“Well, the devil made me do it the first time,

The second time I done it on my own.”

— Billy Joe Shaver

The New Yorker recently published a story about the psychology of delayed gratification.

It discussed a group of 4-year-old nursery school students who were part of a study done at Stanford University in the late 1960s.

The children were given the opportunity to eat a marshmallow. Ones who ate it immediately only received one marshmallow. The ones who waited for an undetermined time, (up to fifteen minutes) would receive a second marshmallow.

Most of the children couldn’t wait. Most grabbed and ate the first marshmallow immediately.

The psychologist tracked the participants over the next 40 years. The children who waited for the second marshmallow went on to live productive, and in many cases, outstanding lives.

Those who immediately grabbed a marshmallow didn’t do as well.

Walter Mischel, the Stanford psychology professor who did the study, got serious about tracking the students in 1981. He studied every trait he could think of.

The students who couldn’t wait were more prone to adult behavior problems and inability to deal with stress.

When they got to college age, the nursery school students who waited 15 minutes averaged SAT scores 215 points higher than those who could only wait 30 seconds.

Mischel seems to have discovered the Rosetta Stone of why some people become wealthy and others do not.

Dr. Thomas Stanley has done extensive research into why some people become millionaires. His book, “The Millionaire Next Door,” was a huge best seller.

Stanley noted that education and intelligence did not automatically predict wealth. He said that small business owners, without advanced degrees, were more likely to be millionaires than were doctors or lawyers.

I’ve been in the financial services business all of my adult life and it has always amazed me how some well-educated people make such stupid mistakes with their money.

Now I understand. They were the people who couldn’t wait for the marshmallow.

The Stanford scientists are studying genetics and are trying to learn if some regions of the brain assist in delaying gratification. The study gives credence to the idea that people who “can’t help themselves” really — can’t — help — themselves. Something in their DNA makes it harder for some people to delay getting a reward.

It’s not about discipline as much as it is about heredity. Knowing that, we need to help those who are prone to marshmallow grabbing by giving them fewer chances to fail.

Right now, we have a financial system that has played to people’s weaknesses, rather than their strengths.

We have allowed people who are prone to instant gratification to have as much credit as they could get their hands on. College students were given credit cards and free T-shirts. People who didn’t want to save for a down payment were given sub-prime mortgages. Payday lenders and tax refund lenders popped up to prey upon the poorest of the poor, who couldn’t wait for their paychecks or their tax refunds. Everyone and everything, (including dogs, cats and dead people) have been issued credit cards.

We stopped giving workers defined-benefit pensions and let them “pick their own investments” in 401(k) plans.

The economy is a mess. That mess can be traced to people on Wall Street and Main Street who wanted the second marshmallow but didn’t want to wait for it.

Now that we are starting to understand the problem, it is easier to find solutions. We need systems that encourage people and businesses to work toward long-term rewards.

Our leaders need to realize that a large segment of society is going to screw-up their finances if we let them.

We can’t let what has happened, happen again.

The devil, their environment or genetics caused people to make mistakes the first time.

It is our job to make sure they can’t do it a second time.

Don McNay, CLU, ChFC, MSFS, CSSC is the founder of McNay Settlement Group, a structured settlement consulting firm in Richmond. He is the author of two books. His next book Blood Money and Blowing It All: Why 90% of Americans waste an inheritance or insurance settlement and how to keep it from happening to your family, will be released later this year.

You can write to Don at don@donmcnay.com.