How much money is too much?

How much money is too much?

Agreed that money cannot buy you happiness, but the lack of it can buy you a lot of misery, frustration and dejection. Further agreed that, by money, you can buy books not the knowledge, buy medicine not the health, and buy tranquilizers not the sleep. You cannot buy everything by money, but you cannot have everything without it.

Does it ever occur to you as what is money? Not a single day passes when we do not use money. So we must know what it is and how it works …do we? On the surface, money is nothing but a piece of paper. Isn’t it? You cannot eat it, drink it or even sleep on it. Yet money is also one of the most powerful things in the world, for a very simple reason, we have collectively decided to make it so. It would be a plain lie if one denies the need of money. It would, however, be equally a fallacy if one treats money everything.

Mark H. McCormack, the author of the bestselling, What they Don’t Teach You at Harvard Business School, has also aptly summarize the role and nature of money in two commandments that say “Never underestimate the importance of money” and “Don’t overestimate the value of money”. In today’s highly competitive and materialistic society, money has become a single yardstick of success. The more money you have, the more successful you will be deemed. And this is not necessarily a correct concept. In today’s world, acquisition of goods and money to buy more goods are usually considered as the ultimate aim in life. More clothes, more shoes, latest tablet, latest smart phone and latest of everything … the list is endless. On a broader level, spacious homes, luxury cars and world tours… dreams are limitless. So, how much money is enough? Or put it simply, can money be ever enough? It may be a painful realization, but many of us have already touched that point of saturation – either with consumptions or investments, where acquiring more money for personal use does not make sense. Even having more money is not a panacea or a source of joy. There are many people who have more money than time and willingness to spend and yet they are still not happy. It is not uncommon that many millionaires and billionaires have even committed suicides out of dejection and boredom.

So, the question still persists as how much money is too much. Its rightful and appropriate answer can be given in the form of a question. How much money is enough money? This answer was given by none other than American industrialist and philanthropist John D. Rockefeller. “Just a little bit more” was John D. Rockefeller response to the question. At the peak of his fortune, Rockefeller had a personal net worth equivalent to one percent of total US economy. Over 90% of US oil and gas industry was owned by him. Today’s corporate honchos like Bill Gates and Warren Buffett are nothing more than paupers to Rockefeller. Yet he wanted “just a little bit more”.

It is worth a careful analysis as what enough is. Needless to mention, enough is not an amount. It is an attitude. Money can be a wonderful toy. However, if let loose, it may become a ruthless tyrant. Money can serve as a medium of exchange and storehouse of wealth. Whenever one grows in life, one exchanges his work, time and knowledge with money. Unless you are born with a silver spoon in your mouth, you are destined to work relentlessly to make ends meet for food, shelter, education and healthcare. It is hard to imagine that you can earn so much wealth that you need not worry about your present and future. In this case, you attain a “financial independence”. It is at this point of financial independence that can safely be called “enough”. It is even harder to imagine having more money than you could possibly spend it.

There are countless examples in our world where one amasses unbridled wealth without having a desire to spend them. In this case, earning money is not a pleasure, it is a punishment. It is always better to let the money do its functions – be a medium of exchange and storehouse of value. It is always appropriate that you define money in terms of its functions. The moment you let money define you, you are gone. You can either let money be your servant or let money make you a servant. 

Larry Swedroe and Kevin Grogan, in their new book “Reducing the Risk of Black Swans: Using the Science of Investing to Capture Returns with Less Volatility”, have tried to answer the crucial question of how much money is too much. The answer, however, varies for person to person, but it bubbles down to following three question: 

At what level are your needs satisfied? It deals with the question of how much money you need to satisfy your basic needs and maintain a decent lifestyle. It measures your appetite for taking risk. The more you turn your desires into needs, the more risk you need to take in your investment portfolio to back your lifestyle. No risks no returns. Simple.

Are you aware of Marginal Utility of Wealth? In the process of accumulating wealth, there comes a point when increase in your wealth does not increase your happiness or satisfaction level. At that point, it makes little sense to add to your fortune. It is always better to think in terms of marginal utility of wealth – how much incremental wealth is justified in relation to associated risk that must be accepted to achieve a higher return.

Are you taking too much risk or too little risk? Once you have reached at the level of financial independence, your priority should be less on increasing and more on maintaining it. It is of utmost importance to minutely scrutinize how much risk you are taking. It always pays to understand that the strategies to get rich are entirely different from the strategies to stay rich. You can take risks to get rich, but to stay rich, you need to minimize or diversify the risks.

Money may bring happiness. But it is common man’s mantra. Those who are spiritually abundant always find happiness in the service of others. The happiness you feel after removing the miseries of others is beyond measurement. The American Universalist clergyman and theological writer Hosea Ballou has aptly written, “Real happiness is cheap enough, yet how dearly we pay for its counterfeit.”

References

• https://www.bankrate.com/financing/wealth/how-much-money-is-too-much/
• https://www.wilsonfield.co.uk/the-work-life-balance-how-much-money-is-too-much/
• https://www.thefrugalgene.com/much-money-bad/
• https://www.thebalance.com/how-much-money-does-it-take-to-be-rich-358043
• https://www.fool.com/retirement/2017/10/02/do-you-have-too-much-cash.aspx
• https://www.shreveporttimes.com/story/news/local/blogs/2017/12/10/how-much-money-enough/930449001/

Life after Covid-19 pandemic: Challenges and Opportunities

The world has experienced and continue to experience the wrath of coronavirus pandemic since December 2019. Coronavirus disease 2019 (Covid-19) is a transferable disease caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). Its severity and gravity are nothing less than the mayhem created by detonation of nuclear weapons over twin Japanese cities by USA in 1945. The world will never forget the magnitude and scale of this menace, which can be rated at par with the greatest catastrophes known to human history.  

Although it would be premature to say that this pandemic has culminated, it would also be incorrect if it is considered as far from over. In view of the developments of various vaccines and treatments of Covid-19, its beginning of the end is in sight. No doubt, this horrible pandemic has caused irreplaceable human sufferings and incalculable economic losses. It would be a myopic view if one focused only on the cost and forgot its benefits in the shape of new challenges and opportunities. It would be naïve to expect that the world today will return to the world that was before Covid-19. Human lifestyle can be categorized into two dimensions: before Covid-19 and after Covid-19. In this paper, I make an attempt to discuss the challenges and opportunities, offered by the pandemic, in two broad areas i.e. global economy and healthcare. 

 The Covid-19 pandemic had exposed the vulnerabilities of global economy painfully as acute supply chains weaken, unemployment rises and markets fluctuates. The 18th and 19th century industrial revolution proved fatal not only for ecological systems in view of worsening of biodiversity, soil degradation, deforestation, abundant use of insecticides, toxic waste in water and burning of fossil fuel. It also widened the gulf between the haves and have nots. According to Nobel Laureate Muhammad Yunus, the primary purpose of business is to earn profit out of self-interest. However, now common interest, instead of self-interest, should take precedence. Gone are the days when profit maximization was considered the sole aim of every business. This is an outdated and shallow concept anymore. Today’s Economic man is defined to be driven by both self-interest and common interest. 

Covid-19 pandemic also saw the unprecedented rise of digital economy. It presents a remarkable opportunity to capitalize on the world wide networks of global economic activities, transactions and specialized connections that are empowered by information and communication technologies (ICT). Other factors may also speed up like regionalization of supply chain management and international data flows. Work culture around the world, in the post pandemic scenario, has also been redefined. It offers new challenges (read opportunities) like income disparity, worker exploitation and work from home culture mostly for white color jobs. The new trends can partly be credited to the rise of digital economy. However, the role of health concerns, security and economic factors like labor availability cannot be overlooked. 

Another global trend, although prevalent well before the world experienced Covid-19 pandemic, has gained momentum is deglobalization. Deglobalization refers to the concept of shift from global just-in-time supply chains. Covid-19 pandemic has unleashed the hidden selfishness of major economies, which are now focusing on nationalism, regionalism and “my country first”. 

There are now mounting concerns about what the life post Covid-19 will look like. Covid-19 pandemic had done an irreparable damage on the emotional side of humanity. The fears of Covid-19 present monumental challenges and opportunities. It can affect worker’s creative talents and ability to stay innovative. The ramifications and negative spillover of this pandemic will be felt for a longer period to come. As a result of it, business organizations must acknowledge the long term trends created by this pandemic and adapt themselves to remain profitable through these interesting times. How organizations succeed and thrive in these difficult times will be litmus test for their survival. 

Ever noticed, how incredible it is that it took a deadly virus pandemic to let the world realize the importance of public healthcare. Since Covid-19 pandemic has engulfed the globe completely, global healthcare has emerged as the eventual and final global public good. Before the coronavirus crisis, healthcare was considered a private good. However this pandemic has changed this mindset and forced the world to treat healthcare as a global free public good. It has placed this undeniable fact in broad daylight that conquering Covid-19 and recovering from it depends on how much priority we attach to the global free healthcare for all, everywhere, swiftly and always. It is impossible to deny that Covid-19 pandemic caused not only an economic crisis but also a healthcare crisis. 

Even in severe recessions, healthcare sector remained immune in the past. The global demand of medical care has remained unchanged since people faces sickness and require medical treatment. But Covid-19 proved this truth incorrect. Since peoples are asked to follow SMS i.e. Social distancing, Masking and using Sanitizers, most of the peoples are preferring to stay home and avoid outside contacts. It also includes those people with an urgent medical care in any other discipline. As long as the world is busy in finding the vaccine or cure to combat Covid-19, the way forward we follow with physical products and service will transform. It will be deemed desirable to refrain from to touch and be touched. 

Apart from physical health and economical problems, Covid-19 pandemic has also done havoc to mental health of peoples. The horrible feeling of being lonely, helplessness and lack of support continue to haunt, especially to those who have lost their dear ones, or may not have a job or support to turn to. Another point to consider is the universal uncertainty, fuelled by conspiracy theories, of what lies ahead has generated a worsened level of anxiety and frustration. A survey conducted by the Kaiser Family Foundation, reveals that around 50% of US populace believes that the Covid-19 crisis is affecting their mental health. 

Solving these economic and healthcare challenges and capitalizing on the opportunities associated with the Covid-19 pandemic will play an instrumental role for the progress and development of humanity around the globe. Life does not need to be scary after this pandemic. We all need to strive to turn the challenges into opportunities. It is the need of the hour and cry of the day. 

References

https://www.thenews.com.pk/print/650245-covid-19-challenges-and-opportunities https://tribune.com.pk/story/2209242/covid-19-challenges-opportunities https://www.imf.org/external/pubs/ft/fandd/2020/06/how-will-the-world-be-different-after-COVID-19.htm 

https://upcea.edu/a-glimpse-into-the-future-economy-after-the-pandemic/ https://healthmanagement.org/c/cardio/news/covid-19-and-its-impact-on-the-healthcare-economy https://www.forbes.com/sites/soulaimagourani/2020/05/29/life-after-covid-19/#7dead7b9344a https://www.vaticannews.va/en/vatican-city/news/2020-05/yunus-in-wake-of-pandemic-we-must-create-a-better-world.html