It's all in the mind...

how you value money.

A sister-in-law recently made a statement in Cantonese, "Cheen ng hei cheen yee ku lei ng yoong" (maybe not the exact words but it was supposed to mean, 'money isn't money if you do not spend it').

If we think about it, there is a whole lot of truth in that statement. To put it simply, for someone who has all that he needs to lead a comfortable life, whether there is Rm1 million or Rm1 billion in the bank, makes no difference unless and until he spends it on the things that please him.

My sole surviving sister called me early this morning, usually to tell me of her 'feel good' happenings. I felt compelled to relate to her the above 'wise interpretation' of the meaning of money, and I wonder how she would react to it.

She is already 66 and she enjoys her work in her nursery everyday as though it is a holiday (good for her). She said she needs a room only to sleep in, so there is no need for a nice house like what most people would prefer as one of the top preferences in life. She related to me how she bought blindly (in early '90s, if not mistaken and against advice that she might be cheated) a piece of land at Rm13,000 an acre near Tapah, which a neighbouring owner said is now worth at least Rm60,000 which is almost 5 times increase in value in less than 20 years. Just imagine the kind of appreciation enjoyed by those with land in KL!

Incidentally, in relation to the popular topic of whether there is any truth in the belief that a person's fortune can last not more than three generations, I have noticed that the most basic form of investment ie. buying vacant land or those planted with crops like rubber or oil palm, compared with selling all and put the money in the bank or stocks and shares for convenience, could be one of the reasons for the fall in value over two or three generations. With exceptions, we are comparing the earlier generation of thrift and savings, and lots of patience with the later generations of indulgence in the luxuries of life, especially where despite the huge incomes, the spending exceeds income which invariably eats into capital.

The other factor is distribution. A rich man with 10 children would have his estate shared and divided by 10, for instance. If he died intestate, then a third goes to the widow and the rest divided equally by the 10 children. This fact alone is the cause of the diminishing importance of a great man's wealth. Even with a goose that lays the golden egg, the distribution would kill the goose and each would get a share of what are left of the golden eggs.

Of course, there are those descendants who are capable and ambitious and with new talents in new technologies and investment knowledge, or just know-who, which could increase a family's wealth well beyond the forefather.

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