A Harvard study started in 1938 that covered 2000 people across three generations for 85 years concluded that being in good health and maintaining loving relationships are the two main requirements for happiness.

What! No mention or money? Wealth?

As one who has been advising people about managing their money well for more than one-fourth of the duration of that study, I am neither surprised, nor disappointed.

No doubt it is important, but money can only be a tool, a means to achieve the kind of freedom that matters to all of us, that can make us all happy. But, like every tool, it must be put to work carefully to yield results.

In the land of the windmills

The other day someone from the social development sector requested me to go over to his office and address his team, one of those financial orientation talks. He was to take me there in his car and promised me a surprise on the way.

He told me he would be taking a detour as he had to stop at a village where he had some projects on. We passed some giant windmills on the way to the village where he had asked the local farmers to gather.

The windmill company had acquired the land belonging to some of the farmers. Some had got several lakhs as compensation two years ago. That’s when the problem started.

There were two farmers who represented the two extremes of the post-compensation situation. Both had a similar family profile and had received the same amount. After getting the money, one added a floor to his house and managed to fund his son’s college education in town. He used the balance to buy a smaller farm a little distance away, where he continued to work.

The other one decided on a long celebration. He bought the latest model of his favourite SUV and used it to go to town with friends every other night. Not surprisingly, he was out of money soon. He still had a family to feed but no farm to bring in some income. His friends disappeared and he started harassing fellow villagers to help him.

The money issue was seriously affecting the projects my friend had started. So, apart from education and water conservation, he was also having to play the role of a money advisor of sorts.

Prudent management, a healthy money habit

The conversations at the gathering were getting heated. During a lull (thanks to a welcome sugarcane juice break!) I suggested that he should ask the farmer who had given up his large farm but was still active, earning, and content, to answer a question before the gathering. What made him do what he did?

The farmer’s answer was simple. “My goal was and is always to take care of my family. First, I paid off the loan I had taken to buy a tractor. That eased a big burden. I want my son to study well and pick up a good job in town. When he comes to visit us, the house now has enough room for all of us. Soon, he will also get married. Farming is the only thing that I know, and I love it. So, why not continue doing it as long as I can and save some money? Who knows what will happen tomorrow?”

As his answer triggered a barrage of responses from the others, I couldn’t help wondering how well he was following the path to financial freedom. Clear debts, provide for goals that are important to you and set aside for the future.

Meanwhile, as I was lost in my thoughts, my social worker friend had gone on and started talking about financial planning. Some of them took it as a joke. “We barely make enough money to survive, and you are talking of financial planning! Whatever that is must be for the rich, those who have money to plan in the first place!”

My friend gamely joined in the laughter. Going by the look he gave me, I suspect he wanted me to talk to them but fortunately abandoned the idea, given the mood of the gathering. But he did shoot a line at them before we left: “Financial planning is for everyone, especially those who do not have enough money. Because it is easy to blow money away, but you have to be smart and careful to make it last.” He pointedly looked at the farmer, the leader of the squanderers.

Invest early in freedom

On the way back, my friend told me about how he had once thought that his life was set. He was earning well, way more than what he and his family needed for their needs. They enjoyed their life of luxury. Then came the pandemic. He lost his job. But the EMIs on his house and his car continued. He lost a close family member to Covid. His wife fell seriously ill. Fortunately, his children were safe. But he had to sell the house and the car. They moved to a village where his father had retained a house. The children’s education suffered. He left the corporate world and started his own small setup focused on social development. Slowly, his life was regaining some semblance of stability.

“I was confident I had arrived. We had such big dreams. I used to think we were free to make those dreams come true. Maybe I should have listened to someone like you then. Yes, no one could have planned for Covid. But I could have definitely planned for my life, prepared for difficulties, given my family a better life,” he paused, overcome.

As I reached out to hold his hand, he looked away, perhaps embarrassed. Suddenly, he asked the driver to stop the car. He got out and I followed.

It was a beautiful evening. The windmills looked tiny in the distance. The sky was clear, and the breeze carried a nip. Far below, a river snaked through boulders and trees. We could see a hut close to the river. A few children were playing in front of the hut, walking briskly in a line, with the one in the front waving a flag. They were celebrating Independence Day early.

Professor Robert Waldinger, the head of Harvard’s longest study on happiness once observed that “people who were the most satisfied in their relationships at age 50 were the healthiest at age 80.”

How wealthy we are is always a matter of comparison and meaningless without a goal. Yet, if we start our journey towards financial freedom early, we too can enjoy an early celebration of independence—from worries of wealth and health.

Lovaii Navlakhi is the Managing Director and the CEO of IMMPL

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First Published: 14 Aug 2023, 10:07 AM IST

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