How to be Rich, Happy and Free from Scams

by Robert Kiyosaki At this time of financial crisis, people are seeking good, relevant advice. But this can be hard to find. The following is typical of a question you would see in a financial publication -- and its less-than helpful answer: Q: What can someone whose 401(k) is down do to rebuild their retirement savings? A: For anyone who is at least five years from retirement, there is probably time for their investments to right themselves. Resist the urge to take money out of a 401(k) or to stop making contributions to it. Research has shown that dollar-cost averaging -- investing at given intervals -- pays off well in times of crisis. Check whether the wild market swings have thrown off your asset allocation -- the specific mix of stocks and bonds that makes sense for an individual's financial goals and risk tolerance. If so, then rebalance it by selling shares that are overvalued and buying those that are below optimal levels. Focus on low cost.... Blah, blah, blah. How naive...

By Jeannine Aversa, AP Economics Writer Economy has worst slide since `82 -- and tailspin is accelerating as Americans ax spending WASHINGTON (AP) -- Battered by layoffs, debts and dread of worse to come, shoppers clutched ever tighter to their wallets in the final three months of 2008 and thrust the economy into its worst downhill slide in a quarter-century. Americans cut spending on everything from cars to computers, and it's only getting worse so far in the new year. All told, the economy staggered backward at a 3.8 percent pace at the end of last year, the government said Friday. And the tailspin could well accelerate in the current quarter to a rate of 5 percent or more as the recession churns into a second year and consumers and businesses buckle under a relentless crush of negative forces. Spending cutbacks hit everywhere last quarter. Shoppers chopped spending on cars, furniture, appliances, clothes, food, transportation and more. Businesses dropped the ax on equipment and ...

By Shamim Adam and Haslinda Amin Jan. 29 (Bloomberg) -- Singapore, whose state-owned funds invested about $24 billion in UBS AG, Citigroup Inc. and Merrill Lynch & Co. in the past 14 months, said the worst of the credit crunch is yet to come. The world’s biggest banks still have toxic assets on their balance sheets, which are clogging up their ability to lend, Singapore Finance Minister Tharman Shanmugaratnam said in an interview with Bloomberg Television yesterday. The finance ministry oversees Government of Singapore Investment Corp. and Temasek Holdings Pte, each managing more than $100 billion. Banks are still focusing on replenishing capital “and estimates of the extent of bad assets on their books are still on the upswing,” he said. “We haven’t seen the worst yet.” Bank losses worldwide from U.S.-originated bad assets may reach $2.2 trillion, the International Monetary Fund said yesterday, more than the $1.4 trillion it predicted in October. U.S. President Barack Obama’s adm...

BUSINESS sentiments in Singapore's manufacturing and services sectors have further darkened in the face of the worsening global economic downturn. More companies expect the business situation to deteriorate in the first six months and orders to further weaken due to the steep global economic decline. The firms most affected are those in the electronics, precision engineering and chemical clusters. Outlook for the services sector is also less upbeat, with firms expecting business conditions to become less favourable. The dismal expectations were borne out in two government surveys released on Friday. In the survey carried out by the Singapore Economic Development Board (EDB) between December and January, which polled 412 manufacturing firms, 63 per cent anticipate deterioration in the sector, with only 6 per cent expecting the situation to improve from January to June. Overall, 57 per cent of manufacturers expect a less favorable business outlook in the first half year compared to t...

BELEM (Brazil) - LAY-OFFS around the world brought on by the economic crisis will result in social upheaval and violence that could herald the death of capitalism, unions meeting at the World Social Forum in Brazil said. Such unrest would be a painful but necessary step towards a new world order that is being delayed by efforts to save the old, crippled one, argued the labour organizations, mostly from Latin America. 'It's obvious the effects of this crisis will be large-scale social conflicts,' Martha Martinez, the Americas director for the World Federation of Unions, told trade unionists here on Thursday. Governments were already making moves to forcibly repress 'social fragmentation,' she said, citing conservative-ruled Colombia and Peru as examples. Long-cherished hopes of a workers' revolution were bubbling up all over the forum, which had gathered 100,000 people from left-wing groups as a counterweight to the World Economic Forum in Davos, Switzerland wher...

NEW YORK - BERNARD Madoff allegedly ran the mother of all pyramid schemes. Now meet the kids. Call them mini-Madoffs - men less ambitious, perhaps, but copying the same alleged fraud and, like Madoff himself, being hauled before judges. The latest is Long Island financier Nicholas Cosmo, arrested on Monday and told by a court Thursday that he must remain in detention while lawyers and prosecutors negotiate bail terms. Cosmo's alleged $370 million (S$557.6 million) pyramid, or Ponzi fraud, would be peanuts compared to Madoff's alleged $50 billion scam. But in essence, the two alleged frauds were the same and so were others emerging across the country, as investment pyramids collapse from New York to Florida and Georgia to Pennsylvania. The Ponzi scheme, named in honour of 1920s fraudster Charles Ponzi, is one of the oldest tricks in the book. A conman promises investors big returns, steals their money, then disguises the theft by using some funds to pay out phony profits. When t...

BERLIN - A SURGE in German unemployment and Asian job cuts signalled deeper distress in the world economy on Thursday but an index of European confidence beat expectations and traders took heart from a US economic rescue package. Official figures showed the jobless total in Germany jumped 387,000 in January over the previous month to almost 3.5 million, well above forecasts for Europe's largest economy. The unemployment rate surged to 8.3 per cent of the workforce from 7.4 per cent in December. There was also dismal news on the labour front in Asia's largest economy with Japan's Nippon Sheet Glass Company saying it will shed 5,800 jobs by 2010 and Toshiba announcing plans to cut 4,500 jobs this year after going into the red. Toshiba chief executive Atsushi Nishida told reporters that the company aimed to cut 300 billion yen (S$5 billion) in costs in the next financial year to weather the global crisis. Other titans of Japanese industry were also showing the strain with Sony...

SINGAPORE'S Finance Minister has warned that the worst of the credit crunch is yet to come. The world's biggest banks still have toxic assets on their balance sheets, which are clogging up their ability to lend, Mr Tharman Shanmugaratnam said in an interview with Bloomberg Television on Wednesday. The finance ministry oversees Government of Singapore Investment Corp. and Temasek Holdings Pte, each managing more than $100 billion. The state-owned funds invested about US$24 billion (S$36 billion) in UBS AG, Citigroup Inc. and Merrill Lynch & Co in the past 14 months, said Bloomberg, Banks are still focusing on replenishing capital 'and estimates of the extent of bad assets on their books are still on the upswing,' said Mr Tharman. 'We haven't seen the worst yet.' Bank losses worldwide from US-originated bad assets may reach US$2.2 trillion, the International Monetary Fund said on Wednesday, more than the US$1.4 trillion it predicted in October. US Presiden...

DAVOS - CHINESE and Russian leaders Wen Jiabao and Vladimir Putin on Wednesday blamed the United States for causing the global economic crisis on a gloomy first day of the Davos forum. Both called for a new attitude by President Barack Obama, while deepening pessimism over the future of the global economy enshrouded the World Economic Forum. Chinese premier Wen said America's voracious appetite for debt and 'blind pursuit of profit' had led to the worst recession since the Great Depression which has rocked the 2,500 strong political and business elite gathered in the Swiss mountain resort. Mr Putin said the disappearance of some Wall Street titans over the past six months testified to the errors committed. Mr Wen blamed the crisis on 'inappropriate macroeconomic policies of some economies' and 'prolonged low savings and high consumption,' in a lightly veiled attack on the United States. He blasted the 'excessive expansion of financial institutions in bli...

GENEVA - UP TO 51 million jobs worldwide could disappear by the end of this year as a result of the economic slowdown that has turned into a global employment crisis, a United Nations agency said on Wednesday. The International Labour Organisation (ILO) said that under its most optimistic scenario, this year would finish with 18 million more unemployed people than at the end of 2007, with a global unemployment rate of 6.1. More realistically, it said 30 million more people could lose their jobs if financial turmoil persists through 2009, pushing up the world's unemployment to 6.5 per cent, compared to 6.0 per cent in 2008 and 5.7 per cent in 2007. In the worst-case economic scenario, the Global Employment Trends report said 51 million more jobs could be lost by the end of this year, creating a 7.1 per cent global unemployment rate. 'If the recession deepens in 2009, as many forecasters expect, the global jobs crisis will worsen sharply,' it said. 'We can expect that for...

MADRID - THE Spanish economy is in recession for the first time since 1993, contracting during the final two quarters of 2008, an estimate by the central bank here showed on Wednesday. Spanish gross domestic product (GDP) shrank by 1.1 per cent in the fourth quarter of 2008 compared with output in the previous three-month period, when it contracted 0.2 per cent on a quarterly basis, the bank said. The negative 'tendency' for the Spanish economy demosntrated at the beginning of the year 'intensified during the fourth quarter, after the international crisis worsened,' the bank said. The generally-used technical definition of a recession is two quarters running of negative economic growth. Spanish GDP rose by 1.1 per cent on an annual basis in 2008 but the bank said this represented a 'sharp slowdown from the annual growth of 3.7 per cent observed in the previous year'. The national statistics institute INE will publish its official estimate for fourth quarter Span...

By the Mole, Money Magazine's undercover financial planner NEW YORK (Money) -- In the last two years, I've been writing columns as the Mole for CNNMoney.com and Money Magazine, with the goal of helping the consumer make informed decisions, and of making financial planning a profession rather than a sales job. I have been contacted by the Financial Planning Association and CFP - the licensing organization for Certified Financial Planners. These organizations claim to share my goals, yet I still see a wide divergence between the talk and the walk. For example, I received an email from the CEO of the CFP Board that stated "Our professional review staff investigates each complaint it receives." I'm sad to say I tested this claim and multiple attempts haven't even been successful in getting an acknowledgement that the CFP Board received the complaint. If there ever will be a financial planning profession to serve the public, our actions must be consistent with our ...

World economic growth is set to fall to just 0.5% this year, its lowest rate since World War II, warns the International Monetary Fund (IMF). In October, the IMF had predicted world output would increase by 2.2% in 2009. It now projects the UK, which recently entered recession, will see its economy shrink by 2.8% next year, the worst contraction among advanced nations. The IMF says financial markets remain under stress and the global economy has taken a "sharp turn for the worse". In another gloomy view of the UK economy, the Institute for Fiscal Studies (IFS) said Britain would be saddled with government debt for more than 20 years. IFS director Robert Chote warned that spending would have to be cut or taxes raised by more than planned to allow public finances to recover. The predictions came as Pascal Lamy, the director general of the World Trade Organization, urged countries not to react to the global economic crisis by resorting to protectionism. Speaking from the World E...

WASHINGTON: - A staggering 90,000 layoffs were announced over the past two days as major companies in the United States and elsewhere reeled from the effects of dwindling demand in the economic downturn. On a day being called 'Bloody Monday', several major firms announced the job cuts - the largest culls in a single day ever. The shedding continued yesterday. Corning alone said that it would trim its payrolls by nearly 5,000 as demand dried up for the speciality glass it produces for flat-panel TV and computer screen makers. Grim news poured in from other corners of the world too. In Japan, electronics maker NEC Tokin said it would slash 9,450 jobs as the government outlined a plan to inject state money into ailing companies in exchange for equity stakes. The move echoes the partial nationalisation of some troubled financial firms in the US and Europe. In Rome, Fiat CEO Sergio Marchionne warned that Italy's auto sector could shed 60,000 jobs. In Iceland, the Prime Minister ...

WASHINGTON: - A staggering 90,000 layoffs were announced over the past two days as major companies in the United States and elsewhere reeled from the effects of dwindling demand in the economic downturn. On a day being called 'Bloody Monday', several major firms announced the job cuts - the largest culls in a single day ever. The shedding continued yesterday. Corning alone said that it would trim its payrolls by nearly 5,000 as demand dried up for the speciality glass it produces for flat-panel TV and computer screen makers. Grim news poured in from other corners of the world too. In Japan, electronics maker NEC Tokin said it would slash 9,450 jobs as the government outlined a plan to inject state money into ailing companies in exchange for equity stakes. The move echoes the partial nationalisation of some troubled financial firms in the US and Europe. In Rome, Fiat CEO Sergio Marchionne warned that Italy's auto sector could shed 60,000 jobs. In Iceland, the Prime Minister ...

LOS ANGELES - A FATHER apparently upset over the loss of his job shot dead his wife and five young children before killing himself, police said on Tuesday. A Los Angeles Police Department (LAPD) spokeswoman said the family of seven was found dead at a home in the suburb of Wilmington south of Los Angeles at around 8.30am. Police believe the man killed his family and then committed suicide. The identities of the dead have not been released. 'Right now we're investigating as if the father killed his wife and five kids and then turned the revolver on himself and killed himself,' LAPD Deputy Chief Ken Garner told KFWB radio. Mr Garner said police were originally contacted by a local television station, which apparently received a telephone call and a fax from a man saying he was going to kill his family and himself. Mr Garner said the fax indicated the man may have recently lost his job at a west Los Angeles hospital run by US health care group Kaiser Permanente. 'He was de...

WASHINGTON - THE current global financial turmoil may take a bigger toll on emerging Asia than the 1997-1998 regional crisis despite the region's enhanced financial muscle, an international financial group warns. Economic growth in the region 'has been severely affected by the global collapse in goods demand' resulting from the present crisis, said the Institute of International Finance (IIF), a leading association of financial firms. 'As a result, the slump in industrial production has been more significant and more rapid than in 1997-98,' it said in a report released in Washington. 'The severity of this slump relative to 1997-98 is a result of the breadth of weakness in demand components - both domestic demand and, especially, external demand have fallen this time - as well as the geographic breadth in the weakening in growth,' the report said. Most conspicuously, rapidly growing China has been more affected in the current crisis than it was in 1997-98, II...

By Robert Armstrong, contributing writer NEW YORK (Fortune) -- In his inaugural address President Obama took just a few sentences to make the simplest and most compelling possible argument for buying stocks now: "Our workers are no less productive than when this crisis began. Our minds are no less inventive, our goods and services no less needed than they were last week or last month or last year." He may be on to something. The S&P 500 closed at 837 Monday, having lost almost half its value since October of 2007. It looks like a fire sale, and investors with cash on hand - if any are left - should think seriously about buying. Even Robert Shiller, the noted market bear who called the dot-com and housing bubbles, has recently said that the market is cheap by historical standards for the first time in years. But there is a simple argument for ignoring the President and Professor Shiller and staying out of the market: The lower valuations still don't reflect risk levels...

BEIJING - China must do more to ease public distress as it battles a slowing economy and rising unemployment, a leadership meeting said, warning officials the global slowdown was colliding with the nation's reckless mode of growth. The warning came from a meeting on Friday of the ruling Communist Party's Politburo, a 25-member elite council, the official People's Daily reported on Saturday. The report from the meeting chaired by President Hu Jintao did not mark a break in Beijing's judgement of the economic outlook. But it underscored the worries dogging the government as China heads into the big Lunar New Year holiday next week. After the break, tens of millions of rural migrant workers will head to cities and factories looking for jobs - which may not be there. 'Our country's economic and social development faces some stark conflicts and problems,' said the official summary of the meeting in the People's Daily. 'At present, the main ones are the im...

By Mark McDonald and Bettina Wassener Published: January 26, 2009 HONG KONG: Hong Kong's gleaming past and current desperation are right there, plain to see, on Vincent Chan's wall - photographs of more than a hundred Bentleys, Rolls-Royces and Jaguars for sale, luxury cars dumped by their once-flush owners in need of some ready cash. Chan sells only one or two cars a week now - a third of the sales traffic his dealership has done in recent years. And under pressure from his bank, he is prepared to sacrifice any of his beauties at a loss, just to free up some money. He is ready to haggle. The Chinese Lunar New Year began Monday, and projections for the Year of the Ox from astrologers, lawyers, bankers and fishmongers are anything but auspicious. "The mood is confused and desperate," said Kerby Kuek, a feng shui master and Chinese astrologer. "Two years ago, people would ask me if they should change from a medium house to a big house, or from a Nissan to a BMW. ...

By Darryl Robert Schoon For Ponzi schemes to succeed, they must expand faster than the request for redemptions. If they do not, they will collapse. This is what happened to Bernard L Madoff Investment Services, the largest Ponzi scheme in history. The same is about to happen to capitalism. Although capitalism is not a Ponzi scheme, credit-based economies, sic capitalism, and Ponzi schemes share the same fatal flaw. Both must constantly expand or they are in danger of collapse. Today, because capitalist economies are no longer expanding, but contracting, their continued contraction will lead to collapse. PUNDITS PUNDIDIOTS & PREDICTIONS Dr. Philip Tetlock, author of Expert Political Judgment (Princeton University Press, 2005), has done remarkable work regarding the ability to accurately predict future events. In a highly disciplined scientific study, Dr. Tetlock had asked experts to predict future events and over 20 years analyzed their predictive accuracy and methodology of thinki...