History Repeats Itself?

Back in 1998, Robert Kiyosaki in The CASHFLOW Quadrant wrote, "Historically, if people lived to be 75 years of age, they live through two recessions and one depression. As baby boomers we have gone through two recessions, but we have not yet seen that depression. Maybe there will never be a depression again. But history does not say that."

He further said, " Just as there are waves on the ocean, there are great waves in markets. Instead of the wind and sun driving the waves of the ocean, the waves of the financial markets are driven by two human emotions: greed and fear.

I do not think that depressions are things of the past because we are all human beings and we all have emotions of greed and fear. And when greed and fear collide, and a person loses badly, the next emotion is depression. ... Economic depressions are emotional depressions."

Wow! What an explanation. Is he an economics history professor? Economics philosopher? Economics prophet, or what?

Forbes magazine wrote, "In the year 2010, the first baby boomers turn 65. In the year 2010, instead of adding money to the stock market, baby boomers will begin withdrawing money from the stock market ... if not earlier."

From the above, it appears that the present economic tsunami and financial meltdown is not something that is unexpected.

The U.S.A. is the world's number one international debtor. Numero Uno! Just servicing the debt amounts to some $250 billion! That is just the interest payment, baby! Not the principal.

The principal is some $40 trillion! People like Robert Kiyosaki have said, "The world will realise that the U.S. will not be able to borrow its way out of ... problems." It also means, without any new policy or financial invention, the U.S.A. may go bankrupt. Sooner or later. So, you better be careful where you put your money!

I attended a 4-week training program on 'Oil and Gas Accounting' in 1985. The American professor who conducted the training had a similar view.

Is 2008's global financial turmoil (starting with the U.S. sub-prime loan crisis), the manifestation of what some economists have been aware all along, all these years?

The manifestation of greed, with which the sub-prime loan crisis has been attributed to. And the manifestation of fear, which has led to the credit crunch when even banks have no trust (or confidence) in another bank's ability to pay. For fear that the other bank may collapse completely. And no wonder - 25 U.S. banks failed in 2008 compared to 3 in 2007. With even the likes of Lehmann Brothers going bankrupt, and global Citibank needing a U.S. government bail-out.

There appear to be many around the world who are still in denial about the present global economy going to be in a depression. Perhaps it is politically incorrect (or dangerous) to say that you will be facing a depression soon.

Perhaps afraid of a self-fullfilling prophesy? I guess it's a little bit too late now for such a thing.

The moral of the story? Understanding history is important because it indicates where you have been. And where you will likely be going.

All indications for the year 2009 (as prophesied by Robert Kiyosaki and similar like-thinking economists and businessmen) is that you are going to experience a global depression. Maybe worse than the 1930s!?!

If you follow the Boy Scouts' motto "Be Prepared", you have nothing to worry. If not, then may the Good Lord be with you.

There is a silver lining in the clouds, though. If you are a true investor, this is the opportunity in the crisis. Everyone will be selling (stocks, real estate, etc). In a fire-sale (arising from people being emotionally depressed), the calm investor will go for the bargain.

Are you a calm investor? Then, strike when you are ready!

I wish you Success in your undertakings and Good Health and Wealth to you and your family. Take care!

P.S. It now appears that for $3000 (or less), you can buy a house in some parts of the United States. The banks have to sell the houses (almost for free) so that they are not burdened with maintenance charges and local taxes. (The other big reason is that banks are not in the home realty business, but in the money-lending business, so they do not want to keep any foreclosed house on their accounts). Of course you may need another $15,000 - $20,000 for repairs. Or you can just demolish the house and build a brand new one. The land, for one property with 0.38 acres, is certainly worth more than the $3,000 plus the demolition costs.

P.P.S. On 29/Jan/2009 I read that the International Labour Organisation (ILO) forecasts that(for a worst case scenario) global unemployment could rise (by the end of 2009) by 51 million people, to 230 million (7.1% of the world's labour force). The worst recession since the Second World War.

Do You See Obstacles, or Opportunities?

What happens to you when you see obstacles? Will you be energised to act, or will you be petrified to act??

What happens when you see opportunities? Will your energy level, to take action, decrease or increase?

You are aware of the story of the two shoe salemen who were sent to a certain country to do a market survey for their product? Salesman 'A' saw the so-called natives not wearing any shoes. He reported to World Headquarters in "Malaysia - Truly Asia", "There is no market potential - no one's wearing shoes here." Will salesman 'A' be motivated to take the next step to meet his sales target?

Salesman 'B' also saw that the natives were not wearing shoes. He reported back, "There is a massive golden opportunity here - no one's wearing shoes yet!" Will Salesman 'B' be moved to take immediate action to meet his sales target?

What your mind focuses on, expands. When your mind focuses on obstacles, you see obstacles.

When your mind focuses on opportunities, opportunities seem to appear in front of you. Sometimes, as though out of thin air.

Remember when you were thinking of buying a new (say, a Toyota Rush) vehicle? Didn't you, suddenly, become aware of Toyota Rush vehicles on the road as you drive your old dilapidated jalopy? This is the Law of Attraction in action. What your mind focuses on, your eyes will see.

I have talked to dozens of my friends and acquaintances regarding an investment program in properties which gives at least a 20% annual Return-On-Investment (ROI). (I have no financial rewards or share in this program. I simply wanted to share the financial reward opportunity).

Only two guys understood what I was saying about the program. One guy was because his father-in-law was personally using a similar business model, as his primary source of income. The other guy was because he and his brother were using a similar business model to generate an additional source of income.

The other guys only saw obstacles when I explained the program to them. "It's too good to be true." "Beware of people collecting money from you, giving good returns in the beginning, and one fine day disappearing into thin air."

A similar business program was presented to some 500 people in Singapore in June 2008. The preview showed how money could be made from opportunities arising from the U.S.A.'s sub-prime loans crisis.

Yes, many people will unfortunately lose money from the sub-prime loan crisis. Yes, they chose to be in that position (although you may not agree with this statement). A few will make money from the sub-prime loan crisis. Yes, they also chose to be in this position. Life's a choice, don't you think so?

The annual Return-On-Investment was stated as 19% to 26%. "Too good to be true", thought the cynics, who see obstacles in their mind. "Sounds a very reasonable rate of return", thought those who have the knowledge (or experience) of how the property market works.

Exactly the same presentation and information, but completely different interpretations or views. Interesting, isn't it?

The moral of the story? Opportunities abound. Whether for a business opportunity, or a life partner! Look and you will see! Ask and you will be given!

I wish you Success in your undertakings and Good Health and Wealth for you and your family. Take care!

P.S. A very good friend of mine joined the property investment program when I told him about it. He said he trusts me (thank you sir!). I believe his trust in me jumped a quantum leap when he saw the bank cheque from my investment! ... Hehehe ... he's one smart guy, don't you think so?