‘Look before you leap’ makes for investment erudition

Warren Buffet, Bill Gates, Ratan Tata, Azim Premji and the likes have taken the charity route for self-esteem. We, too, in our own limited capacity get this need fulfilled. Investments are a pre-requisite to fulfill this need

“Sadhan Aur Sadhya Alag Hain, Antar Tum Lo Jaan;

Nivesh Sadhan Matra Hai, Sadhya Karo Pahchan”

Translation: Means and ends are different, differentiate between them;

Investments are just a means, ends; you must fathom.

“Wealth is a means to an end, not the end itself. As a synonym for health and happiness, it had a fair trial and failed dismally”- John Galsworthy (Nobel Prize winner in Literature in 1932)

Most of us will subscribe to the content of the above quote by the eminent Briton, but only a few would follow it in the true sense of the term. That’s human nature. There may be big dichotomy between what an individual preaches and practices. We would stop here as this will be a deviation from today’s deliberations.

Let’s define means and ends before proceeding further:

Means: It refers to resources, methods and actions that can be employed to achieve a goal or an objective. Resources could either be mundane or supra-mundane. They are the tools to fulfil our various needs.

Ends: These are the purpose or the desired outcome. They are the very reasons for which we mobilise or accumulate our resources. Ends are fulfilments of our needs.

To be precise and succinct, I will go by Abraham Maslow’s ‘Needs Hierarchy’ and discuss where the investment stands as regards fulfilling the needs.

Physiological: These are bare necessities like food, water and shelter for survival. No investment is required at this level. Mother-nature has provided enough to take care of physiological needs of every creature. But unlike other creatures, human being barely lives in the present and mostly plans for a secure future. This implies that they are driven more by greed than by need. And thus begins scarcity.

To quote Mahatma Gandhi, “The world has enough for everyone’s need, but not enough for everyone’s greed.”

Truly speaking, it’s not enough for even one’s greed leave alone everyone’s greed.

Taka a pause and think about whether you are after your need or your greed. The former is already fulfilled, and the latter can’t be fulfilled. So, look before you leap.

Safety: As a human being, we claim to be superior to other living creatures as we possess the capability to perceive the future. This calls for a need to plan for it. We are also capable of imagining or visualizing uncertainties. This faculty of human being gives rise to needs such as personal security, regular source of income and making enough provisions for the time when earning capabilities are withered away.

The concept of investment starts playing role here. I won’t go into the nitty-gritty of investment here; enough of Nivesh Sutras are there to throw light on this.

My only advice while planning for the future is on deciding how much and for how long. I have heard people try to amass wealth for generations so that their progeny may not require slog for a living.

I would like to quote Lao Tzu for such breed of restless amassers: “Give a man fish, and you feed him for a day; teach a man how to fish and you feed him for a lifetime.”

Indeed, teach them how to earn instead of earning for others.

Moreover, if you emphasise fulfilment of a particular need beyond a certain limit you will have to compromise on fulfilment of other needs in hierarchy thereby causing frustration. Be watchful!

Social: This includes friendship, intimacy, community and a sense of belonging. No material investments can fulfil this need. This requires honesty, selflessness, dedication and compassion, among other traits. Here your means could be your time and attitude and not money.

Recall the poem ‘Sympathy’ by Charles Mackay and imagine yourself in his shoes. There might have been many situations when you might have felt exactly like the poet, “Oh! Gold is great; but greater far is heavenly sympathy.”

Therefore, take some time out of material investments and invest in something to have some sympathy for fellow human beings and win some sympathy from them.

Self-esteem: Confidence, achievement, respect, status and recognition are attributes that fulfil these needs. Material investments, to some extent, are helpful at this level. But, at this level you create wealth not to accumulate but to distribute.

To quote Sir John Templeton, an America-born British investor, banker, fund manager and philanthropist, “One of the keys to prosperity is realizing that prosperity does not come by getting more, it comes by giving more.”

Warren Buffet, Bill Gates, Ratan Tata, Azim Premji and the likes have taken the charity route for self-esteem. We, too, in our own limited capacity get this need fulfilled. Investments are a pre-requisite to fulfill this need.

But be careful! A charity in expectation of reciprocity can at best be a commercial deal and never an act of charity, per se.

Self-actualization: I don’t know what Abraham Maslow meant by this, but I believe, when we fulfil all other needs in the need hierarchy, this comes to us automatically. This can’t be tried for.

There are no strict hierarchy tables; there are no non-overlapping boundaries amongst these needs. All needs are required to be taken due care. I understand, giving undue and out proportion importance to the second need (Safety) has been main reason for personal and social malaises.

I reproduce an excerpt from Morgan Housel’s, International Bestseller, ‘The Psychology of Money’, to drive home my point: “At a party given by a billionaire on Shelter Iland, Kurt Vonnegut informs his famous pal, Joseph Heller, that their host, a fund manager, had made more money in a single day than Heller had earned from his wildly popular novel Catch-22 over its whole history. Heller responds, “Yes, but I have something he will never have…..enough.”

(The writer is senior Vice-president, SBI Funds Management Ltd; Translationand text by Capt. A Choudhary, an ex-army man, a corporate leader, an entrepreneur, and a philanthropist)