The brink of capitalism

As Wall street tries to steer its way though this week, one by one of its giants are falling. It all started with Lehman Brothers, one of the oldest institution in wall street crashing on 4 billion dollars worth of debt. Despite talks with Barclay Bank and Korean Development bank, none was able to rescue Lehman which eventually filed for bankruptcy on Monday 16th of September 2008.

The chain of events further weakens AIG the largest insurance company in the world. On the previous week AIG was reported to be seeking 40 billion of loans from the Fed. But suprise suprise it turns out AIG was in the far worst condition than anybody has expected. The Feds eventually rescued AIG for the sum of 85 billion dollars.

Who is next? Morgan stanley shares are plummeting and Goldman Sachs as strong as it is seems shaky. In the UK Lyodds just took over HBOS. Six of the among largest central bank is pumping over 270 billion dollars to the stock market in an effort to prevent market from further crashing

Steping out and looking at a larger picture and one has to wonder, where has all the money gone? We do not see global production of any commodities or manufacturing drop so much in one day as the drop of the market in Wall street.

It is when one understands the core of capatilist that such drops and bankruptcies are possible even when production of everything else is relatively stable

I shall not bore you with the details of how capitalist works. But strip everyting from the regulation and conservertive investments, capitalist works on greed which is the very most intristic nature of humans. The more greed the market the more positive the growth. Prices start of companies and assets becomes inflated , far more that what their initial value is. Unregulated and uncontrolled the positive growth can turn into a bubble. Stock prices become overinflated and like any bubble become to overstessed. Investors are paying a lot of money expecting a good return. However, companies, consumers and production cannot keep up with investor's expectation. Turning sour the investors sell away the holding to minimise lost.

Prices tumbled. In an event when a lot of this happens market declines. Suddenly the very people who works for the company loses their job because when the investors pulled out the company does not have enough money to continue operations.

The customers loose too. Not only that they loose the product that they have been loyal, all the extra money that they have paid for the product ( cost of production ) has been robbed away by the capitalist.

In the end of the day, Its the capitalist who becomes rich. This is even when markets are down. And it seems that this has been a vicious cycle again again.

If you want to be rich and you can't beat them, then join them. Of course there is a different between a smart capitalist and a foolish one. A capitalist looks when the market is in recession and starts investing on good stocks that are cheap. when recession is over, market price will go up along with profits. However, do not be over confident. Take the money out before it drops again.

The ability to spot the right time to buy and sell as well as being able to more or less predict the trend that defines a smart capitalist. An even smarter capitalist would be able to move from one stock to another thereby sustaining profit even when the general outlook of the market is poor.

So there you go. If you do not know a lot about investing start reading the books concerned with it. Do not directly jump start on buying stocks but follow the market first to get a feel on the market. Start small and roll the money. Lastly, don't be a fool and put everything you got on something that you are really not sure about.

have the right attitude

Of course wanting to be rich itself is not enough. There are certain behaviors that has to be imprinted within you so that you have the right attitude for the path of richness . Among my suggestions are:


1. Think about the pennies.
Every penny counts. Sometimes you may think its just a couple its just nothing and you should forget about it. Wrong! it all starts with the ignorance of a penny and then progresses on to larger denominations. Before you know it you will be spending more than you are making.
Nevertheless, this does not mean that that you have to be stingy with your family and friends. A penny extra goes a long way in building lasting relationship to which it may turn to a more money making ventures. And don't even start on the gratitude part

2. Optimize and save

Once you have establish the importance of pennies and pounds its time for you to save them appropriately. make sure that each of those extra pennies count to savings. Big amounts can go to the bank. but its the little ones that you may need to save. Its not the matter of how much you save but its a habit for you to eliminate wastage. Wastage is a rich man's no. 1 enemy.

Of course you don't save when it comes to things that are more important. Things that would make you actually lose more than you save. for example you waste time looking for your 1 ringgit note where at the same time you are missing a multi million dollar meeting. That's just penny wise pound foolish.

3. Invest, Invest, Invest

Saving alone won't make you a rich man... yes, you can live a comfortable life, but you won't get rich. Time and time again the world has proven only the people who invest are the one who gets it all. Be it on you own business or property or some else's business

Besides business, investing is your second best chance of getting rich minus the hard work of growing a business.

When talking about investment there are of course a certain attitude mold to follow in order to be a rich investor. It is a characteristic of a successful investor to be a risk taker. For obvious reasons, the higher the risk the higher the returns. But be reminded a rich investor despite taking risk, the risk taken is a calculated risk. Taking risk without any basis is just plain foolish and definitely an attitude that could make you poor

4. Live with no regret

Many skillful people trying to be rich gets trapped in this limbo. They all begin with an optimistic view of being successfully rich. After failure of the first attempt many gave up for a not so rich and but comfortable live. In the end of the day their life do not involve any risk because they are scared. Hence their wealth is stagnant and do not grow as much over time.They become the classic of being conservative.

A person that aspires to be rich must not fall into this trap. Positive attitude despite failure is important in order for the perseverance attitude to thrive. Failure in the beginning at most times are imminent. One must not give up but instead use it as a lesson for the next get rich project.

Things happen. It's your choice to be in the right get rich attitude of seeing the half glass full or live as a cynic by seeing the glass as half empty.

It Starts today

The interest is there. However, the creation of this blog marks the turning point of idea of being rich to just the confines of coffee shop talk. This blog would not only act as a central repository of business ideas but also acts as a discussion forum to strengthen the ideas of being rich

As being rich is about diversifying, My post would be categorized to the following sections:

• Investments
• Starting your own business
• Ideas and discussions
• Projection

As this blog is alive, contents may evolve through time. As such do check often as when times go on, contents may be obsolete. However, it is my intention to keep all contents publish and archived so as to be able to trace to be able to trace the developments of be it a model, idea or even to track progress on projects.

Constructive comments are welcomed!