Father Sez

Economic and financial miseries can never be truly understood unless a person actually experiences one. 

I have never ever been retrenched out of a job. Well, technically, I was, but the next day, the holding company took me in. All my life, there always was money every month, there were no pressing unpaid bills, there was food on the table, clothing and transportation were not a problem, etc. 

When the Asian Financial Crisis struck us in 1998/99, I was working in a small company. And thankfully, almost simultaneously we got a substantial contract in Ghana, where we never really felt the financial typhoon that mercilessly lashed Malaysia and most of the region.  

What if a financial typhoon lashes us now? What if what all the doomsayer’s predictions come true? Or even if some of their predictions come true?

What should I do as the leader and provider for my family? 

Let’s look at some of the recent gloom and doom stories. 

a)    These people have come up with 15 predictions about how the near future will play out. I was most concerned to read about Prediction No: 5 and 6.

- The Asian economies are not going to “decouple”, they are going to have their own financial crises and recessions. Yes, this includes China.

- China’s stock market will collapse some time next year. China will go into a recession. There will be huge amounts of violence and the Chinese government will redirect anger towards the US and Japan.

b) JP Morgan has now forecasted that a tsunami of systemic margin calls will sweep the banking industry. The amount they are throwing about is USD325 billion. No small change! Margin calls are particularly vicious, as they come when we are usually least capable of paying. So the collateral held is sold indiscriminately and the loss just lumped upon us.

c) Goldman Sachs is predicting oil price to hit USD200 per barrel, a view shared by the EU’s Energy Commissioner.   These are the same guys, who three years ago, predicted that the oil price would hit USD100 / bbl. So they cannot be simply ignored as being over pessimists.  

There was a time when I would have been completely ignorant of all this kind of talk. Then there was a time, when I would have known, but completely ignored these.  

Now, I have a family, a family that looks upon me for leadership and as a provider.  

I cannot just keep my eyes blinkered. I personally think:- 

-         that there would be no violence in China or Japan or the US and, 

-         The Asian economies may not be so strongly and intricately coupled to the US economy as before. 

However, it is likely that a number of banks will fail. The first to fall would be the smaller US banks, and the public will then try to take their money out of some of the larger ones and this should start to shake their foundations. The banking world is seriously intertwined, so some major ripples will hit our shores. 

In the extreme case, currencies and paper assets of any kind will see drastic declines in values.  

And all it takes is public perception that such a scenario is going to unfold, and it will. This may result in a wave of companies closing and rampant unemployment.

What should I do? I do not have an answer yet. Like I mentioned at the beginning, we have to go through something as cataclysmic as this to understand. And this is something I have never experienced.   

I think the answer would be a little of living as a warrior, a little of living life as Katie and a little of back to the farm kind of living. 

Do you think I am being too alarmist? Have you ever wondered about whether you could survive in a 1929 setting? 

What do you suggest we should do? Or should we just merrily carry on and continue to save in our ETF’s, Index Funds and the like?  

The 8th of March 08 is set to be a day of historical significance in Malaysia.

Our 12th General Elections were held on this day. Malaysians long used to having only the Government controlled mass media as information sources, have now alternative information pipelines like the Internet, a proliferation of political blogs and sms’es. Coupled with an influx of new young voters, a tsunami of political change resulted.

For the first time in 50 years, 5 states are now in the hands of the opposition.

This is great as we, members of the general public, want more accountability, transparency and governance in our Government . At least the levels of checks and balances should now be better.

I want to see the pillars of democracy restored. An independent judiciary, executive and civil service. During the long reign (22 years) of our previous Prime Minister who though, credited with putting Malaysia on the world economic map, did a lot of damage to this icon of democracy. He was changing laws whenever it was an impediment to his plans.

(I think we may be holding the world record for the number of times our Federal Constitution has been amended.) 

Malaysians have matured politically, and for the good of my children and God Willing, my grandchildren and their children, I hope the new political leaders will set down iron clad rules for:-

a) Transparency, accountability and good governance in Government,

b) Limiting the terms of major political posts to 2 terms,

c) Separating and creating independence for the three pillars of a democracy, i.e. the judiciary, civil service and the executive.

d) A press that is more free and responsible. A press that will report the good, the bad and the ugly of our country, and let us, the people decide on what we want every 5 years.

The next few days will see this tsunami of political change  analyzed and counter analyzed to death.

However, the Malaysian people have already succeeded in telling our political leaders that they are but our servants and if seen not to perform, they would be sacked!

The world was quite different before 9/11. 

Travel was a lot easier and I dare say, the world was a lot more trusting place. Now there appears to be a lot more apprehension amongst Muslims when they travel to/in some non Muslim countries. And I believe this feeling could be reciprocated by non Muslims traveling in many a Muslim country. 

In all my travels I have never had any problems as far as my religion was concerned. 

What advice can I give my children as they prepare to leave the family nest and may want to travel? 

My earlier suggestion on “how to deal with people” is relevant. Here I want to address the issue of religion in particular. 

1. Never ever judge anyone by their religion, their religious rites or beliefs 

I have earlier stated my stand that we should never judge anyone by our standards. This is re emphasized. Faith is a tremendously powerful force, sometimes seemingly completely disconnected with logic or science.  Whatever the religious beliefs or rites of the people of the country or locality that we are visiting, we should just respect them.

We do not have to show that we believe or show that we don’t believe.  Just show our respect and show it sincerely!  Exactly as we would want others to respect our beliefs, equally sincerely.  

If we must remove our shoes before entering a particular place, then we must do so. No question. If we have to cover our heads, then we cover our heads, no question. If we feel strongly about removing our shoes or covering our heads, then we just don’t enter the place.  I am sure, our option not to enter the place will be equally respected. 

This is exactly what happened when I visited a particular part of one of the ancient palaces of the Kings of Benin, West Africa. It was their belief that everyone should take off their shoes if they wanted to enter the place. I did not want to, so I did not enter. No problem. 

Many tourists of all nationalities visit our National Mosque in Kuala Lumpur. They respect our rules that we should cover our heads and take off our shoes.  I have visited the Golden Temple in Amritsar, India, the holiest temple for people of the Sikh faith. I was made to feel most welcome.  

2. We do not have to be ashamed that we do not know much or anything of other religions 

This is pretty self explanatory. However learning about and understanding other religions are always very good. During my working stint in India, I have visited a number of Hindu temples with my colleagues when they went to pray. I’ll wait for them and after their prayers we’ll leave together. They’ll do the same for me.  

I have had many talks with my colleagues on their religious beliefs and rites and the talks have always been very educational. And they have not made me less a Muslim in any way. 

3. If we meet someone seeking to debate with us on religion, or to justify our beliefs, just smile, say that we are not experts and change the subject or excuse ourselves. And, of course, we should never do the same.   

This seldom fails.  Just keep on smiling and remember our family’s rule number 2 and 3 on dealing with people. 

I have only very pleasant memories of traveling in non Muslim countries.  In Hanover, Germany a lady taxi driver took me to a mosque and waited for me till I finished my prayers. In Kobe, Japan it was also a taxi driver who took me to a mosque.  Restaurants have also been very accommodating when I ask about “kosher” or “halal” food. 

Again, in Benin, a member of a Christian Missionary group went through a lot of time and trouble to configure my laptop when I had some problems.  

Hence to my children I’ll say, travel as much as you want and as you can afford. The world may be a little less trusting now, but people are still people.  

Treat everyone well, politely and as you want to be treated and you should have no problems. No problems at all.  

Dear Readers,

Thank you for visiting my new premises.

Welcome, look around and make yourself at home.

There are still a number of boxes which are still being unpacked. I hope that none of the doors have been labeled wrongly or directional signs placed or pointed to where they should not. Maybe some screws and nuts may be loose, hopefully they will not bolt!

Once again, I must thank the young, enteprising and capable Danny and Phuah of Simpleet Soloutions for having hand held me through this process of design and getting this new site up and running. Thanks a lot, guys!!!

I have also redone the blogroll. I benefited a lot from following the blogrolls of other blogs that I read and hope to keep adding on to this blogroll from time to time. I must also thank Brooke of Dollar Frugal for the inspiration given when she wrote her post on her “insanely massive blogroll”.

Please let me know if I have made any mistakes in the sites listed or missed out your site by any chance.

I would also like to beef up my blogroll on fellow Malaysian bloggers who post on personal finance, motivation and self improvement. I have marked the Malaysian blogs in the roll with a **.

Please email me at fathersez (at) gmail.com if you know of any blogs that I should include. My thanks in advance.

Naturally, I would welcome and appreciate any comments you may have on the site.

Thank you

Fathersez

Note:

The picture is from Google. It reminded me of Air India’s famous welcoming Maharaja.

Many self improvement blogs, books and gurus, suggest that we should follow our passions. And the suggestions on finding what our passions are range from: 

-         what would we do if money was no object, to 

-         what would we want people to say about us when we are dead and gone.

Lynnae at Being Frugal has written a poignant post, “what I want most of all”. Stripping aside all the frills, she has articulated the one thing that she would want most of all. 

And she had found it in her book of Guidance. 

She is blessed in that she has with pin point focus identified what she wants most of all. This is important, as it will influence and guide everything else that she does. In fact, it could well be the cardinal rule against which all other issues will be judged. 

Whatever our plans are in life, be it savings for retirement, writing a book or running for political office, it will all be dictated by what we really, really want in life.  

How we earn our money, how we conduct our affairs and how we raise our families will all be dictated or at least be terribly influenced by what we really, really want in life. 

I, too, have thought deeply about what I want in my life. Though I was not able to bring it to focus as sharply as Lynnae did, my findings are also from my book of Guidance. 

As the concluding paragraph of my personal mission statement, I have written that when I pass on, I want to leave behind:- 

a)    Pious, value driven, balanced and confident children, 

b)    People who have benefited from my assistance, and  

c)     People who have benefited from my knowledge and teachings.  

These shall be the cardinal rules against which all other things I do have to be judged against. 

Paid Twice speaks about why keeping an eye on her long range goals is good. It’ll help smoothen out the little short term bumps and setbacks that happen as we progress on our way to meet the long term goals.  

And I have the above listed 3 things as my ultimate long term goals. And my eye shall always be on them.

Image Credit:  Google Images

This morning I read an article by Ms. Norma Alias in our local daily newspaper, on sharing a verse she once read on what would be the “Best gifts.” 

It is a beautiful verse, and in the Christmas spirit, I thought it would be fitting to repeat it here.

The Best Gifts 

To your enemy, forgiveness;  

To an opponent, tolerance;  

To a friend, your heart;  

To a customer, service;  

To mankind, love;  

To every child, a good example;

To yourself, respect;

To God, yourself 

Here’s to wishing all my Christian readers a very Merry Christmas! 

And to all of us a very Happy New Year! 

May we all be showered with the best of what is good for us and be protected from what is not good for us.   

……and my sincere tribute to all personal finance and self improvement bloggers. 

The review of the year as it ends and to make plans for the year ahead is a regular activity, almost a tradition for many people.  

Some look back at the year that is ending with satisfaction and content, others with regrets.  

Not all years of people’s past are the same. During some of the years, changes would have been, shall we say, incremental, but essentially, more of the same. Some other years would have had significant changes happening in comparison with the year before. 

These changes result in people also changing. Events and issues are seen from a completely different perspective. Previously inconsequential issues suddenly become important. And previously serious issues are thrown aside. Some old friends are literally discarded, and new friendships and peer groups and formed.  

The person “has changed”. 

I term these years of significant changes as years of paradigm shifts. The year I married my wife, the year we had our first child, Along, the year, our second daughter, Aja, had a near tragic accident resulting in my wife agreeing to stop working and becoming a full time mother and Family Chief. The year I found my switch.

These, and some others, were years of paradigm shifts for me.  

2007 was such a year. 

It was the year I discovered personal finance and self development blogs. 

Now, why do I place this “discovery” so reverently on a pedestal?  

Please hear me out. 

It was in sometime in May or June 07, I think, that I googled “Passive Income”, looking for the elusive get rich scheme, that I discovered the Simple Dollar, the very first pf blog that I have ever read. I liked the story, and then dug into his well catalogued archives. I was murmuring, “Hey, I should do that! I never thought of that! This will save me money!…..etc., etc.  I was hooked.

And it was also clear, despite all the efforts of my past, that I was a pf Neanderthal.    

I saw references and links to other sites and followed them, and again enjoyed the posts. All the while, learning, absorbing and getting more and more motivated.  In the short space of time between May and now, about 7 months, I have made more positive changes in my life than in perhaps the past ten years put together.

These are some of the specific changes. 

1.                Embracing better habits 

Getting up early, meditating, doing some spiritual duties and exercising has been an unmet goal for almost as long as I have made goals. And that is for a mighty long time. Now, I am very happy to say that wakey, wakey time for the past month or so has been between 5 and 5.30 am. 

2.                Putting my financial house in better order 

I use the term “better”, since even this “improved” state is still far short of the sought for “targeted state”.  

-         My family’s health insurance has been rejigged and is in much better shape now.  

-         I have checked my debt levels, and decided that I am too good a description of a walking time bomb. We have put up one of our assets for sale. Once this sale goes through, our debt levels should be close to negligible. If the sale does not happen, I know exactly where to look for advice on what I can do to make it happen. 

(The first approach I wanted to do was to refinance. We turned down the loan when we realized the loan documents were not what the financier promised in the advertisements.) 

-    We have calculated for the first time, expected returns on a piece of agricultural land that we have. We found it to be a little too low and are now working on improving them. 

-         For the first time, since we got married, we did our family budget. We also have great “how to” guides to pare the budget down. 

-         A lot more targeted effort is being put into educating our children in personal finance. 

-         I have for about the first time in my life, been unemotional and calm in reviewing my investments in these times of market turmoil.  

And I do believe that I now have the resources to help me work smarter towards bringing my finances to an ideal state. 

3.                Cleaning the dust off my “dreams” and beginning to work on making them a reality. For this, I have to thank:- 

          The blogs that have talked about “early retirement”, the preparations leading to this and the issues to look out for before and after “retiring”.                

          The blogs that have advocated living our passions.  

          The blogs that have talked about awakening the hidden entrepreneur in us, and listed piles and piles of ideas on what could be done.  

4.                More positive outlook to life 

The blogs have also given guides on how to better approach the world. How to handle down days, How to handle down people. How to handle rejections. How to handle negativity. 

5.     More audacious goals for 2008 

With this new found confidence, the goals for 2008 have been stretched. By my standards, really stretched. And you know what, I am pretty sure, I shall hit them, as the focus is so much sharper now. 

Other than the one mention of the Simple Dollar, I have refrained from naming any other specific blog here, as I feel a mention in this one post will not do justice to any one of them. Not for what they have done for me. I plan to express my thanks to specific blogs in this blog from time to time. 

My previous sources of motivation used to be books. However, after the initial rush of adrenalin, and the self made promises of doing this and that, Mr. Negative would get up and say, “Enough”. Bringing me to “Go, without collecting the $200” 

Even reading daily affirmations has not had the effect of the blogs. 

Somehow the Blogs are different. There is a daily dose of motivation. Daily doses of encouragement. Gentle pushes and nudges. Hey, why don’t you try this?  Why not try this approach? This has been my experience with this ……etc. 

And not forgetting the fact that that the writer is another lady or man, with experiences not too different from mine. 

To those of my friends and family circle, who have yet to embrace blogs, I am now somewhat of a semi evangelist. I forward them posts that I feel may be of use to them.  

I ask them to treat the blogs as their peer groups, listening to them as we would listen to a friend. Not necessarily as an expert, but just like another guy or girl who has walked the path before. 

Read, listen, absorb, learn, enjoy, and finally do what your mind tells you is right and reasonable. After all, we are the only ones responsible for our own selves.   

And to all the pf and self improvement bloggers out there, I, salute you and express my gratitude. For the positive changes you have created in me, my wife and children also thank you. 

May you all continue to share your experiences, your feelings and your thoughts on how to make the world a better place, one reader at a time.  

And be assured that if the need ever arises, I shall step forward and testify that each and every one of you have “Paid it Forward”. 

Have a great 2008!   

Last week was a great week for me and my family. 

- 1^st – My daughter, Nana, did very well in her first major school exams. She is only 12, so these results will give her and the rest of us, a major psychological boost. Well done, Nana. 

- 2^nd – One of my favorite PF bloggers, KC Lau, listed my post on “Knowing where we are is the first step to getting to where we want to go”  as being amongst his weekly favorites. Thank you, KC. 

He has also listed 9 more varied and thought provoking posts from others in the PF blogging community. Check them out.  

- 3^rd – I participated for the 1^st time in a Carnival, The Carnival of Personal Finance, hosted by Million Dollar Journey.  MDJ’s event attracted a total of 89 entries. I am sure he must have had a hard time choosing his favorites, which he has listed as his Editor’s Picks. 

The other 79 posts are also listed, classified under the headings of real estate, investing, tax talk, debt/credit, career, economy, savings/frugality, money management and general finance. 

My post on Debt Management 101 – Taking on only known and well understood debt obligations was listed under debt/credit.  

Thank you, MDJ.

This week? It can ony get better. 

The Simple Dollar (www.thesimpledollar.com), one of my favorite personal finance blogs, had a post on Educating children on fiscal responsibility. 

Please see :-http://www.thesimpledollar.com/2006/10/31/educating-children-on-fiscal-responsibility/ 

The Simple Dollar listed the three main factors that he had crystallized from his research on this subject, namely :

a) Showing our children how we  spend money. Showing them prices when taking them shopping, talking to them about what things cost,

b) Allow them to manage a small amount of money themselves. Maybe an allowance or some other form, but it must have clear limits and they should manage it themselves. Talk to them about how to manage it: should they buy a toy now, or save for something else?

c) Involve them in the finances of the house. Show them what you spend each month and demonstrate that you save each month. Tell them when there are financial problems and when there are windfalls.

The Simple Dollar wants to start off his son with an allowance and take it from there.

Will managing an allowance help instill an importance of personal finance management in our children?

It most certainly would.

The prime cause of being financially challenged is “uncontrolled spending.” Learning to spend within our means (i.e. spending within the allowance), will form a rock solid foundation for healthy personal finances.

I have earlier posted my thoughts on the two most important personal financial management lessons that I have learnt and want to impart to my children.

Whilst for the two elder children, I proposed that a peer group is more important now, for the younger children an allowance and its management would be the best start.

I’ll write more on this after my wife and I implement this scheme.

I am sure that we have all heard about the often quoted study of 1979 Harvard MBA grads which showed that the 3% who had written goals, plans and read them daily earned 10 times more income than the other 97% - 10 years later.  

Having written goals gives motivation levels far higher than just having some ideas in our minds. 

Can we get our kids to have written goals? 

Yes, we can and we should.  

In December 2005, we started this “exercise” of getting the children to write some objectives to achieve during the next year.  My younger three children, i.e. our son, Abang (“Ahbang”), Nana and Ain were then 11, 10 and 6 years old respectively. They accepted the exercise willingly, and wrote some goals in their “goal book” to shoot for. 

 We now do this exercise every year, and I sort of review their goals with them individually, every school holidays (about 3 times a year).  It has now become a yearly ritual.  Though there are now some groans and moans when this exercise is mentioned, we get this done.  

I am very happy with their cooperation and hope that we shall keep this up every year, until this becomes an ingrained habit in my children.  

My suggestion is to start this practice early. Don’t be too bothered when it is clear that none of the goals are being achieved. This happens even, to the best of us. Eventually you will see some achievements being clocked.  

The key is for them to have something simple written up that they can identify with. Review these goals periodically with the children. Try not to be too judgmental or aim for too lofty a goal. “Washing my own shoes” is a great goal for a 6 year old.  

What is your experience? Please share it with us.