As a Human being we have 2 things which distinguishes us. One is Intellect. We have a brain that allows us to think. Which means we can make a choice.

When we have a kid, we surely give him or her good schooling, and we do think we are good parents. The question is what are we doing to develop the intellect. If you can’t develop the intellect, the kid will not be able to make the right choices in life.

Let us look at a birthday party. You have a 5 year old kid…and your father comes with 2 gifts. One is an amazingly attractive toy (cost does not matter) which your kid wants, and the other is a SIP application form in the kid’s name. What does your kid choose?

Obviously in life we make such choices very very often. If we do not develop our intellect, we will always choose the toy instead of the SIP application form. Of course a kid needs a toy as much as the SIP, but my argument is that the kid does not have the intellect to make the choice.

So when we choose between exercise at 5.30 am vs a few more minutes in the bed, or fresh vegetables vs samosa or ‘safe’ fixed deposit vs good quality equity – it shows us lack of intellect. Is it?

Well, there is also the ‘Mirage’ effect. When we choose a ‘gulab jamun’ over a cup of green tea it is the ‘Mirage’ effect of IMMEDIATE pleasure vs a long term pleasure. Exactly why in the current times we are likely to find Indian debt market more attractive, US equity market more attractive – as compared to say a small cap fund sip. The ability to see the long term – and that could mean a double digit term – is not easy. Even worse, there are no rules. Buying Hdfc bank in 1994 and holding on till today would have given you awesome returns. Axis bank has also given good returns if not spectacular. However Icici bank would not have given you such returns, and Yes bank would have destroyed your wealth. Simple long term solutions are not visible, and hence the mirage example. You will see water where there is only sand.

We also tend to make easy choices. Pleasure of eating gulab jamun will be followed by the pain of being unhealthy. The painful choice of green tea would be followed by the pleasure of being healthy for a longer time. Ditto for investing. If you had undergone the pain of 1993, 1999, 2001, 2008,…you would have a great portfolio if you choose Hdfc, Asia Paints, LnT, or the Sensex. The easier choice of bank fixed deposits would not have given you the pleasure of inflation beating returns. Well, you did use your intellect AND you made the choice did you not?

So whether we should be vegetarian or non veg, or should your child go to Icse or cbsc or state board or now International board – are the choice you make for your kid. Ditto for investing choice, health – ayurvedic, or homeopathic or allopathic – which doctor which hospital…etc. are choices that we make everyday. Intellect is the training that the mind needs. The mind is emotional, the intellect is rational. So whether it is choosing good food, music, meditation, there is no denying that short term pain leads to long term pleasure. Enduring the pain, having a long term view, patience,…you need to learn all this. Learn it so well that you can teach all this to the kids who come to you! Like  a friend says you do not choose pleasure over pain – you only choose the sequence of pain and pleasure. In Buffett/ Munger language the MIND looks at the external scorecard, the INTELLECT looks at the internal scorecard.

No, it is not easy. However we have to do it. Far more difficult ONLY YOU CAN TEACH this to your kids. Not too many kids who call me “you are like a father to me” on Father’s day..have been able to implement this. Hopefully, you will.