Personal Finance Part 18 – To Crave and Covet (C&C)

It’s been a while since I’ve talked about aspects of personal finance, as I was kept busy the whole of May to July 2010 with analyzing the financial results of the companies in which I hold shares, as well as writing about Sun Tzu’s War On Business episodes. I’d realized the last entry on personal finance was back in April 2010 and was on cycling! I had been thinking in the last couple of weeks about the problems associated with our society in relation to over-spending and lack of prudence or knowledge about financial matters; and it boils down to one major problem which I term “C&C – Crave and Covet”. This will link up to many other concepts which I will point out later (and which have been popularized by the mass media as well).

The simple definitions of the words crave and covet are as follow (from Dictionary.com):-

Crave – To long for; want greatly, desire greatly
Covet – To desire wrongfully, inordinately, or without due regard for the rights of others

It is in our basic human nature to crave and desire for more, of course after ensuring our basic necessities are provided for. But society today is a lot more materialistic and capitalistic than it was say, two generations ago. This is sadly due to the modernization of Singapore, which in some ways has outpaced the maturity of the young minds, who are still struggling to adapt to the “First-World” mentality inculcated within them by our education system. A mature mind is one which is able to handle pervasive emotional influences which may have a detrimental effect on one’s wealth and spending habits. Craving and coveting are an embodiment of that philosophy where everyone starts to compare what possessions their friends and peers have, and it results in a relentless vicious cycle and downward spiral into poverty, debt and bankruptcy if not arrested early.

The Generation Y and Z have been, arguably, brought up in a world of peace, stability and abundance and have not been through the ravages of war (those born in the 1920’s and 1930’s) or recession/inflation (those who lived through the 1970’s). Even more recent is the memory of the Asian Financial Crisis in 1997 which brought many rich people to their knees. Because of this lack of awareness of how fragile wealth can be and how difficult making money is, most youths tend to be apathetic when it comes to personal finance and succumb to the evils of C&C. The latest iPhone, iPad, car or luxury item is always an enticement to use debt (credit cards) and to make one spend beyond their means. In this regard, I should introduce some terms which readers may be familiar with:-

Retail Therapy – The action of shopping for clothes etc, in order to cheer oneself up

Conspicuous Consumption – Public enjoyment of possessions that are known to be costly so that one’s ability to pay for such things is flaunted.

Affluenza – Guilt or lack of motivation experienced by people who have made or inherited large amounts of money.

What the above coined terms have in common is the mentality that we should live for today, spend for tomorrow and heck care about the future. It is about wanton spending, looking good (at the expense of having a wallet with a hole burnt through it) and enjoying the comforts of modern life. There is nothing inherently wrong with this if you can comfortably afford it; but the problem which is surfacing is that many youths have a distorted image of how they should live their life even before they enter the workforce, and the constant desire to mirror their peers’ possessions and obsessions may ruin their financial future and drive them further away from their retirement goals.

But first ask yourself – why do we covet? In the movie “The Silence of the Lambs”, mass serial murderer Hannibal Lecter (played by Anthony Hopkins) mentions that “we covet what we see every day” in order to help detective Clarice Starling (played by Jodie Foster) solve a crime. So the genesis of coveting is actually being exposed to so many images of wealth and success being associated with material items and spending a lot of money. We also covet because we feel that owning more items enables us to be “hip” and popular, or modern and fashionable. Other root causes include exhibitionist tendencies, to show the world that “I am rich and successful”, even if your Balance Sheet looks tattered.

So how do we solve the persistent and pervasive problems associated with C&C, which have inflicted a majority of our youth and left them almost defenseless against the barrage of advertising by companies eager to suck their money dry? This may sound clichéd but the answer is – Contentment. Contentment is the secret to happiness, and not having more money or owning more physical possessions. I have travelled to countries such as Myanmar and Cambodia where children scavenge rubbish dumps for food, and naked children play along the streets because their parents have no money to buy clothes for them. With this in mind, I have developed within myself a sense of contentment for what I have, and thus have no desire or ache to acquire more material possessions. I see no need to justify to the world that I am rich or successful; my internal self knows the status of my Balance Sheet and Cash Flows and I am happy to keep that to myself. Contentment is telling yourself daily that you are lucky to have a job, a happy and complete family, are healthy and can enjoy the simple pleasures in life with your five senses.

If we are able to propagate this message of contentment instead of continually egging on our graduates and students to strive to earn more (in monetary terms), perhaps this can solve the perennial problem of being rich, yet unhappy. Then again, with the way values are degenerating in this country, perhaps C&C will remain an inseparable aspect of our culture, and it will forever be etched on the faces of our future generations, to our eternal detriment.