The Morality of a Liberal

This past Thursday, Paul Krugman, the Nobel prize winning liberal economic columnist of the New York Times, was outraged. He was outraged because he had discovered that the U.S. was losing its moral heading.

The event that set him on the discovery was an exchange about death and freedom during the Republican presidential debate. According to Krugman:

CNN’s Wolf Blitzer asked Representative Ron Paul what we should do if a 30-year-old man who chose not to purchase health insurance suddenly found himself in need of six months of intensive care. Mr. Paul replied, “That’s what freedom is all about — taking your own risks.” Mr. Blitzer pressed him again, asking whether “society should just let him die.”

And the crowd erupted with cheers and shouts of “Yeah!”

Krugman singled out Milton Friedman and his Free to Choose TV series for this supposed breakdown of morality and the loss of compassion in the country. (The title of his column was Free to Die. Got it?) He wrote:

The incident highlighted something that I don’t think most political commentators have fully absorbed: at this point, American politics is fundamentally about different moral visions.

How can one make this fool realize that he himself is in the “other” camp?

He blames Friedman for lowering the country's moral standards, but his own mentor at MIT, Paul Samuelson, was every bit as instrumental in emptying the mind of students of moral considerations.

As for Krugman himself, google his defense of NAFTA in the 1990s – the same NAFTA that was supposed to bring in jobs to the U.S. – and see that he can be as vicious as the most vicious Tea Party member or neocon thug.

Three years ago, I touched upon the relation between morality and economics in the The Descent of Man.

For an even deeper insight to the subject, let me quote Jean Paul Sartre from his Critique of Dialectical Reasoning.

According to Sartre, a society consciously chooses its dead, “whether it be the raft of the Medusa, an Italian city under siege, or a modern society (which, of course, discretely selects its dead by simply distributing items of expenditure in a particular way, and which, at its deepest foundation, is already in itself a choice of who is well provided for and who is to go hungry.)”

So, you see, Mr. Krugman, you do not have to wait for the next election. The selection has already been made – and made with your full and energetic participation. It is all there. It is just a matter of willingness to see.

Answers to the 8 toughest retirement decisions

Investopedia has brought up the 8 toughest retirement decisions and here MalPF shares her answers

Q: When to retire ?
A: You can retire ANY TIME by adjusting your lifestyle vs your saving.  Retirement is NOT defined by your country or your financial advisor.  It is an 'action' you can take any time to stop working.

Q: When to withdraw retirement money ?
A: If you Social Security/EPF is generating lower return than your saving/investment, then withdraw them.

Q: Where to live ?
A: Live where you are now, you can move any time you want later.

Q: To continue working or not ?
A: Work on whatever you like.  It should have been that way anyway even before you retire.

Q: Sell the house or not ?
A: If the offer is good or cannot afford repayment anymore, sell it !

Q: How to deal with IRA ?
A: Just follow the rules, minimize the penalty if any.

Q: How to manage investment portfolio ?
A: As is.  You don't just happen to retire suddenly.  How you manage your portfolio before is how you may most probably continue to manage it that way, with some continuous improvement along the way.

Q: How to budget ?
A: If you haven't managed your budget by then, you probably will never be.

reply to PM asking for more money

the news: Malaysia is destined to double its income in the next 9 years.  In order to achieve that, the "domestic" folks must fork out MYR 94 billions a year until year 2020.  But in 2011, we are behind schedule with only MYR 27 billions domestic direct investment so far. . . .  so the prime minister asked us to invest more locally.

Dear boss,

I would love to invest into my own land and I also want to double my income.  In order to achieve that, each of my investment . . . well, must turn into a 200% income generator.  Which of our projects is generating this kind of return ?

Bakun Dam ?
Putrajaya ? Cyberjaya ?
Greater KL MRT ?  *

SMART tunnel ?
Penang / Singapore Bridges ?

Iskandar Malaysia ?

Karambunai Sabah ? *

100 storey tower ?

Do let me know as I wasn't aware of such a great domestic investment opportunity before.

However, if you just need donation, then just say so lah.  I will still give one ...

Love,

MalPF.com 

Can you see the REAL reason behind today's economy crisis ?

Sub Prime crisis is not new now, most people would know why it happens, this is just another video about it.  But I am just curious how many of us can answer this question ...

First watch this video if you don't know why sub prime crisis happen ( the reason that triggers today world economy collapse ! )

In short, it says ...

• home owner buy a $100k house but has no money
• home owner borrow money from lender by mortgaging the house to the lender
• home owner has to pay $200k to the lender in 30 years
• investment banker get loan and buy the mortgage from the lender for $220k
• investment banker turns the mortgages into another finance tool
• investment banker sell this finance tool to investors
• investors get good returns
• investment banker receive money from investors and home owner, pay his loan and still earn
• if home owner default in payment, investment banker take the house, resell to another home owner
• cycle continues, almost everyone earns except the defaulters, which is really their own faults.

Now, the video says the turning point is when we start to sell the house to the sub-prime home owners, which are the people who are less rich and most likely unable to repay their debts.  But what do you think ? What has really gone wrong in this cycle ?

Understand this truly may open our eyes to recognize the fact that not only properties, but almost everywhere in today's finance ecology, similar 'time bombs' are being created and rebuilt every single day.

What do you think has really gone wrong in above point by point list of narration ?

GST : What can we do ?

Some said GST is good, some not.  The myth how we pay less tax and yet government can earn more money has already been answered.  But GST is coming regardless, so what can we do ?  If you haven't related the answer from "the prefect world" article yet, then may be this article may help ...




Everyone who wants to adapt to GST need to produce REAL values to the people by large around his society.

In business we will need to sell something that people really need instead of just manipulating and deceiving the market.  When you provide what people really need, GST actually helps you reduce cost, hence your profit goes up without even raising your selling price.  If you are too creative in what you are selling, you will have to increase your price to keep what you are earning now when GST comes.  You will have to harvest more money from the public without giving them any extra values.  You just provide value with the few parties you make deal with, just like the primary school friend of the fisherman story.

In addition to that, you should create your own merchandise or at least shorten the distribution channel as much as possible ie. import the goods yourself.  Before GST, importing the goods yourself may mean extra profits but with GST in place, importing directly is essential for survival.  The best is to 'produce' your own goods.  For example, I buy seeds and soil to grow my own papaya which is extra juicy naturally.  The seeds and soil may be the same as all my competitors but 'the way' I grow my papaya is unique.  If general public like that, I have created value directly.  GST will be in favour of me in this case.  This is significantly different than the typical trading business ie. I bought a papaya from central market and sell it in my village.

If you are just having a job, then there is less you can do to combat with GST.  In short, GST will still drive inflation up and your 'saving' will have a higher return target (saving return should be higher than inflation).  If you don't think your next few years job earning can increase 4-6% annually, then this is the time you seriously think what real values you can produce for the people around you;  be it still within the job market or starting your own business.

If all of us are creating values for each other, implementation of GST will be in favour of us.  We should all seriously think about that and start making something of our own be it making cloth, growing food, making shelters or transport.

Creating a self sustain eco system within yourself will seal yourself from any negative effect of GST.  This can be done in a small way, ie, within your families, friends or just neighbours and villages.

Consuming wise, if you see price hike due to GST without any additional values, you should now very well aware that it is because that business is NOT well managed or there are some cronyism within that business.

So what value are you going to add to your community to seal yourself from GST ?  Or will you just sit through complaining about this one as well ?

This article was suppose to be read in this sequence.

Malaysia's GST - a MAGIC !

Secrect of the MAGIC revealed !

a Perfect World !

What can we do ?

Interview : Self

Questions

1. Tell us a bit about your childhood and how it affects your today's practice on personal finance ?
   There was once I was slapped real hard until my whole body fly toward the wall, so till now one of my ears is half deaf.  I learned that not everything can be undone.  We have to be careful not to let our emotion/feeling drive us over the edge.  Which turns out to be a very valuable blue print in my stock investment.
   Since teenage I was influenced to save in mutual fund.  That has helped me survive through my varies business cycles 20+ years later.  DCA does work especially when we just get started.
   During the first year of my high school, a classmate helped save a fire.  Then a broken electric cable fell upon his body and he died.  I learned that sometimes life is bigger than ourselves.  So I knew since young personal finance is never about the money, its about what we want in life.
   His father was an illegal immigrant but we never felt any indifference.  I also learn that all being in universe always share some similarities while each one of us is unique.  Same goes to PF, you can think and do whatever you want but at the end, we are most probably going through a similar path.
2. Answer this question without checking or asking for references : If you can remember, what is your Zodiac and Astrology signs ?
   Rat Aquarius.
3. What are the things you like to do during your free time, ie. your hobbies ? And what do you most dislike about ?
   I like to find those impossible to solve challenges and then think, strategies and plan around them during my silent time.  I used to jog, basketball and badminton a lot.  But now I just walk wherever less than 5km and cycle wherever within 25km.
   I don't like myself when I think I am prefect - there is nothing else to live for !?
4. What is your favorite colors and numbers ? Any most dislikes ?
   red, black, white.  I like 7.  I like dull color less, like my 10 years old over worn shirts.
5. What is your favorite food ? What do you hate most ?
   tomyam, laksa, curry, salmon shashimi, beef noodle, lamb shank ... OMG !  Why did you get me started ?
   I don't like monkey brain may be !?  Never try before . . .
6. If you can meet a person dead or alive, who would that be ? What would you ask him ?
   Mahathir : Deep down inside, do you really think current corruption status has absolutely nothing to do with what you have done or not done in the past ?
7. What is the best and worst feeling you have ever had ?
   I feel excellent when the person I love most trust me fully without any doubt, appreciate my existence and companion.
   I am in hell when she felt the other way.
8. What is the last thing you do before go to sleep ?
   I structure an unsolved question of the day to my mind and let my dream solve it.
9. What is the first thing you do when you wake up ?
   What do I have to do today ?
10. If you were to build a personal finance portfolio for a young man who has similar life path as yours, what will it be ?
    Build a portfolio according to malpf.com and then assign the right person to manage it.
11. You met someone in a social party, describe what you do in 2 to 3 sentences.
    I turn your money from 1 to 2 in a way that you can accept it, personally or business wise.
12. If you are not doing what you are doing now, what would you be doing ?
    A philosopher, a monk, robin hood, a cruel or loving king . . . all seems possible.
13. How much time do you spend on your personal finance blog ?
    Averagely a couple hours a week I suppose except recently less active.
14. What is the main objective of your blog, is it initially profit oriented and who are your targeted blog readers ?
    My objective is to share a side of personal finance story that I haven't found else where within the same blogsphere.  It is still NOT profit oriented.  I target to those who has the time to read through the whole article which is tough because most internet browsers just spend minutes on one article.  I don't know any other more suitable venue or medium yet.
15. What is the biggest achievement your blog so far ?
    I left it for 2 years and it is still running ?  That is a big wow to me despite the low readership.  I guess at the end, content decides how far to drive a site !?
16. Tell us one URL other than your own that your readers should read about ?
    http://en.wikipedia.org/wiki/Personal_finance
17. How many more years do you think your blog will exist for and how do you plan to finance your blog forever if planned to at all ?
    malpf.com may die when I forget to renew the domain.
    malaysiaPersonalFinance.blogspot.com should live as long as Google lives which should be at least another 10 years ?  :)
    A trust deed (self growing fund) has been setup to keep it running but the mechanism of how to keep it running forever has not be exactly determined yet.  Eventually I also need to change the trustee to someone who really care about the topics I wrote about.
18. The world is big, many people have different point of views and emotions. If you met someone who called you geek, liar, cheaters because you yourself didn't do what you preach, how would you handle them ?
    Sit down and listen to what his view point is.  Understand the true cause and motive behind it.  Then acknowledge him and assure him there are other people who think and feel like him too despite most of my readers are on the other side of the fence.  At last ask him how he would improve the situation if he were me.
    There is always something we can learn from, even the worst enemy ever or an ass hole.
19. What do you think about these interview questions and how this interview session can be improved ?
    Nothing can replace a face to face interview.
20. Would you be interested to meet other finance bloggers in person ? If yes

• Do you smoke ?  No
• Do you drink liquor socially ? Yes
• Are you a coffee lover ? Yes
• Where do you stay and work ? ( Country, State, Region etc.)  Malaysia KL

Interview : Kris - knowthymoney.com

1.    Tell us a bit about your childhood and how it affects your today's practice on personal finance ?

I lead a moderate lifestyle during my childhood. My family is quite frugal and we don’t splurge on branded goods.(nowadays a lot of young people fell into this consumerism trap) Come to think of it, I guess I am fortunate that I did not suffer from any peer pressure during my school days as most of my classmates are quite moderate also even though some of them come from very wealthy families. Until now I don’t really get all the hype of wearing or using highly expensive branded goods just to feel “confident”. Confidence comes from within.

On personal finance perspective, I managed to save quite a high percentage of my salary over my working years. But one thing that my parents never thought me about is the importance of investing to make your money work for you. They are quite conservative investors. Nevertheless, they stressed the importance of education and hard-work to ensure an easy life in the future when I was growing up. One thing to note is that like most old traditional Chinese thinking, they discourages debt taking ,borrowing money to take advantage of the leverage when doing investments or even buying property. Of course too much leverage is hazardous but a good ratio of leverage really does wonders to your total net worth.

2.    Answer this question without checking or asking for references : If you can remember, what is your Zodiac and Astrology signs ?

Aries the so-called fiery ram. LOL..Although I don’t believe in astrological signs.

3.    What are the things you like to do during your free time, ie. your hobbies ? And what do you most dislike about ?

I like to read a lot during my spare time and listening to music while doing so. I dislike cutting my hair as I need to wait there doing nothing.

4.    What is your favorite colors and numbers ? Any most dislikes ?

Favorite color is blue.

5.    What is your favorite food ? What do you hate most ?

I like to eat noodles more than rice dishes.

6.    If you can meet a person dead or alive, who would that be ? What would you ask him ?

I would like to meet my paternal grandfather which I never had the chance to do so. My grandfather who came from China on a boat, without any family members, a few dollars in the pocket and no education manage to become one of the richest businessmen in a small town.(The first family to own a black & white television which is really a luxury item at that time in a small town) He started as an ordinary hawker selling goods on a floating boat to owning a grocery store business, a few shop-lots and plantations. But alas, the wealth preservation did not happen as he sold all the properties and business (no one wanted to continue the family business) when he reached old age and moved to a bigger town; leaving no wealth preservation plan & investments for the next generation. And with no investment, time erodes the family wealth. But luckily, all his children manage to receive good education because our family was one of the few that can afford it.

So if I were able to “go back to the future”, I want to hear his rags to riches story from his own mouth.

7.    What is the best and worst feeling you have ever had ?

Best feeling is to get good academic results in public examination after years of study. Worst feeling is getting diarrhea and food poisoning.

8.    What is the last thing you do before go to sleep ?

Read one of my books.

9.    What is the first thing you do when you wake up ?

Brush my teeth, refresh and get ready for work.

10. If you were to build a personal finance portfolio for a young man who has similar life path as yours, what will it be ?

Generate more passive income while you are still young and have mixed income portfolio consisting of property investments, dividend stocks and mutual funds. And have sufficient insurance and medical coverage to ensure your wealth will be preserved if anything happens. While young, a person must be brave enough to take a lot of calculated risks. (high risk high return kind of game, because you can afford to make mistakes. It is still okay to stumbled on small mistakes, just make sure you learn from it to avoid the big and grave personal finance mistakes) While in old age, one must be concerned on wealth preservation and guaranteed returns.  

At lastly the most important one is to invest oneself in terms of knowledge. Knowledge is power!!!

11. You met someone in a social party, describe what you do in 2 to 3 sentences.

Just say hi and see where we go from there.

12. If you are not doing what you are doing now, what would you be doing ?

I will probably become an academician. A professor perhaps?

13. How much time do you spend on your personal finance blog ?

I read a lot of financial articles online and will blog on related topics that comes into my mind.

14. What is the main objective of your blog, is it initially profit oriented and who are your targeted blog readers ?

The objective of my blog is to encourage more people to share their experiences and knowledge in the personal finance field. There is a lot of more “niche” information that is only available to a small selected group of people. I wish to exposed and share these “niches” to empower the average people through knowledge sharing. There is a lot of hidden pro & cons on certain investment instruments that non-finance related industry people might not know off. (I am from an engineering background myself) . Hence the name of my blog, KnowThyMoney. Know = Knowledge is Power , Thy = Empower yourself through knowledge, Money = Earning more moolah to achieve financial freedom :P

Hence, I always encourage readers to comment on my blog to spur more discussions. Not really sure how to spur this , as I noticed that in general Malaysian readers are only interested to comment on stock pick related posts. (Whether it is a good time to buy stock xyz or not, what is the target price, etc)

Although my blog has Google ads, I don’t make much from it unlike some Malaysian bloggers. I consider it as pocket money if I earn any.

15. What is the biggest achievement your blog so far ?

When I started blogging around 2006, I never expected that I have so much stuff & ideas to blog about on personal finance. (Somehow, I managed to reach around 580 posts as of today.)  

16. Tell us one URL other than your own that your readers should read about ?

http://whereiszemoola.blogspot.com/à Sometimes, I really wonder where he finds the time to do some much research and follow-ups to expose the shenanigans in the stock market. I am curious on his background.

17. How many more years do you think your blog will exist for and how do you plan to finance your blog forever if planned to at all ?

I planned to continue as long as I can. Maybe the number of posts will reduced in the future if I no longer have much time to do so.

18. The world is big, many people have different point of views and emotions. If you met someone who called you geek, liar, cheaters because you yourself didn't do what you preach, how would you handle them ?

I just shrug them off. In this world, there are always people that try to find fault with you regardless of circumstances. So why bother to care their negative opinions.

19. What do you think about these interview questions and how this interview session can be improved ?

I think it is good enough for a starter.