Whenever I hear the idiom – “The long and short of it”, it sets me thinking. How can something be “Long” as well as “short” of something at the same time? Can it ever happen? Long and short seem to be so much at loggerheads with each other everywhere!!
Take for example: A company’s finances – The short term requires the company to carry sufficient funds to meet it’s current liabilities, where as the long term good of the company dictates the company to invest as much of capital as possible back into the business. A company holding too much cash in hand has a problem. But then company having no current assets is also in the soup.
Doesn’t the same thing happen for the personal finance as well? For good and safe returns on the investments, we need to invest in instruments like Fixed Deposits, but to meet the day to day expenditure we have to keep money available in the savings or current accounts.
The same dilemma is present whenever the question arises about saving for retirement or children’s education, versus enjoying a holiday abroad, or saving for future, or having a good time in present, in general.
Now, if you thought this happens only in case of money, it is not so. Let’s look at our decisions while we are studying. Short term benefits need us to get employed as soon as we complete our studies. But the long term good requires us to go for higher studies. Going after one puts the chances of getting the other in danger.
Let us take another example. I am sure you have seen this happening. Not only people’s “Vision”, even their eye sights also have the same “long and short” issues. Most people who are below 40 and wear spectacles can see what is near, but can’t see what is at a distance. In contrast, people above 40 can’t see the nearby things, but can see things at a distance.
As a Human being, most of us tend to attend to the short term, as it is more urgent. We seem to be jumping from one urgent issue to another urgent issue. But in the process, we always tend to neglect the long term, which is far more important for our growth, as it is “not required right now”.
In order to come out of this dilemma, we have to make our short term requirements so minimal, that we do not have to spend whole of our lives trying to meet only the short-term needs. Only when this happens, we can put our time, energy and other resources to focus on the long term.
This is why successful companies keep minimal current assets, and plough the rest into the business. Smart people go for sweep-in savings cum fixed deposit accounts. Smart young people join a job, make some money, and then quit the job to pursue further studies. All this in order to attend to the long term, while taking care of the short-term.
The key to success seems to be able to strike a balance between the “Long and Short of it”.