By IndiaHub 
The father did his best to offer various arguments— security, peace of mind, comfort, status, and so on. However, his son was ready with counter-arguments. The exchange ended soon and the duo moved on, but I was left wondering what could be said in defence of habitual saving or building assets over one’s lifetime. We make a virtue of both the saving habit and the wealth it enables to create. Why is this so?
Signs of prosperity
Laying claim to something as ours—and knowing that we own it and no one else is entitled to it—perhaps goes back to humanity’s early territorial behaviour. With time, the ownership also signalled power; the bigger the territory, the greater the power. Wars were waged to claim land as territories; properties were acquired and expanded as a mark of wealth.
As we moved on from monarchies to democracies and common life as we see it now, external signs of prosperity in the form of consumables, such as cars and clothes, expensive accessories like jewellery, as well as exclusive possessions, told the world that one was rich. The richest, however, do not necessarily need opulent physical assets to show for it.
Today’s wealthiest own large businesses, their money primarily held as equity in the companies they founded. The power of their ideas created wealth that gained in value over time. Alongside them are the newly wealthy, who built businesses and sold them at a significant gain; employees who worked long enough in significant enough positions to earn part of their incomes as equity; and passive holders of equities bought in the market and held to benefit from the appreciation in value over time.
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Living in the moment
The young man’s argument was that wealth today is between one’s ears. It exists as long as one is alive and perishes with them. What merit would converting an asset into money that is hoarded serve? Everyone earns as per their capability. Anyone can borrow funds to build a house, buy a car, or get around to making a large expense that won’t fit into a regular income. Any business with merit can get a loan, any individual with income can borrow too. Why should money then be hoarded? What ‘rainy day’ could hit someone so hard that they won’t have any option but to fall back on savings and stop earning? Isn’t this mania about money nothing but a manifestation of greed and insecurity? How could something so entrenched in fear, insecurity and negative emotions become a virtuous thing?I recall an instance when I had just begun working. My colleague’s wife, who was on maternity leave, decided she would not return to work. She felt too responsible for her newborn and could not bear leaving him to come to office. We were travelling to another city the next week and my colleague told me he needs more travel, more work, more consulting assignments coming his way, so that he can provide for his family. Wasn’t his current salary enough, I asked. He told me he now had to save every rupee he could and earn every rupee he could since he was the only earning member of his now expanded family.
Was this response rooted in fear? Insecurity? Greed? I would think not. Here was a young, intelligent and resourceful man, who was going about his life normally until he sensed the need to earn and save more. What prodded him? We are not always in the stable state of feeling prepared to deal with whatever life may bring our way. When one’s present is seemingly under control and the past seems to affirm it, one’s confidence in doing whatever is needed as new situations arise is quite high.
Deliberate action
However, our future resides in the realm of our imagination. It could turn out to be anything we may or may not be prepared for. We recognise we have no control over how the future may unfold. Our response to the unknown is not just rooted in our past experiences or present capabilities, but also in what we believe is the action we must take to get a semblance of control. We dislike the unknown and unfamiliar, and thinking that we can do nothing about it but accept it as it unfolds, seems too passive. Or even fatalistic.
When the future unfolds and things turn out as expected, it feels worse to not have acted on that rare foresight of getting it right. The guilt and regret of what could have been done is heavy. In a bid to control the unknown, unforeseen and uncertain future, we use deliberate action as a tool.
Such deliberate actions were earlier centred on territory, possession and hoarding. Now, these are centred on brain power and its ability to ideate, solve problems and its innumerable other applications that earn a reward; a reward that offers the tool to believe that we can still be in charge and remain standing if the unforeseen were to happen. Hence, the desire to set money aside, to save, to invest, and to see it grow.
We would be lost and desolate if we did not know how to save. If it did not become a habit, we would question the first principles too often to persist with it. To save is to simplify our responses when the unexpected happens. We still don’t know what better tool there could be. Do we?
The Author IS CHAIRPERSON, CENTRE FOR INVESTMENT EDUCATION AND LEARNING