The Poverty Business

“The Poverty Business” is the title of an article from the May 21, 2007 issue of BusinessWeek. An excerpt from the article:

In 1989, households earning $30,000 or less a year paid an average annual interest rate on auto loans that was 16.8% higher than what households earning more than $90,000 a year paid. By 2004, the discrepancy had soared to 56.1%. Roughly the same happened with mortgage loans: a leap from 6.4% gap to one of 25.5%.

Does this help explain why the gap between the wealth and poor is expanding rapidly in the past years? Not only are these people making less, they also have to pay more. It’s a double whammy!

Another thing is, the poverty business, which includes service like pay-day loan, subprime mortgage, etc., use procedures and strategy that entice the poor or make use of their ignorance to use their service and then hit them with outrageous interest+fee (BlueHippo?). It is always my insistence that we are the results of our own action. Based on that principle, these people should educate themselves financially and know they are getting themselves into, otherwise, it’s their own fault. However at the same time, it’s also problematic that these business are exploiting these folks who are already making less. That’s just adding trouble to misery, kicking them when they’re down, and get them stuck in a vicious poverty cycle.

Who is responsible for this “poverty problem”? The business? Or the people themselves? What do you think?

Either way, this raises another point – there is a need in our society to better educate people on personal finance and raise their financial awareness.

Originally posted 2007-05-20 23:24:21. Republished by Blog Post Promoter

Dealing with Ego

Imagine someone egotistical… how are they like? I predict you have the image of a flaming jerk in your mind. What does it mean to be egotistical? How is it that some people have more ego than others? Following is how I will break it down.

Ego is a product of thoughts. It is a composite of all of our thoughts that project into a self-image of what we think we ought to be. One may think he or she needs to be confident, pretty, macho, skinny, full-bosom’ed, wealthy, know-it-all, normal, non-conforming, etc… Take a moment to look inside yourself to see the qualities and attributes you think you should have. All together, that creates an image of what you think you should be like. That is your ego.

Ego exists in all of us, and it is not necessarily negative. It is okay to have ego. Saying ego is a bad thing is like saying the fact that we have emotions and thoughts is a bad thing.

Most non-physical pain and suffering spring from the fact that the ego becomes threatened. The ego can be threatened by external attacks or through your internal dialogues, where you struggle because you feel you must be exactly like your ego but you are not. Negative emotions are produced in the process, such as anger, resentment, fear, envy, and jealousy. However, it does not have to be like that, with the pain and suffering.

Imagine someone said something to insult you, or perhaps a rumor going around about you. Something to the effect of “You are worthless,” or “You are an ass.”

Do you feel hurt?
How would you feel about it?
In reality, do you become worthless?

You will probably feel hurt and angry, even though it did not make you worthless all of a sudden or take a physical chunk of you away. If anything, it is part of the ego that is lost. Your ego says that you are worth a lot of value, and as this person challenges that, you become angry.

In such a scenario, there are 2 outcomes(choices). You can choose to react purely base on your ego and the resulting emotions. Or, you can choose to react objectively and optimally with the knowledge of your emotions and thoughts. It is obvious which choice can provide a better ending. Hence, ego produces pain and suffering for you when you react to situation base entirely on your ego and your emotions. And you do so because you may yet observe your own ego, and it becomes out of control when you act like you are it.

Now that we are clear about ego being a matter of thoughts and emotions, dealing with ego is the same as dealing with emotions and thoughts. Sorry for being repetitive, but we learn through repetition :)

Once again, the key lies in awareness. As stated, ego is not a bad thing per se. The goal is not to get rid of ego, just like we should never aim to remove or suppress our emotions and thoughts. You must embrace your ego as your emotions and thoughts. At the same time, you are aware of their existence. Once you start becoming more and more aware, you learn that you ego is not you.

In the above scenario, once you notice what you are thinking, the anger can go away because you know the other person did nothing to you, although he did something to your ego. And because your ego is just what you feel and you think, there is no reason to be so dramatic. Unless you feel you are very very important and are at the center of the universe… which is another form of ego.

For more details, please read Dealing with Emotions.

As a personal observation, a lot of thing is out of whack today is due to out-of-control ego. More and more so, the society puts a huge emphasis on monetary and materialistic wealth. THE RULE is that only with abundant or excessive wealth should you be considered successful, and ONLY THEN you can be happy. What craziness.

But as a result, people think they need to be rich. They HAVE TO be rich. Their ego is a rich and “successful” person, and without being aware, people act base solely on such ego. As a result, people do whatever it takes to make money and often do terrible things to the environment and other people. It is truly a sad state of affair, and I studder watching people continue to act upon such runaway-train-like ego. If they keep doing it, a train wreck is simple inevitability.

Originally posted 2008-04-27 01:16:47. Republished by Blog Post Promoter

Terrible June for Stock Market

arrow-down.jpgLet’s be thankful that it’s the 4th of July and the market can take a break from tumbling. The terrible June has left everyone staring at some bloody red balance sheets. Hopefully the market fares better in the 2nd half of the year.

I do not look forward to calculating my networth for June. Oh well.

Now is even more critical to be reminded once again of the important idea of investing long term, instead of dumping the all the stocks and funds at huge loss. As long as you maintain the idea of finding solid investment that provide modest gain and not some get-rich-quick-thingie, whether you went with index fund or not, you should be alright in the long term and hence, best to stay put.

Keyword being “should” because let us not forget that buying into the market does not guarantee return. Even if you buy index funds. Even if you diversify. There is always systemic risk. Perhaps a major catastrophe causes the downfall of the sector of your funds, or the Wall Street somehow disappears, or the global market gets destroyed all together ,or our money system simply disintegrates! Give me your best guess. These are not likely scenario but who knows. Pessimistic? Perhaps. But I am just reminding you that no form of investment guarantees return. It is not a privilege.

Actually, the results of the above-stated disasters may not be that bad. First of all, people are screwed all together in those cases, and as result, we may live in better harmony supporting each other. Yeah, I can be a dreamer sometimes. On another thought, the idea of money may disappear and could return people to the true state of living. Or we may return to an age of the survival of the fittest, which will force people to be physically healthy and capable. Alright, I digress. I am done exercising my imagination.

The current market is a mangled pile of mess that is the result of people desiring unsustainable amount of growth in a short period of time and many of these so-called growth are a result of manual fabrication through layers and layers of abstraction (ie. CDOs). A dozen drunken monkeys in a room probably cause less chaos that that. My opinion is that it will take awhile for it all to untangle. It may even take the next 2-3 years during which we see little to no growth, if no losses, in our investment. But like I said again, we should be looking long-term.

Speaking of long-term, people always quote that the market returns somehwere between 10-12%. I don’t really like that. Past pattern does not predict future, especially the future of a speculative market that is a projection of the ficklest human minds. And when you really think about it, a few decades of data is not even that big of a sample either. People just love pulling statistics out of their donkeys to justify arguments.

Here is the thing, I took a look at the Vanguard Wellington fund that has been around since 1929 and Vanguard’s website said the average return is 8.3%. That gives me some idea and helps set my expectation. I do my diligence in investing — studying, carefully selecting, diversify a good chunk through funs — and I shall be happy if I get a 5-8% return in the long run.

I am in no rush to become rich. The journey is the fun part.

Originally posted 2008-07-03 23:19:44. Republished by Blog Post Promoter

New Year Resolution is Silly

It’s that time of the year again. It’s that time of the year where everyone sets grandeur plans and shouts that those plans shall get accomplished. It’s that time of the year where gym is all jammed, albeit temporarily. Oh, new year resolution, allow me to say a few words about how silly that is.

It’s ok to talk and have fun talking about it… it’s still silly though.

Silliness of Emphasis on Weight Loss

As much as we always talk about positive thinking and affirmations and as much as we emphasize aggression in our society, losing weight on the contrary is such a defensive maneuver while positivity in this context implies becoming healthy. Losing weight does not mean becoming healthy.

While losing weight is usually a natural side effect in the process of becoming healthier, the way people lose weight often neglects the restoration of the body to a healthy state and worse yet, they sometimes do things that further undermines health, JUST to lose weight. As such, speaking, we are missing the point logically and pragmatically.

Silliness of Emphasis on New Year Resolution

What I really mean is not that new year resolution is completely and utterly silly. It is symptomatic for the fact that people cannot act or achieve without setting a goal.

I mean that the way we are emphasizing new year resolution is silly because in doing so, we completely neglect to look at our entire life as a complete process. We are treating our lives as a repeated process of going from point A to point B. It is easier to think like that but it is also far from reality. When we get so narrow-minded by goal, it is equivocate to mistaking a tree for the whole forest.

I mean that because, we had so focused on these small steps, milestones, we never get down to thinking about the character that we want to be as a person and what we really want to in life. The importance of character to a person is like what a wine connoisseur called “body” in wine.

So maybe instead of new year resolution, we should have life resolution and that is to an on-going effort to work on our characters.

The difference in questions is “What am I going to do this year?” vs. “What am I going to do with myself in life?” or “What kind of person shall I become?”. Which one is more aspiring?

A more concrete example is the questions “How do I become president?” vs. “How can I serve my fellow citizens?” Note the difference.

Who you are and aspire to be drives your behaviors and habits. You cannot change who you are without first facing who you are, in its entirety, without self-deceit. And then go from there.

Silliness of Rugged Individualism

It is too easy to say it’s all genetics and that we are born and grown up in certain way and that is that. But genetics and conditions only afflict on us a tendency which does not have to be, and to say otherwise, you are surrendering to the belief that there is no free will.

If you had not sit down and take the time and effort to re-examine yourself, you are not going to create any real and permanent change. You’ll forever be a random juxtaposition of concepts and ideas that happened upon or drilled into you. You can enforce short-term change that may work for a little while but never lasts. Change by repression without understanding does not liberate. That’s why there’s what is call the “rebound.”

You cannot change who you are until you see who you are. It sounds simple but what is simple is always most difficult. It boils down to…

(And if you continue living your life without ever done a self-examining process, you will forever be either what others want you to be and/or a pretension of who you THINK you are.)

Rugged individualism – to shout “I am who I am” – without ever first discover who it is that you are, is silly and leads to insecurity in ourselves, and insecurity turns us into sheeps and conformists because we will feel that need to band together (and eliminate those who are different) to feel a bit more secure. And that is the state of affair we are in. And that is what we are teaching the next generation by being great “role models”.

Silliness is that rugged individualism leads to conformity.

Self-Examining

People who rebound had never internalize their change… they didn’t really change in the first place because they had not discover the inner character that drives their behaviors.

Who you are shows. As Emerson once said, “Who you are screams so loudly into my ears that I cannot hear what you say.” That is indeed true that your character will be obvious to someone who pays attention and is aware.

Thus, it is helpful to: Focus not on what you said you will do. Focus not on what you think you did. Focus on observing your own action in various contexts to understand who you really are. Likewise, if you care to observe and understand others.

We, national and global populace (even most of our so-called leaders), are so accustomed to focusing on very short-term and “me-me-me” while I sincerely believe, a complete human being (shall we say an evolved, wise, and intelligent human being?) requires also the ability to think far and wide.

The prediction is: Until we, as individual, as fellow earth dweller, as global citizen, go through a period of self-examination and only after follow with actions that is base on self-understanding and thus also our connection with our surrounding world, the world will continue to get worse, before it gets better. There will still be more and more man-made crisis – be it medical, environmental, financial, etc. – (and probably made even worse by natural phenomena) in the coming years, until we had confronted ourselves. That’s the prediction.

Happy new year and I wish everyone a wonderful, peaceful year ahead/
vs.

Originally posted 2012-01-01 00:15:38. Republished by Blog Post Promoter

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