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RM543 Billion to be paid as bonuses.

How would you feel when someone is paid a bonus which you may never earn in your lifetime? Actually if you happen to work in a plantation company and it was a good year, a 12 month bonus is not uncommon. This is true even for banks. Of course, the basic would not as high as a typical MNC but then again a typical MNC would never give you a 6 months or a 12 months bonus. In Britain, the bonus payout for ONLY the bankers and insurers are expected to exceed £100bn by the end of March 2015. That’s ONLY about RM543 billion. This is as per analysis by the Robin Hood Tax campaign on the data from Office for National Statistics.
This bonus number is equal to £1,500 for every man, woman and child in the UK. Some of these investment bankers actually earn more than what most people could ever do in their lifetime. Robin Hood Tax campaign is a group of 119 UK organisations including Barnardo’s, Comic Relief, Oxfam, Friends of the Earth, Stamp Out Poverty and the TUC. In a statement issued by David Hillman of the Robin Hood Tax campaign, he said, “This eye-popping sum is evidence we live in a two-tier Britain where an unreformed financial sector continues to pocket huge rewards while the rest of us are left to clear up their mess.”
Actually, what he said is quite true. The reason why some of these financial pay so much bonus is because it does not want to lose key talents who helped them to earn extraordinary profits. To earn extraordinary profits year after year, it is obvious that the risks taken would be higher every year. That one particular year where everything went wrong would be the year the government would have to step in to rescue these institutions failing which the whole country goes into trouble. It is not too far-fetched to imagine this happening in the near future. Perhaps Britain may still be doing okay because due to public pressure, some of the banks are reducing the payout and some banks which were bailed out previously would be announcing even smaller bonuses. There’s no need to ask me which country may have the highest risk for this to happen. Read here: USA: 48% of banks lower lending standards
In another statistics for UK, the financial sector makes up about a 10th of the UK economy, but accounts for well over a third of all bonuses paid out. Awesome right? For those who worked in sectors which contributed so much more to the economy but getting lesser bonuses, I seriously think that you should encourage your children to go into the financial sector. Skip the doctor or engineer mindset. They really do not earn anywhere near these bankers as shown by the stats. Too bad, I am also not part of the financial sector. I think I should be able to do well enough to get a huge bonus every year. During a bad year? Well, my bonuses on the good years would have easily covered that one year. Okay, back to reality. Happy investing.
written on 27 March 2015
Next suggested article: Standard & Poor’s rating for Malaysia, subsidy and competitiveness

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.


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