by on

In the last blogs we saw how debt inflates our needs for bigger purchases and traps us into situations that are undesirable like tolerating bad work culture, poor working conditions etc. Next step in achieving resilience is to avoid the marketing traps especially the ones that call your money “Disposable”.

A lot of people get into buying properties on loan because they would spend the money on luxuries when they see a big withdraw-able balance and it is growing month on month. People prefer being locked into long hefty repayments to prevent the temptation to dispose off the money, so they will end up with a housing loan with hefty repayments. The reason for this mindset is, any money left over after taxes and essentials (rent, medical, food, utilities, child care etc) is called disposable. Forcing us to prime it such a way to spend.

If we ask someone what will they do if they have million dollars, a vast majority of people will give ideas on how to spend a million dollars like buying an exotic car, expensive jewelleries etc which may bring joy momentarily but also drag the wealth down by many notches. While we need to spend on joy to remain sane, how much of it is required is the question we need to answer. By default we humans are hedonistic, we will keep wanting more and more of the same thing or something bigger than what we want. So we will end up disposing what we have in hand without thinking twice.

Unless we think about the cash in hand as a capital than disposable money, we would not have the mindset to invest large sums of money across different asset classes which makes us resilient. Replace the term ‘disposable income’ with ‘discretionary income’ that is waiting for its business owner to be invested. You will realise ways to budget spends for joy and standard of living, yet set money aside for investments. Best piece of advise I got from a friend was to create two other bank accounts apart from the salary account. One is to keep 3-4 months of expenditures for emergency usage and another one to fund SIPs, equities and loans. The moment salary arrives, the account is left only with budgeted money for essentials, living standards and joy and the rest goes to investments. In other words, the disposable income becomes limited. This helps in not succumbing to temptation to spend until zero or buy a huge property with hefty repayments so that we will not spend it away.

by on

In a king’s court, there was an argument that people get what they seek. If they seek luck, they get lucky. If they seek food they get fed. The king had to break this argument so he orders an experiment. Get one person who believes in luck and get one person who believes in hard work. Let us lock them up in a dark room with food and see what happens.

Two of the identified people one believer in luck called lucky man and one believer in hard work called worker both are locked up in a room where some food and water is kept at a slightly hard to reach place. People outside can observe the conversations. Over a few hours, both the prisoners got hungry. They started to debate about their way of something good happening to them. The worker did not spend time arguing much. He began to explore the room and tried to reach out for if anything was placed for them. The lucky man told him that his efforts are waste, this is an experiment and they will sure be released and fed something.

The worker found a box full of peanuts, he was very elated and started eating. Instead of sharing the food, he mocked at the lucky man. He did not stop there, in the box of peanuts he also found some stones he threw them at the lucky man saying you can eat these if you feel lucky. The lucky man laughed and kept the stones thrown at him anyways. Few hours later the room was opened and the content worker came out along with the tired looking lucky man.

The courtiers who batted for hard work were very happy, just then the king asked the lucky man about how did he feel. The lucky man reached into his pockets saying he got some stones by doing nothing. When the courtiers saw the stone they gasped, because they were gemstones not mere stones. So the king declared ‘people get what they seek’.

This story was confusing for me because I immediately drew parallels with laziness but the crux of this is ‘What you seek is what you see or get’. This is so true in both our personal and professional lives that we will be able to pile on instance after instance, evidence after evidence to prove our point of view about something or someone.

Photo by Brett Jordan on Pexels.com

When we grow up from our being an adolescent to an adult the things that we were subject to has to become more objective. Example a teen is subject to peer pressure but a grown up can distance from it and see it as an object. Similarly irrespective of our age or development we are subjected to winning be it playing a game, having an argument or even doing something small. This primes us to seek what will make us win, while this is useful while playing games it is not useful when there are disagreements and needs a dialog to sort out.

We need to be deliberate in our actions sometimes, which can be achieved through reflections. This will make us realise the subject/object relationships of us and make adjustments towards more objectiveness. If we seek snacks of victories, we get it; if we seek gems of wisdom, we get it.

by on

Recently we did some renovation at home which involved buying a few big ticket items. As I had read a lot about supporting local vendors, I drove to the stores after doing some browsing online on big marketplaces for options.

My first reaction on the purchase experience was the level of willingness to negotiate an offer when the bill is running close to a lakh. Every shopkeeper wanted to keep the conversation on the MRP, declining to accept credit cards or were trying to pile on more charges like delivery, installation etc when preparing the bill. In all, the transparency was poor and the mindset to extract as much as possible from a lead was set in stone.

The same I had observed from a medical store nearby, with aged people at home; the maintenance medicines for a healthy life add to substantial costs, so I tried asking the store keeper that I will place order with them month on month but let us work out a deal because the big medical chains give me 20% and I am willing to take a cut for convenience. The shop keeper flatly declined saying that he does not do business less than MRP and I can continue to shop at the retail chains, he does not need my business.

Photo by Maria Orlova on Pexels.com

Why is this happening? We perceive a loss to be greater than a profit of same magnitude. Winning a gold coin may not be equal in magnitude of happiness compared to the sorrow of losing a gold coin. That is what is at play at the small vendors. They do not see the overall profit gained in the transaction instead they read the money lost on the transactions that could happen on MRP. This clouds the judgement even if this can tun into a repeat business with a steady cash flow.

On browsing more for stores, finally I found places that gave a good deal even bettering online deals. These were businesspeople who are in the same business for generations even though their turnovers were small, looks like the family wisdom is passed on as a trade secret and I ended up noting their numbers to give to friends who will have similar needs.