Abhimanyu is a smart trader who trades everything from crypto to derivatives to international stocks. He has made a fortune since he started during covid-19. In his early 20s, his colleague in the US introduced him to the financial markets. Abhimanyu used to work for a US firm, The covid-19 lockdown made him work from home and employees across the globe of the US firm became friends online.
Beginners’ luck favored him when he booked profit within a few hours of taking a trade. Since then, he has been trading heavily. He would earn and spend his profits as if there were no tomorrow. He would show off his newly made fortune to his million-plus fans on Instagram. With time, his bets kept growing. He did not believe in saving for tomorrow. Every day he would bet millions and make millions, until one day when the market gave a wild swing. His entire capital was blown up. He tried his hands again borrowing money from friends and family only to blow it up again. He is broke now with a huge liability to repay.
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His fans on Instagram do not follow him anymore, they tell him he is a fraud. Abhimanyu is not a fraud; he is the victim of his greed, the “Get Rich Quick” syndrome. He believed in instant gratification. He lived up to his name, like the Abhimanyu in Mahabharata. He entered the Chakravyhu but couldn’t escape it.
There is always a lag between the effort and its outcome. That is how nature is designed. It follows a pattern. Sowing seeds does not immediately yield crops, and there is a gestation period between conceiving and delivering a baby.
Present-day society is the outcome of the realization by early humans that delaying gratification brings reward and security in the future. Early humans while hunting discovered by accident that not eating the entire hunt immediately and storing the excess would save them from going hungry when they would not find prey for days. They invented ways to preserve the flesh and meat from decaying.
Now that daily hunting was not the sole purpose of living, as the hunt was stored for future consumption, humans learned to utilize their spare time in something more creative. It wasn’t easy to carry the stored food everywhere thus settling in one place made more sense. Storing food brought stability and gradually they stopped being nomads.
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Exchanging stored food for other essential items began. The idea of barter was born. Humans started sharing and communicating with other tribes or groups. The delay in gratification gave birth to society, the institution of trust. We started to control our impulses for our future and the benefit of others. The positive relationship between being able to delay gratification and reap its future benefits started getting established into ideology.
Groups who shared similar ideologies started getting closer and clans were formed. The strength and power of the clan were determined by the fact of how much the clan had for immediate consumption for its members and how much was stored for exchange.
With time, clans started becoming kingdoms having control over large geographical areas. The activity was no longer a barter between the two groups. Trade and commerce between clans and kingdoms started to happen. As the commerce started growing, so did the disputes.
The need for a rule and an entity to settle the disputes arose. Each society had its own rules and a supreme authority. Initially, it was a shapeless form, some divine power. With time, the power shifted to institutions, law bodies, or religious beliefs that had wider acceptance. It resulted in more trust among humans and kingdoms. Innovations started happening.
Over several thousands of years, mankind has evolved from being a hunter to a social being to a super advanced human processing trillions of data, to finding life in space. The quest for better lives has been growing more than ever.
All this began from the idea of delaying gratification, which is the ultimate pathway to happiness and prosperity.
Our religions have been saying the same. Verse number 47 of Chapter 2 of the Bhagavad Gita says: “karmaṇyevādhikāraste mā phaleṣu kadācana| mā karmaphalaheturbhūrmā te saṅgo’stvakarmaṇi||” (As humans, we have control over our deeds and not on their outcomes. If the deed is good its outcome or result will also be good. There will be delays and let us not instantly expect the outcome. Emphasis is laid more on work).
In the Biblical narrative of Paradise, God tells Adam: “By the sweat of your brow, you will eat your food until you return to the ground,….(Genesis 3:16-19. KJV). The interpretation is that Adam and his descendants need to provide labour to get something in the future.
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Like everything in nature, in the investing world, too, the effort and its outcome have a lag. Savings when translated into investments become wealth over time. Look around, the land that cost a few thousand rupees a decade ago is worth millions today, the same applies to gold, silver, the Sensex and Nifty, and every asset class you deal with.
The craving for instant gratification, the “Get Rich Quick” syndrome is against the laws of nature. It can make you famous but not wealthy. Instant gratification does not work in investing as the magic of compounding needs time. The longer the time, the better the outcome of compounding.
I wish Abhimanyu would have been patient and kept part of his “hunt” aside for the future. “Always remember: Wealth gets created over time and not overnight”.
Jay Prakash Gupta is founder of trading platform Dhan.