Thursday, 5 April 2012

Spend Now for a Rainy Day

I was recently accused of not being a saver by a good friend.

Upon reflection I had to conclude that this would indeed appear to be the case to an outside observer.

You see, his definition of savings was accumulating pieces of paper or electronic digits that was is a claim on real goods, and I am not doing this.

Strictly speaking however, savings is the deferred consumption of goods (or services) that could be obtained from renumeration without resorting to loans.

As tangible physical goods go, gold is the ultimate or universal good that embodies deferred consumption. Granted that in it's acquisition one does not accumulate fiat units which hold the promise of future consumption.

Interestingly however at present I am not acquiring gold with my meagre excess and yet still consider myself a saver.

How does one reconcile my expenditure of almost every cent I earn with my conception of myself as saver? The answer is quite simple, being that the key word in my above definition of savings is 'deferred'.

Savings not utilized at some point is wasteful. More rigorously I believe that savings not consumed by myself or another of my choosing is personally wasteful. The latter being one reason why I do not accumulate currency units, as some of that consumption is usurped by others who are not of my choosing.

The second problem with fiat savings of course being that more claims exist than tangible physical goods, even taking into account the period in which such relinquishment of claims is supposed to occur in general society.

I decided to list, for myself, which expenditures I consider to be savings. Gold is obviously first and foremost, however having some glimpse of the shape of things to come, I also view my expenditure on non-perishable foods (which I am not consuming), medical supplies, weaponry, and various related items as savings. Even paying for my studies can be viewed as savings, as I am storing non-tangible knowledge for future use. :P

This then is how one can save by spending every cent you earn. Consider what those fiat claims will represent in future, and acquire them in the present with thought to use as needs may arise.

Spend now for a rainy day. :D


The Fool