Friday, 16 Nov 2018

Are wealthy people morally obliged to give it back to society?

201824Sep

Besides feeling good about yourself for doing something for others, giving back is also good for your health. Doing something for the community you live in and returning the favor to those who have helped you are strong motivators. You should donate your money and use your influence to inspire others to care about the causes that matter most to you.

Are wealthy people morally obliged to give it back to society?


When I met this friend at the airport after 30 years, what struck me was how easily he flashed his wealth.

From the shoes to the watch, the belt to the ring, bag to wallet, he wore extremely expensive stuff. Life has been good, he told me.

We are a lucky generation that worked when India transitioned to a market economy and provided immense opportunities for career and entrepreneurship. He wanted to speak about his wealth, and it is his story this week.

First, he makes so much that neither him nor his family is sure what they want to do with all the money. My question was what was it he did that was so important that he had to be rewarded thus? Isn’t a doctor, a teacher, a nurse, or an artist also doing very important t tasks in society?

His view was that vocations that have the highest demand will pay the highest money, and we now live in an India that is obsessed with consumption. It is not just him, but many families are better off than before and buy stuff, go out, spend money and live well. Therefore, the sellers are at the top of the wealth pyramid. If you have something that many want, you are well on your way to becoming rich.

 

Second, he does not think much about the long term. His theory is that we do not have the patience for great design, production quality or enduring businesses that last for centuries. We are good at coming up with a solution to a problem as we see it. We make money off it, and move on to the next thing. He pointed to the struggles of businesses that want to excel in one thing, and to the successes of businesses that have diversified.

He gave numerous examples of people moving from one business to another in the name of diversification. They all chase money, and don’t care about reviving what is dying. For a few HDFCs and Bajaj Autos there will be thousands that begin with one thing and quickly move on to others when that fails.

Third, there is a lot of pain in trying to do the right thing. He finds that new, young entrepreneurs are keen to create honest and efficient businesses. But the obstacles are many. If a business remains small and local, specialized and niche, it can remain close to the promoters’ ideals. Once it begins to scale up, there is loss of control, which can take the business in directions that promoters don’t control.

Strategy is not everyone’s cup of tea. Soon enough there are investors, interested buyers, bankers and financiers, social media experts and business developers. He says the TV quiz has to ask foolish questions to reach a larger audience, and the shouting matches and saas bahu serials are inevitable.

Fourth, his wealth is invested in property. He owns flats, houses, farm houses and land. He finds it easy to make the decision as his scale of operation is large. He associates mutual funds with Rs 5,000 as ticket size, and when I told him he can easily invest his in millions too, he was not convinced. He has no idea about the size of the industry.

He does not trust private wealth managers or advisers. He thinks others will have no idea what it is to be rich and what it takes to invest it. He hears them out but seldom acts. He has no time for paperwork or the inclination to look at other options. Large ticket property investing suits his temperament, and he does not care much about the delays or the returns. It has to appreciate, is his argument.

Fifth, he thinks he has earned enough, but does not want to retire. He tells me he would be bored without his work. He keeps long hours, travels 12 days a month, has work on his mind most of the time, and does not allocate time for anything else. Since it is now fashionable to be fit, he has a personal trainer and his wife manages his diet.

There is no fear about the future as there is enough wealth, but he is not sure why he continues to work as hard as he does. He asked me if I found his position ideal and inspirational. When a society begins to prosper, it gets taken in by the new riches so much that hedonism rules. Full stomachs should provide the scope for thinking minds to solve larger problems.

The idea of welfare of the community we live in, the need for public service to the society that supports us, and the appeal of the common good should prevail. I asked my friend whether he thinks of such things. He is rich enough to influence others with his actions. He shrugged.

If you are convinced that you are not doing anything so important as to reward you so well, are you sure it will sustain? If you see a trend and capitalize on it, shouldn’t you think of others who may follow your path? If the path you take wouldn’t lead to riches as you have enjoyed, but only turn risky for those who come after you, isn’t there a responsibility to build as you go, educate as you rise, enable as you prosper? Are we a country of opportunists? Is it that we are good at short-term pursuits only and do not have the patience for long-term commitment? Of what use is wealth if it shuns morals?


He told me I cannot guilt him for being rich. I earned it, he said. But neither are you proud of how you earned it, nor are you confident that it is the best way to earn it, I said. That is why the wealth is treated with disdain, spent mindlessly; that is why it is tough to trust anyone with it, for you see the other like yourself; and that is why it lies mindlessly; that is why it is tough to trust anyone with it, for you see the other like yourself; and that is why it lies mindlessly invested in assets you will never use in your lifetime.

Being wealthy is a responsibility, because no one became rich by themselves. There are costs the society bore to enable that wealth, and there is the moral obligation to give back. Without empathy for others, shutting ourselves into our bubble might harm us as well. He told me that I was mad.

Courtesy: ET Wealth Date- 24 Sept 2018(Uma Shashikant)

 

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