Thursday, 27 October 2016

We, The Idiots!

I read a few blog posts about how our march to modernity is ruining life, depleting values and causing massive exploitation. People like me, who've 'stepped out' of the mainstream regularly express themselves on such issues. Based on such articles and on my experience during the last few years, I've realised that we’ve come to belong to a category of idiots – absolute idiots.

We are able to see and very clearly articulate the follies of the system – the education system, the economic system, the governance system, the social system. We are able to see clearly and articulate the exploitation of the human resources, the natural resources, animals and birds. We are also able to articulate solutions, at least a direction in which the exploitation can be avoided, the follies can be overcome. But we are naive enough to believe that others cannot see them. We offer talks and discourses thinking that we’re the prophets. People listen to our rambling and agree wholeheartedly, but also ignore it. Neither the ruling party is interested nor the opposition. Neither the industrialist is interested nor the consumer. Neither the media is interested nor its audience. Neither is the exploiter bothered nor the exploited. That is the ultimate proof of our idiocy. The farmer, for whose cause we are prepared to take on the government does all he can to ensure that his children don’t have to get into farming. The unskilled worker, whose life we thought is better off in the village, is willing to grab half a chance to run to the city and live in miserable conditions. The parent, whose children are being ill-educated by the system isn’t interested in any ‘real’ education. He wants his child to pass the system and make a life for himself. Aren’t we idiots – fighting someone else’s battle, when that someone else himself is on the ‘other’ side.

We think of ourselves as brave pioneers of a new way of life. We think we’re an inspiration and hope for people, who want to take a plunge into bravery. Indeed, we’re idiots – for we are nothing more than a source of entertainment for them. They never call on us. When we repeatedly invite them, organise events for them, they oblige us by coming over. They enjoy the romantic side of our lives and make us feel good about it. To make us feel better, they even share a desire of living a life like ours, but soon forget all about it. Then we’re not expected to disturb them – this chapter is over for them. We, the idiots, tell ourselves that we must go in a thousand or ten thousand will be moved to act!

All this is still not the true representation of our idiocy. There are very few idiots like us, who walk out of a system, without insurance. But all of us want to live independently. We aren’t inclined to collaborate in order to improve our own lives. We hold the flags of our ideologies high, make small compromise every day, but to approach someone with another flag will be to lose identity.

God save us.

Tuesday, 18 October 2016

Just As Much (JAM)

"If you stop earning - absolutely, how many years can you carry on with whatever you own?”, I asked a few people. The neighbouring small farmer said three months. The bigger farmer said five years. My ex-subordinate, who earns about a million and half p.a. also said five years. My ex-colleague earning about ₹ 5 million said 20 years. The manual labourer who works in our farm said I won’t be able to repay what I borrowed to live during the last 3 months.

To earn for livelihood is a compulsion for few, not so for few others. Wouldn’t it be fantastic to know how much is enough to suffice till old age, say 90? If I knew that, and let’s say a buffer for another 10 years, I can live like a child – provided for – not a worry about finances – at least one aspect of life completely sorted out! Then, there is no point in earning more. I can work for other reasons.

The concept of JIT became quite famous in the context of production management a few decades back. Before that, ‘earlier the better’ was the norm. With regard to money, ‘more the better’ is the norm today. Let us explore the concept of Just As Much (JAM).  Why? For the same reasons that JIT was popular! If I continue to spend time and effort to earn money, which I won’t need, is it not a waste of time and effort?

Is it a difficult calculation? Does it require one to be a financial wizard to calculate? All that is needed is basic arithmetic. In fact, an excel sheet can obviate the need for that too. However, it can only be done by people who no longer aspire for a more expensive lifestyle. I use the word expensive and not better. Here we will confine ourselves to the domain of money.
Let us understand how. If I have ₹ 1 Cr and I am 40 years old, is that sufficient if I live till 90? More information required? My monthly expenses are ₹ 75k p.m. and I don’t aspire for a more expensive lifestyle. It should be quite easy to calculate. We need to check for inflation, returns on investment and plug in the figures in a sheet.

Calculations suggest that if my investments are able to generate a 12% pa return and the inflation is 10% pa, I will be able to manage till 2028 i.e. till the age of 52. I’ve also factored in a 2% pa increase in expenses due to lifecycle – kids growing up, medicines, etc. A ₹ 2 Cr networth can carry me on till 2050 (age 74 years). In calculation of networth, there is no need to exclude anything – not even the house you’re living in.

Now, that should sound encouraging to a lot of my friends. How will it get operational is the next question. But that’s a much easier one. This first level needs much deeper understanding and acceptance.

Is there a catch? Yes, there is if you’d like to call it so. Financial planners across the world make you believe that you got to slog it out till you retire, so that you’re able to survive post retirement. They plan to build a corpus or capital so huge that its earnings are able to meet your expenses till you die. The assumption is that the capital cannot be spent. I think this thinking became obsolete a couple of decades back. Look around – so many people who retired 10 - 15 years back have built sizable capital (networth), be it in real estate, equity, debt or gold. They’re all set to pass it on to their children as inheritance. But it is hardly required! The children are well off by their own selves. There is no reason to believe that I will have to leave any inheritance for my children. Correction: There is no reason to believe that I will have to leave any financial inheritance for my children. If this does not provide comfort to the reader that using up capital is okay, the discussion can end for him/her.

Let’s get back to the calculation. A ₹ 75k p.m. lifestyle in a city like Mumbai is not a lavish one, but neither is it very modest. We’re not considering investments here - 75k of expenses. So, if one is paying an EMI of say 40k, we consider only the rental value, which may be around 20-25k, or less.

The next calculation can be done for how expenses can be reduced, without impacting the quality of life adversely at all. How does that impact the sufficiency of capital? A 10k drop in expenses gives me a 5 year increase – takes me to 79.

I’ve moved out of Mumbai to live on a farm. Our monthly expenses for a family of 4 average out to less than 20k per month. Factor in the lumpsum expenses of travel, capital expenses and the figure will average 35k per month. Our standard of living has definitely gone up. Our expenses should come down, because we’ll grow more food in future; currently we buy everything.

Sounds interesting? Let me know.

Friday, 7 October 2016

The (Ir)Relevance of Intellectualism

Is all the intellectualism around governance methods, economic models, morality, social justice and education worth any effort? 

Can't we notice that constitutions, laws and codes have never managed to reign the corruption within?

We may want to believe that gift culture or bitcoin will avert collapse of the economy, that permaculture will reverse the destruction of agriculture, that alternate education will change human behaviour. But inside of the inside, we know the none of this will happen. We know that it is fear, which is making us believe!

Dear Intellectual,
Intellect is a tool of the divine, not a servant of your ego. Be mindful of the urge to misuse it.

Writing codes of civilisation is futile. When people have been cleansed from within, it will get reflected in their behaviour and intent. Stop wiping the mirror; the spot is on the face! Let's get that straight.

Can your intellect be useful in cleansing the inner selves? Cleanliness is, indeed, Godliness!