environment. It just does not make sense in this environment. Today we face a different set of problems:
- Will I have enough money to comfortably retire or be financially independent by 50?
- Will I get the promotion at work or remain stuck in my current job?
- Will I have more paper loss if I don’t sell my stock holdings now due to bearish sentiments, knowing very well that these are resilient counters?
Problems in a Delayed Return Environment can rarely be solved right now in the present moment.
What to Do About It
One of the greatest sources of anxiety in a Delayed Return Environment is constant uncertainty. There is no guarantee that working hard in school will get you a job. There is no promise that investments will go up in the future. There is no assurance that saving money now and investing will secure you a comfortable retirement. Living in a Delayed Return Environment means you are surrounded by uncertainty. It is inevitable. So, what can you do? How can you thrive in a Delayed Return Environment that creates so much stress and anxiety?
The first thing you can do is measure something. You can’t know for certain how much money you will have at the point of retirement, but you can remove some uncertainty from the situation by measuring how much you save each month. There are no assurances that you’ll get a job after graduation, but you can track how often you reach out to companies about internships. You can’t predict when you will find love, but you can pay attention to how many times you introduce yourself to someone new.
The act of measurement is something that takes an unknown quantity and makes it known. When you measure something, you immediately become more certain about the situation. Measurement won’t magically solve your problems all the time but it will clarify the situation and pull you out of the black box of worry and uncertainty, and help you get a grip on what is happening. If you disagree, well, is there a more realistic option?
Furthermore, one of the most important distinctions between an Immediate Return Environment and a Delayed Return Environment is rapid feedback. Animals are constantly getting feedback about the things that cause them stress. Thus, they actually know if they should feel stressed or not. Without measurement, you have no feedback on your progress or how much further you are from your goals.
Shift Your Worries
The second thing you can do is “shift your worry” from a long-term problem to a daily routine that will solve that problem. The other analogy is to not eat the elephant but eat the bite-sized parts of the elephant. Here are some non-monetary examples:
- Instead of worrying about living longer, worry about taking a walk every day.
- Instead of worrying about whether your child will get a scholarship, worry about how much time they have spent studying today.
- Instead of worrying about losing enough weight for the wedding, worry about cooking a healthy dinner tonight.
The key insight that makes this strategy work is making sure your daily routines both rewards you the right away (immediate return) and resolves your future problems (delayed return). Our brains didn’t evolve in a Delayed Return Environment, but that’s where we find ourselves today. My hope is that by measuring the things that are important to you and shifting your worry to daily practices that pay off in the long-run, you can reduce some of the uncertainty and chronic stress that is inherent in modern society, especially when it comes to money.
About the Author
CF Lieu, CFP CERT TM is licensed financial adviser at Standard Financial Adviser Sdn Bhd (StandardFA). CF Lieu personal blog – http://HowToFinanceMoney.com is one of the top personal finance knowledge website in Malaysia.