Debt and Conspicuous Consumption Speak Fundamental Problem

2007111850020101.jpgDebt and conspicuous consumption are symptoms of a much fundamental problem.

The subprime crisis, consumer debt issue, and negative national saving rate don’t happen together out of sheer chance like giving birth to triplets. They demonstrate the change in people’s values and perception from past decades. What is the difference?

It is a fact that life can be a bitch and some are very unfortunate to be much handicapped to begin with. However, it is also a fact that they are the minority of the population who have no choice being in poverty. Here today, let’s focus on the majority of the population who has the luxury of the freedom to choose.

At the end of the day, people deep down know what they need to do for themselves regarding their finance, but somehow somewhere along the timeline, people stop admitting to reality and ignore what they know. They prefer to be denial, and may even do their best to stay in ignorance, so they can justify themselves. Ah, ignorance is a bliss… but not really. There is always a choice, and people choose to be ignorant so they can be superficially happy through materialism and instant gratification. They like taking the easy way out, though it is only temporary, but they don’t care if it’s only temporary.

Being in denial, people try to become something they are not. And whether they know it or not, that builds up a void within… you can think of it as a spiritual void or a feeling of emptiness. Call it what you want. As this void gets bigger, people try to fill it with external things, which are paid for with money or credits — money they don’t have. These external things provide instant gratification and the perfect noise to mask that void. As time goes on, they lose a great deal of responsibility, integrity, discipline, and compassion with such behaviors.

I don’t think people should blame credit cards. Credit cards are merely financial tools and dead object. Like subprime mortgage, like all other forms of intelligent(dumb)financing program. Like money. They are all dead objects. How can they be held accountable? Companies make them available, and people choose to use them.

I think life is structured a way that allows us to make many mistakes. We can make a lot of mistakes at different times, as long as we recover from each. And frankly, we all make mistakes in life. We need to do our best to stay aware and catch and correct mistakes as quickly as we can. I cannot fathom that it is one big mistake that brought everyone down to their knees. Humans are tough and adaptive creatures. The key lies in being aware and always learning — the opposite of being in denial and ignorant.

It only becomes the big issues today as people remain in denail and continuously make the same mistakes, until one day — WHAM!!! — they found out they are holding on to a thread hanging off a cliff. They tried to chase after the something that they vaguely see and believe that will bring happiness but won’t and now they need to catch themselves before they fall. They need to recover from their mistakes, and they will if they choose to.

Indeed, we need external things for survival and for pleasure. It’s a part of life. But when you look to ONLY externals for happiness, you are chasing after shadows.

I believe happiness happens when you look within yourself first. When I said to look within yourself, I mean to find the values in life that are important to you. You need to get to know yourself. Know what you want in life. To each person, there are many important values, so you must prioritize, and I dare claim that no one should have money and fame at the top of the list. With such a list, you shall know what is “enough” and hence, be able to distinguish between “wants” and “needs”. You can then simplify your life and not have excessive externals yet be content, though remember being content does not mean being satisfied and complacent.

Problem happens when people never stop to find out their values. Again, they try to become what they are not. I don’t believe it is entirely the people’s fault because of how they become conditioned the way their are — constantly being distracted by advertisements, bombarded with information, and conditioned about money/appearance/fame. As a result of those: They think they will be happy when others see them as rich. They think they will be happy when they have that next-best-thing. They think they will be happy when they beat their neighbors.

However, there comes a time for each of us to come to understand that such a culture doesn’t work and therefore, learn not to buy into such a culture. It is not easy, but it is what we need to do. This is where discipline comes into play, and where we take responsibility for ourselves.

So at the same time you are learning and reading about all those “methods” on how to get rid of debt or to build your wealth, why not take a pause to learn about yourself and get your values straightened out? Because if you don’t, your changes will likely be short-lived because your character has not changed.

You can shred your credit cards, but if you don’t fix the problem by fixing the fundamentals, the problem will come back as easily as it is to shred the credit cards.

Originally posted 2008-03-28 10:22:28. Republished by Blog Post Promoter

Before and After that BP Oil Spill Reveals

First of all, I don’t think we should still use the word “leak” for this BP… event. Nor the word “spill” would be appropriate nor sufficient, seeing that oil is GUSHING out at an incredible rate undersea. I thought about “oil stampede” but a friend suggested “oil rush” which sound quite a bit more catchy.

I had said before that when I read current events that I do not focus so much on the specifics of THE event where instead, my desire is to observe the underlying trend of the present time. Here I share the observed trends in the before and aftermath that are common in our culture and society now revealed in the BP “oil rush”.

Trend in the Before — Rushing to “the End”

Beyond all the investigation and quips and quibbles coming out of people’s mouth, the bottom line is so clear that these executives and businessmen have their eyes only on the money at the end. Thus, I shall say with almost 100% certaintay that — they had rushed the construction and drilling of at the oil rig, where processes and workers efforts are rushed and skipped to finish NOW to get the rig drilling.

A rushing mentality can only mean that things are never done right. If I am to build an oil rig like that with such potential disaster, I’d be damn sure to have 5, 10 safety locks and backups to prevent disasters, if not 50. These BP guys put ONE safety mechanism in, and it does not even work. That speaks a lot by itself. Yeah yeah?

And they rush for what? Profit of course. And indeed, they are not alone. This rushing mentality to get things done NOW (for the sake of profits) is pervasive even in all other fields, software, financial, manufacturing, etc. No, and indeed no, no one strives for quality, and so no one seems to do things right (without unintended consequence because intention is off from the very beginning!).

And Of course, we are on a quest to destroy the distance and continuance of time and space in order to instantly satisfy ourselves of all desires… but most the time, for sake of money :)

Trend in the After — Inability to Take Responsibility

Nope, I do not mean this in the sense that someone needs to come out and accept the consequence for this “oil rush”, though it would be nice.

I mean taking responsibility in that we humans all involved have yet collectively come together to do everything, and I mean EVERYTHING to stop further damage to natural habitats from day one. BP what with all their effort labeled with dumb names — top hat, hot tap, top kill, junk shot, etc. — and even dumber results, and also the government is taking their good time. Further, these people seem to spend more time shedding blame and pointing fingers and calculating economic damage than REALLY getting this whole thing fixed.

And so this is the age we have come to. An age where monetary growth trumps all. An age where humans bathe in the glamor and glory of technology. As if gold plated, but only to be slowly rotting from the inside out. I would like to coin the term the Golden Dark Age.

After all, there is one more trend, and that comes from the echo that claims we need to have more regulations for deep sea drilling, and all other things including regulations on the financial industry.

Such naivete for us to have such trust in laws and having more of them. I shall elaborate next time.

Originally posted 2010-06-14 22:39:13. Republished by Blog Post Promoter

To help my cash flow, I refinanced

It’s either networth or cash flow when we measure and talk about the health of our personal finance and how to improve it.

In many cases, money is risked or sacrificed to generate more cash flow through buying some sort of investment to generate monthly pay out. Vice versa is also true when asset that generates cash flow is sold for a lum sum of cash.

I recently just closed on my refinance of my condo… thank god~! This one took longer than I thought. The background story is that I bought my place in 2008 with a 10% down payment when I got lucky in a small window where banks had loosened their lending requirement. That said, I was left to pay private mortgage insurance (PMI) as part of my mortgage. That’s a $200+ on top! Oh, what did I choose to put on myself… anyways, with the recent property price coming back up and mortgage rate down more than ever, I decided to refinance.

refinance_take_my_money

So in my case, I “sacrificed” many thousands to get myself that 20% equity to remove the PMI by going through refinance. That plus the 4% interest rate on a 30-year mortgage, I had reduced my monthly payment by more than $500. Although the “sacrificing” makes me feel sad, I think and feel that it is worth it because if I lose my current job, I have more options such as taking my time to find a job I want, doing a simpler job that means less pay, or even starting my own business. Less fixed cost to deal with is good.

A few other take away points from my refinance experience…

  1. Never expect to close with 30 days or on time because most cases… it won’t. It took me about 1.5 months for this refinance.
  2. For condo owner, know your HOA’s insurance coverage of your dwelling. Because if it already covers the reconstruction of the unit to original form, you won’t need to show prove of your OWN insurance coverage. Unfortunately, I had a young loan agent who is not familiar and that caused me some headaches with handling my home insurance coverage and potential higher premium that is not necessary.
  3. Pending sales DO NOT make direct comparables in the property price appraisal process. Only final sales do.

I was hoping my appraisal price to be higher so I can put less money down in the refinance process. Maybe if the market gets really hot next year, I can try again. BIG if. A man can feel greedy, right? Me think it’s ok as long as I don’t act too greedy.

At any rate, it’s hard for the mortgage rate to go much lower… and many real estate market has rebounded in price. That makes now a good refinance opportunity, especially if it does not cost you a lot relative to what you had saved.

Originally posted 2012-12-26 23:14:48. Republished by Blog Post Promoter

Weight Loss, iPhone, and Osama Bin Laden

Now you must be thinking, how in the world are these 3 subjects connected? Check out the article What We Want More Than iPhone.

In DietTelevision.com’s poll of more than 1000 members of the Facebook community, 32-percent of respondents said they would rather reach their ideal goal weight compared to 30-percent who said they would most want to get an iPhone. Only 21-percent of respondents said they would most like to see Osama Bin Laden caught, while a mere seven percent most wanted to have dinner at the White House.

Of the women polled, 44-percent preferred to reach their ideal goal weight while only 23-percent desired the new iPhone.

Couple thoughts from reading the article
– I am glad that people still care more about their weight, health, and appearance more than the iPhone.
– It is somewhat depressing that more people care for an iPhone than seeing the world’s top terrorist taken out. Can I say materialistic?
– Women ARE more conscious about their weight than their counterpart, which is parallel to the social trend.

Now I have a question for you.
What do these 3 subjects have in common?

Think about it. Now if you really think about it, these 3 subjects that people want are things that all somehow will enable us to have a happier life.

So in other words, happiness IS our ultimate goal, which we often lose sight of in the midst we wanting all these things.

We often don’t consciously relate our wanting of these materials with our desire for happiness. And it’s exactly the same when we lose sight of the goal to achieve happiness when we are so ferverously pursuing success in personal development and personal finance that we would put ourselves through unnecessary pain. Some pain is inevitable in life and necessary as sacrifice for the future, but focus should be on “the ultimate goal.” We must consciously and critically think about these things that we want and also things that we do, whether they will bring us happiness.

Some personal experience as analogy
When I sometimes become frustrated with learning and practicing piano. I feel that I’m not improving quickly enough. “How come I can’t play this piece perfectly already!?!?” Yes, no doubt I want to get better in playing piano, but I forgot that is not the main reason for me to play. I then remind myself that I play because I enjoy playing the piano and I want to continue to enjoy playing. Getting better is the part of process, not the focus, not the goal. I need to focus on the joy of playing the piano. The improvement will come.

Originally posted 2007-06-30 02:15:55. Republished by Blog Post Promoter

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