I’ve been meaning to make this post for a few days now, but work prevented me from finding the time to do it. It also feels particularly funny to write a post like this on a day when the banks in Malaysia have announced cutting interest rates and penalties for credit card holders to reduce their debt. (For the record, reducing these charges only encourages accumulating more debt, but then again, the government is probably thinking that increasing consumption, even if it has to be fueled by increasing debt, is a good thing in a depressed economy.)
My subject today is savings. Now, traditionally, people think of savings as an unalloyed good. That’s the whole point of the parable of the ant and the grasshopper after all. However, one thing that people don’t usually think about is that ultimately savings equal capital, as in the capital of capitalism. This is because unlike the ant storing its food for winter, nowadays, we don’t save money by stuffing cash under the pillow. At the very least, we put it the bank and expect the bank to pay us interest for the privilege of safeguarding our money for us. For those who aren’t risk adverse, there’s no end to the array of possible investments your friendly financial planner is willing to sell to you.
