Tally with this…
An Economist is a person who knows everything about money but doesn’t have it.
I am happy to hear it as this is the only sentence I understand about the ‘boring’ subject called economics. It’s tough for me to relate with any discussion pertaining to finances, banking and accounting. I am sure in future too I have no plans to learn anything about these subjects at any cost! Of course, I don’t underestimate the importance of learning these topics but nothing has gone drastically wrong with me so far by not understanding them. And there may be many like me who will buy this.
All we know is money doesn’t grow on trees, isn’t that enough?
However, those who show how much they know about finances and accounting aren’t strikingly different from us in day-to-day affairs. I never bothered to observe people’s financial management until I saw them getting confused handling simple matters. The latest VAT on flat for buyers came as a reference point. It has left many in the lurch as thousands of people would have to raise huge amount. The decision kept phones at our newspaper office ringing. Interestingly, it wasn’t just technical information they were looking for. I could gauge concern behind their voices. They wanted to know if there was a way out. I could imagine the fate of those who had exhausted all resources to buy a home and this unforeseen expense was going to throw their plans topsy-turvy.
Government policies, shares, economic downturn, international gold prices and all sound good during discussions. However, in the end what counts is how you manage your expenses and how you plan for future. An in-depth knowledge about financial subjects is worth nothing without financial wisdom.
Here go two families. People at the helm in the first have planned everything right from the word go. Does their grasp of economics matter if their children’s education, marriages, medical costs, retirement and unforeseen expenses are taken care of? The second family often weighs shares and international prices. But their family balance sheet doesn’t even have a semblance of balance! What if they end up investing most of they have in shares and eventually are left with no backing to meet essential expenses? There is no point in becoming penny-wise and pound-foolish.
Usually, I see people discussing material attributes of money. All they understand is figures and balance sheets. In fact, they lose track of what they have lost in years while keeping checks and balances to make every penny count. What does one do with money if one cannot live passionately? Forget losing sleep, share market fluctuations have given people heart attacks.
I met an 80-year-old fitness freak. He wasn’t an earning member but I feel he is one of those ‘wisest’ men who never fell sick all his life. A clean bill for health not only saved his medical cost but earned him a good deal of mental fitness.
Financial wisdom and management don’t have as much to do with your understanding of balance sheets as with leading a balanced life as a person. Time will come when you will be pinched but it depends on how you tackle difficulties instead of running into them. Economics, it seems, is all about common sense, which, they say, is uncommon!