The M&M Theory

Today I want to share a story with you that was told to me back when I was much younger. It’s stuck with me and served me very well and has affected how I think about money. In fact, it’s been so important to me that writing this article has made me write several more about finances. So, consider this the first in a series of articles about financial success!  Let’s start with this theory, shall we? It’s called the M & M theory, and it goes something like this.

Take a group of third graders and put an M&M on each of their desks in the morning. Then, tell them if they don’t eat the M&M by the end of the day they’ll get a whole a bag.  Just sit back and watch what happens. They will inevitably eat the M&M before the end of the day. Their willpower is simply not developed enough to resist the temptation even if they know they will get more candy at the end of the day. 

If you do the same experiment with sixth graders, most of them will still eat the M & M, however, a few of them will save theirs until the end of the day and get the reward of the whole bag. I have noticed this in the lives of adults, too. The M&M theory applies to our financial well-being.

When most people graduate school—whether it’s high school, college, medical school, law school, etc.—we are tempted with our new found “financial abundance” called a paycheck. We are tempted to spend every penny of that paycheck on extravagant items. We buy stupid things we really don’t really need, but we gotta keep up, right? The problem with this is that it’s similar to eating the M&M. If you eat every single M&M, i.e. spend all of your paycheck, the time will come when you will not have any M&M’s and you can never have the whole bag.  However, if you just save the M&M in the beginning and invest it, the time will come when you will be rewarded with the entire bag of M&M’s.

What does the entire bag look like? There will come a time when you’ll be financially abundant and will not only be able to spend money if you desire, but you’ll still be able to save more than ever and contribute to others more than ever—all at the same time. This may be hard to believe if you’re just starting out, however, I am a witness that it’s doable and true.

When I was 22 years old, I was living in Guatemala, and it was there that one of my companions told me about the M&M theory. I had nothing at the time, and this idea stuck with me. I made a commitment then that when I started to receive income, I would always save the M&M so that one day I might have a whole bag.

When I finally started making money, I always committed to putting away a portion of everything l made, or as George Samuel Clason says in his book The Richest Man in Babylon, a part of everything I made was mine to keep.  Fast forward 30 years, and I feel like I get the opportunity to have the “whole bag.” I’m not pretending I’m one of the richest people in the world, or even in my town. I don’t have billions of dollars, but I do feel like, considering where I started and where I am today, I have financial abundance and, additionally, that I live an abundant life. I relate this back to the M&M theory. I remember the M&M theory every time I get a paycheck. By resisting the temptation to spend every dollar and making sure I save and purchase assets not liabilities, I am now able to spend more than I ever had, while still investing more than I ever have, and yet still being able to contribute to and help others more than I ever have.

Remember, a part of everything you make is yours to keep. Spend less than you make. Invest the difference between what you make and what you need to live on. Stick to the plan. Every day think about making more than you spend. Invest. Create the plan. Become the best you can be. Resist eating the M&M. One day, you’ll enjoy the abundance of the entire bag.

Living Every Minute,

Dr. Tim Reynolds, M.D.