Every Dhanteras, the Iyer family performs three rituals: they clean the house, light the lamps and buy a small gold coin that nobody has ever sold. This year, a new ritual was added by the youngest member of the family, 14-year-old Aditya, who came to the jewellery shop with a calculator.
“Why do you have that?” asked his father.
“To check the making charges,” said Aditya, as if it was obvious.
The salesman behind the counter, who had sold gold since before Aditya’s father was married, smiled at the calculator the way a lion smiles at a mouse that has just joined the forest.
“Sir, what weight are you looking for?” he asked.
“Five grams,” said Mrs. Iyer. “Something auspicious.”
The salesman brought out a tray of coins stamped with Lakshmi, Ganesh and, in one case, a small elephant of uncertain religion. Aditya picked up a coin and tapped on the calculator.
“Today’s gold price is this much per gram. Five grams makes this much. But the coin is priced at this much. That is eleven per cent extra. What is that eleven per cent?”
“Making charges, beta,” said the salesman kindly.
“For making a circle?”
There was a pause. Mr. Iyer coughed. Mrs. Iyer pinched Aditya’s elbow, which in the Iyer family is a very effective parental argument.
“It is the craftsmanship,” said the salesman with great dignity. “The stamping, the finishing and the box.”
“The box?”
“It is a very nice box.”
Aditya looked at the little red velvet box. Honestly, it was a very nice box. He conceded the point.
They bought two coins. On the way home, Aditya continued his audit in the back seat. “If we sell this coin tomorrow, we get only the gold value and not the making charges. So we will lose eleven per cent immediately.”
“We are not selling,” said his mother.
“Then why buy?”
“Because it is Dhanteras.”
“That is not a financial reason.”
Mr. Iyer, who had been silent behind the wheel, finally spoke. “Aditya, ten years ago I bought a coin like this for ₹2,300. Today it is worth many times that.”
Aditya considered it. “So the coin is a bad deal today, but it was a good deal then?”
“That,” said Mr. Iyer, relieved, “is called long-term investing.”
Aditya thought about this for the rest of the drive. As they reached home, he said quietly, “Then I would like one more box, for the next ten years.”