Basic Concepts1

Basic Concepts

Meet the Trimurti A long time ago when I was a kid... On one sunny day that I still have fond memories of, my father came home in the evening with a toy pig. I turned it around and discovered that it had a hole in its back. My dad announced that it was my 'Piggy Bank'. He fished out a 10 paise coin from his pocket and instructed me to put it through the hole in the pig's back. I did it eagerly, expecting the pig to start walking. Walk it didn't but my father patted me on my back and said,

"Son, this is your first saving. I will give you 10 paise everyday and when we have collected Rs50 we will go to the bank and get you a savings account." Savings! suddenly a new activity had begun in my life that I understood nothing about. My Dad noticed the puzzled look on my face. He scratched his head and suddenly a meaningful look came in his eyes. I think he remembered the ant menace that my mom had been complaining of for the past few days. He showed me the ants that were carrying grains in a line to their hiding place.

"The ants are carrying grains and saving it for a rainy day, he said. He took out my World Book Encyclopedia and showed me various other animals that save food for a time when they may need it.

"You know that I go to office to earn money for all of us. But when I turn 58 years, I will have to retire and stop going to office. We will need money to buy food and clothing even after I retire from my job and stop earning. I need to save now, so that I can pay for our food and clothing later," he explained. "Similarly, you can save the money I give you now to buy a good book or a paint box later," he impressed upon me.

That was my first lesson in 'saving'. A few years later I learnt in my class that all of us have two choices. We can consume now or can consume later. Hence, savings is just postponing consumption. Does it then mean that only what we consciously keep aside for a rainy days is called "saving"?

"No, what ever you do not manage to consume and stays as a surplus is also 'saving'. But that is a lucky state to be in," my teacher responded. And that set me thinking...

"If I can 'save' to consume at a later date, I can also spend more now if I know that I can earn enough surplus to pay for it later..." Just then my teacher's booming voice interrupted my train of thoughts... "Borrowing is the opposite of saving," she announced. Now that was easy to visualize. I had a classmate who was fairly irregular to class, spent a lot of time in the school canteen and supposedly even bunked classes to watch the 'matinee'. How did he manage to pay for all his nefarious activities?