The Time Value of Money | A Story of the Huluppu Tree

The coin is a symbol for money. It has a face value. In addition to a face value, the coin also has a time value. We hope, as we always do, that the value of what we bring to the table grows over time–much like a plant or a tree. In the earliest days of commerce, when the world of finance and abundance was tied to concepts of the fertility of the land; we saw money in terms of agricultural abundance.

For a field to flower–it needed water, a good gardener and foresight. Foresight is not just about predicting possible futures, but is also rooted in having a clear vision of what you would like to grow in your field. In many respects, the domestication of plants was no different to animals. Some plants could be domesticated; while other plants couldn’t.

In The Epic of Gilgamesh, there is a story of creation myth that features a tree. Specifically, a huluppu willow tree that takes ten years to mature. In my view, the myth is a historical pointer signalling the beginning of our understanding of a longer time horizon (i.e. the time value of money). This very concept did not exist in our minds when we subsisted as hunters and gatherers, relying solely on Nature to provide.

The art of planning was born. However, the texts also reveal that having a plan is not enough. We also need to be prepared for circumstances when things do not go according to plan. Ten years is a significant chunk of time. In the creation myth, when the willow tree matures and is ready to be chopped down for its intended purpose; it is found to be inhabited by a bird and a ‘demoness’ named Lilith.

The protagonists of the Mesopotamian myth–Gilgamesh and Inanna–will have to fight a series of battles before the wood of the tree can actually be utilised to create the vision that they had in their mind; which was to make furniture.

Which brings me to a simple lesson in finance: there are the crops that we grow to sustain our daily existence (mainly plants and animals), and there are the trees that we grow to create assets that may be used for a long period of time.

But even when creating assets, we can be met with difficulties right at the very end. In the Sumerian texts, it was a demoness and a bird that had claimed the tree for themselves; and the role of the protagonists was to get rid of the obstruction that was hindering their plan and their vision.

As mentioned earlier, we hope–as we always do–that the value of what we bring to the table grows over time, much like a plant or a tree. However, a plant is something we consume; whereas a tree is something we use to create assets. Which brings me to my point of short-term versus long-term horizons.

To plan effectively, we need a long-term horizon. We can only do that if we have a vision. The plan may fail, but with a vision; we know what we want and thus need only to figure out how to get there.

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