Piece of action or peace of mind?

Every once in a while, I have to stop and think about how much consumption driven we have become. Indian’s were, and still are, one of the highest savers in the world. But things are changing rapidly with the young. Saving is not very high on the list of priorities.

Being Green

Everyone talks about being green, buying green. We participate in new fads like the ‘Earth day’. Personally, I think that not buying at all is even better.  Do you really need to buy a new mobile phone each year? What about the music player, the laptop, the car?

Whether I look at children or young employed adults, I see a clear trend. Everyone wants the biggest; latest; best, gadgets; phones; bikes etc. This is one American cultural influence I am not very comfortable with. Americans are known for their massive debt powered consumption. But imagine, with India’s population and her growing appetite what could happen to this planet?

What is causing this shift? Why are we becoming a consumerist society? I can think of a few factors.

Identity crisis

peer pressure and societal acceptance / one-upmanship causes a lot of purchases. I refuse to let any latest fad or technology, define me. So I am neither a PC nor a Mac. I am me. I do not have an identity crisis, and do not seek to have peer acceptance. Consumption driven social status is not cool for me. If you think not having the latest gadget makes you a social outcast, may be you need a new set of friends.

Teaching the value of money

Could this change from a saving society to a consuming society be because parents are not teaching their children the value of money? I see several parents pampering their kids not end and fulfilling every request.

And even if they were not pampered, the newly employed youth would rather blow its pay check on the latest fashion or fancy restaurants rather than building a savings base.

An article in ‘get rich slowly’ shows the lack of training from parents. Wish there was a similar survey done on Indians. I wouldn’t be surprised if the numbers were equally bad, if not worse.

‘Did your parents prepare you well for financial independence?’

Over 1000 GRS readers responded:

  • 17% of you said, ‘Yes, they did a great job in preparing me.’
  • 17% said, ‘They did well ‘” I learned the basics.’
  • 18% said, ‘It was okay, but they missed some key areas.’
  • 48% said, ‘What preparation for Financial Independence?’

I too made some initial missteps, like buying a Rs. 1 lac (~2000$) PC at the age of 15. Although I can rationalise that it was that purchase that enabled the career I have today, the fact remains that a custom built (assembled) PC in the range Rs. 50,000 – Rs. 60,000 (~1000$) would have had the same effect.

All articles and reviews in PC World and PC Quest made me believe that the ‘multimedia computer’ was the thing to buy and comparing the offerings of HP, Compaq, IBM, HCL etc. I was convinced I made a good choice. But when I understood, that the same 1 lac could have bought a Maruti 800 at that time, I was able to put things in the right perspective. I learnt my lesson.

When I have to decide between an iPhone and an Android, I ask myself, ‘Do I even need a phone’? What else the 2000€ I will pay over 2 years for an iPhone can be used for? 2000€ is what I spent on my MBA, and invested wisely can pay my daughters college fees. So when the decision is between Apple, Android or my daughter’s college, I think the answer is easy. Which is why I don’t even carry a mobile. I don’t need one, I am away from a fixed phone for 1 hr a day, no more than 20 minutes at a time and never far from a pay phone. A few people will say, ‘What if there is an emergency’? Which brings me to

Fear mongering

Fear, and guilt, are heavily used these days to manufacture demand. Whether it is for baby food, or bottled water or the latest educational concept, each marketer uses fear to make us part with our hard earned money. They play on our primal fears and blow things out of proportions. Only a few sane voices out there put things in perspective. But no one talks about the fear I care about, the fear of financial dependence. I deeply care about my financial independence, and which is the reason I never fear losing my job. In fact, I have secured the financial future of my family. If I want to, I can quit my job any day. Which I have already done once to launch a start-up.

Summing up

In conclusion, all I can say is think before you spend. Ask yourself:

  • Do you have financial goals? Are you on track?
  • Do you really need it? Not want, need.
  • Put things in perspective. What else could that money do? How much will it take for you to earn it?
  • Can you afford it? Will it cost you, your financial independence?
  • Are you doing it to show off, or gain social acceptance?

Be wise, be green, be financially independent.

I hope there is more discussion on this topic, but in the gadget-crazy world I live in, my voice might not be heard at all. But at least I will try, and if no one else, I am sure, my daughters will appreciate and care about financial independence as much as I do.

14 comments

  1. I try to be a minimalist and fiscally responsible. I get ridiculed for being thrifty a lot. I am really glad to hear someone else being concerned about being fiscally responsible in this consumerist age! 🙂

    IMO one needs to really ask oneself if the new object they want to buy is “necessary”. One needs to weigh the pros and cons of buying it and go for it only if one feels the pros outweigh the cons. Even a simple purchase like a fancy pen that one “knows” will never use in one’s lifetime occupies space on the desk and adds one extra bit of “clutter” to one’s life.

    So, not only is buying less stuff good on the wallet, one’s future, and the planet’s future, the biggest benefit is that having less stuff around increases one’s peace of mind and reduces stress.

    For example, not keeping a cellphone means that not only do you need not worry about losing an expensive device, your mind can also stop worrying about being “interrupted” while focusing on work, while spending quality time with family or watching a movie. This is a God send in today’s interrupt driven lifestyle. There is a good reason why Knuth does not even read email and spends his working day uninterrupted focused on writing his tomes.

    1. As an aside … money and time are uppermost on everyone’s mind. Money can be lost, but earned too. Time only passes. I am sure your daughters will one day appreciate the “un-interrupted” attention their parents gave them! 😀

    2. You have really taken to the zen lifestyle 🙂 I totally agree with the clutter part. Living in a small house has made us realize the importance of decluttering.

      We even declutter my daughter’s room every month and throw away a ton of junk. Earlier she used to be very attached to her things and would not let us throw / giveaway anything. But now when she realized that we do not buy anything new until the old ones are gone, she has become selective in what he keeps and what she lets go.

      We do have a prepaid mobile for those exceptional needs. Just this morning when my wife was visiting the dentist, I asked her to carry it, and back came the usual reply, ‘the battery isn’t charged’ 🙂 That’s how much we care about the phone 🙂

      1. Yes, I have been very influenced by Zen Habits and Minimalist and have been trying to declutter my life as much as possible:
        http://zenhabits.net/
        http://mnmlist.com/

        I recently travelled in Japan and that was a real eye-opener to how small a house one can comfortably live in. It is astonishing how small, spare, efficient and (not to forget) modern Japanese housing is. That puts the world’s most “technologically advanced” and “developed” titles of this nation in perspective, compared to what most folks attest to those titles.

        You mention attachment to stuff. This is a *real* problem. I moved recently and the attempt to gift/give away/trash every possession of mine I deemed “unnecessary” was *so* hard. But, once I dived into the cold water, more than half of the stuff was gone, and I was able to move my stuff by cab (instead of a moving truck)! I felt genuinely happy on seeing how less my belongings were.

        I have a pre-paid cellphone too. The reason it is not post-paid is because the only time it is used is for weekly calls to India and for synchronizing weekend meetups with friends. I have given up on communication that interrupts and begs for attention (cellphones and IM) in favor of those that are not (email) or are human.

        I think we are living through the most tempting phase humans have ever lived in. News, opinions, gadgets and Web 2.0 apps/tools/networks, are all free/cheap/affordable/accessible and they beg to be used/bought and wish to take a bit of our privacy, space, attention and time. IMHO it is our responsibility to know our priorities (Ex: family, friends, people over technology), our limits (Ex: only 24 hours in a day), our weaknesses and strengths and choose wisely. 🙂

  2. This sounds good. But if you really don’t care for any material goods, what are you doing in this capitalistic world of ours trying to make $$$s? You can take it to the extreme and lead a “zen” life in the Himalayas right? 🙂

    I think what’s important is to be in control, prioritize items on your wishlist, think long-term (does buying this XBox mean not being able to fly to PyCon next year?). Different people like to do different things with their life. Maybe you would like to backpack in South America. If you really want to do that, maybe you shouldn’t order that iPad when it comes out. But maybe owning an iPad is what you really want. Some people like spending money on expensive clothes. To you, that might seem like a complete waste but to them that’s important. Preaching to others what they should be buying/not-buying is not such a good idea I think.

    I’m saying this because to my parents, traveling and seeing the world is not one of their wants and they certainly don’t see it as a need – they perceive spending money on travel as useless (they would rather invest that money somewhere and be happy when they see returns from it in another 5 years). OTOH I would like to travel to interesting places and so I prioritize it higher up in my wishlist.

    1. I am not trying to say buy this or don’t buy that. I just took mobile phones as an example.

      All I am saying is think before you spend. And the first thing to think of is “Do you have financial goals? Are you on track?”

      If the goal is to save enough money to go around the world, so be it.

      Personally, I want to be able to ‘retire’ soon. No, not to got to Himalayas, which I would love to, but to do what I really love – teach. Challenge the way things are taught in India. Research better options and curriculum.

      Unfortunately teaching is such a low paying job that it does not attract any talent. I need to be able to do it for passion not money. Else it will be one of those so called international schools, which try to prepare children for the hardships of life in an air-conditioned classroom.

  3. Well, from the first read of the post I thought this wasn’t really about just ‘financial’ independence and the discussion seems to have borne that out.

    I guess phones are expensive in Europe but in India there are plenty of people who can’t afford clean water but have access to a cell phone. So, the issue is hardly financial independence.

    For me (and I think this is what you were saying as well) ‘mental’ independence is the real prize. The mind is the ultimate source of distractions and material ‘stuff’ is just one of its tools, and not even the most insidious one. Others are popularity, fear (as you mentioned), pride, victimhood, the list goes on. A number of people have committed suicide in Andhra due to the Telangana issue — which affected them in no material way whatsoever, but probably was just a question of identity. Do you think it would’ve been better had they been so enamoured, like some of us are, to earthly goods and not decided to end their lives?

    It may seem that we’re particularly worse off because of the abundance of ‘temptations’ around us – twitter, instant news, gadgets galore (like Ashwin said), but I don’t think thats the case. First, because it’s really your mind that creates these desires, it can create an unlimited amount of them — regardless of actual availability. In other words, clutter can fill up to expand all available space if you let it. In the ‘old’ days, temptations were different. If you wanted to be social, you had to worry about being invited to enough parties and throwing enough of your own instead of constantly updating Facebook.

    Second, the easier we can access these ‘things of luxury’, the less of a deal we make out of it (well, some of us). If the average person were totally unable to afford the gadgets of the rich even after working all their life (and this was the case a hundred years ago), they might never really get out of constantly wanting it. But today these things may not be cheap but they are certainly more than accessible; and what does happen to anyone who’s paying attention to his internalized state of mind? He/she gets it, realizes it isn’t a big deal and prioritizes around it. You bought a fancy laptop when you were 15 and realized it wasn’t worth it. A few people went big-time into facebook and twitter and all that only to realize it was more of a burden than a value, and started limiting their participation.

    Of course, it’s a tug of war, but the point is it always has been, and probably always will be. One of the best pieces I’ve read on this is The Power of Now by Eckhart Tolle.

    The journey is personal. You can get some inspiration from books and blogs and discussion, but 95% of it is purely work you do by yourself — whether meditation, or reasoning things out, or just taking time to stand and stare. I used to follow the zenhabits guy too, he’s good, but then I realized he has three blogs (zenhabits, minimalist, thepowerofless) and five books — on living the ‘simple’ life. The point of course isn’t that they’re not valuable, they are — but I started wondering if reading about minimalism three times a day wasn’t distracting me from actually being minimalist.

    1. Anshul, thanks for adding a new dimension to the discussion about mental distractions. Much enjoyed reading and chewing about it. 🙂

      To nitpick: If a person were totally unable to afford something, I doubt it would affect him much. It is only when something is (or seems) within one’s grasp that it starts to play on the mind.

    2. You just took it to a whole new level with ‘mental independence’. Honestly I have experienced mental dependence but never realized it. Most of the time that one thing playing / preying on my mind will make me distracted and even snappy at the cost of everything else.

      So I have to stay away from it, whether it was playing table tennis in school or the desire to start a company, if I get obsessed, it never results in anything good.

      I know you were not referring to this obsession, but I still see it sort of related. Will now try to be more conscious of my mental slavery of any thing.

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