Goodbye 2010, Good Luck 2011

"it was the best of time, it was the worst of time" a famous quote by Charles Dickens, a famous British novelist, best described the economy outlook of the past decade. Saying good buy to 2010, and the end of the first decade of 21 century, I say we have yet to overcome all the obstacle of greatest changes in the age of globalization.

Looking at the past 10 years, from the dot-com boom and burst, collapse of financial institutions, subprime mortgage crisis, energy price in surge to international fiat-monetary system disputes, we had and have survived so far. Yet, the real challenges has yet to come. We are approaching to the true age of changes, changes where will happen in the speed of light. Therefore, we are much to learn, adapt and act upon to build a brighter future for us and the coming generation.

As history is how we learned. People believe history does represent future in some sense. I tend to agree. history does has the tendency to repeat itself, since human tend to repeat the same mistake, even though it might be in different pattern. So, what should we learn form the past 10 years in order to strive for the coming years? What are those challenges?

There are many big event and changes happened during the past 10 year since millennium. Some i personally believe to have great impact and implication to what might come in near future. Here are some which i would like to share with you all:

1. G-20 had replaced G-8 as the major international group to regulate international economy matters. This imply that, developed country had no longer dominate the world economy. Developing countries now has played a greater role to sustain and ensure the stability of international economy affair. BRIC will play a bigger role in years to come to replaced NATO nations and Japan. The formation and coordination between developed countries and developing countries will ultimately dictate the outcome of our future economy.
2. Notrth Korea and south Korea issues will be another key event to come in 2011. From Cheonan Incident to artillery assault by North Korea at South Korea's island, the tension between 2 nation has become heighten. North Korea had since abandon her offer by United Nation on the 6 parties talk to abandon her nuclear weapon project in exchange to economy aids. China has since act upon from her passive stand against North Korea issue, to host a re-talk between North Korea and the 6 parties on February 2011. President Lee Myung Bak from South Korea had agreed on the proposal provided North are sincerely committed to resolve the problem by peace. The outcome of the event will greatly influence the peace of the world for the coming future.
3. Developing country should gradually evolve from nation that exported-support-oriented country to becoming a self-technology sustainable countries. As there most products from developing countries are imported by developed nations, the current balance accounts crisis face by developed countries will greatly impact the economy growth of developing countries. Any collapses in any developed countries now will create a domino affect to the developing countries.
4. Greater globalization will continue to come in our future. The revolution of communication and financial technology will making the international trade become more flat. As book written by Thomas Friedman, "The world is flat"; this ideology will become more prevalence in years to come. For people who still live in the industrial age idea, they will be found more difficult to live and survive in the new world to come.
5. Climate changes and environmental issues. As notice in media, our world is indeed sick. Innovation of green technology will be the next trend if human would like to enjoy the privilege to enjoy the greatest thing in life in world. Fossil energy are no longer encourage to be the primary energy source. Deforestation must be stopped. Pollution both air and water must be controlled. Government and enforcement authorities must play a bigger role in regulate industrial player in global scale, educate them on the idea of balancing between economy and environmental benefit. If we wish our next generation to see deep blue sea and green forest, we should abandon any toxic application that will harm our world. or else - 2012 might come.

Above are some of the events that we need to take precaution for the years to come. In the end it is still up to each and everyone of us to wake up and act together to build a better and greater future for everyone to live in.

Happy New Year 2011!

Businesses Marketing - Positioning

Positioning is not a new terminology in business world. yet, most people speak of it, but failed to act on it. Positioning is a essential term in marketing internally and external. In today fast changing and abundance world, market is fill with if not thousand but million of services and products. Everyday, there are new innovation being introduced to the market. Consumer are given a much more choices when come to spending. Unlike during 1960s, 70s and 80s, there are less product and services to meet the needs of consumer. Big ads on tv screen and other sale perks had become prevalence during that time. Positioning seem to not be so important during those ages. Eventhough the concept of positioning had been raised by many marketing gurus such as Rosser Reeves (1910-1984) during 1950s, on his theory about USP (Unique Selling Proposition); many businesses, small and big ignore it. Until recent years, people start to seeing the important of being different. Hard Sell is no long sufficient in order to beat the market. Consumer has become smarter when come to spending. Simply provide needs will no longer be able to keep your business vibrant, since your competitor probably can provide what you provide. Therefore, differentiation has become the key element in business as pointed by jack Trout, in his book "Differentiate or Die". The title itself had clearly sending the message to the public. Businesses now need to position your standpoint, your niche market, your philosophy, your identity, your perceive value in the consumer's mind in a different way apart from your competitor. By correctly positioning your business stand point, you are in the sense of making competition irrelevant.

The Circle of Reality - Why Most People Can't be Rich

I had attend a seminar talk by a famous speaker Mdm. Tan yang Ho. I had learned something very interesting yet truthful. It is the circle of reality in our life.

In our everyday life, we are guided by a invisible force, called the circle of reality. We are guided by the circle regardless we notice or not its existence. So, what is the circle of reality is all about, and how it affect us in the path to build wealth?

Here I will tell you how I come about to understand the circle of reality. In our earliest life, when we were child, a toddler, a baby, we have a plain big circle of reality. Everything is possible in life, as often anything we ask for, we just need to cry, and walla, our wish often is fulfilled. Life is full of joy and disappointment seem to be so trivial, as we learn to walk, we wobble and fall again and again, we never give up and believe that we will definitely be able to walk and we did. Times goes by, and we are now a 9 years old primary standard one student. Remembering when teacher had given us an assignment to draw a elephant. Everyone is so excited and draw the elephant based on their imagination with their preferred colours. And imagine yourself drawn an pink elephant with wings on it. The teacher come over and take a look at the drawing, saying :" there are no such elephant, are you stupid?". From then on, the circle of reality become smaller.

When come to puberty age, being a teenager, believing falling in love is the best thing in life. And here goes a puppy love, but soon end up with breaking up. Now life seem to be ruins, disastrous like it was end of the world. Falling in love is worst nightmare in life. Such typical anecdote and episode again diluted the circle of reality in most people life.

Soon, we grown up, and started to have our first job, we believe by work hard we can be secured and successful in life. But soon after years and so, recession set in, despite seniority and hard work, the management decided to lay off those "obsolete" and "expensive" senior executive to be replaced by young and "cheaper" executive to reduce cost. Life again full of disappointment. The circle of reality now is almost disappear . The circle of reality turn form baby age of full of possibility into life that full of impossibility and disappointment. Ever since such pattern of life, we unconsciously shape our life into what I called cynicism. We would not believe in opportunities. We rather to believe opportunities to be something too good to be good than " no harm to try". Therefore, we lose many chances in life to change our life, to pursue and ensue wealth.

This is why, most of people today cannot be rich. Most of our life have greatly destroy the circle of reality that unconsciously shape our life pattern. When he circle of reality is gone, we lose faith, we do not believe. Therefore we failed. We failed because we fail to believe in ourself, to get whatever we desire and make it happen.

Determine and Desire

What it take to become rich? It take determination and desire. For most people, they want to be rich, but they never did because they do not want to pay the price. They do not want to pay the price not simply because of they cannot afford it, but it is because they do not have the strong desire to become rich. Being rich is something like an optional, or bonus to most people now days. As we are living in the abundance civilization and longest peace time human race had ever experienced in history, human tend to be complacent. Survival are no more a major crisis inmost countries across the globe. Most of us are born to be in the world that full of everything. Just find a secured job, with secured pay, you can afford the wonderful things in life that even a king could never be able to enjoy in ancient time. A big house, sport cars, and expensive vacation, is what most people, even the medium class can archive without necessary to be rich. So, why bother to live outside the comfort zone, to become rich. Why bother to risk everything they have now to become rich? Isn't security and comfort is more important? Well, as each of us are different, therefore, what is the priority in our life is different. For instance, some people panic to see a snake, and others exciting to see a snake. So, what make us different from the billionaire is the word - desire. Desire is the combination of hate and love. And as we all know, love and hate are the most powerful emotion humankind can possess. With the emotion of love to become rich, and hate not to become rich, desire create passion and determination. By then, miracle can happen since, it is often the product of determination. Determination can move mountain, determination can turn a steel bar into a fine needle. Determination can produce limitless energy to a person to archive what he about to archive, including to be rich.

New Right Brain Business Age

In the industrial age, the world economy is drive by our left-brain power - analytical strength , logic and utilitarianism. German and Japan are the best exemplar in the case, whereby, they are fast emerge again to be a formidable economy empire after defeated during world war 2. In those age, practicality and price are the essence of any businesses to outperform in the market.

In today information age, we are living in a longest peace time ever record in history civilization. We are living in the world of abundance, automation and 3 billion labour forces. In today business model, having a bunch of good engineer and high technology production system will not guarantee the success in business world. Left brain are no more sufficient to meet the consumer market today. For instance, we have a dozen of goods and services in the market now, whereby, we could virtually walk down to a 5 minutes walk shopping mall down the street to get virtually anything that we practically needed in daily life. From hygienic, entertainment, food to health care items, we have abundance of choices. All production today, compare to industrial age, are drive my automation system, manage by artificial intelligent, machines that are more efficient than human flesh in the way of left brain mechanism. Such dramatic changes has enable any business across the globe to produce a high quality product with less price. So, not the quality nor price that destine the success of a business, then what is it that matter?

In the abundance age we are living today, the key for us to outperform the rest is our right brain. The aesthetic side of our mind. Some use a different terminology like positioning or differentiate by a famous author Jack Trout. Other use the world of conceptual mind. Take for instance of a toilet brush. In the past, we purchase a toilet brush for a cheapest price, to do it job - clean the toilet bowl. That's all it mean to be marketable. But today, there are bunch of maker or factory can sell a good toilet brush. Other than it is safe and efficient to be use, other intangible element such as whimsical, beauty and colour become matter. Today people would then to buy a more expensive toilet brush than the ordinary one which possess quality such as a appearance that do not look like a toilet brush. People now are buying the art than buying the stuff. They are in buying a emotional stuff than a simple utility. This how our right brain come into play. Paula Antolleni once quote:" Design is a renaissance that combine technology, cognitive science, human need and beauty to produce something that the world does not know it was missing". Don Norman Said :" Aesthetic matter. Attractive things work better." Today, all business person need to become a designer. To think using their right brain. To create something that have identity, soul, meaning and emotion. In the new business world, it is not about price of practicality, is about the combination of "utility" and "significant". A whole new world to come that need a whole new mind to jibe.

Businesses Cycle

Business cycle is the common nature rule in economic. What goes up must come down. It is true and always true, since it had been depicted by Adam Smith since 1886. So, how we able to understand the business cycle?

Every business is drive by private consumption. For most major economy countries from G20 to 3rd world countries, private consumption making up the major share of annual gross domestic product. In the end, it is the customer that making a business to profit. Yet, most economist are only focusing on the spending pattern of the consumer. Rather they should be paid more attention to what drive those pattern. Apart form the psychological aspect, there are more about the economical aspect, that we can examine.

First of all, salary & wages is what drive consumer to spend. You could not spend if you do not have income. Unless you got a parent who left you hundred of million dollar heritage. Salary obviously is given by private sector - the employer. The economy size of company will ultimately decide the scale of salary, given there is no government wages control policy. Here is the key factor, the economy size of private sector. All private sector is funded by private investor or institution - private direct investment. The same goes to the question of "egg & chicken", "Private investment & private spending" , which drive which, which come first. Indeed, Private direct investment, is motivated by consumer spending. But, in business world, you can't dig hole only when you need to go to toilet. It will be too late. So, the motivator is what perspective and outlook of future consumer spending pattern - the future potential demand and supply. You need to place your money some place though, therefore, decision must be made, by means of calculated risk to potential projection return. Whenever there are prospective economy opportunities available, it will attract private investment. Every boost in private investment will therefore increase the economy scale of certain company. When new fund is introduced to a company, salary and wages normally will increase. New jobs will be created as well to accommodate a bigger and more aggressive business activities. Employment increase making consumer market even attractive. This will induce Productivity, hence, market supply will go up. While for every positive economy demographic, chances for demand to meet the supply is still high during the beginning business cycle. A sound proven economy activities will boost profitability therefore return of investment. Such episode will draw even more private investment. Again, more fund is received, the management of company will need to conjure new way to spend it. Here is the part which drive the ultimate break down in the business cycle. Excessive investment and mis-allocation of funds will likely to happen. While more jobs created, and there is higher productivity; there will started to plant a oversupply seed in the market. Apart from that, competitor will started to flow into the economy, since profitability had been proven from the first cycle of businesses. Now, the oversupply or market glutted will emerge, making price to go down. Profit will retreat. Less jobs will be required. No new private fund will be induce into market. Unemployment raise, making the consumer market even less attractive. And recession set in. Supply will withdraw to the limit where demand is higher again. And only then a new business cycle will begin. This how our economy work, and it will always work. You can't avoid economy bust, if there is an economy boom. So, it is always foolish to believe that market will ultimately goes up to the sky. What always make men kill is utopia optimistic. And a lot of amateur investor always got kill during the end of business cycle. Being optimistic is important, but realistic must play its role as well.

"The only way to avoid economy recession and contraction, is by to prevent a economy boom" John Maynard Keynes

Dollar Crisis - Major Impact To The Future Generation

Since 1973, under president Nixon administration, the fall of Bretton Wood system had planted a seed of global financial crisis. The new monetary system that replace Bretton Wood gold standard - Fiat Currency, had making country, especially United State to print as much money they desire to fund against imports and credits. Such phenomenal has create a irreversible disequilibrium in global financial system. On 2002, it has been reported money supply level in United state had set all time record high since peace time. The conservative estimation of 1.2 trillion us dollar of international reserve now available in the market. As replacement of dollar standard to gold standard, United state can purchase goods and services from other nation by debt. United state which her import are encompassing 75% larger than her export, has since became the major trading partner across the globe, especially those developing country such as china. Therefore, the stability of United State will direct effect the global economy health. The excessive cheap credit, Quantitative Easing policy, and the "helicopter" policy originated by Fed Chairman Ben Bernanke during credit crunch crisis in 2008, has help fuel the monetary instability - debasing the dollar. Such intention to ease a temporary pain of economy crisis and stimulation to prevent deflation as happened in Japan, will make the asset bubble easy to be created than sustained. Money are pumping into the market to encourage private sector to invest and create jobs. However, the action has cause back-fire to United State as private market started to feel confident against the credit worthiness of the country. Dollar market become less attractive, as private investors started to selling their holding. But, simply selling the dollar will not help to prevent from being part of the dollar crisis. As United State is the major import nation to most export countries across the globe, the value of dollar will direct effect to its earning. By selling the dollar and exchange to their own currency, this will simply inflated the value of their own currency therefore making export less attractive. So, major export country such as Japan and China, to avoid the negative impact to the export sector and income to the nation, they will rather using its us dollar revenue to reinvest into us dollar dominated assets. Again, such action will making assets bubble in United State even bigger. Since in basic economic, everything that goes up must come down. As the conclusion, the ripple effect will be the perfect storm of economy crisis in future, which will cost be paid by the future generation. This will not be a rhetoric. This will be the episode of the son to pay off the father's debt. The question is how the young generation be able to do it? What will happen if the economy totally collapse? Will we be able to enjoy the peacetime we enjoyed for the past 50 years? Economic has always been the reason to social stability. Weimar Republic in German during post WW1 is the best example. In my point of view, history does has the tendency to repeat itself, as human tend to repeat the same mistake again.

The Market Is More Important Than The Real Estate Deal

Location is the most important word when come to real estate investment. I am agreed. But, location is shouldn't be measured based on geographical alone. It has to be based on the market concept of supply and demand. In the idea case, a great location is based on the market that the supply is low and the demand is high. Meaning, even though a property that is located at a metropolitan city, it does not justify the soundness of the location. As in from the perspective of economic, "location" in real estate investment is the "market".

In real estate investment, the most frequent mistake that people make is making first priority on looking for a property deal. These type of amateur real estate investor always just go to any major cities, especially capital cities which the properties prices are high, and the communities seem to be crowded, starting to picking up 1 or 2 good looking houses, buying at broker offer price, and believe in a year or two, price will be higher. They always fall prey into the jargon and sale pitch that broker gave to them. They invest in gut feeling rather than a rational facts and findings.

In any place in today civilization, before looking for any property, the first priority is doing research to the market that you interested in, market research that will provide you information which related to supply and demand. For current supply normally is the number of housing start, a overhang rate of constructed building available, the new launching housing rate, and the unsold under or non- constructed units in the market. For future supply, that will be the pre-planned housing start in coming years. All these information can be obtained from well established broker firm, and real estate government agency. For the demand is a little bit tricky. Demand normally can be estimate from the absorption rate of new housing launch. In other word, it is the sale performance. Occupancy of the property in the given market also very related to the demand. If the vacancy is low, the demand is strong; if the vacancy is high, the demand is soft. Employment opportunities, schools and universities also a indication of demand for now and future. Population are in the function of employment, that the basic of economic. Housing price at particular market also has a very strong indicative to the demand. If the housing price on particular area is high, people at median income group could not afford to buy any houses. they are only about to rent. Therefore, rental market for medium cost apartment could be great vice versa. Buying right is profit when you buy, not when you sell. In order to archive that, the market is obviously more important than the property itself. Identify a market should come first when come to real estate investment!

Information Age - Change is Wealth

Berlin wall had tumbled down on 1989. It mark the end of industrial age that started 500 years ago, when Columbus sail out Atlantic ocean to seek a new trade route to east. Today, on 2010, our new information age, our new world is 21 years old. For the pass 21 years, we had witnessed the greatest pace of changes happening around us. From financial, social, politic to cultural, dozen of significant revelation and revolution had occurs. In the information age, the industrial age idea had became obsolete. For those who still live in the industrial age idea, they will lose. Industrial age idea such as the government has to take care the people, find a high paid job and work hard to climb corporate ladder, would not work in the information age. During the industrial, the problem is lack of information. Today, in the information age, there are too much information. The problem is how you be able to differentiate which information is good, unbiased and truthful. In the industrial age is how much you know that will make you rich. But, in the information age, is how fast you can learn and how compatible you to adapt with changes that keep continue coming in your everyday life that make you rich. For those we cannot keep up with the changes pace will be left out. The information age formula, Moore's law said that, the information processing capacity are doubling every 18 months. It means that, the information that you have know might expired in within 18 months. Meaning, today, you might be the king of the business, but tomorrow you might be out of businesses. In the information age, "changes" is wealth!

Insanity is "doing the same thing everyday to expect a different result"

How Energy Price Will Affect the World Economy

Energy is wealth. In today world and modern civilization, energy has become so essential above roof for our head and food on the table. Electricity light, refrigerator, vehicles, power plants, shopping complex, houses and even lamp street is powered by energy. Today oil and gas has become primary source of energy replacing coal. As we know that oil and gas is limited in supply as our consumption has set all time record high since oil field is discovered during 1859 by Colonel Drake in Titusville, Pennsylvania.

Since year 2002, oil price has been incidentally increase as consumption progressively absorbed most of the reminder of world's buffer of excess capacity, which reached 10 million barrels a day in 1986. In years past, the buffer of such excess capacity of oil being produced, natural disaster in the scale of Katrina and Rita will not produce any shock to the oil price. By 2005, even an unexpected maintenance shutdown in some big refineries plant in the world will drive the price higher. Oil price has been so sensitive as our daily consumption keep growing especially at some emerging country such as China which the consumption rate is growing at exponential pace. In US alone, there are 8 million of gas gazzling truck on road everyday, which consume up total gasoline more than all the vehicle added up in Europe.

In today market, there are many other uncertainty that will drive oil price crazy. Volatility has been highest since 1971 oil crisis in US under president Nixon administration. Terrorism that prevail across middle east and some other oil producing country will create a treat to the safety of its refineries plants. Any strike to those refineries plants will result oil price to spike overnight. It is true that there are numbers of innovation in oil and gas industries such as deep sea exploration, yet such the high cost of such operation will not mitigate the price of oil. OPEC, recently had very reluctant in increasing its output capacity to accommodate the increasing demand of oil from the world. Oil reserve from the developed country has gone very low from 113 billion barrel during 1997 to less than 80 billion barrel in 2006. Such depletion of reserve will soon run off, therefore there will be no buffer to any surge of demand from day to day. Price of oil will be so sensitive, with any sudden surge of demand will sky rocket the price. Even being reported there are number of new oil field are discovered, the refineries capacities could not promise to handle the new discovered oil, at least for few years to coming. It take years to upgrade the technology in refineries capacity, and it is very costly. Another treat is global warming and changes in climate across the globe. Numbers of disasters has been reported to hit oil producing country like Indonesia. Such unpredictable incident could create a shock in oil market.

Before the first gulf war during early 1990s, oil price has been about 20 usd per barrel. During 1991 to 1999, oil price are at the range of 20usd/barrel to 35usd/barrel. But since 2006, oil price had reach all time record high at more than 110usd/barrel. It all drive up by the factor of supply and demand. IEA (International Energy Agency) recent contingency forecast, assuming the OPEC will lag in expanding its crude oil capacity, the average world price of oil will be at 130 usd/barrel. Oil demand on 2030 will be surprisingly strong according to the IEA pundits at about 116 million barrel a day versus 84 million barrel a day during 2005. Such surge in demand which do not accommodate with proportional increase of supply will drive oil price to some astronomical number. What will you do if the price of oil increase more than 50% or even 100% overnight? What is your salary growth rate? Can you afford to drive your car anymore? What will affect to your spending pattern if energy bill is so high? Energy price will not only cause gasoline price increase but also, any businesses associated with it including transportation, manufacturing and even some other services provider. Your utility bill will be increase if the oil price is high.

Yet, not to be too pessimistic on current trend of oil price. many innovative measurement had been taken. Hybrid cars is introduced to replaced high fuel consumption vehicles. Conservative and renewable energy become more popular in developed country powered by wind and solar. Nuclear power is one of the key to replace power plant that run by hydrocarbon despite of it unpredictable aftermath reaction. Still, history had proven that most of the nuclear reactor across united state had found no dramatic side effect to people and environment. Study had justified that a great scare of Mile Island incident of interrelationship of nuclear power plant to thyroid cancer during 1979 - untrue. Nuclear power plant by prudently utilize, could create the energy that human race ever needed now. It does not emit any green houses gases as conventional hydrocarbon generated plant. Greenhouse effect has been another major issue apart from financial problem & terrorism that our civilization is facing now. Other innovative, is the battery technology. If such innovative is successful, and by apply such technology into cars and trucks on road, in US alone, you can save up 9.5 million of gasoline consumption and 2.5 million of diesel consumption daily on highway alone. If the new innovation of battery technology with alternative green energy can emerge in major way, soon, human race will be no longer rely on "black energy source". Could that be a euphoria realistic future or just a pipe dream? Only human race can answer that question with proper initiative actions.

Market Oriented or Government Oriented

On September 2008, the most major financial breakdown in the history broke out in United State. Numbers of blue chip company has filed for chapter 11. Lehman Brother had fallen during pre-financial crisis hit. Bear Stearns had been take over by JP Morgan at 2 dollar a share. The America flagship financial system has finally created the biggest creative destruction tools in the market - derivatives. Since year 2000, financial institutions had been creative in selling myriad type of derivatives to investor, touting how easy the laissez faire market enable people to make money. It was a great marketing, and great success sales. The concept is selling orange juice from orange. CDS - credit default swap is the best exemplar in the concept. People can hedge against mortgage pool that they actually do not involve or own. The banks was happy, since premium coming in from the CDS, and they think that people are betting against something that will not failed. But as usual, the "invisible hand of Adam Smith" always at operation and its always works in the laissez faire market. Greed set in, and those financial institutions start to sell more "orange" in order to sell more "orange juice" to the market. People who are no credit record can buy 200k worth of property. Maids can suddenly owned 3 houses across the street. And the bubble is on the way to growth. Like the law of gravity, you cannot defy the law of natural. Tree could not grow to sky, that is the time it die and come back to the ground. The bubble burst. And panic set in. The financial market is not at the brink of collapse. The effect is market oriented. It is the burst cycle after the boom. Yet, human nature always defy the bad side. Claims on the imperfections of market oriented economy system is the major factor of such break down. Too big to failed? Government then step in to prevent social economy problem. Government then start to bail out the problem company, or so called victim such as Citibank, BOA, AIG and GM. The new idea of save the bank and you shall save the market. But the truth is, once the money is given to the bank, the bank do not effectively liquid the fund to the market. They are on the path on protecting their own interest first before the market itself. Even on the time of recession, big bonuses are being paid out from those bailed out companies to their top executives. And, government again has to do something. More interventions are necessaries. New rules and policies is being imposed and restructured. Doff-Frank act was signed on July 2010 by president Obama to protect the consumers and investors in wall street. There are virtually no pure investment banking in United State after the event. Quota had been set on the allowable volume of derivatives. Transparency is the top priority. It is like everything you do or did, you need to ask for permission from the government. Capitalism had evolved into social capitalism. We had come to learn that central planned policies do not do any good to the economy growth. What is failed shall let it failed. What the government did is taking away the best lesson the market could learn during the crisis. They are in the sense of pushing the problem forward to the future generations. People are tend to repeat the same mistake because they know the government will save them. They never learn the lesson since they never actually fall down. Such manner of market behaviour will definitely bring the market to another crisis. The questions is, how many times the government can save it? And who going to pay for that?

Impact of Malaysia Budget 2011 to Malaysia Economy Outlook

On 15 Oct 2010, Putrajaya had announced on the her finalized 2011 budget plan. Among all the announcements, the one that will have the major ripple effect to Malaysia economy outlook is on the EPF (Employee Pension Fund) a.k.a KWSP role on local and abroad investment project. Budget plans that related to the involvement of EPF are:

1. EPF will undertake 10 billion Sungai Buloh development project
2. EPF will be allow to invest up to 20% of investment of overseas up from its original 6%. This is the very first time government has allow GLICs to be more aggressively involved in private capital market
3. EPF will join venture with UEM offer for PLUS Expressways at RM23 billion Cash

It mark that Malaysia Government has taking further step into intervene her free competitive market. The idea perhaps is adopted from John Maynard Keynes, Keynesian, whereby government intervention is needed in jump start a stagnant market to create jobs and spendings which what a market made of. However, the involvement of EPF will not do any good in jump start the market because EPF is a designated fund for retiree. It is a debt to be pay back to the people during retirement. The retirees who born on 1955-1959 which consist of more than 1 million in population will start to retire 2011. These retiree will start to withdraw their money from the pension fund. Assuming each retiree will withdraw RM50k; if my maths is right, 1 million retirees multiple by RM50k is equal to 50 billion Malaysia Ringgit. The hypothetical amount do not count immigrant which today made up quite a potion to Malaysia community. Since EPF will be putting up so much cash to its proposed project, how the fund be able to come up with the money to the retiree? The repercussion will either be simply printing more money (inflation), cut off or sell off investment in private market which will cause the stock market slump, or by increase taxes. Either one of it is very very bad for the economy.

Currency War Between China & U.S

There has been several claims by Washington that the recent economy calamity is cause by China RMB devaluation. The claim pointed that undervalue China RMB tend to create imbalance trade between the two nations therefore it is the primary cause to budget deficit in U.S. Recently, Washington, lead by secretary of Treasury Timothy Geithner has putting a lot pressure to China to increase the value of RMB. The U.S believe that will bring back a more healthy and vibrant competitive market, and balancing the widely gap of trade imbalance within the 2 nations as well internationally. Still, there are many controversy on the hypothetical theory by Washington. Taking a look at the condition of market from the perspective of economic study, there are more than just currency exchange problem. The creative destruction from the financial market - derivatives such as CDS are still prevailed and preferred by most investor might create another wave of financial breakdown. The interest rate are still all time low in record in most of the nations across the globe especially U.S that will flood billion and trillion of cheap debt into market therefore creating a ripple effect of big inflation wave which soon or later will hit the shore. Oil price is shoring as other commodities high price indicating the effect from flooding cheap credit to the market is become more serious. Government pension and social security plan that on the index of stock market with mandatory withdraw rule attached on it will cause a major break down in the market. Aging population which the younger worker are no long able to support the baby boomer age retiree will burden the society, taxes will sky rocket. Unemployment hit all time high record at prevalence of 9.6% in U.S. is the major problem. On the outlook of current economy condition, the low RMB actually is an buffer to the major impact of financial perfect storm that about to hit shore. Without the low RMB, there will be no more cheap products and services available in the market, therefore hyperinflation will prevail. The low RMB is a key factor in today market to "buy time" for all nation across the globe to prepare and restructure the financial policy in order to face the inevitable incoming real financial perfect storm. On Octorber 2010, China had announced that they will increase the flexibility exchange rate of RMB gradually, it shown for the very first time in human history after the 1929 financial disaster, human race are about starting to see a real financial prefect storm that might bring down the whole world economy in a major way.

How Government Fiscal Policy Would Affect The Market

The government finally announce to reduce taxes and increase spending to create more jobs. It is a good news or the bad one. Most of us would probably think that is a tremendous event to celebrate. But, think twice, there are no free lunch in this world, at least in the world that we come to know.

First of all, we need to see everything in the perspective of economic. The economic is made of constant exchange of resource in the community - the market. The resource we refer to often are in the form of currency - paper money. The paper money now is called the fiat currency, which it is backed by the government which its value is direct affected by the stability of government. The currency flow from person to person, institution to institution, entity to entity to make our market constantly vibrant. The current will die if it does not move, same like the electric current. Therefore spending is a form of exchange which required source of income, method of payment and party to receive. Government primary income is coming from taxes - the source of income. And it normally spend in the form of incentive, taxes exempt, subsidize and government project that provide jobs. When government need funding from new project or subsidize the citizen in the form of tax rebate, they need source of income to support it. They either can tax the private sector or borrow money by selling bonds or by simply printing more money. Since if the government vowed not to increase tax and promise abundance of government spending for benefit of social, the only way to fund such vow is by minting more currency. Well, most of us would think, what is the problem with that? The problem is inflation. Imagine when suddenly paper currency flooded the market, everyone will suddenly have more currency to spend. Yet the supply of goods and services available do not increase at the pace of government is printing the money. The demand is more the supply, therefore price increase phenomena will likely to abrupt. It is exactly what happen during post world war 1 of Weimar Republic in German, 1990s financial crisis that swept across south America like Argentina and Mexico, and 1998 Asia financial epidemic. So, whenever the government is making such promise to win vote, they are in the sense of conspire to steal from your money by dilute the value of dollar that every single person is holding. It does not make any sense if you could have a million dollar but only can buy a bread.

The Force of Globalization - The Invisibile Hand of Adam Smith

On 1776, the father of modern economy, Adam Smith promoting the laissez faire economy system, advocate the free open market system by far the most effective way to ensure, regulate and sustain the stability of the economy. The idea of "invisible hand" within the laissez faire market, which its force originate from the sheer will of individual inside the market to strive and act for self-interest, will automatically steer the market instability back to its stable state. Yet, the theory has been debated many centuries. Controversies had been raise by many new-borned economist after Adam smith age, such as Karl Max, John Struat Mill, David Recardo, Parson Malthus, John Maynard Keynes and Milton Friedman. Among many controversies that raised since 300 years ago, one issue that has been always be on the heat debate table is the government role in the free market system. The arguement of, "how can the market regulated and provide neccesary safety net without the government intervention?". From the market boom and burst since the golden age before War World I, post World War I, 1930s financial crush, Post War World II, 1970s oil crisis, 1989 recession, 1998 Asian Economy Epidemic, DotCOM burst on 2000s and the recent financial crisis originated by the "creative destruction" of financial instrumentations; many of those incident had provided anecdoctel evident fraud and rocketeering are the main issue of financial crisis to happen. Some participant that using the "loopholes" in the free market had reap adnormal high profit from the market system in exchange to putting a timer boom in the system. Therefore, government and politician to win vote, had taking such issue to interven the free market system. Protectionism, anti dumping, anti trust act become prevail in our new economy system. Yet, those intervention did not do much good to the economy, instead impair the economy growth. Especially in today globalization world that the system itself is made by the Adam Smith's invisible hand, liberal market need to be sustain. For nation that resist the invisible will jeapordize not only its own domestic economy but also its counter trading partners - other nations. Japan is the best exampler by far how deteriorating the impact of government intervention toward it economy growth. The globalization economy system is not perfect by its past performance, yet, the up and down of the market is the a nature of the economy made of. We shall not resist but to accept the nature of the economy by understand the economy, not try to change it. How can we fight the hand that is invisible? It is like fighting the gravity!

World that without paycheck

Well, most of us are brought up in the environment to study hard, get a good grade, graduated and find a high paid secured job. Job and security has and had always been the highest priority in almost everyone life in today civilization. What if a person who has a high paid job, with good benefits and government pension plan, realize that he or she need to start invest? Usually the comment response if our friend ask us about that is, keep you day time job and do a part time business, so that you still got a back up if you failed in the new arena. Having back up is good. But, always backup is killing us from giving all to archive our goal. Back up always been a strongest resistance or excuses for people to give up when obstacle set in. The point is what is the main motivation that push you to continue live on? It is security? Comfort? or freedom? For the apocryphal scenario mentioned, the person who give the feedback and the person who accept the feedback, are people who value comfort and secure above freedom. Well, it does not mean is a bad choice. It is a almost the best choice for most people, especially who has too much commitments or too much to lose and at the same time sceptical on the word of business and investing. But for those who value freedom above everything else, quit your job and focusing on the new arena with passion and perseverance, he or she could gain more important thing than just simply wealth. Because, he or she who could break through the cage of average, unchained themselves from the 8 to 5 routine, the world of pay check, 40 hours a weeks minimum routine dictate by the company or superior; he or she can see the world very few could see; a world that without pay check, a world that he or she could finally learn the essence skill of live, the skill of be able to survive at any kind of circumstances, the world of abundance. Imagine, if you rich by having a high paid job or part time business or both, and one day, a market crush, not just you but everyone has lost everything they owned, can you be able to survive? Imagine the psychological stress that hit into your life, the world of have nothing to start with. Because, the market can take anything away from you, the job, the house, the bmw, the jewellery and the money; the only thing that will always stay with you is what you learn during the process of building your wealth. The process that build up your potential. The environment and reality of without pay check that push you to go beyond your limit. It is truth that for everyone is much stronger than what we give ourselves credit for when a proper stress come into our life. You need a good gym to build a good physical. Therefore, you need a world that without pay check to make you a truly successful, coming from within type of wealthy rich tycoon. So start young while you have the most valuable thing that money could not buy - TIME.

Mistake in Investing

Is is good to know where you from, but it is more important to know where you are heading to. That is why the wind-shield is so big, and the rear mirror is small. Often people who wanted to invest but never invest, is they care to much about the pass. Yet, I agree that bad pass experience could be very harmful to people. That is why we has a psychology sickness syndrome called post traumatic disorder (PTDS). However, the bad experience is not that bad if we could see the another side of the coin. Asia richest man Li Ka Shing once said, "Never look good as too good, never see bad as too bad". Simply mean, every good experience has its drawback, same goes to the bad one. It is how we, ourselves to turn the bad one into something not bad, and helpful. Every time, I experience or heard other bad experience about investing and businesses, a.k.a mistakes, I would not trap into the cynicism atmosphere. I simply focus on what I could learn from the mistakes. We all learn from mistakes. Mistakes make us stupid once, smart forever. That's why i love to make small mistakes, and bit by bit learn from it, so I could become smarter. Once you focus on what you could learn from the mistake, you could more focus on the future, future that you dream of. The pass is passed. It will only become a memory or memoir, which in fact has very little force to dictate where you heading.

Job Security: Giving up your life's Steering

Job security is a fad idea among the middle class and industrial age people. Most of us leave school with the reality to find a high paid, jobs, good benefit, a social pension in order to survive. They think their life is in the mercy of government and big private company. A secured job is more desirable than anything include times to spend with their family. They think is the job that feed their life, but the truth is, they give up their life to the job.

Today, we are talking about democracy, freedom and human right. I would said, that is just a figment of imagination especially, today people, at least most of us are living by job security. Freedom is to do what you desire to do at any time without encroach others freedom. Do you have a freedom if you on a job? Can you choose to sleep for another 5 min in the Monday morning? Can you say no to your bosses? Can you live without your job? Are you really in control and steering your life? What if tomorrow your bosses decided to fire you? How long you be able to live without your job? Can you sell your job? Can go to see your son football game in the middle of meeting? That's the freedom i am talking about. Once we in a job, we often use the words responsibility or obligation to be the excuse to keep us on job, and scarify others we wish to do. Job become our priority because that is the only reality people believe in order to survive in today society. But, people had forgot, less than 100 years ago, most of people are small and medium entrepreneur. Everyone is so creative and survive without a job. Not until giant corporation such as Ford created by Henry Ford during early 1900s, people started to give up their small business and enrol in job and security. The transaction from the spirit of entrepreneurship to job security since early 1900s has trap most of human in giving up the steering of their life.

So, by principle definition of job security, it mean giving up control in your life. It is okay for those who like to become passenger, but if you love driving, and wish to drive yourself to the destination you desire, it is best to give up the idea of job security and start to live yourself in the world that without a paycheck. All you need to do is to get educated financially and make yourself financially free. Doing the same thing everything would not change the outcome of your life, so if you want a different life, make the move today and start doing differently.

Expecting something Difference in Life

Albert Einstein once comment about insanity is "people tend to do the same things over and over again to expect a different result". I tend to agree with him. Most of us are doing the same routine every single day and hope some day our life will get better. The catch phrase of "it will be ok, don't worry" keep people doing the same routine every day. They go to work, feed the dog, mow the lawn, going shopping, cling on a pay check, buying expensive cars and house, save some money, spend the saving when "unexpected" event occur, hoping the government will someday help them. These familiar routine are what today people experience and practising. They want a difference life, yet, they fail because simply they do not change for what they do. If you want a different life, you need to change the way you doing things, or else nothing will change. In richdad poor dad series books, Robert Kiyosaki once mentioned that if you want to see your future, look at the 6 persons closest to you, you will see your future. Unless, you willing to change your life style and the way you live... nothing can be changed.

Change Your Idea

"Change" is the key to become rich. Yes! All we need to do to become rich is by changing our idea, our thought. It is free to do it, and will cost you nothing. However, we often heard "it is easier to change a dynasty than a person thought". Metaphorically, it means for most people, changing their idea is very difficult.

How to change your idea? For me, it take courageous, commitment and discipline. There are differences between rich idea and poor idea. The poor always said:"study hard, get a good grade and find a high paid job". But the rich would say: "study hard, get a good grade, and buy a good business." The poor would say:"I could not afford it", but the rich would say:"how could i afford it".The poor could say:" i couldn't be rich because i has a kid", but the rich will instead say: " I need to be rich because i have a kid." These are some of the generic difference in term of idea between the rich and poor. The idea is the one that feed their brain into action to do the things that make them become what they became now, rich or poor. The idea is the one that motivate people to become rich or poor. So, stop using the poor idea, and start changing your thought and idea if you want to become rich and retire young.

Ways to Find a Great Investment Opportunities

There many ways to find a great investment. There specifically some of it which i personally think is very useful as a guidances. Here are the nutshell:

1. Time where economical, political or technological changes.
2. Depression or recession. During this time, amateur is selling and true investor can going back to the market to buy the best deal at the best price.
3. Personal tragedy or calamity. During personal tragedy or calamity, they are desperate to exit, therefore you could get great bargain deal. It might sound exploitation to the victim, but this is one of the best way to find a good deal.
4. Do not follow the crowd during the economy boom. Amateur are always coming late. That apply to both buying and selling. When taxi driver is handing out stock tips, it is time to sell.
5. Know your numbers, do not be a guessing gambler. For every deal, good or bad shall be accountable. This where accounting is kick in to place.

Control over your Information

On 1989 Berlin wall came down, industrial age officially ended and information age started. Today, the information age is at 20 years old. In the information age, how much you learned is not as essential as how fast you learn. Today Moore's law stated that information processing capability is doubling every 18 months. It implicate that the information we get now will likely to be obsolete after 18 months. In the information age, virtually everyone can get all kind of information by clicks. This simple changes in today civilization has making opportunity to everyone to become rich never be easier. During industrial age, lack of information are always the factor for the poor or middle class difficult to be rich. Most of the valuable information are only accessible for certain group of people - the rich. But, at the information age, everything is on the world wide web. In today world it is not the lack of information, but too much information. Therefore, we need to know how to identify and distinguish the validity of the information. Control over the information you gather, and know how to manage it is today number skill to become rich and retire young. The one who can't control the information will find it difficult to become rich since they do not know how to use the information nor perhaps the information is not valid. As this apply to investing in stock, real estate and businesses. Remember as a professional investor, lack on information will bring you back to the stone age, and overload on information will fall prey to predatory con-man. So, manage your information well, and you shall be able to gain from the information you gather which virtually costless.

The Price of Being Rich

Everything in life has a price. And the price of something is not always measure in money only. So, what is the price of being rich? Many so called financial experts are touting on financial frugality, asking people to live below their means, getting out of debt, save money, clip on coupons on sales, buy on cheap vacation and drive a second hand car. These financial expert believe in the price of being rich is to be cheap. Yes you can be rich by being cheap, but the problem is, even you are rich, you are still cheap.

For me the price of being rich is to be financially educated, learn to manage risk, willing to make mistakes, always be humble, be generous and continuously learning. Being rich is not so much to have a lot money to invest, but to be a person who himself is rich. It is the "people" thing that is the price of being rich, not the material or external factors. So, start asking yourself how bad you want to be rich? And would you willing to pay the price?

Leveraging Other People Time

Leveraging simply mean to do more and more with less and less. This is the second important words in business and investing. For most people, leveraging only can be related to money, debt and bank. Nothing could further than that. Leveraging also can be related to intangible elements such as relationship, health and time. Time is one of the most important and valuable things in life. And time could be simply mean as speed. In today world, getting rich is not difficult. But getting rich quick is need high financial intelligent. It will be useless to become rich at the age of 90s, when you had consumed your whole life to achieve it. You might be rich, but you has no time to enjoy it. So, to buy time, you need to leverage it. We only have 24 hours a day, 7 days a week, and 365 days a year. That is the maximum time, we could produce by individual. To accumulate wealth and make it growth, we need mass of time. 24 hours is definitely not enough. To solve the problem, the rich has come out with a brilliant solution - other people time. This why most company wiling to pay out hundred of million of paycheck every months to their employee. They pay them for their time. They leverage other people times. If you can leverage one more person time, you now has 48 hours, if you have 3, you got 72 hours, and if you have 1000, you now have virtually 24000 hours. If a project to accumulate 1 billion dollar require 240000 hours to complete the task, by numerical term, if you pursue by your self, you need at least 10000 days or 27.39 years to work it out, not to count the time of sleep, eat, social and recreation. yet, if you got 10000 employee work under you, you could have achieve the 1 billion dollar by 1 day . Consider the paycheck for 10000 employee is at 10 million dollar of that month. You virtually earn yourself of 990 million on that month, while only require 24 hours to complete the task. So by leveraging other people time, you not only could complete the job faster, you can have more ideas, more diversify skills and more alternative to achieve wealth and make it grow. In other word, leveraging other people time is the key why rich are getting richer and the middle class and poor remain poor.

First Who..Then What

What do we try to do? What should we do? What is the perks? What is the objective? There are so many "Whats" before we embarking to achieve something. The truth is, people always trap in "what" before commencing any actions to achieve what they want. For my opinion, it is the "who" that is really matter. We should change the concept of "what" to "who" in order to success in life.

Skills and knowledge is important. Especially come to "What" questions. Yet, skills and knowledge can be teach and trained. It is not the birthright or genetical. Therefore, knowing what to do and possess the skill to do it is not really going to guarantee you to success. But, "who" or should I said behavior, character and belief is difficult to nurtured. You can't send a person to 5 years university or intensive 5 days short course, expecting that will change a person behavior. It is almost impossible. The old saying in Chinese, "it is more easier to change a nation dynasty than change a person character", has proven to be truth by many main stream professional physiologist. Discipline, ethic and a strong heart is the essence to dictate whether a person would success or otherwise. There is why, we seen many A students who graduated from college and yet failed in their life. Yet, many C students who drop out of high school end up to be rich and successful. It does not mean that education is not important. What I trying to say is that, it takes behavior and positive character to determine a person's chances of success. If we examine those C students who drop out of high school, they are the one who learned from the failure during academy times, and change in behavior, and strive to success. And those who possess well-trained skills, graduated first class from university, they do not have a good character therefore could not strive well in real life regardless how educated they are.

The points is, before ask yourself what to do in order to success, simply ask yourself, what should your be? Who to be? That in order to bring you from point E to point A in your life.

Entrepreneurship: Words of Life

There are slow words and fast words when come to investing. The rich use the fast words and the poor use the slow words. In Sunday school we learn, the words become flesh. It is what you speak in words that reflect what you are. It is the words you speak or spoke that entice us to action on what we preach. Words can motivate and de-motivate us in doing something. Slow words make you poor and fast words make you rich.

I believe there basically 3 big words that dictate people life: (1) Security, (2) Comfortable, (3)Freedom. Each words are speak of different context and content. Each word has different reality. Therefore, people will choose different life based on which word that is the highest priority for them.

People who preach security will be put roof on the top of head, food on the table at their highest priority. Job security, high paid jobs, government pension funds, social security and other perks are at the highest priority for them. These people could not to tolerate month without paycheck. They could not associate their life with risks. They are the group who belief their future is under responsibility of government and company. They are the victim society that believe everything should come from outside of them. External factors are the one that dictate their life. Most of the middle class and poor people are fall into this group.

The second type of people is the one who preach comfortable. This group of people are the group who are smart and responsible to their life to certain extend. They believe that everything they could have today is the product of they did yesterday. But being rich are not important to them. These people can take risks, but until certain level. They have their own threshold. They love to be comfortable and love to do only what they like to do only. They are the often self-employed class people or the high paid executives. They invest some portions of their money with moderate return with moderate risks associate with. They just want to have a big house, a vacation home, 2 big cars, high standard of livings and perhaps a million dollar in bank. They are the group that may look rich, but they spend almost as high as they earned to make them self comfortable. When any new idea that introduce to them which might disturb their comfort, they will shun away, and go back to their comfort zone. This class of people are those who at the high managerial position in big A firm, professional such as doctor, lawyer and engineer. These people still working for money.

The third class of people are the rich who want only freedom. These people put freedom above anything in their life. They are the group of people who always associate with risks. They love risks, because it is the only way to achieve freedom. Freedom is the product of being financially free. Financial free is a byproduct of being rich. And risks can bring you fortune people could never be able to imagined once it is managed well. Therefore, they learn how to control the risks and weight the reward ratio to the risks. If the rewards outweigh the risks, they can afford to fail as many as they could in order to success once. They love challenges and achievements. They are the one who come out of no way, no title, no money, but with passion and idea of rich. They are the one who could create fortune from nothing. They are the riches, the one who create jobs, build buildings, and the one could make a nation prosper. The are the true capitalist.

"The true happiness is the product of achievement. The true achievement only can be realize when risks is associated. When there is no risk, there will be no achievement. And if there is no achievement, there will be no true happiness."

Quote By Ray Kroc, Founder of McDonald"

Real Estate Investment - Location, Location, Location

Location is the most important word in real estate investment. At least it is what everyone said so. But for me, location is not justify from the geographical perspective alone. Great location should be justify base on the principle of supply and demand. Regardless of physical condition, government incentive, promotion, or any rumors local opinions, all great location can add up to one and only one simple truth - low in supply & high in demand. Even in the hottest area of your near by downtown, if people just do not like to stay there (low in demand), regardless how great the site look like, or how convenient the location is, it is never consider as a great location.

A great location possess quality of drive by visibility. Drive by is the most effective and cost efficient advertisement means when come to rental property. The more cars that pass by your property and can see the "for rent" sign, the higher chances your investment to success.

The second typical attribute to great location is rare quality. Rare quality such as natural phenomena ie waterfront, great scenery & greenery can draw desirability of people to stay there. It is why, if your unit are facing a city skyscraper, often the price is higher than the one which facing a garbage dump site.

Employment is also a key to great location. People will only move to the town that has plenty of jobs. That is the fact! A place or town or city that is limited supply of jobs couldn't be any better a location compare to a stranded countryside village.

The bottom line is, any evaluation of location, do not caught into the delusion of geographical quality. In the economic term, any investment in real estate should be justified base on the most basic simple rule - Supply & demand.

SMART Goal Setting

Goal setting is very important to success. At least it is what those who been a successful person said so. It is easy to caught with lexicographical definition of goal, vision and mission. For me, goal is simply something you try to archived. And the goal must be written in clear manner. A goal that is not written and review frequently is simply a dream that could never be realized. A good goal should be included "SMART" concept which the acronym of Specify, Measurable, Attainable, Realistic, Time activated. For example, in real estate investment, "to be rich by investing in real estate" is not a good goal, simply the context is too broad and ambiguous. A good example goal pertaining real estate investment could be "to invest in 2 rental single family property (specify) that provide 10% return of investment annually each (measurable & attainable) in X community area (specify) in a year (time activated and realistic)." A SMART goal can make us focus, and by stay on your lane, you be able to shorten the race.

4 Things that Make People Poor: #4- Taxes

In today world, 2 things are guarantee when we are born - death and taxes. Taxes is the single largest expenses in our life. We are taxed when we spend, save, work, and die. For most people who are in the employee or self-employed quadrant, you have no control to your taxes. Tax is the first expense in the employee expenses column. The government will make sure that they get their shares first before you do. In most country, the more you earned, the higher percentage you are taxed. This will very difficult for most people to become rich. In America, high paid employees who are on the highest tax bracket will pay 50% in taxes of their gross income. Malaysia is about 30% to 40% range. Korea at about 35% to 45% range. This simply means, the higher your paid, you need to work almost 2 months in order to get full pay of 1 month gross salary. This single rule will make most of people who are in the employee quadrant stay poor.

4 Things that Make People Poor: #3- Inflation

Inflation is a thief to everyone. It is a thief that make most of us poor.

Inflation is simply means raising in price of goods especially the commodities such as oil, grain and rice. Another words, inflation make the value of every dollar you have in your pocket worth less. Every time, when we heard government is increase their budget, launch new social benefit program, hire more government servant during the recession, promise the citizen that there will be less taxes but more benefit to the society, they are in the context of hiring inflation. Why? Because, those program and promises are expensive, someone has to pay for it. Since there will be no additional taxes on the people, how they get the money? The answer is, they simply print it. They are printing pseudo money and flood the market. Yes! It is legal for the government to do that. In most case they called it minting. Since our current monetary system is fiat currency, it is the money back by the government, not the hard asset backing on it. So, as long as government can impose delusion to the community that they are strong and capable to pay back any debt, the currency of that country will be valid regardless how much they printed.

But the problem is when there is too much money is printed. The private sector simply could not supply or produce goods as fast as the money is printed. There are so much money suddenly being introduced in the market, making the market felt a delusion of rich. The market now can buy more goods. Yet, since the goods supply is constant, commodities could not be created (ie. gold, silver is god made money), demand of goods & commodities is now higher (since people now have more pseudo paper money printed by government), the market self-regulated law - demand & supply will automatically adjust the price for every goods higher. Since, most money that is newly printed by the government are often goes to the riches, inflation do not much have impact to them. But to the poor, who are employee or self-employed, working hard and saving hard, they money value is diluted by inflation. Every single dollar they have, is worth less, even the amount is never lost. The stuff they could buy is less than what they could buy years back. They are getting poorer the most they save. Interest rate of 1% or 2% given by the back are less than the inflation rate. Their money is been stolen every time the government increase the money supply. This is why the government do not need to taxes you, since they could take it from you by simply printing more! This is why most people now are getting poorer and poorer.

4 Things that Make People Poor: #2- Debt

The second thing that make most people today poor is the word called - "debt".

Debt is why most of people today are poor. The following is the typical story how debt (bad debt) affecting most people life. Consider a young person who just come out to work. He or she will rent a small apartment and work as an employee. Then he or she will meet someone. Times goes on, they fall to each other, then they get married. For time, life is sweet and fruitful, since now 2 person can live with 1 expenses. Now, they both able to set aside a portion of money every month as saving. Then, they finally be able to buy the dream of most of young couple, their first home from their saving as down payment and taking debt from bank. Now, they have a new home, so, they need new furniture and new toys. So, they become prey to the ads like easy payment and delusion cheap credit. Few years later, they finally got their first baby, and now they need more money to give a good life to their baby, thus, the only solution, more debt. By now, the couple will forever trap into debt, working for debt. Everything they earn, will go back to repay their never repayable debt. And they end up retire poor and destitute.

The story has illustrated the most typical bad debt that make people poor:

1. The long term debt - home mortgage
2. The short term expensive debt - unsecured debt, personal debt, credit cards

This simple one typical life pattern has cause million if not billion of people globally unable to become rich, and live poorly forever after.

4 Things that Make People Poor: #1- Retirement Plan

There are 4 main things that make most people are poor today. The first thing is:

The retirement Plan: Common known as 401k in America, EPF in Malaysia, CPF in Singapore and Superannuation Plan in Canada. These are the plan that supposingly structure by Government in many countries to enforce employer and employee to set aside a percentage of money from the pay check every months. The so called government guarantee pension fund, which can and must be withdrawn by retired at the designated age, such as 75 (America), 58 (Malaysia) And so on. The problem is, government didn't really just save the money collected from the employee and employer. They spend it. They will utilize the money for government budget. The thing become worst, when there are so much money being collected, the government then discover away to use the fund to boost the economy. Most of the Pension fund in any country are the major share holder in the public listed stock market. It means, most of the stock is been purchased by the fund. Every single cent is collected, will go into the market. It is why, we can see the market mostly are trending up, because the fund has create a figment of illusion that there are always more buyer than the seller, therefore the price goes up. This mean, the pension fund is the index of stock market. The fund today are so rich, it due to the baby booming age, who mostly made of employee. They are the major contributor to the so called public pension retirement fund. Since, the law has regulated that every retiree to withdraw the money from the fund, and people will definitely withdraw the money, this will cause a disastrous to the market. When the baby booming age started to withdraw the money, the pension fund, by law has to give the money back to the retiree by selling the stock. This will then cause the stock market to crush, since there aren't many people buying. It is not just a matter of people could get the money that been promised by the government. It is the macroeconomic problem which will cause the whole market crush, panic and ultimately social economic problem. When this do happen, most people will live their retirement age at the destitute.

The Art of Investing - Professional Gambler

Average gambler like to let "Luck" to dictate the outcome of their games. Money is often more important than the game for the average gambler. This often why, the casino across the globe is rich. Professional Gambler know it is not the "Luck" that decide who win who lose. Is the "skill" to be learned that is most concerned. The game is more important that the money. They know for every game, it is very little to do with the money. The know the odd of winning reset for every new game. The previous result of the game has very little to do with the new game result. They learn how to master the game, and use other people money to play for them. It is same apply to the concept of professional investor who use other people money to invest. The professional gambler follow the rule of the game, which is:

1. As long as the money is on the table, it is not your money, is the house money
2. The game is more important than the money
3. Put the money in the game, get your money back, continue using the house money to play, repeat the process
4. The house money is the money you win from your own money.
5. Your money is the money you take out from your pocket.
6. The ultimate goal of the professional gambler is to play the game by using house money, while their own money is off table. Which mean, their risk is zero, yet the reward could be unlimited depends how well they play the game.

The concept is simple, but the application is very wide. The same concept is very similar to the world of investing. The professional investor think like professional gambler, they like to put their money into an asset, get their initial investment money back, continue controlling the asset, use the initial money to invest into a new asset, get the money back again, repeat the process.