In 2017, a behavioral economics study in rural Bangladesh posed a simple choice to poor participants:
Would you prefer $6 now or $18 after three months?
Surprisingly, 70% chose the $6 — a guaranteed but far smaller reward.
The researchers were puzzled. Why would someone reject a 200% return in just 90 days?
The answer lies in something deeper than numbers — and it reveals a psychological pattern that dominates even the modern stock market.
💡 Present Bias: A Universal Human Flaw
This behavior is known as present bias — the tendency to overvalue immediate rewards and undervalue future ones.
It’s not irrational in their context:
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They lived day-to-day.
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$6 now could mean food on the table or medicine for a child.
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Three months is a long time when your future is uncertain.
But here's the twist:
This same bias affects millions of investors across the globe — including those with ample resources and time.
📈 The Stock Market Parallel
Ask any seasoned investor how wealth is created in the stock market, and you'll get a consistent answer:
Long-term investing in quality businesses.
Yet, most market participants behave like the Bangladeshi villagers. They:
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Chase quick returns from trending stocks or options.
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Panic-sell during corrections.
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Exit multibaggers too early.
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Ignore compounding because it feels “too slow.”
They are choosing the equivalent of $6 today over $18 later — even when their survival doesn’t depend on it.
🧠 Why Does This Happen?
1. Instant Gratification Culture
Apps, social media, and mobile trading platforms reward dopamine hits from short-term wins.
Long-term patience feels boring by comparison.
2. Uncertainty Aversion
Like the villagers, many investors don’t trust the future — they see markets as risky, not as a long-term wealth creation engine.
3. Lack of Mental Models
Investors often lack a framework to understand compounding. Waiting for “only” 15% annually to work feels unrewarding — until they see a stock go 10x in a decade.
📉 Data Doesn’t Lie
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Over 90% of retail traders lose money over time, often due to frequent trading.
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The best-performing portfolios in many studies?
Accounts that were forgotten or owners who had passed away.
These investors, by accident, chose $18 later — and won big.
🔁 What Can We Learn?
Just like the Bangladesh study taught us that poverty shapes decision-making, it also highlights a universal flaw in human psychology. Whether it’s a rural villager or a city-based trader:
We crave the now and discount the future — even when the future is more rewarding.
But investing success demands the opposite:
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Delayed gratification
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Trust in long-term value
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Patience during volatility
🧭 Final Thought
The secret to wealth in markets is not IQ, hot tips, or timing perfection — it’s temperament.
“The stock market is a device for transferring money from the impatient to the patient.”
— Warren Buffett
Don’t be the one who chooses $6 today.
Train your brain to wait for the $18.
Because in the market, the real compounding happens over decades, not days.
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