It’s ten year later next year. Financial crisis thoughts.

Reported in The Guardian was this particular statement, “The Financial System is still blinking red. We need reform more than ever.” Do read to understand more yeah. In brief, some points put forward was that there are still arguments about the best way to reform the economy. The author does not like President Trump’s views. Here’s an earlier article. Donald, do not touch the tough regulations Some stats were also shared. For example, the financial sector in the U.S. creates just 4 percent of all jobs but contributes a quarter of corporate profits. The writer reminded everyone that the father of modern capitalism, Adam Smith believed that the financial system existed to serve the the real economy. It should not be the other way round. (What this tells us is that a lot of these cheap money in the financial system were NOT lent to businesses which need them to grow their business but was borrowed by companies which are using it for financial related products and services and of course ever more startups focusing on the internet) The article can be read here. Quite a lot of good learning. 

What about our financial status since 2008? For the past 9 years, are our personal finance blinking red? I think paying credit card bills in full is one sign. Anyway, it does not need to be perfect but are things under control? Are we having properties which we are struggling to pay the mortgages every month? Talk to a good real estate agent for some solutions. A ‘hair-cut’may be needed if we have indeed overstretched ourselves. Do we sweat every time our car breaks down because our salary is not enough to cover unforeseen circumstances? Can we do something about it? Seriously, there are cars which are far cheaper to maintain even if some of our peers may ‘laugh’at us. Are we still renting an expensive place because we could not accept cheaper places? It’s always a trade-off but when we are still young, perhaps it’s easier to do. It will get harder to do as we age. 🙂

What are the reforms that we have done thus far where money is concerned? Not enough money to pay some bills but owns a place currently? Renting out 1 or 2 rooms is not such a bad idea.  Staying in a posh place with awesome looking people? It’s better to save much more and have an ‘awesome’ looking bank account instead. Have we moved to a much easier to maintain kind of car? Older cars do not mean higher maintenance fyi. There are new cars which have  more problems even if they may be better to drive! There are a lot of other financial reforms that we could do. It will strengthen our foundation so that we are doing okay even during bad / slow times. Getting ready for unforeseen circumstances would be one of the best reforms we could do too. Medical expenses will be getting ever more expensive and not lesser. Education fund for the kids, perhaps? Happy ‘reforming’instead of stagnating. Cheers

written on 16 Sept 2017

Next suggested article:  Household Debt Malaysia vs Assets as per Allianz Global Wealth Report

 

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