It seems obvious. The economy is slowing down. There are more challenging times in front of us. Probably it will get worse before it gets better. No, it's not all DOOM AND GLOOM but to keep imagining a goldilocks economy is also naïve.
Things were good, maybe too good for a while. There were some excesses. Some of us lived beyond our means and now we are shifting back to normal. Normalcy may take some time because of the housing inventory, stricter credit availability and some erosion in economic stability.
Is the writing on the wall that there will be some pain in the future? Consider the following
"Oil Jumps Back Above $100 on a Texas Refinery Outage and Possible OPEC Production Cut"
"At the pump, gas prices rose further above $3 a gallon."
"The market was also concerned that rising inflation might make the Federal Reserve reconsider its bias toward lowering interest rates to help the economy."
"Global banks have written down more than $150 billion from bad bets on mortgage-backed securities -- and more losses are expected to the first quarter."
"Credit-card delinquencies are rising across the nation, a sign that some Americans are at the end of their rope financially."
"The price of steel is set to rise after Asian and European producers agreed to pay up to 71 per cent more for iron ore in term-contract rates beginning on April 1, the second-largest annual increase ever recorded."
Bottomline – the speculation about recession is a moot technical debate. We are entering a period of economic slow down and the question is how severe is the slow down and how long will it last? Conclusive answers to these questions are again an exercise in idle speculation about future world events – they can be amusing but hardly productive.
Common sense financial discipline that one needs to keep in mind includes
· Conserve your money: Reduce discretionary spending and extra expenditure. Trim, reduce, defer and tighten your spending habits.
· Stick with your LONG TERM INVESTING PLAN : Don't panic and run for the door or try to time the market or ignore your investing plan. Tweak as needed but stick with your plan.
· Keep your eyes and ears open: Assess your industry, market and company health. Keep your resume current and your network humming. Readiness is the key when the job market starts to weaken!
· This too will pass: Bull, bear, bull … the tide will eventually turn. Keep your head about water, pick up some bargains and enjoy the ride.
Monday, March 24, 2008
KNOWING YOUR ENEMY – INFLATION
Back in 1985, I did remember my late mom gave me RM 0.30. With that I bought nasi lemak which cost me RM 0.20 and a cup of drink. After 22 years the price of nasi lemak has been increased to RM 1.00. The price rise 5 times after 22 years. That's inflation! However, Nasi lemak is still very affordable. Think about your fuel tank now!
Inflation is the rise in the general level of prices of goods and services in a given economy over a period of time. It may also refer to the rise in the prices of some more specific set of goods or services. In either case, it is measured as the percentage rate of change of a price index.
In layman terms, several explanation of inflations is how fast prices rise, or how fast your money becomes less valuable.
What cause inflation
There are two camps that disagreed strongly on the main causes of inflation
Monetarists - argued that MONEY SUPPLY dominated all other factors in determining inflation
Keynesians - argued that it is real demand that causes inflation
But ECONOMY is such a huge subject that there is no one sure thing that causes the other.
How to calculate inflation
A variety of inflation measures are in use, because there are many different price indices.
Two widely known indices for which inflation rates are commonly reported are the
Consumer Price Index (CPI) - measures nominal consumer prices,
GDP deflator - measures the nominal prices of goods and services produced by a given country or region.
Inflation is causing YOUR MONEY to become less valuable, if you do nothing about it.
According to this INFLATION CALCULATOR based on US CPI
What cost $1000 in 1997 would cost $1309.22 in 2007. Also, if you were to buy exactly the same products in 2007 and 1997, they would cost you $1000 and $785.20 respectively.
How to outstrip inflation
For sure, if you do nothing to prepare for inflation effect, your buying power may drop in the future.
Living below your means
Human being is a very flexible creature. When the certain products get more expensive, and it finally hurts our wallet, we will be flexible enough to use less of it. You can either
buy less of the more expensive stuff, and more of the less expensive stuff. OR
let your standard of living fall
INVEST FOR BETTER RETURN!
You just have to get your money to work harder, and get a RETURN THAT'S HIGHER THAN INFLATION RATE.
In the area of WEALTH ACCUMULATION, inflation is an enemy that approaching you step by step quietly. By the time you notice that and feel the pain of its attack, it is probably too late.
Inflation is the rise in the general level of prices of goods and services in a given economy over a period of time. It may also refer to the rise in the prices of some more specific set of goods or services. In either case, it is measured as the percentage rate of change of a price index.
In layman terms, several explanation of inflations is how fast prices rise, or how fast your money becomes less valuable.
What cause inflation
There are two camps that disagreed strongly on the main causes of inflation
Monetarists - argued that MONEY SUPPLY dominated all other factors in determining inflation
Keynesians - argued that it is real demand that causes inflation
But ECONOMY is such a huge subject that there is no one sure thing that causes the other.
How to calculate inflation
A variety of inflation measures are in use, because there are many different price indices.
Two widely known indices for which inflation rates are commonly reported are the
Consumer Price Index (CPI) - measures nominal consumer prices,
GDP deflator - measures the nominal prices of goods and services produced by a given country or region.
Inflation is causing YOUR MONEY to become less valuable, if you do nothing about it.
According to this INFLATION CALCULATOR based on US CPI
What cost $1000 in 1997 would cost $1309.22 in 2007. Also, if you were to buy exactly the same products in 2007 and 1997, they would cost you $1000 and $785.20 respectively.
How to outstrip inflation
For sure, if you do nothing to prepare for inflation effect, your buying power may drop in the future.
Living below your means
Human being is a very flexible creature. When the certain products get more expensive, and it finally hurts our wallet, we will be flexible enough to use less of it. You can either
buy less of the more expensive stuff, and more of the less expensive stuff. OR
let your standard of living fall
INVEST FOR BETTER RETURN!
You just have to get your money to work harder, and get a RETURN THAT'S HIGHER THAN INFLATION RATE.
In the area of WEALTH ACCUMULATION, inflation is an enemy that approaching you step by step quietly. By the time you notice that and feel the pain of its attack, it is probably too late.
MALAYSIANS SLOW ON PLANNING RETIREMENT.
ARE YOU ONE OF THEM?
In the survey carried out by research house Synovate, 313 working people aged 25 and above and 319 retirees aged below 75 in urban areas Malaysia were interviewed over the telephone.
The survey, part of a global study conducted in 26 countries and involving 18,000 respondents, was undertaken for the first time in Malaysia, from July 23 to Aug 27 last year.
" More than half of Malaysian workers have not prepared for retirement. Those who have, only started after 40, most began after they married, had children, or fell into financial difficulties or had health problems. The retired saved an average of RM478 a month, and the working RM704.Malaysian retirees feel that their retirement income is insufficient to cover household expenses. Their average income is RM1,243 but the amount they need is RM1,568 – a deficit of RM325Singapore's average retirement income is RM3,690, and the amount needed RM3,465; while Thailand's average income is RM1,276, and the amount needed RM903."
SOURCE : THE STAR
Friday March 14, 2008
Majority neglect retirement plans
KUALA LUMPUR: More than half of Malaysian workers have not prepared for retirement while those who have, only started planning after age 40, according to a survey.
The average age working Malaysians began preparing for retirement was 41, while retirees said they did so at 47.
"That's way too late. It doesn't give them enough time to build their retirement fund," Axa Affin Life Insurance Bhd branding and communications head Cheah Leng Sooi said in announcing the findings of the AXA Retirement Scope 2008.
In the survey carried out by research house Synovate, 313 working people aged 25 and above and 319 retirees aged below 75 in urban areas were interviewed over the telephone.
The survey, part of a global study conducted in 26 countries and involving 18,000 respondents, was undertaken for the first time in Malaysia, from July 23 to Aug 27 last year.
Among those who had planned for retirement, most began after they married, had children, or fell into financial difficulties or had health problems, Cheah said.
Their sources of retirement income included life insurance, Employees Provident Fund and personal savings.
The retired saved an average of RM478 a month, and the working RM704, figures that were considered low compared with other countries.
"Malaysian retirees feel that their retirement income is insufficient to cover household expenses. Their average income is RM1,243 but the amount they need is RM1,568 – a deficit of RM325," she said.
In comparison, Singapore's average retirement income is RM3,690, and the amount needed RM3,465; while Thailand's average income is RM1,276, and the amount needed RM903, according to the survey.
The disparity between high and low income earners in Malaysia is wide, the high-income retirees having four times more than those with low income, the survey found.
Despite insufficient income, three-quarters of the retirees said their quality of life had improved if not remaining the same, while 83% of the working group expect their quality of life to improve or remain the same.
BEFORE IT IS TOO LATE FOR YOU, PLEASE CONSIDER ME TO ADVISE WHAT IS THE BEST FOR YOUR RETIREMENT!
In the survey carried out by research house Synovate, 313 working people aged 25 and above and 319 retirees aged below 75 in urban areas Malaysia were interviewed over the telephone.
The survey, part of a global study conducted in 26 countries and involving 18,000 respondents, was undertaken for the first time in Malaysia, from July 23 to Aug 27 last year.
" More than half of Malaysian workers have not prepared for retirement. Those who have, only started after 40, most began after they married, had children, or fell into financial difficulties or had health problems. The retired saved an average of RM478 a month, and the working RM704.Malaysian retirees feel that their retirement income is insufficient to cover household expenses. Their average income is RM1,243 but the amount they need is RM1,568 – a deficit of RM325Singapore's average retirement income is RM3,690, and the amount needed RM3,465; while Thailand's average income is RM1,276, and the amount needed RM903."
SOURCE : THE STAR
Friday March 14, 2008
Majority neglect retirement plans
KUALA LUMPUR: More than half of Malaysian workers have not prepared for retirement while those who have, only started planning after age 40, according to a survey.
The average age working Malaysians began preparing for retirement was 41, while retirees said they did so at 47.
"That's way too late. It doesn't give them enough time to build their retirement fund," Axa Affin Life Insurance Bhd branding and communications head Cheah Leng Sooi said in announcing the findings of the AXA Retirement Scope 2008.
In the survey carried out by research house Synovate, 313 working people aged 25 and above and 319 retirees aged below 75 in urban areas were interviewed over the telephone.
The survey, part of a global study conducted in 26 countries and involving 18,000 respondents, was undertaken for the first time in Malaysia, from July 23 to Aug 27 last year.
Among those who had planned for retirement, most began after they married, had children, or fell into financial difficulties or had health problems, Cheah said.
Their sources of retirement income included life insurance, Employees Provident Fund and personal savings.
The retired saved an average of RM478 a month, and the working RM704, figures that were considered low compared with other countries.
"Malaysian retirees feel that their retirement income is insufficient to cover household expenses. Their average income is RM1,243 but the amount they need is RM1,568 – a deficit of RM325," she said.
In comparison, Singapore's average retirement income is RM3,690, and the amount needed RM3,465; while Thailand's average income is RM1,276, and the amount needed RM903, according to the survey.
The disparity between high and low income earners in Malaysia is wide, the high-income retirees having four times more than those with low income, the survey found.
Despite insufficient income, three-quarters of the retirees said their quality of life had improved if not remaining the same, while 83% of the working group expect their quality of life to improve or remain the same.
BEFORE IT IS TOO LATE FOR YOU, PLEASE CONSIDER ME TO ADVISE WHAT IS THE BEST FOR YOUR RETIREMENT!
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