18 May The General Theory on Finance
In the intricate world of societal hierarchies and personal triumphs, there exists a tacit association between one’s success and their financial prowess, particularly in the metropolis I call home. In this concrete urbanity, a lack of financial productivity and inability to generate substantial monies can lead to unfavourable branding of a “struggler” or a “philosopher” or, unfortunately also, a “failure.” As a discerning observer of mankind’s peculiarities, I find it endlessly amusing how our society has progressively moulded us to worship at the altar of finance, leaving every other pursuit vying for the second spot. In our march from socialism to capitalism, the notion of busy-ness takes the centre stage, with a tacit assumption that being busy equates to productivity, which in turn, opens the gates to the treasure chest of uncle Kuber. Now, if you’ll join me, let’s dive headfirst into this profound and, might I say, occasionally unnerving world of finance.
After years of relentless trials, contemplations, and numerous encounters with the elusive nature of money, I have taken on myself in my forties to unravel the intricate tapestry of finance and present to you “The General Theory on Finance”! As you would’ve guessed, the choice of name of my theory is a playful homage to Einstein’s “The General Theory of Relativity”. The aim is to showcase the captivating mysteries of finance and its relative meaning in our lives.
Let’s also face it that “finance” means different things to different people, and its meaning changes over our lifetime. The multifaceted realm of finance takes on different guises depending on the beholder. Its meaning morphs and evolves, much like the stages of life. In our youthful exuberance, we yearn for an abundance of money, craving its tantalising promises. As we mature into our thirties, we relish the tangible pleasures that riches can bestow upon us while savouring life’s indulgences. And then, one fine day, we may find ourselves crossing paths with the blazing inspiring wealth.
But it doesn’t end there! Men and women, with their unique perspectives, often dance to different tunes when it comes to the symphony of money, riches and wealth. Culture, too, paints its vibrant strokes on the canvas, adding hues of diversity to this enigmatic discipline of money, riches and wealth. The more I delved into the vast sea of financial understanding, engaging in conversations and experiments towards that coveted state of financial nirvana, the more evident it became to me that clarity of definition among these three realms—money, riches, and wealth—is the compass that shall guide us in making prudent investments of our precious time and energy with utmost discernment.
Finance, to the discerning eye, in my humble theory, should encapsulate only three distinct realms: Money, Riches, and Wealth. Don’t let their seemingly interchangeable usage fool you! While these terms may often be deemed the same by a newbie, a closer examination will soon unveil their individual significance, each weaving its own thread into the fabric of our personal and professional endeavours. Let’s attempt to embark on this intellectual escapade, for it may enrich our understanding of the scenic landscape we call finance.
Money
Money serves as the medium to fulfil our immediate ‘needs’.
Money is the lifeline that ensures our survival in this civilised society we strive to build. Picture a hermit living deep in the forest or an animal frolicking through anywhere; they have no use for money. But we, as social creatures, find ourselves in constant need of interaction and transactions, often requiring skills beyond our own expertise and fitting poorly into our busy schedules. Fear not, for money steps in as the ultimate bridge, ferrying us toward the fulfilment of those necessities. Therefore we need Money, my friends, since it is the provider of our needs, and it does a jolly good job at it. Money is the lifeblood that satiates our basic sustenance.
Riches
Riches are a medium to fulfil our ‘wants’, status and comforts.
Riches are bestowed upon those who possess an abundance of ‘money’ surpassing their basic sustenance needs. Riches is the opulent treasure that unlocks the gates to desires fulfilled, bestowing upon their fortunate possessors a sense of status and luxurious comfort. They pave the way for a life brimming with opulence, glittering in glamour, and basking in the warm glow of indulgence.
And here’s a little secret to ponder: acquiring riches does not solely rely on extraordinary productivity, street-smart maneuvers, or shrewd employment choices, because riches can also be obtained through the artful dance with credit-based liquidity. However, do tread carefully, for while satisfying your desires beyond mere necessities, we need to ensure that our riches remain firmly within our grasp. We need to sustain the flow of financial resources, whether through fruitful endeavoors or prudent credit management, to watch our riches flourish. Excess Money, whether through earnings or through credit liquidity, gets us Riches. So long we keep that money supply flowing like a never-ending river, riches will be ours to cherish!
Wealth
Wealth is a medium to ‘automate Money and Riches’.
Wealth fulfils both our needs (Money) and our desires (Riches), first for ourselves, then for everyone who is associated with us, and it should not demand much of our time. Wealth’s purpose is to eliminate the conscious effort for making Money and for pursuing Riches. In effect, the purpose of Wealth is to make Money-needs inconsequential and Riches easily affordable, sans credit or favours from others. Wealth over time grants us a remarkable gift – the sublime mastery of ‘time’ itself.
But let me iterate the well known truth amidst this bewildering financial labyrinth. The pursuit of wealth, my friends, is no walk in the park. Many of us find ourselves entangled in the clutches of money and riches, their gravitational pull sapping our energy and time. However, a paradigm shift awaits those brave souls who dare to perceive wealth as a distinct entity, detached from the shackles of mundane necessities and extravagant desires. Wealth is the holy grail of purposeful living, beckoning us to embark on a conscious transition from ‘needs’ to ‘purpose’, from ‘desires’ to ‘purpose’, or even from ‘needs’ to ‘desires’ and then to ‘purpose’. It may require us to make sacrifices, cut corners, and delay gratification, all for flaming the fire of inextinguishable wealth.
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Perhaps, understanding ‘purpose’ a bit more in context may be useful. ‘Purpose’ is a simple term that can be defined as a conscious decision. It means not being pulled into doing something without due diligence or giving it conscious thought. So, if one’s ‘purpose’ demands alignment with ‘money’, so be it. If one’s ‘purpose’ aligns with ‘riches’, so be it again. The same goes for aligning with ‘wealth’, so be it! More often than not, financial decisions are not so black and white. Invariably, financial prudence is a conscious mixture of a weighting of all three elements aligned with one’s ‘purpose’.
“If not us, then who?
If not now, then when?”
― John Lewis
When do we start our journey towards wealth? When may we proclaim ourselves as wealthy?
This state of being wealthy is achieved when we have fulfilled both our needs and desires without relying on credit or favours from others. Mere pursuit of needs and desires, my friends, falls short of true wealth. Wealth liberates us, granting us the gift of time to pursue grander purposes and savour the sweetness of each moment without the burden of busy-ness. Money and riches may offer fleeting glimpses of fulfilment, but wealth is the ultimate destination. It demands unwavering focus, unshakeable conviction, and yes, a sprinkle of luck too (though wealth rarely arrives solely by luck). To welcome wealth, one must recognise, embrace and hardcode the distinct nature of money, riches, and wealth in one’s psyche.
In conclusion, as we journey the roads of our lives, let us often park alongside at the kerbs to contemplate on our incessant busy-ness and pursuits. What drives our financial goals? Is it the insatiable thirst for money, the tantalising allure of riches, or the profound yearning for wealth? Remember, fellow seekers of financial enlightenment, our Return On Time Invested (ROTI) manifests most profoundly when we extend our hand and firmly grasp the soul of Wealth. Let’s drive on the lanes, roads, and highways of life with this focus, hands extended, armed with knowledge, adorned with the new paradigm, and dance our way out of the maze of Finance.
If you are thinking how much Wealth is enough, then you are still pursuing Money.
If you think you are ‘wealthy’, then you are either only rich or a philosopher.
Wealthy folks do not have these thoughts.
Image Note: While cleaning my cupboard, I found the loose treasures of countries where I would love to go again :)
P.S.: If you liked this post, then you may consider reading The General Theory on Fitness, Elements of a fulfilling life: A Vedic Insight , and “Give Well To Live Well” also
Also, check out Money and Wealth pages on investopedia.com. Investopedia’s Dictionary of Financial Terms is recommended for referencing the mumbo-jumbo that makes finance full of jargons.
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