Wisdom of Rich Dad

Our hearts and best wishes go out to the victims of the catastrophic earthquake in Japan late last week. This quake, the strongest in Japan’s history, ranked 8.9 on the Richter scale, spawned a massive tsunami, and is said to have claimed 10,000 lives. Now the natural disasters have triggered explosions at nuclear reactors.

This tragedy has far-reaching effects, from forcing the U.S. to reevaluate its energy policies to actually altering the spin of our planet. Aside from what this means on a human level, you may wonder what effects natural disasters like these have on global and national economies and your personal investments. We’ll break down what this earthquake means for you, even if you’re halfway across the globe—and how you can help.

1. What This Means For The Global Economy.
In the short term, global natural disasters nearly always hurt the economy in the countries where they take place. Stock markets around the world often follow suit, since all of our economies are interconnected. Japan’s Nikkei stock market index was down more than 6% at the end of the day Monday, and the S&P 500 had its lowest close in a month on Thursday. Read the rest of this entry »

~Robert Kiyosaki~

When I was a kid, I loved watching western movies. A common scene in almost every western is the showdown, the culminating battle between the good guys and the bad guys. This usually takes place on a dusty road in the middle of town as scared and defenseless citizens look on, taking cover behind swinging wood doors and shuttered windows.

What I loved about those movies, and particularly those scenes, was the tension and that ultimately the good guys won, justice was restored, and usually the hero got the pretty lady. As a kid this was appealing.

Now that I’m an adult, I understand that while showdowns happen all over the world, there is often not a happy ending. This makes the stakes much higher and the tension much more tangible.

This week, showdowns are happening all over the world.

The Middle East Showdown

One of the biggest showdowns happening is between young, pro-western, educated citizens in Middle Eastern countries and the old ruling religious and military, corrupt governments.

Read the rest of this entry »

A team of economists from Nomura Securities weighed in Sunday with an early analysis of the financial effects of the natural disaster that continues to rock Japan.

In the aftermath of a series of earthquakes and a tsunami that has also destabilized a number of the country’s nuclear-power facilities, Japan’s economy is likely to see positive and negative effects from the disaster, the economists write. While the report, issued by economists Takahide Kiuchi and Kohei Okazaki, uses the Kobe earthquake of 1995 as a reference point, it is also careful to note that the still-evolving nature of last week’s disaster makes estimating its impact on financial markets “problematic.”

Negative economic effects described by the report are expected to last as long as six months and are attributed to the loss of material resources such as housing, industrial facilities and offices, and public infrastructure. A reduction in consumer activity also is expected to adversely affect gross domestic product. Expanded public, capital and housing investment expected to accompany medium- and long-term efforts to rebuild will deliver a positive effect on the economy, according to the report.

The disaster is also expected to delay Japan’s exit from its economic lull. “We expect the negative impact on real GDP growth to be greatest in Apr–Jun, but we believe it is too pessimistic to expect a sharp downturn in the Japanese economy,” according to the Nomura report.

“On the other hand, we do not expect rapid expansion in rebuilding demand stimulated by significant government spending to drive a V-shaped recovery, given the precedent of the Kobe earthquake and the delays to funding then. We tentatively project that the net combined impact of the earthquake and rebuilding demand on quarterly GDP will be negative in Jan–Mar and Apr–Jun, roughly zero in Jul–Sep, and positive in Oct–Dec.”

A FRIEND and I discussed money recently: how we extravagantly spent extra income. We had spent money on gifts for family over Christmas and self-indulgent shopping. “We have no savings from last month,” we guiltily admitted.

About this time last year, I was jobless and nervous about employment: where was I to work to fund the work that I love (unpaid volunteer work) and to find the sort of work that would not suck my soul from its core? Therefore, I am grateful to be worrying over how I spent my salary this year, as opposed to wondering where is my next salary coming from: at least I have an income and a couple of part-time jobs.

At home, it is always obvious when I worry about money. Suze Orman’s financial books (secondhand), women’s memoirs on shopping habits (given by dear friends) and Buddhist essays on mindful spending (also gifts) make a grand appearance. When Robert Kiyosaki’s Rich Dad, Poor Dad comes out, you know I have really lost it.

Luckily, my line of work as a social worker puts me into regular contact with persons who have little money and survive on less than half of my pay. This is not going to be a patronising article on how we should use others’ misery in order to feel happy about our lot. However, there is something to be learnt from some of the children and families I am fortunate to work with.

Earlier this month, I was mourning the loss of a lot of savings due to spending over Christmas and New Year. Despite the pact close friends and I made not to buy each other gifts, it was important to treat a few.

I was at work. In walked one of my teenagers, brandishing a stick pierced through a generously-sized potato, sliced thin.

“Grab a piece,” she ordered.

“What is this?”

“I bought it in Masjid India. Grab it, and pull.”

I love street food when it is bought in little lanes, but am less certain when it is sold in the midst of traffic fumes. Still, to please her, I pulled. “Mmph. This is good! What is this?” Whatever the vendor marinated the potatoes in, MSG aside, it was good. Topped with chilli sauce and mayonnaise? Utter street perfection.

She grinned, pleased. “Sedap (tasty), kan?”

The girl and the food made my day. She shared the snack with her friends. “Pull!” she would shout, laughing.

Who needs single malt whisky in a bar full of friends, when you have a group of kids laughing and munching over a potato stick?

Some months back, a friend responded to a little piece I wrote that was never published. He was determined to pursue his dreams, which meant lower income for a while.

“Tomorrow I will save on my beer tab and buy beers and drink in a park with friends instead.”

I am trying to follow his example. This month, I am resurrecting an old practice: instead of shopping in malls, shop thy wardrobe and shop the bookshelves of thy home for clothes and books. Also, go out less.

Thus, so far, unearthed several gems: old loves that were untouched for years, such as the works of Amy Tan, Ben Okri and Louisa May Alcott, some of my favourite action films, as well as wonderful books my sister bought, that I never would have otherwise considered. (It helps to have a sister with near-irreproachable reading taste.)

Shopping my wardrobe, I dug forth pretty dresses and cosmetics friends gifted the past two years to spoil me: an Audrey Hepburn inspired dress (probably from Nichii Fashion City, not Givenchy) and Estee Lauder eyeshadow, both never worn.

It is time.

Tonight, instead of heading out, I shall pretend to be Audrey Hepburn and stay in to read Little Women and watch Ironman.

Thrift, sometimes, has its rewards.

These apps for your iPhone or Droid make it easier to save cash on your purchases. Plus they’re free — so you’re already ahead.

Gas Buddy

With gas prices increasing every single day, this app can save you a pretty penny. It gives you a list of the gas stations near you, the price per gallon, and directions to the station.

And at nearly $4 a gallon, shaving a few dollars off each trip to the pump can adds up to over a hundred bucks a year — not bad for a free app.

ShopSavvy

Recently I popped into a sporting goods store looking for a pair of cycling sneakers. The pair I wanted was $100, and I was pretty confident that I could do better.

So I scanned the barcode on the shoe box with my ShopSavvy app and saw that I could order them through Jenson for $85 with free shipping — a $12 savings.

The only downside? They arrived a week later missing the bike clips. I guess there’s a buyer’s beware lesson there.

Grocery iQ

This app is ideal for anyone who has ever sent their husband to the store for groceries only to have him come back with potato chips and beer.

You can scan the barcodes of the groceries you want (say, the box of Cheerios in your pantry) and Grocery iQ will generate a list of the exact items. It will even categorize them by food group and show you what coupons are available.

Then you can email your list to said husband and up the odds that he will return with the items you requested.

TheFind

Like ShopSavvy, just scan a barcode and TheFind will locate the best prices online and at retailers in your area — plus show if there are coupons available.When I scanned the Point Break DVD on my desk (don’t ask), TheFind App found it online for as little as $6 (a steal) and at a Borders nearby. Although it told me that the closest Borders was five blocks away when there is also one in my office building.

Plus, it gave me coupons for as much as 33% off at other retailers.

Shop Lucky

Lucky Magazine’s App gives you top picks for dresses, jeans, jewelry and so on, and let’s you check availability online and at nearby stores.

You can even put the goods on hold for same-day pickup!

Granted, this may be more geared towards ‘spending’ rather than ‘saving,’ but it’s still cool. You can also see Lucky’s daily deals, which offer 50% off of the editor’s exclusive picks of the day.

Today’s deal: on-trend diamond stacking rings for just $62.50.

In my book, Increase Your Financial IQ, I wrote about the four economic ages of humanity.

They are:

1. The Hunter-Gatherer Age: In the Hunter-Gatherer Age, humans relied on nature to provide wealth. They were nomadic and went where the hunting was good and the vegetation plentiful. You had to know how to hunt and to gather—or you died. For the hunter-gatherer, the tribe was social security. Socio-economically, everyone was even. They were all poor.
2. The Agrarian Age: The Agrarian Age saw the rise of classes between people. Due to the development of technology to plant and cultivate the land, those who owned the land became royalty, and those who worked it became peasants. The royals rode horses while the peasants walked. Socioeconomically there were two groups, the rich and the poor.
3. The Industrial Age: While many people would place the beginning of the Industrial Age in the 1800s with the rise of factories, I actually think of it as beginning in 1492 with Columbus. When Columbus struck out to find the New World, it was to find new sources of valuable resources such as oil, copper, tin, and rubber. During this time the value of real estate shifted from growing crops to providing resources. This led to the land becoming even more valuable. And three classes emerged: the rich, the middle-class, and the poor.
4. The Information Age: Today, we are in the Information Age, where information leveraged by technology and inexpensive resources like silicon produce wealth. This means that the price of getting wealthy has gone down. For the first time in history, wealth is available to just about everyone. There are now four groups of people: the poor, the middle-class, the rich, and the super rich.

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