I recently started a blog called The Coloured Paper where I post articles on all things gold, silver and money. Do drop by for more and I hope you enjoy this one!

People in the US spend an average of around $942 on gifts each year. That’s about $1267 in terms of Singapore Dollars.

It’s definitely a big pinch given that the money spent is not even for ourselves. $1267 is one third a fresh graduate’s monthly salary, which can be used for annual insurance payments or to even make a study loan repayment.

Knowing this, gifts are the furthest anything can get from being an investment. By investing in something, you expect it to appreciate in value or give you back something of value over time like an income stream.

Gifts are actually the perfect tool to facilitate this. Let me explain.

Gifts are tools to keep invaluable connections

Gifts extract a very unique and important kind of value between you and the recipient; that is the maintenance of friendship and connection. The wealthy give gifts to maintain relationships instead of impressing and pleasing their recipients.

These relationships in turn gives back an ‘income’ in terms of knowledge, career/business opportunities or even more connections.

Everything the wealthy do maximises the value they can extract from every action they perform. Gift-giving is just one of the actions the wealthy has fully optimised that value-adds to their wealth.

That means the people they give gifts to should also be those they want to keep close within their social circles. Their connections are their assets, and gift-giving is simply a way to remind the people within their network that “hey, I really cherish this connection we have.”

We can learn from the wealthy by reserving our gifts for those who matter; our loved ones, close friends and those that benefit our professional careers. By giving gifts, it is simply a reminder for the recipients to know that they matter, and this does wonders for maintaining relationships that value-adds to our lives.

By gifting a certain someone, you are investing in your relationship between the both of you be it intimate or professional.

Gifts are a bad investment if you don’t plan ahead

Now that you know who to give gifts to, it would still be a complete waste if you gave a gift that made completely no sense to its recipient. It’s like investing in a stock without doing your due diligence.

Of course, you could definitely buy a bottle of wine for a wine lover. But what if the recipient has no specific preference or wants?

Buying something expensive could work to show your appreciation for the connection you share with the recipient, but it definitely is not sustainable if you have many friends or family who are like that.

If your gifts are not thought out well, then they become expenses more than a tool for you.

One way of going about this is to simply ask the recipient what do they want to have as a gift.

People actually appreciate gifts they asked for more than those they did not and have no need for. Worse still, undesirable gifts can negatively impact the recipient’s view of the relationship you have with him or her according to a study done by psychology professor Elizabeth Dunn.

So there’s no harm asking. Just avoid buying any random gift for the sake of it as it could backfire and damage your relationship with the recipient.

You can simply write a card and send your sincere wishes. Additionally, writing more than just a wish can make the card feel more personal.

By planning ahead and preparing your gifts with the recipient in mind, your gifts will be far from a bad investment and take form to what they should be - reminders to their recipients that we cherish our relationships with them.

Summing up,

Gifts are like bad investments without the right perspective about it. With proper planning, it becomes a tool that maintains invaluable connections and friendships you forged. You do not have to give expensive gifts to maintain these connections. All you have to do is to plan your gifts ahead with the recipient in mind.

They say your network is your net worth. Investing in the right gifts for the right people is like investing in the strength of your network. In time, your net worth will be the eventual beneficiary from all the gift-giving and you will be patting yourself on the back for making one of the best investments in your life.