Money Dilemma: to buy gold or gadget this Diwali?

If you are a regular Firstpost reader, you probably know that we’ve done a story on Bonus Money Dilemma. There we said that as ordinary people we face several choices when it comes to our money. Should we be an active investor or a passive investor. Or, should you buy a house or stay on rent. Today, we are posing a classic Diwali dilemma; should you buy gold or should you buy gadget this Diwali.

Analysis: If you have a lump sum, say of Rs 30,000-50,000 and are facing a dilemma of whether to buy a gadget this Diwali or buy the yellow metal, you first need to answer a few questions. Why you want to buy what you want to buy. Whether it is for consumption or for investment?

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[caption id=“attachment_522954” align=“alignleft” width=“380”]  If YOU would have bought a television (any gadget) in 2002 for around Rs 5,500, the price of that TV would have become Rs 500 or lower.AFP[/caption]

If you are buying for personal consumption, find out whether the gadget is a need or a want. While, if you need that gadget (it improves your productivity at work, or decrease the labour you put-out while working at home) or is the gadget that you’ve been eyeing, more of a want.

If the gadget you plan to buy is a need, you probably will buy it anyway. And if discounts are the only reason to buy, the festival season will continue until December, and discounts will still fall your way then. If it’s a want and you fight the temptation to buy this Diwali, there is a good possibility that you might not buy it later on, when the festival season’s emotional buying desire is over.

If you face this dilemma today, 10 years back, your dad also must have faced the same dilemma. And he had two options, either buy gold or buy a television. If he would have bought gold for around Rs 5,500 for 10 grams in 2002, that gold has now appreciated to as much as around Rs 31,200. If he would have bought a television (any gadget) in 2002 for around Rs 5,500, the price of that TV would have become Rs 500 or lower.

We spoke to a couple of financial planners. One said, if it’s a need (something that will increase your productivity), there’s no harm in making the purchase. Another planner said, it has to be gold, it’s a no brainer, after all its an investment.

Of course, life is supposed to be enjoyed. But, like your dad, if you too are facing a dilemma between some gold and an iPad, we suggest, this Diwali, follow the footsteps of your dad. And see how you feel, later in years.

As far as that gadget goes, if you really need it, you will anyway land up buying that later on. But this Diwali, make it special, and different, go for gold.