Making a meal of frugality

Habits of thrift may be hard to shake for an older generation born poor, but there's no need to go the whole hog either
By Jonathan Kwok, The Sunday Times, 11 May 2014

The mad scrum for the free food at annual general meetings (AGMs) never fails to amaze me.

Those who have attended these gatherings know what it's like - investors make a beeline for the buffet table once the meeting ends, or even before that.

Out come the plastic containers for "takeaways". And if you are late, you won't get a morsel while the early birds will have enough food packed away to feed their extended families for the next week.

It has become so bad that some firms now distribute vouchers for bento boxes: one shareholder gets one voucher for one meal - no more, no less.

What's puzzling is that many of these folks attending AGMs appear to be able to afford nice meals at posh restaurants.

When covering meetings, I have sat next to middle-aged men and women who hold hundreds of lots of shares, as indicated on the hand-held sets that they use for voting.

Yet with hundreds of thousands of dollars worth of assets in just one counter, these investors have no qualms about rushing for the food line.

Many young people who have grown up in relative comfort won't be able to understand this mindset. While food is precious to baby boomers, many of my generation have a diametrically opposite attitude.

The fear is not of having nothing to eat but of putting on weight, so many of my peers are happy to throw food away to cut a few calories.

But if we remember the very different childhoods of the earlier generation, we can understand why they are loath to waste even a crumb.

My parents are happy to remind me that they mainly ate plain rice with soya sauce when they were young and got to enjoy a chicken drumstick only if they came first in class - a big incentive to study hard.

Fortunately most Singaporeans no longer face this reality, although there remains a large number of poor people who live from hand to mouth.

But attitudes towards money are hard to change.

Although they may have benefited from Singapore's growth over the past few decades, and amassed a sizeable pot of savings, baby boomers remain extremely thrifty.

Many people may continue to have insecurities about the future. They may doubt whether their savings are enough in the face of ever-rising costs and a social security net that is less comprehensive compared with Western societies.

This probably explains the behaviour at AGMs that younger people may find bizarre.

One ironic thing is that the type of people who should be worrying about money don't worry about it enough - people with credit card debt, for instance. Those who should not worry too much, like those rich retirees at AGMs, sweat too many buckets over it.

A similar theme was espoused in The Financial Times this month in an article by banker-turned-novelist Akhil Sharma.

Mr Sharma and his parents are first-generation immigrants in the United States. A difficult childhood became a nightmare when his elder brother Anup had an accident that left him with severe brain damage.

"Till then worry about money had, of course, been part of our lives. Now it turned into a sort of terror," wrote Mr Sharma.

"Not having money during a medical emergency is like not having oxygen. My brother's skin used to get dry in the heated hospital air and we couldn't afford US$4 for a tube of lotion."

After two years, his parents took Anup out of hospital and brought him home and began taking care of him. All the time money was a worry and there were many fights.

Mr Sharma later earned a lot of money as an investment banker but his money habits remained unchanged. He was "unable to accept the comfort money can provide", no matter how much cash he accumulated.

He received his annual bonus of several hundred thousand US dollars one wintry day, and found he needed a pair of gloves.

"Since I wanted to pay as little as possible, instead of going to a store, I began looking for one of those vendors who sell gloves, hats and umbrellas near subway stations," said Mr Sharma.

"For about a week, because I was leaving for work so early and returning so late, I didn't see one of these vendors and so I walked around the city with my frozen hands in my pockets.

"Not only was I unable to spend money to buy such simple physical comfort as a pair of gloves, I also found little value in the status that money conveys."

So what lessons can we learn from this?

First, money habits and attitudes are ingrained from our early years. Someone who grew up struggling financially will probably always have insecurities about money, even after he makes a fortune.

Conversely, a person born with a silver spoon in his mouth may never learn the value of thrift, even if fortunes turn against him.

Although it is harder to mould our attitudes when we are older, changes are still possible with effort.

Young people just starting out in the workforce should first and foremost learn to be thrifty. Your bud-get can increase when you earn and accumulate more money.

It can even be considered healthy later on to increase spending as your wealth rises.

You should also stop worrying about money beyond a certain point.

Money can be a major source of worry and disagreements and it's unwise to let it affect us too much.

At the very least, investors should recognise that they can afford a meal in a restaurant or at least a hawker centre, after the AGM. No point in jostling and scrapping with everyone else for those buffet leftovers.