At the current rate of inflation, any 1 million BDT worth asset should have a growth of at least 50 thousand BDT. Is it the best time to invest? Hold a second.
There is always the other side of the coin. In this case, it is the gradual devaluation of money. If you are happy with the savings account giving you only 3% or just okay with your salary, with no or little increments, you are on the slot to be slaughtered. Money rarely grows, asset grows in value.
Seeing a dead grasshopper in a train recently, the Aesop’s famous story of the ant and the grasshopper clicked back into my mind. The heart touching death of the grasshopper and the survival of the wise ant can illustrate the whole thing. Let’s have a closer look at the story.
The summer was great for both the grasshopper and the ant. Both ate, drank and enjoyed life though in different ways. The grasshopper focused on luxuries like drinking, music, and others. The ant focused on food grains, loved and admired those. He knew that in any crisis event those grains will save the day.
The aftermaths were rather simple. The winter came. Foodgrains grew in value. The ant lived happily with the grains. On the contrary, the grasshopper had nothing left to survive. The ant was gentle and helped his neighbor as much as he could. But he had a family too and could not support anymore. The liabilities of the grasshopper ate up all his assets and made him starve to death. The case of our country is often similar to this story.
We have got a very poor country with the highest GDP growth in the world weirdly enough. But the problem lies in its distribution. The lion’s share of the growth goes to a bunch of people at the top. The rich are getting richer, the poor getting poorer. The number one cause of this financial misery is the lack of financial education among the poor and the middle class. The businesses are majorly held by rich people and difficult to think for the poor and the middle class. They are really endangered by the fraudulent sector of investment.
However, the government has turned its focus to open up this sector. Many changes are being taken and the results are visible. The World Bank’s ease of business ranking is going to report Bangladesh among one of the most progressive countries (rank rose from 175th to 138th). But the main challenge is to fight the stigma towards investment that is dominating the poor and middle-class society. We have no choice but to accept the business systems in our social life, sooner or later. The people failing to take part in the system will be the sufferer of it.
Now to be liberal, the choice is always ours. The purpose of this article is only to indicate the difference between assets and liabilities. In their simplest sense, assets are the things growing in value and liabilities are the things having depreciation. Keeping a balance between the two is essential for financial survival. Like any apartment building we live in, we need to develop the columns first before building the essential structures upon them. Once the columns are strong enough, we may think of creating a rooftop garden or swimming pool or luxuries like these. In the field of finance, we need to build asset columns when developing liabilities.
Identifying the assets from an idea is at the heart of entrepreneurship. It is equally important for the job oriented ones to identify the skills for tomorrows. So in all sense, like the ant in Aesop’s fable, valuing the valuable things does the trick.
The Three Big Issues and the 1930s Analogue. https://www.linkedin.com/pulse/three-big-issues-1930s-analogue-ray-dalio