Benifits: Why I Am Against Jobseekers Allowance

Growing up, we have all heard of the story of the ant and the grasshopper. The ants slog all through the summer to save food for the winter and the grasshopper is having the time of his life feeding on everything that’s on offer without a care in the world as to how he is going to deal with the oncoming winter. Lo and behold, winter arrives, the ants are in their anthill all warm n cosy sipping on their cups of tea ( or ant food! ) and the grasshopper is now shivering in the cold and hungry and is almost about to die when the ants see him and take him in give him some food to eat and tell how it’s necessary to save for the bad times! The grasshopper realises his mistake and promises that this will not happen the next season and that he will be more careful in future.
Now I know legions of people who grew up listening to stories like this and others encouraging people to save for the bad times. Infact, the origins of the retirement fund lies in this very story! And yet I am sceptical about if I would ever read this story to my kids! I am terribly afraid that they will get the wrong message because the logic has well and truly reversed in the modern day welfare state!
A modern day welfare state promises all its citizens a certain jobseekers allowance when they are out of job. The best part of this allowance is that you don’t get it if you have enough money saved in your bank etc. So, what it means is that when you were in job if you had managed to save any money during that time, you have to first take that money, spend it all, make yourself utterly and completely bankrupt and then apply for state support which comes in at approx. £650 pm. Or the other (and more wise option) is never bank your money when you were in the job, just take all our salary out and stash it under your mattress. That way when you are out of job it will be easier to prove you are bankrupt as your bank account will be empty ne ways. Also, another wise way would be to run a massive credit when you are in job that way most of your income is spent furnishing the credit and you can live a luxurious life as long as it lasts and when the job goes (and your things on credit!) you can always count on the nanny state to support it bankrupt sons and daughters.

My ideas must sound incredulous (stupid!) however that’s what its come to! The bankruptcy of thought in the government is running at an all-time high. And actually the 2nd suggestion in the paragraph above is not that out of the ordinary. Its pretty much every middle class person in Europe and America is doing already (and almost every middle class person in BRICS following suit closely). As to elaborating on the bankruptcy of thoughts in the government, I recently heard that the national minimum pay in UK is going up to £6.10 per hour. As soon as this number was talked about, the trade unions and all the other organisations were up in arms about how that number is low, and how the poor were hoodwinked etc. and I cant help but think is it really low?? And why is it illegal to pay someone lower than that when the government itself thinks its ok and does so??
Before I am chastised or you lose interest in this article, let me quickly elaborate. The government if you are out of job pays you £650 a month as job seekers allowance. A month has 150 working hours (37.5*4) so effectively the government is paying a person £4.34 per hour when he doesn’t have a job and reckons that that’s enough to make do for a month. However, the same government by law prohibits businesses from paying anything lower than £6.05-6.10 per hour (£900 per month approx.). That doesn’t make any sense to me! If the national minimum wage was set in order to make sure that the employers don’t pay less than whats basic minimum requirements of living, then why do they themselves pay less??? If  £650 is enough why is it higher for business???

The best way out of this mess would be ideally keep the national minimum pay compulsory for minimum pay (£900) not to the employer but to the employee. What I mean by this is, the employer and employee should strike up a job and a salary. Now if this salary is less than the national minimum pay, then the shortfall is filled in by the government. This way neither party loses! The employee gets fair wages, the employer gets an employee at the wage that his business can sustain and the government ends up only paying the difference instead of £650 all the time. Also, this way if the employee has to avail the government benefit, he will have to come and register at the government offices which will solve the problem of undocumented labours. Also, this will make Britain’s labour market more cost efficient to the businesses. This will also have a profound effect on the foreign labour that’s coming to do unskilled jobs as they won’t get the government salary support making Britain’s labour better option for businesses.
As always let me know what you think

Consumer Debt: Being Debtfree - Student Loans - Means of Better Life or Golden Handcuffs??( Part Four)

Is there a cost to education? Or is it necessary to get it at any cost? Should the rising university fees stop any one from getting the all important education?? Are student loans a good way of supporting your time at the university? Will the education and the raised living standard “higher salary” counter the cost of education or will student loan eventually be the golden handcuffs that all of us will sport for a long .. long time to come??

I am currently doing some research on Emerging markets and as such have been reading lots of financial news from India and China. While browsing through the financial newspapers, what caught my attention was one of the insignificant financial news, which I thought had profound social implications. The newpaper reported that a bollywood flick ‘Three Idiots’ (http://www.imdb.com/title/tt1187043/ ) was one of the highest grossing foreign films in China! Now although this piece of news finance was not the most eye popping financial news I read that day it certainly is the most socially significant problem in the emerging markets and the story seems to have attracted just as many eyeballs on the other side of the Himalayas. The story of ‘Three Idiots is about students in a engineering school how against all odds are trying to get the education. They come from different backgrounds some rich, some poor battle against all odds and go on to achieve their goals in life. It seems to have hit a nerve in the emerging markets and from what I have seen the story is not that dissimilar in the West either!

In recent years, the UK and Europe in general has seen a lot of student demonstrations against the governments for cutting the aid to higher education which resulted in higher education fees ( this by the way was a direct effect of the sovereign debt crisis, but this blog is about consumer debt / types of personal debts so I wont discuss it any further in this blog ). The student bodies were complaining that the fees were unsustainable and that average student will be have £50000 debt by the time they are done with their university. To make matters worse the government was trying to explain its ‘repayment plan’ ( or the lack of !! ). It said the student will have to pay the loan back only when he / starts earning over £21000 in a year and any balance after 20 years will be written off!!! Now, I don’t know about what my good readers think about this scheme but if there ever was a Ponzi scheme, this is one!!! This is a blueprint for defaults in 20 years time. What the government is saying in no uncertain terms is that students should take loans for studying and in the event of them not getting a job ( which is a very high possibility given that students are being enrolled on courses which have no market value, just so that universities can lay hands on more government aid via the students!! ) they don’t have to pay it back or even if they do get it back the repayment is 11% of their income above £21k i.e. unless a student earns well over £30k from day 1, the repayment will never even cover the interest on the loan let alone the principal!!! And ladies and gentlemen hold your breath, cause if you thought that this has the subprime crisis written all over it, think again, cause atleast in the case of sub-prime crisis, there was a property against which loan was given, hence atleast part of the repayment could be ensured by selling the property, in this case there is no collateral! So if a student doesn’t get a job, then he not only gets jobseekers allowances but also gets his loan money waived off!!! Now many would argues that no one would want that, but to me this is actively encouraging the youth to not work cause if they work their earnings will not be that much higher ( after loan repayment and taxes ) compared to their allowances! From the information I have, governments across Europe and the US are following policies that are not that different from the ones in UK! All this means more pain for the tax payers (yes any one who earns more than £7450 per year ) in coming 20 years!!!

So as usual, by this time, I assume the reader must be thinking, that although most things that he read make some sense, whats the alternative?? Not studying?? Surely that’s worse?? By this time the regular readers of this blog must have guessed that just like in parts 1, 2 and 3 of this series, I will present an alternative. Don’t get me wrong, I am not suggesting that people should not study! Infact I would actively encourage people to study! Liking a subject and then getting as much knowledge as worldly possible can be very rewarding and as I had written in one of my previous blogs ‘Pleasure’ (http://socyberty.com/philosophy/pleasure-the-essence-of-good-life/ ), it can be very satisfying. The question is not if you should study, but how you should study! A dear friend of mine and an inspiration in many ways has lived a debt free life got educated and is one of the happiest man on earth! I am going to tell his story in this blog which is in many ways an alternative to traditional sources of study.

My friend got out of school at the age of 18. He was a decent student and had finished in the top ¼ of his class. During his previous summer holidays, he had worked as a sandwich maker at Subway. Although it wasn’t his favourite job, he decided to go back to do it after finishing school as by this time he had become mates with the stores manager. As he spent more time in the store, he realised that there was lot more to business then just making and selling sandwiches! And the whole business aspect of the franchise fascinated him, and 6 months into his job he decided that business management is his area of interest and that he would pursue it. BBA is normally a three year full time course but a very reputed university does the same course part time in 5 years. He got enrolled in that course. The curriculum was not any different than the full time course, just that there were less modules per semester. My friend worked 4 days full time and attended 9 hours of lectures 1 day every week. He usually had 2 exams and one mini project to be handed in every semester. He finished his course in 5 years and secured a higher second class. However, what I thought was most impressive was that at the age of 23, he had no education loan or any other kind of debt and owned a car and most other luxury items that we can think of! Oh and 5 years into Subway, he was now a manager of the store earning an impressive £23500! per year ( in 2005! ). Infact he had used Subways supply chain management that he had learnt on job as an example of process improvement for manufacturing industries as his final year project! Talk about on job training! When I look at his example, and compare it with the more traditional route of full time bachelors degree, I can clearly see that he at 23 was much better placed than many others that I know. He had a healthy bank balance, a much better understanding of his personal finances, had never suffered lack of money ( as he was always on 4/5th of full time income all through ). Not to mention that he was never out of job and as a result had even managed to progress in what is usually considered as a dead beat job. His degree and years of experience as store manager at Subway helped him to move on to bigger things. He now manages a high street retail store and earns 2-3 times his Subway managers salary. All through living a debt free life! He still doesn’t own a house, but given his income I think he will be able to buy one in less than 10 years!

The point I am trying to stress here is knowledge is important and necessary, but debt isn’t! I think the standard way of getting educated is making people less and less creative. The shackles of debt as soon as they leave university prevent free thought and creativity and happiness that follows get replaced by this instant urge to repay the debt, or to make up for the lost time. Infact I would go so far as to argue that opening up the mind to various new thoughts and ideas which is the very purpose of fruitful education gets well and truly lost in the modern way of acquiring education via a debt ( student loan ). I think my friend is just one example of living debt free ( without student loans ). I can think of many more examples where car mechanics ( mechanical engineers ), waiters ( hospitality ), cooks, office assistants, literature and drama etc can be learnt on job while studying part time. The extra years spent in acquiring will be offset by the years of experience gained ( which based on my personal experiences always counts more in the real world! ). What do my good readers think about this?

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Consumer Debt: Being Debtfree - Renting vs. Owning( Mortgaging )?? Part Three

Consumer Debt: Being Debtfree - Renting vs. Owning( Mortgaging )?? Part Three

Is being debt free a pipe dream? Can it be done? Can a house be bought debt free? More importantly, is it necessary to buy a house? Is renting bad? Does it make more or less financial sense to rent??

In my previous blog, I wrote about the story of my friends and how they looked completely different on the day that they made the last payment on their mortgage. I am sure theirs wasn’t an isolated story and that this scenario has been witnessed by almost everyone in our daily lives ( our parents? ). When I started writing about the consumer debt and how it can be avoided or should be avoided, I got a very positive response from the readers. Most of my readers agreed that debt for consumer items is uncalled for and is best avoided. However, there was always an exception made to this rule for items that are deemed expensive i.e. generally cost more than 3-4 months salary. Car and house were the most common examples cited. In part 2 of this series ( ..) I had written about how if debt is avoided a car can be bought in less time than required to clear off the debt and also if things were to go bad how you will not lose you sleep over it. The problem with debt ( car loan ) is that if things do take a bad turn, no matter how many payments you have made your car will be repossessed and payments will be taken by selling it. The problem with this is that a new car is subject to roughly 20% depreciation every year. So the value of car drops more quickly then what you have paid off in the 1st, 2nd or 3rd year of your loan repayments ( typical 5 year car loan). This is called ‘negative equity’. Simply put, even when the car is sold, you still owe money to the bank! Imagine this scenario: you have lost your job, now lost your car and just to add insult to injury, you still owe money to the bank for a car that you no longer own! One of my family member is a car salesman and he would tell us how his firm had to repossess cars and then send bailiffs in order to secure the full payment, it was a common theme in car loan market. On the other hand ‘negative equity’ was an unheard phenomenon in the real estate market. Things have changed and how!!!

Most middle class people dabble in the stock market. They may or may not be good at it but still everyone likes to put some money ( may be negligible ) in some shares, if for nothing else than, to have another talking point at the pub! However, not many people dabble with the options and futures market. When asked, the common reason cited is that ‘leverage’ is a beast! Most options and future contracts can be owned by fronting around 10-20% ( called margin ) of the total cost of the asset i.e. a futures contract of £100 can be bought by putting up £20 ( sometimes even less – depending on your broker ). If the cost of the contract goes up by 10% i.e. £10 and you sell it, you make a 50% profit on your original £20 investment! On the other hand if the cost falls by £10 you make a 50% loss! This in short is leverage, it can make or break fortunes and hence common people tend to avoid these risky investment vehicles. And yet almost everyone buys a house ( and a holiday home! ) by fronting only 10% deposit on a £165000 ( avg. UK house price ). It means if the house price goes up by 10%, you stand to make 100% on your original investment ( £16500 ) however what everyone conveniently forgot ( until 2007 ) was that leverage is a b*tch! And works both ways i.e. 10% ( don’t even want to imagine 25% ) drop wipes out the original equity! A further drop can quickly be equal to or more than a years salary!!! If things go bad, you will not only lose your house, but still owe enough money to the bank that the debts will only be written off with your death!! Can anyone recall ‘Merchant of Venice’ and the demand of pound of flesh?? This demand of a pound of flesh or rather the its absence could be easily seen on my friends face when they paid off their mortgage ( although I have to say being close to 60 is not the ideal time to be debt free! Well actually there is no ideal time to be in debt! )

So then I hear you say, what’s the alternative?? Most of us don’t have the required £165000 required to buy the house. Does that mean we should never own one?? Is that not careless?? Also, isn’t renting throwing the money? If you have the mortgage, at the end of it, you atleast own a house!? These are all legitimate questions, some of which are typically used as sales tactics by real estate agents. Now I am going to provide you with an alternate scenario. This scenario will rival the standard way of ‘buying’. A 25 something couple buys a avg. UK home £165000 by paying 10% deposit £16500 and pays towards the mortgage. Rate of interest 4%. I used an app call mortgage calculator to find out what they have to pay per month. It is £785 approx. The home insurance, maintenance and property tax ( £1800 approx. per annum ) is another £100 per month i.e. they are liable to pay 16500 + ( 785+150 )*25*12= £297000!! Also the first 16500 down payment does not yield any interest ( 4% ) and that loss alone over a period of 25 years is more than £20000 which should be added to the eventual cost paid ( 297000 + 20000 ) taking the house price to £317000!!! I can go on and on, but I think my readers get the picture that when a house is bought at more than 180% of its cost price, it costs you precious time of your life ( lost in the extra repayments ).

Now look at the alternate scenario, you have £16500 instead of buying the house ( £165000 ) you decide to rent it at £500 a month ( again this is personal experience! I have done it for the past 5 yrs in one of the most sought after locations in midlands!) This saves you ( 285+150 ) £435 every month compared to your mortgage i.e. £5220 a year. Now all you need is some excel sheets and if you work it out, at 4% interest rate your initial £16500 and £5220 that you would add to it in 25 years, you will not only have lived in the same house but will also have £250000 as bank balance! Also, you will never have to worry about the house prices going up or down and in the worst case scenario, if one or both lose their jobs, they will have a bank balance to support them through their worst times!! I think it can be done. Most Germans rent. Only the really rich ( and most people who do not buy houses at 25 can be rich by 40!! ) buy houses.

I think there are lessons to be learnt. Living debt free in not a pipe dream. It is not privy of the very rich. Financial freedom truly is the best freedom! It can and will change your life.

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Opportunity: It Never Knocks Twice… Or So They Say

Opportunity: It Never Knocks Twice… Or So They Say

Is the old cliche true? Does opportunity not knock twice?? Is that our experience in our day to day life?? Why do so many people believe this “truism”? Why is it taught at the management schools??

I sat at the table, looked around, the hustle and bustle from 10 min back was replaced by an almost pin drop silence. The only noise was that of the cutlery on the dishes as people quickly munched on the Christmas dinner. How many Christmas dinners can I have before I call it a day?? This was my second for the day and 8th in as many days. I sipped on the wine and what fine wine it was! Needless to say I had plenty to drink and was revelling in the Christmas spirit. I said good bye to my friends and as I got out ( stumbled !! ) of the restaurant I realised that I was way too drunk to be driving. Now this restaurant is right in the city centre so I decided to stay at the bus stop right outside the restaurant and take the ride back home. Just as I was deciding to take the bus one went by right in front of my eyes! What timing I said to myself. The public transport in Belfast can be dodgy even at the best of times, and 15 min into my wait I realised that waiting for another bus on Christmas eve might not be my best option ( 25th obviously was a holiday even for the buses! ) and looked over my shoulder to see if there was a taxi in sight. None. So I did what every tech savvy person would do. I googled Belfast taxi and started systematically calling each number that came up in search. After about 10 calls I had given up the ghost and was almost ready to start walking home ( 2 miles in sub zero temperatures and bone chilling winds! ) when the pink and white angle ( yes it is pink ) trudged to a halt at the pole and the doors ( to heaven ) opened. One to city centre I said and off we went. Now this seemingly boring sequence of events may not sound or feel as eye-catching as some of the other things that we experience in life, but in the space of 20 minutes I had gone from “Ah what an opportunity squandered”, “I am never at the right place at the right time” to ” you beauty, good thinking”, “well done”. On reflection this is pretty much the story of life. I have been part of so many, ‘if only I had taken that decision’ or ‘if only I had done that then things would have been different’, ‘opportunity never knocks twice’ chats that I have almost accepted it as a part of life. But that night ( may be it was Christmas that made me think more?? Did I hear any one say the wine?? ) all I could think was that I might have been out in the cold had I not waited at the bus stop trying to call a taxi. So then, is it right that opportunity does not knock twice? Do you have to be at the right place at the right time to get ‘lucky’?

I have had many a chats with my friends on this topic. Grab the opportunity by both hands when it presents itself, cause it never knocks on your door twice is one of the most used clichés in the management world. I have already made my thoughts clear on the management world in some of my blogs ( http://bizcovering.com/management/leadership-lead-by-example-naaaah/ and http://bizcovering.com/management/team-work-2/ ) and I hold the view that no one can be taught management. It is to be learnt, the hard way in the school of EXPERIENCE! Coming back to the topic, so then if I think opportunity does come your way again and again, whats all the fuss about? To be very blunt, I think it is a very nice way of making money of people who are already under the cosh! I believe that being at the right place is very important but not necessarily at the right time, cause that is then down to luck. People who work hard and be at it, show patience will get many opportunities and as long as they are in the right place, there will always be that next bus!

I am a big fan of people who have made something out of nothing! No, I am not talking about magic here. I am talking about people like Bill Gates, Steve Jobs etc. These people did not depend on the government handouts or any other charity for that matter. They showed lots of dedication and hard-work. Infact the example of Steve Jobs first run at Apple ( Macintosh etc. ) is the best example of someone at the right place and having patience to wait for the right time and opportunity to come and knock on the door again ( ipod ) and again ( iphone )!! The story of the legendary bollywood actor Amitabh Bachchan and his second coming through the Indian version of Who Wants to be a Millionaire has achieved folklore status, is just another example.

I am also completely unimpressed by people on state benefits ( jobless allowance ). It is almost in fashion today to say that this is due to the lack of opportunity!! This to me a slap across the face to all those hard working men and women who went out there searched far and wide and got whatever they could. Any one who waits and thinks that right place and right time are necessary, will more often be found in the dole queue explaining to others how he missed the opportunity of a life time. Also, a quick mention to what I alluded to earlier in the blog, experience is the key. You don’t get it unless you put in the hard yards, and with experience come opportunities. So my logic is pretty easy, don’t wait for the best thing to fall into your lap. Start with whatever, remember, being at the right place is more important ( not necessarily right time!! ) and with experience will come opportunities. To take a bus, being at the bus stop is important, that however doesn’t mean you stop calling for the taxis, that option is always open!!!

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Greed: 99% vs. 1% or 99% Who Failed to Make It to 1%??

Greed: 99% vs. 1% or 99% Who Failed to Make It to 1%??

Are we IN midst of a major social battle? Is the 99% Vs 1% occupy campaing worth its salt? Is the purpose misplaced? If the rich are greedy, are the poor( not rich) any better? were rules( unwritten) broken on both sides?? Have we conviniently forgotton that it was our greed( along with others) that is responsible for current situation?

I love bar natter. It is almost impossible to predict what you will be talking to a person at a bar let alone who you will be talking to! It might be a 65 year old pensioner, a 40 something Irish dancer or a 22 year old hot girl! To make things clear from the outset, I am just as comfortable talking to all, no preferences ( well….. that may not necessarily be the whole truth but for the sake of this blog, lets assume my statement as ultimate truth and move on ). Also, the range of subject not only amuses me but sometimes even truly baffles me. Politics, religion, rich and poor, dictators, tyrants, conditions of the hospitals, weird things and experience around the world, culture and the list goes on. But I have a funny feeling that I don’t need to stress anymore on this topic as almost everyone of us have had one ( actually many ) of these over the years and dare I say will have many in years to come. It was just one of those damp cold night in the city of Belfast ( I know I am not being specific as this description fits 350 out of the 365 days in a year! ) and I found myself with my friends in one of our favourite bars. Unfortunately, I had a long day at work and had driven straight from work to the bar and so had to keep myself away from the ever so tempting pint of Guinness. Being sober in a bar at 8 o clock is not so bad, but when its close to midnight, its torture!!! Clearly my friends were having a lot better time then I was J. I started to look around to see if I could find anyone who was having as ‘good’ a time as I was and a girl caught my eye. She was I thought mid – late 20s and from the looks of it, was designated driver for the night. I said ‘Hi’ and to cut long story short after a few pleasantries we got talking. Just when you thought you have seen everything in life, life throws a curve ball at you! The girl was an activist and was part of the occupy Belfast campaign ( inspired from the occupy wall street campaign ). You know where I am going with this don’t you. Lets just say the talk wasn’t the typical bar talk about likes and dislikes.

As much as I was trying to skirt around the issue, curiosity got the better of me and after a few minutes of chit chat I asked her what was the purpose of this campaign?? The answer I got was in many ways not what I expected. The campaign was aimed at the council authorities that were going to enforce cutbacks in their yearly budgets to charitable institutions jobseekers allowance etc. I like people who are driven by causes and hence there was something innately likable about this girl. But then again I am a man of firm thoughts and have my own belief structure so I couldn’t help but question some of the things that she was saying. I asked her so what exactly is this demonstration aimed at? She said that just like in America, it was the 99% telling the 1% that cutbacks that hurt the poor the most are not the solution to the problem. Now I was not going to argue that the poor people should be in anyway taxed more or that their government supplies should be cut etc. but I thought she ( and most other who are debating on this topic ) aren’t looking at both sides of the coin. Most people are looking at the ‘have nots’ and blaming the ‘haves’ for all the trouble. Now althought there is some element of truth in that I am not totally convinced that a sweeping statement against every rich ( or poor ) person is the answer.

Our chat invariably led us to the 2007 crash and the repercussions of the same that are being felt even today. So I asked her, who do you blame for the crash and without a moments hesitation came the answer BANKERS ( she called them Banksters, implied reference to ‘mobsters’ ). Now I asked her how do you think they are responsible for that? She said that they gave loans to people who could not afford it ( teaser rates on home loans that were low to start with and shot up in 2-3 yrs ) and as a result there were foreclosures and people lost their hard earned life savings while they made their money on commissions and got rich. Now there is not much there that I can disagree with. As a matter of fact, I have no doubt that this is what happened. I have seen and read a lot on this topic, enough to know that even people who were in prison somehow managed to get mortgages!!! But the point is, did the bankers or estate agents put a gun to anyone’s head and ask them to sign on dotted lines accepting the mortgage? Even if there have been isolated incidents when this happened ( I don’t know may be may not be ) it is hard to believe that all the mortgages signed all across America ( or the world for that matter! ) were done in this fashion. So then the question remains, that yes the bankers were giving loans to people who didn’t deserve it and that they were greedy, raking up their commissions in the process, but didn’t people who signed up to these mortgages have any responsibility? Should they not have been more careful ( and realistic ) about their financial position and ability to pay back the mortgage?? So if it is a question of greed, who’s greed was greater, the one who offered the loan or the one who accepted it knowing that it is a big risk?? I have talked about unwritten rules that we follow in one of my previous blogs ( Rules: Are They Made Just So That They Can be Broken?? http://is.gd/4BI6Fb ) and it is sufficient to say that unwritten rules were broken on both sides and the reason was greed.

As much as I was trying to skirt around the issue, curiosity got the better of me and after a few minutes of chit chat I asked her what was the purpose of this campaign?? The answer I got was in many ways not what I expected. The campaign was aimed at the council authorities that were going to enforce cutbacks in their yearly budgets to charitable institutions jobseekers allowance etc. I like people who are driven by causes and hence there was something innately likable about this girl. But then again I am a man of firm thoughts and have my own belief structure so I couldn’t help but question some of the things that she was saying. I asked her so what exactly is this demonstration aimed at? She said that just like in America, it was the 99% telling the 1% that cutbacks that hurt the poor the most are not the solution to the problem. Now I was not going to argue that the poor people should be in anyway taxed more or that their government supplies should be cut etc. but I thought she ( and most other who are debating on this topic ) aren’t looking at both sides of the coin. Most people are looking at the ‘have nots’ and blaming the ‘haves’ for all the trouble. Now althought there is some element of truth in that I am not totally convinced that a sweeping statement against every rich ( or poor ) person is the answer.

Our chat invariably led us to the 2007 crash and the repercussions of the same that are being felt even today. So I asked her, who do you blame for the crash and without a moments hesitation came the answer BANKERS ( she called them Banksters, implied reference to ‘mobsters’ ). Now I asked her how do you think they are responsible for that? She said that they gave loans to people who could not afford it ( teaser rates on home loans that were low to start with and shot up in 2-3 yrs ) and as a result there were foreclosures and people lost their hard earned life savings while they made their money on commissions and got rich. Now there is not much there that I can disagree with. As a matter of fact, I have no doubt that this is what happened. I have seen and read a lot on this topic, enough to know that even people who were in prison somehow managed to get mortgages!!! But the point is, did the bankers or estate agents put a gun to anyone’s head and ask them to sign on dotted lines accepting the mortgage? Even if there have been isolated incidents when this happened ( I don’t know may be may not be ) it is hard to believe that all the mortgages signed all across America ( or the world for that matter! ) were done in this fashion. So then the question remains, that yes the bankers were giving loans to people who didn’t deserve it and that they were greedy, raking up their commissions in the process, but didn’t people who signed up to these mortgages have any responsibility? Should they not have been more careful ( and realistic ) about their financial position and ability to pay back the mortgage?? So if it is a question of greed, who’s greed was greater, the one who offered the loan or the one who accepted it knowing that it is a big risk?? I have talked about unwritten rules that we follow in one of my previous blogs ( Rules: Are They Made Just So That They Can be Broken?? http://is.gd/4BI6Fb ) and it is sufficient to say that unwritten rules were broken on both sides and the reason was greed.

I am aware that after reading this some of you might think that I am playing the devils advocate in this blog. But its not just that. I genuinely believe that the demostrators are missing the point and that instead of blaming everyone left right centre, people should accept responsibility of what happened. Remember the rich were rich even before all this happened, and probably will stay rich long after. The choices are to keep looking and them and feel sad about your life or find a new way to look at it and try to be happy. What do my good readers think? Would love to hear from you.

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Consumer Debt: Modern Day Slavery??

Consumer Debt: Modern Day Slavery??

It was the late Friday afternoon. I was just returning home from a gruelling day of work and all I could think about was a nice cool beer and a natter with the friends. Little did I know that the weekend what the rest of the day had instore for me! I remember clearly, at about 5.00 clock I got a call from my friend. The voice on the other side was not the usual jovial one and just as we were exchanging pleasantries it was clear to me that the news wasn’t good. “ So tell me whats the problem” said I. I heard a deep sigh on the other side of the phone, “ how do you know about the it”?? “I don’t” I said, “but clearly this is not the normal you that I am used to listening, so go on and tell me” and then she said the dreaded words, “ my husband has got the pink slip”. I suppose in the world that we live in today this line is never our of place. Almost every conversation at the pub invariably had a so n so who lost his job just like that on a Friday afternoon without any warning, or they didn’t even bother to inform him face to face just an email or something along those lines and yet you always think it will never happen to you or anyone you know!

As I was driving to my friends place, I was not sure what I was going to say or do. I knew them for quite sometime and her husband was a very qualified software engineer with 7+ years of experience. I was sure that someone like him will always get another job! Yes, I thought, that’s what I am going to say to him. It’s a temporary blip, people like him don’t remain unemployed for a long time. Also, I thought to myself, he was very well paid ( or so I presumed ) and must have recourses at his disposal. I thought to myself, if I lose my job today, I would think on the same lines. I have enough savings to keep me going for about 3-4 months and then I can always find something as a stop gap arrangement if I don’t get what I want right away. With all these thoughts racing through my head, I reached their house, quickly parked my car alongside his BMW. Even as I was doing that. I thought, look at this he is my age and has done so much better than me. He has a great car, a house of his own, goes for holidays twice a year, has a lovely wife, he will get through this ok. And its probably this though process that accentuated the impact of what I was going to see next.

My friends husband was already drunk. As I entered the house, she said to me that he is going through the motions and is oscillating between declaring that he never wanted to do that job ‘good riddance’ to his life has been destroyed and that he will never be the same man! He was also shouting at my friend calling her names and blaming everyone who was in the house ( his family and close friends ) for the mess that he was in! I know this man for the last few years and I was almost dumbstruck at how he was behaving. I went into the room, and tried to calm him down. I held him with both hands, then gave him a hug and asked him one simple question “ whats bothering you the most”? You are a well educated well qualified engineer with lots of experience under your belt, you will always get a new job, so why are you behaving as it the world as you know it has come to an end!? Now I agree it wasn’t the most appropriate question in the circumstances, but I thought someone had to knock some sense into him as his behaviour was freaking out his wife and parents. Two mugs of black coffee later he said to me that he never liked this job, infact he hated it and yet he went there day after day for the last 7 years, endured his boss ( who according to him was barely human! ) all so that he can have a good life. I looked around at his house and at this point I had to say “ So what’s the problem? Look around you don’t you think you have everything you want? You can always get a new job and everything will be just as before”? And that’s when I realised what the real problem was. He said to me that everything in the house was bought on EMIs ( easy monthly instalments ) and that he is going to lose everything if the bills weren’t paid in a weeks time. This unfortunately wasn’t the worst of the declarations, he had a credit card balance £8000 outstanding ( at 24% = £160 a month just in interest). Every electronic thing in his house was on pay monthly basis through the store cards ( yes even his Ipod! ). Even the furniture and cutlery weren’t bought by paying the full sticker price! Also the big ticket items like house and BMW were on monthly instalments. He said to me that he hated his job so much that every day when he got up, his wife had to push him out of the house. Everytime his boss shouted at him, made him work long hours on short notice, he did it because he knew even a month without the job meant that he will lose ‘everything’. He always wanted to start his own business but never had the capital or time to do it. And now after all those years of torture, the one thing that he thought he was doing it for was taken away from him even without a weeks notice! The whole evening passed listening to how his life was miserable and how helpless he felt doing that job.

On my way back to my house, I could not help thinking how a man earning upwards of £3000 per month still thought that the day he lost his job was the day he lost everything? More so, I couldn’t stop thinking about why he kept doing a job ( under a tyrant boss ) that he so clearly disliked? And the only answer to all this was consumer debt!! Like most of us, my friends husband did not think twice before buying almost everything on EMIs. Yes, they had even bought their yearly holidays ( two a year!! ) on EMIs from a reputed travel company. The consumer debt he had taken was so huge that leaving his job ( actually the very thought of not having a salary at the end of the next month ) was never and option, he couldn’t ‘afford’ it. I couldn’t help but wonder, are modern families equivalent of slaves from the middle ages?

By definition ‘Slave: A person who is the legal property of another and is forced to obey them’. Now I know some of you may think that comparing a well paid engineer to a slave is one step to far, but please hear me out. In the middle ages the slaves were made to work long hard hours and in return all they got was enough to keep them alive. They never had the time to express themselves or manifest their creativity in any way. I have already written about why most people tend to hate Monday (http://socyberty.com/issues/monday-a-love-hate-mostly-hate-affair/ ) so I will not go into details of that here. Also, when I wrote about the pleasures of life (http://socyberty.com/philosophy/pleasure-the-essence-of-good-life/ ), I have said that getting rid of the 9-5 routine is one of the goals of my life and there are lessons from this story that I will try and learn and hopefully not emulate. Coming back to the point, as far fetched as it sounds I think that’s what modern day consumerism is doing to people like my friends husband. The social pressures of ‘having it all’ are making us slaves to our jobs and indeed our bosses and organisations ( many people take loans from their organisations and are then required to serve them until the loan is paid back ) and killing our creativity and individualism in the process. We are becoming less and less human and more and more like machines, a cog in the wheel that keeps turning day after day! Most people that I know, their only way out is retirement and the money they get after retirement! Is there any other way out?? I think there is, and I will make it the topic of one of my blogs to follow.

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Attitude: Ambrosia of Winners??

Attitude: Ambrosia of Winners??

What is attitude? Is positive attitude necessary for winning? Do circumstances dictate attitude? Is positive attitude cause or effect of a winners mindset?

Staring at the light overhead I stood there cursing. I had just missed a shot, an easy one at that. The score line was daunting and inspite of all the exhaustion and pain endured over the last hour and half, all that mattered were the next two points! How do I play my next point, how do I get over the agony of missing a straight forward shot, how do I interact with my partner? What is he thinking right now? So many things to consider before I take my position on court to play the next point. And yet as I looked over my shoulder trudging back to my mark, I saw the steely look in my partners eyes, a look that said, I know you are tired, but you better not give up on me now!! It was so intense that for a moment I forgot that its only a game of badminton, but boy it could well have been WAR!!! I knew then, no matter how tired I felt, I had to pick myself up. I have to give it my 100% for my partner was not taking no for an answer. In a strange way it inspired me. I took those precious extra seconds to gather my thoughts and stood there to play the next point. As luck would have it, the pair on the other side were just as tired as we were and two unforced errors were made giving us the match. I saw my partner clench his fists in delight. All that stern determination was gone replaced by pure joy. He was actually more relieved then happy and there I was right next to him thinking that I was so tired 2 minutes back and here I am jumping up and down with joy! We live life for moments like these and yet as I was walking away from the court, all I could think about is how that one look from my partner made me stay on the court and put in that extra effort. I had always wondered what made winners different from the others, and here the answer was starting me right into the eye. Its this magic word ATTITUDE!!

I had written earlier about a management seminar that I attended and how they discussed about team work ( http://bizcovering.com/management/team-work-2/) and Leadership ( http://bizcovering.com/management/leadership-lead-by-example-naaaah/ ) qualities. Attitude or to be more specific positive attitude was often listed as one of the qualities of a good Leader and strangely attitude was important for being a good team member! So is positive attitude important to be successful? In a simple world, the answer would be a plain and simple and an overwhelming YES! However, life is never so black and white. I think too often we tend to take parallels from the world of sports or army ( highly organised group ) as anecdotal evidence for the recipe of success and based on that it is easy to conclude that a positive attitude is a must for success. Life in general though is never so straight forward and more often then not has shades of grey. One of the popular joke to explain the positive attitude of managers is that they think that if one lady can get pregnant and deliver in approx 9 months then two can do it in 4.5 months!!! I don’t think I need to elaborate the scenarios in office when the ‘positive’ attitude of bosses often ends up upsetting the employees and creating an environment of discontent!

Your attitude towards life is a good reflection of your state of mind. Circumstances often play a role in moulding the attitude of individuals. Each person follows a different path in life and its his or her experience that often reflects their decisions and is often wrongly interpreted as their attitude towards life. So then the big question is can attitude be developed? Or is it a personality trait? Can a person be moulded into thinking in a particular manner? Can we be ‘programmed’ for success? If I were to a classic cause effect analysis, I think winners develop a positive attitude and not vice versa. I know it’s a wee bit controversial to say that cause since we were kids we were told that attitude is what separates winners from losers. I think the thing that makes anyone a winner is practice! As mundane as it sounds, that is exactly what it is! It is often said that some people just have the right attitude that is necessary to become a winner and I think this myth is one that has perpetrated into the inner sanctum of our society and our minds. And I for one don’t buy it.

I later asked my badminton partner what made him behave the way he did and did he know that it inspired me? He said he wasn’t sure. But the more he played and the more he won, the more he wanted to win! And as he tasted success and got into the habit of winning positive attitude followed. What I learnt from this and many other experiences is that attitude doesn’t make winner, but it helps sustain them! It is therefore more important to be good at what you do and make winning a habit, positive attitude will follow. Am I right in thinking this? What do my readers think?

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Disclaimer: No attitudes were hurt in the creation of this blog. The writer does not have an ‘attitude’ and any suggestions about the same will not be tolerated :p No animals were hurt in the game of badminton as the shuttle used was a plastic one.