Father Sez

From and to parents - parental advice to our children on personal financial management and life.
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Posts Tagged ‘trickle up effect’

I must really guard my multiplier effect. After all, it all starts at a micro level first.

Friday, February 20th, 2009

Recently a friend sent me a link to an International Herald Tribune article that talked about Dubai spiralling downwards. Not too long ago, Dubai was more in the news for the highest and the most posh buildings. And it was unthinkable that the party would ever end.  

Now the IHT reports that cars are being abandoned at the airports as the owners flee the country leaving a trail of debts. Property prices dropping 30% in 2 – 3 months. Well, the party seems to be coming to an end.  

I read this IHT story not long after reading Brip Blap’s “Trickle Down”. BB wrote about how as the heavy hitters got laid off or had to tighten their belts, they would in turn let go others lower down the food chain like nannies and maids. Small business gets hurt and so on. The Trickle Down effect. 

Almost 90% of Dubai’s population are foreigners. Indians, Malaysians, Europeans and God knows who else. I expect that many of the Indians and Malaysians working in Dubai could be considered relatively “upper middle class”. Getting paid in Dirhams and in amounts far higher than those working at comparative jobs back home. They and their families might or might not have adjusted to this upper middle class life.  

I think most Asians working in Dubai would gave lived a fairly frugal life, and not extravagant lives. But some might have been unable to save because of having to support a large extended family back home. These people will be badly affected by this “trickle down” effect if they lost their jobs. On the other hand some of these families might have stashed away significant amounts of this income in the form of savings. Some might have invested in property or businesses back home. When they are sent back, there might likely be a “trickle up” effect as they start small businesses back home. 

The Fathersez family also has this responsibility. We have 3 people earning their livelihood from our goat farm. Two are Indonesians whilst the third is Malaysian, my partner. I am sure the lives of my two Indonesian workers’ families have improved many fold since they started working with us.  

I must try my level best and guard the business of our farm.  

One for reasons of getting a return on our investment.  

And two, more humanly and more importantly, to prevent a “trickle down” effect being caused by me.

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