Mind Your Money

Money is in the mind; a product of maya. Particularly at a time when the world is sinking into the quicksand of recession. So how do you survive? The story of the bankrupt billionaire might hold a clue. To get over his bankruptcy blues he decided to treat himself to a holiday at his favourite luxury resort hotel. However, instead of booking himself into the $12,000-a-night Presidential Suite as he usually did, this time he booked into the Vice-presidential Suite, which was only $8,000 per night. Reassured by his perception that by staying in the ‘cheaper’ suite he was saving $4,000 a night, the thrifty ex-tycoon had a most gratifying holiday. The Chivas Regal ad which shows a half-full bottle with the line: ‘To the host it’s half empty, to the guest it’s half full’ is even more appropriate to the maya of money than to whisky. The current financial crisis is based not on tangibles but on perceptions. The words used to describe and explain it belong to the vocabulary of sensory perception, of maya: market sentiment, risk-averse climate, asset values; shimmering mirages conjured by the mind. Barring isolated pockets here and there, the world and almost everyone in it is, today, materially much better off than ever before: we are, generally speaking, better fed, better clothed, better cared for medically, and longer lived than we have ever been. In terms of resource-command (energy, technology, medication) and life expectancy, the daily-wage labourer in Agra today has a far better deal than his counterpart who helped to build the Taj Mahal. So, in the midst of tangible plenty why this sudden panic of global penury, of a looming Great Depression? The current financial crisis stems from, and is being perpetuated by, perception. In the US, greedy loan sharks, perceived to be bankers, handed out credit, perceived value, in the form of home loans, to subprime, or perceived high-risk, borrowers. The perceived property boom went perceivedly bust, along with banks that had bought into this perceived opportunity for making perceived megabucks which when they didn’t materialise compounded perceived fears of lending money, resulting in a real credit squeeze created by perceptions. As an Indic sage might have said: “Oh what a tangled web we weave/ When first we practise to perceive.” Perception, of course, also rules the stock markets. With global markets plunging like bungee-jumpers, daily and hourly media reports tally the losses: X trillion dollars, or rupees, or whatever, of investors’ wealth wiped out. But — unless the investors in question actually book their losses, i.e. cash out of the market — that wealth has not really been wiped out but is only perceived as such. For instance, if you had invested in the market in January this year when the Sensex had touched 21,000, today you’d perceive that your investment had lost almost 50 per cent of its original worth. But unless you sell out, your investment loss will remain only a perceived and not an actual loss. Rather like Schrodinger’s cat in quantum mechanics. A hypothetical cat is locked in a hypothetical box which, upon being opened, might or might not kill it. While the cat remains in the box it is presumed to be in a state of suspended animation, neither alive nor dead. The fate of that unfortunate feline is dependent on our perception of it. Why let the cat out of the box, or the bag? To ride out the recession you might take a tip from the perceptive ex-billionaire who made a perceived saving by opting for a (slightly) less expensive hotel room. Book a round-the-world cruise and a case of Chateau Petrus at Rs 3 lakh a bottle. Then settle for a Kundu Special four-day Kullu-Manali package and a glass of nimbu-paani. Count the perceived fortune you’ve saved, and effect a further saving by putting suicidal thoughts out of mind. Don’t worry, be happy. And imagine the money you’re saving on rope nooses and rat poison.