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Your parents probably told you that borrowing money is unwise. Yet today’s culture tells us that borrowing to spend is cool and thus should be celebrated. Which perspective is right?

Debt is a potent, powerful, pernicious invention. I know of nothing else like it within the complex, crowded arena of economics and finance. Furthermore, debt, as a class of financial instruments, has been around for a really long time.

The first record of a structured debt-based system goes back 55 centuries to the time of the Sumerians! Since then, our species has embarked upon a deep-seated love-hate journey with borrowing money.

Today, the expansion of credit in individual countries fuels all national GDP growth rates. So much so that a prevalent debtor culture has spread everywhere. It’s easy to grasp how pervasive that cancerous culture is by shifting our focus from the macro levels of society to the micro and then right on down to the nano scale. At that “electron-microscope” level of societal granularity, we start focusing on you, me and those we love!

Take a moment to mull over the current economic texture of your life and the lives of your friends and family. How many mortgages, car loans, personal loans and credit cards (with rolling unpaid balances) are now being serviced by the nine people you’re closest to and also by you?

If all 10 of you are representative of average working adults in any normal community, your emphatic answer would be: “Way too many loans!”


Now, zooming out from the nano level of society back up to the macro, here’s what renowned anthropologist David Graeber, a professor at the London School of Economics, explains in his book DEBT: The First 5,000 Years:

“Consumer debt is the lifeblood of our economy. All modern nation-states are built on deficit spending. Debt has come to be the central issue of international politics.”

You’re probably aware of that from what you’ve read in the financial press. But what might come as a shocker is this bizarre claim by Graeber: “But nobody seems to know exactly what it is, or how to think about it.”

Since you and I know a debt is a liability — a sum of money owed to another person or organisation or institution, then isn’t it weird that a clever LSE professor who's authored an international bestseller on this vital human subject would write that “nobody knows... what (debt) is, or how to think about it”? Evidently, as Sherlock Holmes might have declared to John Watson, “Something is, indeed, afoot!”


So, perhaps what’s required of us is a subterranean deep dive below a mere surface understanding of personal finance into the innards of debt, money, poverty and prosperity to grasp the nuts and bolts of thriving in the 21st century as homo economicus, which is just a fancy way of describing “Economic Man”.

Each of us, regardless of gender, can be described as Economic Man to the extent that our simultaneous twin goals in life are to:

1. Maximise utility as a consumer (in terms of usefulness and joy derived) from spending money; and

2. Maximise economic profit as a producer who earns money or makes profits.

For most of us, there exists a daily tussle between our consuming and producing sides. So, here’s a useful framework to think about that natural tension. Of the 7.7 billion people alive on Earth today, a little over half of us, about 3.9 billion, are in the prime working age range of 25 to 65.

Malaysia’s current official retirement age (ORA) of 60 is low by global standards. Most other countries have ORAs of between 62 and 68. So, given Malaysians’ gradually lengthening lifespans and our country’s rapidly ageing demographics, our own national ORA will undoubtedly be bumped up every decade or so.

I’m so sure of this projected trend that several years ago — after taking stock of the high levels of fun, joy and meaning I derive from my work, and after assessing my family’s fortunate pre-disposition toward long lifespans (in the 90-plus to centenarian range) — I decided to set my own targeted retirement age at 75, which, God willing, is a little over 19 years away for me.


Today, with about 3.9 billion of us working and thus actively earning money all across the planet, simple arithmetic tells us there are 3.8 billion other people alive today, young and old, who are probably only economic consumers.

In contrast, the earners among us who work for others or who actively run our own businesses are, by virtue of our earning and spending activities, economic “amphibians”. We’re both consumers and producers.

An important question we should then ask ourselves is which side of humanity do we gravitate toward: consumers or producers? At the simplest level of analysis when we consume, we spend. When we produce, we earn.

Therefore, the metric people use to measure all this consuming and producing is money, be it be denominated in RM, USD, SGD, £, ¥, €, or any other of the world’s total of at least 164 unique national currencies.

Consumers need producers to produce, while producers need consumers to, well, consume. Therefore, next week we’ll scrutinise this important dichotomy within human society and learn how our personal utilisation of debt determines our financial destiny.

© 2020 Rajen Devadason

Rajen Devadason, CFP, is a Licensed Financial Planner, professional speaker and author. Read his free articles at; he may be connected with on LinkedIn at, or via [email protected] You may follow him on Twitter @RajenDevadason.

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