Senin, 29 April 2013

I don't want to win a lottery

What is man's greatest weakness. No, its not sex. No, its not even gambling.  It is his uncanny ability to fall for every "get rich quick" scheme.

Take the case of the collapse of the Saradha  (and probably numerous other such schemes) in West Bengal. This was a classic Ponzi scheme. Investors were attracted by fantastic returns (15-50% !!!). The early investors were paid off with money collected from subsequent idiots. Bingo. An avalanche started. Two years on, it has collapsed leading to much hand wringing and vociferous shouts of indignation.

What attracted my attention was not the scheme per se. They are dime a dozen. Remember the Emu farm scheme a little while ago in Tamil Nadu. Emu farming I believe - never mind that not one soul who put money into it had seen an emu in his life. But what has really got my attention is the response to the affair after it broke news.

There has been much clamour for regulation of such funds and criticism of governments for not regulating them well enough. Ramamritham must be rubbing his hands in glee at this new opportunity that has fallen into his lap. They want the death penalty for the owner of Saradha. A few people who have lost money have committed suicide. The loud lady who holds sway in the part of the country where this mess happened has announced a Rs 500 cr package to reimburse those who lost out . Never mind that the state is plain broke - there isn't money to pay salaries of government employees. The economically challenged lady, plumbed record depths by saying that she is going to  fund this by raising taxes on cigarettes and then exhorted her fellow citizens to smoke more !!!!! I kid you not.

The ancient fossils who are in opposition to the shrill lady, obviously oppose this, but their alternative is that those who lost must be reimbursed by auctioning the property of the owners of the chit funds. No wonder that this state has little hope of any advancement, if it is blessed with such wonderfully economically literate leaders.

Not one word has been said against the  lot who invested in such schemes. Pray ; why reimburse the clowns who lost money in this. They are no saints. They were simply attracted because somebody promised incredibly high returns. Any human with an ounce of intelligence must pause and think whether such returns are possible. Where will they come from. There is no return without risk and the correlation is direct. So if you let greed rule you, then don't cry when you lose your shirt. You deserve to be fried. 

One of the great rules of life is that winning a lottery is actually a curse. Getting rich quick is the surest way to misery. There is plenty of research to show that the majority of lottery winners do not find happiness.

The way to a better life is to get rich, of course. But slowly. Through hard work. Through initiative, through endeavour, through education, through innovation and through blood, sweat and tears. That is what brings true wealth. And happiness.

By the way, talking of Ponzi schemes - the biggest Ponzi scheme of all is property.  The only difference is that it operates on a time scale so large that an entire generation can become rich before it starts to unfold.  Pause and think about it. Every one of us gloats about the land/flat/house we bought some time ago and how its value now has an added zero to it. If you really think about it, its just another Ponzi scheme - some sucker will be left holding the curse sometime into the future. 

Grant me Lord, the ability to do a hard day's work, to make money by ethical and honest means, the strength not to be carried away by temptation, the courage not to want to get rich quick and some compassion for those who weakened and got burned. Compassion yes, but bailout, NO.

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