Punishing prudence.

Short term bias is in our heads.

When folks tried to educate tribes in the Andaman, they showed them Amitabh movies — and guess what, it worked better than showing them easier ways to earn a meal. Reminds me of a teacher trying to explain civics in class. We hated it, but given that it was combined with stories of history, we had some respite. But does it really matter? The tribes would understand the pains of everyday work and we would understand civics in due time. That’s right — in due time.

The other day, we were at a mid-level IT firm, trying to educate them on the benefits of savings and on how, it was important to be independent even when one does not have the means. Before the meeting, we were wondering if these folks, who are used to FDs, would even accept equity as a means, given how risky it’s perceived. We were in for something.

The event lasted 30 min, but the only thing people asked was about bitcoin. They seemed to think that we would advise them on buying bitcoin at the right price.

There was an obvious lull, when we told them that bitcoin is not a long term investment option. Honestly, we least expected this.

It felt more like Inception — someone planted the idea and planted it better than Cobb.

This brings us back to the story about tribes and civics; they aren’t very different. People in this case, would also realize in due course that savings is important and that they need to plonk money in the right assets. The only difference is, realizing late could be far more expensive when its related to your savings. We owe it to compounding.

Building your asset base early, helps it compound over a longer period. That’s the long term view you need — don’t punish yourself with any short term bias.