Money management also evaluates the reward of a trade and resolves the most functional use of investment money. It declares the number of shares to purchase and how much money to place at risk. It is the distinction between an outstanding trading performance and pitiful performance. It will make the difference between making money and going broke.

Money management gives practical advice among others for gambling—wagering money or something of material value on an event with an uncertain outcome with the primary intent of winning additional money or material goods and for stock trading—buying or selling stock shares.

Money management is also associated with risk management. It is considered definitely crucial to successful trading on an ongoing basis. Many traders look at it as the single most vital element of trading. Indeed, deficient money management is one major cause of bankruptcy among unseasoned traders. There is little doubt that adopting proper money management will lead to more traders being able to attain success, or to avoid devastating failures.

Some traders wrongly perceive that they are managing their money by having money management stops. These stops enable the trader to get out of an event where they lost an inevitable amount of money. However, such kind of stop does not announce the quantity, so it really has nothing to do with money management.

Controlling risk by proclaiming the amount of loss if you are stopped out is not identical to directing risk through a money management model that determines the extent of your problem.

There are many money management strategies that are available. Some are probably more suited to your style of trading than others.

Having said that, there exist two basic systems for money management that we need to be take interest in. These systems were derived from the gambling theory.

The first trading system is the Antimartingale System. It denotes an increase in risk every time one wins and marks a decrease in risk when losing. This system is found to be functional and is often used as basis for most of the money management systems.

The second is the Martingale System. This strategy aggrandizes money at risk during a losing streak. Following a loss, the value of money increments on the next trade. The assumption indicates that one eventually wins after a series of losses.

One of the focuses and main ideas behind money management is to safeguard and maintain a healthy capital so as to enable a person to live to trade another day. Before ever undertaking a trade, the first thing you should consider is the amount of money being risked. The next pondering would involve the extent of loss that one is able to accept and correct. One of the most common mistakes new day traders make is that of putting all of their capital on one or two stocks.

Perhaps you’re a single mother with several children and in great danger of falling under the poverty line. What will you do about improving your financial situation? Or you’re deeply in debt. How will you make your payments and become debt-free?

Reasonable prosperity is something all of us would like to achieve and hold on to. But, in many nations, people face nearly insurmountable financial problems. The things that most people in the developed nations take for granted — automobiles, electronic gadgets, savings accounts, adequate clothing and furniture — are out of reach for vast numbers of the human race.

Many developing nations face staggering poverty, near runaway inflation, unpayable national debts, vast unemployment and underemployment. People in such nations must think in terms of basic survival rather than financial prosperity.

To some degree, as they read these articles, they will have to look over the shoulders of those who live in the well-off nations and who have an opportunity to improve their financial situation.

Let’s, then, look at six financial principles that can help a person become more financially secure.

1) Budget Money Wisely

A most important point to remember: Make the most from the money you already earn. To spend one’s money more effectively is the same as increasing one’s salary. How’s your “money management quotient”? One well-known family financial counselor wrote, “Managing your money may well be the single most important thing you can do today.”

We may learn to be money earners, but can still end up as paupers. We have to become wise money spenders as well. Studies show that even those individuals who earn large salaries still feel financially strapped. It seems that many people’s outgo for needs and wants exceeds their income.

Sound money management teaches us a basic financial maxim: There is never enough money for everything we might want or need. So we need a sensible spending plan.

A spending plan is like a road map. A budget helps us arrive at our financial destination, safe and sound. Every business and government must have a spending plan and must strive to follow it. Such a plan guides the effective use of money in many ways. It helps us:

Live within our means. A plan gives us greater control over our financial resources. We can immediately know whether something we desire to purchase is affordable.

Realize personal goals. With a spending budget, we can plan purchases properly, service debt payments, accumulate savings, save for the future.

Spend money effectively. Merchandisers know that shoppers make spur-of-the-moment purchases. Items on the supermarket counters are often positioned in such a way as to encourage purchases. A spending plan helps us to circumvent impulse buying. We buy only what we planned to buy and only those things our plan tells us we can afford.

A spending plan helps us to ask the right questions about our money. Is this the time to buy this product? Is this the most economical way to buy it? Would we rather have this product than something else? Do we have the money to buy it? Does it fit in with our goals in life?

A spending plan helps us to balance the desire for present enjoyment with long- and short-term financial needs. Instead of buying now and paying later, we begin to think of saving first and then buying when we can afford it.

If you don’t know where the money goes, you can’t get it to go where it should. A budget or spending plan should include three important areas:

Emergencies. We should put money away each month for unforeseen circumstances such as car and house repairs.

High-cost items. Don’t buy that new television today. Each month put money into a savings account. Buy the television for cash — on your terms, without interest and at the most financially appropriate time, such as during a timely sale. Don’t buy that new television today. Each month put money into a savings account. Buy the television for cash — on your terms, without interest and at the most financially appropriate time, such as during a timely sale.

Annual or periodic bills. Put away money each week, month or pay period for a future bill such as insurance or taxes. For example, if you pay an insurance bill once each year, put away one twelfth of the total in your savings each month.

2) Increase Income

Another step toward financial security has to do with maximizing our income. We need to have enough money and resources to make life what it should be without jeopardizing our mental, social and spiritual needs.

Most people are paid an hourly wage or work on salary for someone else. If you’re in this situation, your chances for suddenly increasing your income by a large amount may not be particularly promising. You may receive automatic but small raises based on a company formula or union-management agreement. In some cases, your company may grant built-in cost-of-living increases.

If there is a possibility of “moving up” financially, you will have to demonstrate your usefulness. Make yourself more valuable to your boss or company. Put the emphasis on helping your organization earn more money, save money or improve its product or performance. Earn a raise.

What if you cannot do better financially even though you work harder and smarter? You have two options. Stay put or move to another job or company. Do not consider quitting your present job, however, until you know a better and more secure position awaits you.

Perhaps your type of employment has only limited monetary value. And you’ve achieved the highest pay possible. Can you educate yourself and improve your value in the job marketplace?

Perhaps you have the ability to create your own job by starting a small business. To succeed, you will have to make your product or service valuable and desirable to the consumer. Beware, however, of the immense amount of paperwork involved in being self-employed.

Simply put, being able to earn more depends on your attitude of service to others. It also means making the most of your abilities and situation.

3) Use Credit Wisely

The proper use of credit has significantly facilitated the flow of goods and services. Long-term, low-interest loans have made it possible to purchase items such as homes or automobiles that otherwise would have required the accumulation of many years’ savings.

Another credit mechanism, the credit card, has been a tremendous boon to the consumer who is temporarily low on cash. It has eliminated the danger of carrying large amounts of cash, especially during long periods of travel. And credit cards may even be required for some purchases. But buying on credit can be a financial curse as well as a convenience, particularly when a person falls behind in making payments.

Credit buying often creates the illusion of prosperity. The small size of the monthly installment, its delayed arrival at the end of the month and the lack of cash at the time of the purchase make luxuries seem suddenly within reach. These features persuade millions of families, with otherwise adequate incomes, to spend their paychecks before they even receive them.

Once you get trapped in installment payments, the money you could have in your savings account goes to a credit institution. In effect, you are paying a premium in order to own something now instead of later.

If you habitually use credit in this manner, it can often turn out to be an expensive proposition. Many credit cards, revolving charge accounts and automatic overdraft facilities require a minimum monthly interest charge on the outstanding balance. It sometimes adds up to a staggering 18 percent a year.

Shopping with cash, on the other hand, can often save the consumer more than just monthly interest charges. The person who pays cash can sometimes buy at a discount. Cash-conscious consumers can also take advantage of seasonal sales. They are able to shop around more freely and buy where their money has the most purchasing power. Individuals operating on credit are sometimes forced to purchase where they have their charge accounts, even though a sale may be going on next door.

Solomon wisely perceived that “the rich rule over the poor, and the borrower is servant to the lender” (Proverbs 22:7). A cash basis of financial management is a good way to avoid this type of financial bondage. Therefore, the question logically arises: Where do I start?

The average money manager first should realize that there are two types of family and personal expenses: needs and wants. It is important to know the difference. In today’s society, credit buying for items such as a car or a home can be looked on as a necessity. Even these purchases, however, can sometimes be delayed until more cash is available to lessen the finance charges.

On the other hand, credit should rarely be used for wants. Families in trouble have often used too much credit on wants rather than on what they really needed. Until they can accumulate savings, they should adopt a policy of buying wants, such as television sets, sporting goods or excess furniture, strictly on a cash basis. Here’s why: Saving cash for luxuries or desires puts a remarkably stabilizing influence on a family’s monetary policy. By the time you have saved the cash, there will be little doubt in your mind whether you can afford the item or if, in fact, you really want it.

To use this approach, you must resolve not to purchase anything on credit until your accounts are all paid in full. At least limit the credit purchases during your transition period to an absolute minimum so you can get your credit accounts paid off as early as possible. Then, instead of immediately obligating yourself to more payments by purchasing additional items, let your savings accumulate until you can begin to buy these items for cash.

Remember: The wise family can learn to live with credit, but it should never live by it!

4) Trim Expenses

We live in an “Era of Aspirations,” as one money management authority has called it. That is, we order our lives on the belief in and need for a constant upgrading of personal demands. We take this increase in our standard of living for granted. We spend our money on that assumption.

It may seem strange, then, to say that we should take a hard look at what we buy or use — and cut down expenses. Yet that is exactly what we should be doing if we want to increase the value of our money.

A few examples. Do you need that magazine subscription? Do you need the services of a gardener? Is it really necessary to have a new car? Why not purchase a good used one? New-car payments, plus the required total insurance coverage, have been the ruination of many personal budgets.

One important reason our money doesn’t buy what it should is that we are using far more services than ever before. Most services depend heavily on labor costs. If we carefully budget our money, we can identify those services that lead to excess expenses. Then we can take appropriate action to change our spending habits.

One example of an area where you may be able to cut costs is by eating out less often. You might be astonished at what some people spend over a year’s time eating in restaurants. Figure out the cost of a single meal at a restaurant. Then estimate how many times you do this weekly, and multiply the amount spent by 52. You will find the yearly sum spent on eating out can be astonishingly high.

5) Invest for the Future

In terms of financial goals, we must first plan for today. But we must also carefully consider the future. If we include a regular savings plan in our budget, we can build up a sizable nest egg over the years.

It’s important to think through your goals in life as early as possible. However, it’s never too late to do so. Consider your long-term financial goals. Make these a part of your spending and saving plan. What about a possible home purchase, the cost of educating children, and money for retirement?

Perhaps our income is not that large. Can we save at least a small portion each year? If we do this over a 30-year period, placing the money in a wise investment, we’d be surprised at how much we would have for the later years of our lives. From this nest egg, we could draw an income, upon retirement, from the interest we receive on our investment.

So far, we’ve considered several points on increasing income and spending it wisely. Now, let’s turn to the most important consideration in managing your personal finances.

6) Make God Your Partner

Strange as it may seem, what we are able to earn depends little on us. Any income we produce depends on assets we did not create. And they don’t really belong to any human being, corporation or government.

The fact is that a personal Creator God made and sustains all that exists. Would not this God, by virtue of having created everything, have good reason to claim that everything — including ourselves — belongs to him? God does make such a claim. “The earth is the Lord’s, and everything in it, the world, and all who live in it” (Psalm 24:1). He says the wild animals and cattle are his (Psalm 50:10-12), and so is all the silver and gold (Haggai 2:8).

Everything that’s produced depends on some element originating in the earth. Our product may be a tomato, a steel girder or even a piece of plastic. But the primary elements have already existed in some form. We may have used our energy to create a song or write a book, but where did that energy come from? Who made your hands, your eyes, your body — your ability to sell, manage, invent or create? God did.

Of course, we apply a certain thinking process to whatever we do. But God still has a prior claim. God created the human brain and mind that we use. Thus, we finally stand naked before God. We have brought nothing into the world. Everything we have has come as a gift from the Creator.

Out of this truth comes another basic and far-reaching income-generating and -spending principle: Since God ultimately gives us everything we need, we depend on him for our economic survival and prosperity.

• Which jurisdiction are you in?
• Is the forex broker regulated?
• Which platform are you familiar with?
• How much do you plan to invest?
• Forex Tax issue need to be considered?
• Is the broker an IB or a dealer?

I will make clear on each of the tips what you should consider when making your decision.

Which jurisdiction are you in?

As for as I concern, the only country that prohibit its resident into investing offshore is USA. There might be more countries that practise the same policy but not as strict as USA as the CFTC has been warning the residents and many forex brokers have been persecuted.

Once your pick from your brokers comparison, I suggest you to create demo accounts. Trade these accounts in various market environments to get familiarize with the forex brokers. The best way to learn is to get your hands dirty. As you learn and practice online, if you have any questions to ask your broker. Many brokers have excellent customer service and are more than happy to answer your questions.
Check if the broker is registered with regulatory authorities.

If the brokers for registered as an American company, they should registered with The National Futures Association (NFA) or Commodity Futures Trading Commission (CFTC). One drawback is American forex brokers only offer up to 50:1 leverage. If the broker is rooted outside the United States, you can check whether the brokers are register with Financial Services Authority (FSA) or other registration such as Cyprus SEC or ASIC (Australia). Many prominent forex brokers who gone offshore because of the stringent and heavy cost of operating with heavy regulatory environment prefer offshore location such as Belize, Malta, Mauritius and British Virgin Islands. This broker such as MF Financial Ltd is regulated by the IFSC (International Financial Services Commission) of Belize. The benefit of doing business offshore forex broker that you will find higher leverage, maybe more competitive spreads and more relax trading environment.

If the broker is registered with are certainly not these kind of you can look for a broker added. Other questions to ask such as are the broker operation is a Dealing Desk or non-Dealing Desk operation? Is the forex spreads fixed or not fixed? In addition, is there widening of spreads during news release?

Open demo accounts and practice, practise and practise…

You need to practise trading with demo account until you feel comfortable in executing trade. Treat your demo account like a real account. Trade seriously and document each trade and learn from winning trades and losing traded as well. Always have a trading plan before entering the market; otherwise it will be a suicide. Simple trading plan is Entry Price, Stop Loss Price and Take Profit Price. Take your time to practise and do not rush into opening live account. Practise make perfect!

Thats a fancy way of saying forex!

Forex brokers at the retail level did not exist because these institutions monopolized the foreign exchange due to their abilities to have access to information and data that allowed them to hedge their interests and profit from the monetary policy that the average investor could not get to very easily. This, combined with government regulations and the huge volume required in trades to maintain adequate liquidity,  prohibited the small speculator from participating.

Access to the currency markets changed however, first with the invention of the internet… this new and exciting information super highway opened the doors to allow anyone virtually instant access to the same macro-economic events, news and data that the large world banking institutions had previously dominated. Combine this new fangled world wide web with legislation by the CFTC and we soon found ourselves with a retail market for individual traders to have the same abilities to trade currencies as the big boys.

What Are The Differences Between Brokers?

In order to access the forex as a retail trader, we need brokers to provide us with a platform to trade from, liquidity and reliable execution of our trades. Much like a stock broker, the forex broker acts as  an intermediary for these ( relatively speaking) small trades, and they also can assist in advice, recommendations etc. Each brokerage house can have different commission rates, minimum balances and account requirements that make it essential for any forex trader to research and become familiar with before opening an account.

Before selecting a brokerage firm, it’s important to understand the basic differences from one to the other, and also to have a good understanding of what your choices are. Forex brokers, for the most part, fall into one of two categories. There are Market Makers, also referred to as “Dealing Desks” and there are Straight Through Processing Brokers (STP), also referred to as “Non Dealing Desks”.

Market makers provide the liquidity for a given currency market themselves, and they make their money off of the spreads, (the difference between the bid and the ask) and by placing hedges, or bets against their customers. In other words, when you place a trade with a Market Maker, more then likely, they will be taking the other side of that trade in the expectation that you will lose. So…. the market maker earns money through both the spread and by hedging your bet. It seems a bit counterintuitive doesn’t it? But this is how it works… your trades are commission free, but the spreads tend to be a little wider.

Straight through processing brokers, or non dealing desks, do not create their own markets… meaning that they do not take the other side of your trade. Your order is sent straight to the recipient on the other side of your position. These brokers however, do charge commissions for each trade you place with the advantage to you being a tighter spread.

Do Your Research First

Which type of broker you choose is dependent on what type of trading you do. If you are a day trader and a scalper, then it will probably be better for you to enjoy tighter spreads and just pay the transaction fee because you are attempting to make a profit with a smaller expected move by virtue of the very short time frame with this style of trading.

Conversely, if you are a swing or a position trader, holding onto a position for days, weeks or maybe even months, then the spread is of less consequence to you because your expected move will easily overcome this.

Knowing what type of trading you will be doing is a big part of choosing which type of brokerage house is best for you, but it’s most certainly not the only research you need to do when looking at different forex brokers. You also need to be aware of fraudulent enterprises know as “bucket shops”. Bucket shops are essentially fake brokers that work out of boiler rooms acting as legitimate forex brokers. They man the phones… take your orders and then promptly drop it in a bucket, hence the name. Simply being aware that these types of scams exist should be enough to insure that you do proper research and due diligence before transferring funds to anyone.

Incoming search terms:

• aroon indicator

The first question you have to ask yourself is: is the broker I want to use regulated? There must be no doubt about this first point. All regulated brokers must submit financial reports to regulatory authorities, and when they fail to do it, authorities have the right to fine them or terminate their membership. This enforces Forex brokers to keep transparent financial reports.

The brokers must be regulated by their local regulatory authorities, for instance, for brokers based in the US, they must be regulated by the NFA (National Futures Association) and CFTC (Commodity Futures Trading Commission), Swiss based brokers must be regulated by the FDF (Swiss Federal Department of Finance) and so on.

Also when a Forex broker is regulated allows investors to dispute any resolution, increasing the investor protection.

Trading conditions are very important also. This refers to the features of the trading platform and the trading conditions with the chosen broker. Amongst the most important factors are:

Spread – Obviously the smaller the spread on currency pairs the better the conditions are for investors and traders.

Platform execution – Trading execution refers to how fast and consistent are the execution of trades. Some brokers guarantee fast and transparent executions during normal market conditions.

Fractional trading – Some brokers allow investors and traders to trade on a fractional basis, instead of trading full lots “100,000 units” or “300,000 units”, they allow you to trade “163,345 units” or “325,911 units”. This is very helpful for trades risking certain percentage of their balance on each trade.

Safety of funds – We need to make sure our trading funds are kept in a segregated account or at least insured.

Customer support is very important! You need a broker with a LIVE CHAT feature so you can get in touch with a representative anytime you need for different kind of problems, like withdrawals, deposits etc.

Also you need to check the promo offers that the broker is offering you. Some brokers offer 10% BONUS on the first deposit.

MF Financial is offering up to 20% BONUS on first deposit plus an outstanding trading experience with an outstanding customer support.

MF Financial Ltd. is one of the world leading online currency trading broker offering low pips and commission-free online forex trading. Founded by Wall Street veterans, MFFX’s vision is to service individual and corporate investors such as money managers, banks, and financial institutions in easing the complexity in dealing with forex trading. Their dealing software which specialized in forex dealing is rated second to none for it user friendly environment. Lightning speed and efficient execution is one of its many benefits.

Any new investor should think twice or 10 times before choosing the right broker. I am personally a MFFX client for 1 year and I must say that I have no reason to change it. I will keep it as my trusted partner in forex trading for a long time! For any interested investor I invite you to check MF Financial`s website www.mffx.com

Incoming search terms:

• Financial Trader in malaysia

These  CFTC regulations led to the limitation of the number of forex brokers that accept US traders and most of the brokers available on the US market have low leverages and unfavorable trading conditions. Under these circumstances more and more US traders look for offshore forex brokers with higher leverages and better trading conditions.

Unfortunately neither the foreign brokers are allowed to accept US traders so the only option available at this moment is the binary option trading. All major binary option traders such as Ikko Trader,Anyoption, EZ Trader and Option Fire accept US traders.

The binary option brokers are licensed and regulated by trustfully boards and commissions. For example Option Fire is regulated by the Financial Services Authority (FSA), which  is the regulator of the financial services industry in the UK. So Option Fier is as secure and trustable as any English forex broker on operating the forex retail market.

All binary options brokers have high profit rates, most of them offering up to 85% profit for options expiring in the money and up to 15% refund for options expiring out of the money.

The binary options trading has many advantages compared to the traditional forex trading, the higher returns on investment and the shorter option expiration times being just the most attractive ones.

Best Offshore Forex Broker – www.MFFX.com

Incoming search terms:

• offshore forex brokers

Recently, YB Teresa Kok asked me “Why are Malaysians so keen to leave this country? Life overseas is not necessarily easier!” I agree that life overseas is not necessarily. In fact my cousins living in Hong Kong, Singapore and London tell me regularly that they miss the food and that things are much cheaper at home. They complain about the weather, high cost of living and their long working hours. Despite this, when the possibility of coming back home is raised, they give me a smile and a shake of their heads.

Is living in Malaysia really so bad? What is it that other countries have that we don’t? Lim Kit Siang posted on his blog in December 2009 that more than 630 Malaysians are migrating overseas everyday, and that number is increasing year on year.

This is a worrying statistic and the brain drain issue is one that the current government acknowledges that it is a problem. However, the best they can come up with to make them come back are tax breaks, and tax free vehicles. From day one, it has become apparent these ‘perks’ would simply not work.

This government has a habit of tackling problems in this country by providing quick fixes. The 2012 Budget should really be called the ‘quick-fix’ budget as RM232 billion is mindlessly spent, with unrealistic economic growth forecasts to back it up.

Yes, 60% of households would receive a RM500 relief and we thank the government for it. What then? RM500 does not combat rising costs, or inflation. How far can RM500 bring us nowadays? Not very far.  In no time at all, that RM500 has become a distant memory and we are back to square one.

The Kedai 1Malaysia initiative was put in place by the government to sell cheap products subsidised by the government, and more are to be opened across the nation. Shop owners are now screaming in displeasure as they cannot possibly compete. If the government is intent on handing out subsidies, subsidise the shops which are already operating! Another poorly planned quick fix that provides no long term solution.

Where is the long term economic plan? Where is the investment in our children’s future? Fixing school buildings is an excellent initiative, but the real problem lies in the fabric of the education system.

Our children are taught to be robots, to regurgitate material and not to question their teacher. Many scoff at the lowering of standards in the ongoing PMR exams, and an Additional Mathematics SPM paper was allegedly leaked out to tuition centres. Is all this in the name of grades, just to make the Education Ministry look good? How can this system prepare our children to be competent, effective members of society? The biggest losers in all of this are our nation’s children.

A friend over dinner told me earnestly that he was preparing to leave the country for the sake of his children. As disheartening as it was to hear, he proceeded to tell me why.

His vision for his children was for them to grow up in a society in which they would not be discriminated against. Although racism is also prevalent in other countries, in Malaysia racism is institutionalised and sanctioned by the Barisan Nasional government.

Furthermore, corruption is rampant throughout all levels of government. The payment of corruption money in cases of obtaining building or business licenses is so prevalent, that many businesses have included such a payment in their expense budgets. How can this continue be the case?

These issues are all correlated, and opportunities continue to be stifled. Talented people leave because Malaysia appears to have no appreciation for their abilities. Nepotism and favouritism are practised on the basis of the “Lu tolong gua, Gua tolong lu” principle rather than getting the best person for the job.

Our English standards have been lowered in order to record more exam passes, but quality is sacrificed as a result. If even masters degree holders from local universities are unable to speak proper English, how can we then become a globally competitive nation?

After this budget, more and more people are convinced that this BN government cares only about staying in power and not for the long term development of the nation. The exodus of talented individuals will continue unless necessary reforms are put in place.

On a recent trip to the United States, on our stopover in Hong Kong, a fellow passenger remarked that they could finally talk about issues of Malaysia as they dared not voice out their displeasure at home. Recalling so many holding up their fingers to their lips to shush their friends from bringing up national issues, it is obvious that many feel that we are living under oppression.

Finally, one of my old schoolmates residing in Australia told me that he wanted to come home to take care of his parents. “But the biggest thing stopping me from coming home now is the government”. A change in government may not automatically bring Malaysians home, but what it would do is provide hope for the future of our nation, and hope for our future generations.

Change is needed, and change has to happen now.

By Dr Lim Teck Ghee

“WHAT? CHINESE POOR?”

Soon after I returned to Malaysia in late 2005, I met with a former president of the country’s major Chinese party in his office. During the discussion which covered a range of issues, I expressed my concern at the failure of the Chinese political leadership to deal effectively with the socio-economic problems and challenges that the community was facing.

I had known the leader since the 1970s but especially in the late ‘80s and early 1990s when I was a panelist in the 150-member National Economic Consultative Council (NECC) which had been set up by the then-Prime Minister, Tun Dr Mahathir Mohamad, to come up with a post-1990 economic policy to replace the New Economic Policy (NEP).

The response of the former president to my concern shocked me.

Besides defending his party and his leadership, he declared that the Chinese were very lucky to be able to live in Malaysia .  (Is this joker Long Long Sick?)

“Where else in the world can you find a simple char koay teow seller become so rich and drive a Mercedes!” was his rejoinder.

This view that the Chinese have done very well for themselves — and by extension, do not require assistance from the government — is not uncommon.

However, it is a gross generalization and erroneous on several counts.

Taken to its logical end and juxtaposed with the fact that many of the country’s richest individuals are Chinese, such a simplistic view has provided the underpinnings for the racially biased public policies pursued in a wide range of sectors and over such a long period of time in the country.

OFF THE PUBLIC RADAR

Let us consider some of these facts and figures of the Chinese poor, disadvantaged and marginalized.

Firstly, many of these Chinese individuals and households do not appear on the government’s listing of poor Malaysians because the government has used an unrealistically low poverty line income to decide who comprise the poor.

Should there be a readjustment of the poverty line to a more realistic figure, it is likely that several hundred thousand Chinese households (as well as a larger number of Bumiputera and Indian households) will fall into the “poverty” category.

Secondly, income distribution within the Chinese community is worsening.

In fact the gap between the Chinese poor and well-to-do has increased in the last two decades, for which data is available. According to the Gini coefficient of income inequality, income inequality within the Chinese community has increased from .423 in 1990 to .434 in 1999 and .446 in 2004.

Incidentally, this is the same for all the communities, including the Malays.

The worsening income inequality points to an entrenched and worsening poverty problem within the Chinese community that is not discernible if we simply rely on the conventional statistical indicators used by the government.

EXCLUDED FROM NEP

Why is Chinese poverty so entrenched and intractable?

The answer is that, for the most part,the Chinese poor and lower classes have not benefitted from the NEP and other national policies in the way that the Chinese elites or even upper middle class have.

Consider the following :

1. They have not been targeted by any of the government’s anti-poverty programmes.

2. They have been disadvantaged by lack of mastery of English and Malay.

3. They have educated their children in Chinese schools which have been the victims of unequal treatment. More than a quarter of Chinese school kids drop out before the age of 17 with many coming from the poorer achieving and less-endowed Chinese medium schools which we seldom hear or read about.

4. A large number of them live in new villages or in geographically remote rural areas which have been cut off from enclave of affluence located in the main cities and in the Klang Valley area.

5. Many come from the agricultural sector and are vegetable gardeners, fruit farmers or fishermen or engage in agricultural services.

Unlike their Malay counterpart rural poor, they have had limited access to Felda, Felcra, IADPs and other federal and state schemes that have reduced landlessness and indebtedness and provided access to housing, infrastructure, utilities as well as enhanced incomes substantially. Even worse, they have been denied their legitimate land rights so that many remain squatters or operate on TOLs or short-term leases.

The recent report that the new MCA president Datuk Seri Dr Chua Soi Lek intends to meet with Perak Menteri Besar Datuk Seri Dr Zambry Abdul Kadir to discuss matters pertaining to squatters, land premiums and discounts to new villagers and the issue of limited allocations shows how “lucky” the Perak Chinese are to be able to live in the state and the “tremendous” advances they have made after 50 years of Barisan Nasional rule.  (He should produce more sex video with his as main actor- do u know who is this HE??)

6. In the discussions on the country’s brain drain and loss of talent, much has been made about the out-migration of Chinese educated and professionals. In fact, if the proper surveys are ever carried out on out-migration from the country (according to the deputy foreign minister in Parliament recently, 304,358 Malaysians migrated to other countries from March 2008 till August 2009 compared with a out-migration figure of 139,696 in 2007), I will not be surprised if just as many less educated poor and lower middle-class Chinese are found to have left the country because of poverty and lack of opportunities for themselves and their children.

CHINESE SMES AND OTHER TOWKAYS

Much has also been made of the prosperity of the Chinese that comes from their domination of the small and medium enterprises (SMEs) in the country. However, not all SMEs are prosperous or can provide the secure and sustainable livelihood and incomes that others who are ignorant of the real conditions of these enterprises seem to imagine is the case with every SME.

Most Chinese SMEs are family-run businesses that are barely able to scrape a decent living through heavy self-exploitation of family members and extended family labor. Often working in dangerous and appalling conditions, they are ill-equipped to compete in an increasingly competitive and globalized environment.

The reality is that besides continuous harassment from government officials and politicians bent on extracting coffee money and beating them down for non-compliance with various local council rules and regulations, many SMEs are trapped in low productivity operations and lack access to technological know-how, larger markets and R&D capacity.

In the near term as regional and international competition heats up, many SMEs face a bleak future and are likely to go bust.

These small-fry “towkays” of micro-SMEs (over 90 per cent of the SMEs in the country belong to this group) and their poorly paid employees, eking out a modest living in the country’s workshops and squatter areas, however, have never been on the government’s radar screen, except perhaps for taxation purposes.

How much (or rather little) budgetary support and other assistance has actually reached the SMEs — directly and not through proxies or parasitic agencies — in the last few Malaysia Plans would be an important question for the government to respond to.

Members of the National Economic Advisory Council (NEAC) will find that there is a whole generation of bad policy planning and implementation that needs to be undone with regard to the SMEs if they are serious about the objective of revitalising this sector in the 10th Malaysia Plan and the New Economic Model.

NO SOCIAL SAFETY NET

There is one more important consideration that is seldom discussed when the issue of Chinese social-economic well-being is raised. This is that arising from their self employment or work as employees in SMEs and the informal sector, only a small proportion of Chinese households are covered by the social safety net for health, insurance and old age that comes with employment either in the public sector or with formal private sector employment.

This absence of participation in a social safety net will increasingly make itself felt on the future well being of the Chinese as the community ages rapidly and with the loss of traditional safety nets provided by the extended and large nuclear family.

The trend of Chinese vulnerable elderly who are either abandoned in old folk homes or live in miserable conditions on their own is already gaining speed. This trend is unstoppable without major changes taking place within the community and at the macro level where the state is the key player.

MALAYSIA’S PRESENT, FUTURE AND PAST

Will the 1 Malaysia concept and New Economic Model remove the blinkers that stand in the way of assistance and resources being provided to the Chinese disadvantaged?

Will the prime minister’s promise of raising income levels of all disadvantaged and marginalized groups be kept?

Will we see merit-based, transparent and needs-based policies targeting the bottom 40 per cent of the country’s income strata, irrespective of race and region, implemented?

We will have the opportunity to assess if this new vision of development for the country is more political rhetoric or a genuine path-breaking initiative soon.

As for me personally, I am not so sanguine. I was a member of the five- person team that finalized the NECC report which was presented to the government after more than two years of acrimonious debate.

The major recommendations of the NECC to dismantle the NEP were never implemented.

The NEP remained in force for another 20 years after it was supposed to have ended in 1990.

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But the dollar isn’t an asset — it’s a vehicle through which investments are made. And the fact that investors around the world are buying more and more non-U.S. assets suggests that the dollar will keep falling.

There are, of course, plenty of reasons here at home that the dollar is faltering. Among them: rising deficits; low interest rates paid out by our bonds; and rising inflation fears.

But the dollar is also weaker because “investors think there are better places to put their money to work than in the U.S.,” says Jack Ablin, chief investment officer for Harris Private Bank.

Indeed, the 37% drop in the dollar’s value against a basket of other currencies since 2001 coincides with an unprecedented demand for the assets of other economies, especially shares of companies in fast-growing places such as China and Latin America.

A decade ago, U.S. stocks comprised 54% of the world’s stock market value; today they represent only a third. As investors shift out of the U.S. market, they exchange dollars for the currencies of countries where they’re doing their buying, reducing demand for the buck.

Safety isn’t enough

To be sure, the dollar is still the world’s “safe haven” currency, says Jeffrey Kleintop, chief market strategist for LPL Financial. The dollar’s value spiked after the 9/11 terrorist attacks and again last year during the global credit freeze.

In both instances investors rushed into Treasury bonds, which required the purchase of dollars. So there will be occasions when the buck bucks its long-term trend. But that’s not the same as holding back the tide.

Expand your horizons

This doesn’t mean that the U.S. economy is crumbling. The strength of a nation’s currency is never a pure reflection of economic might. The yen gained on the dollar this year even though Japan’s economy shrank twice as fast as this country’s did.

Nor does it mean you should be dumping U.S. stocks. Keep in mind that nearly half of all revenue for companies in the S&P 500 index comes from outside the U.S., up from 32% at the start of this decade. And the falling buck makes dollar-based goods look attractive to foreign buyers. A jump in U.S. exports is already starting to help, as third-quarter S&P 500 earnings are coming in ahead of analyst estimates.

But the dollar’s long-term decline does argue for keeping a sizable portion of your stock portfolio — at least 25% and up to 50% — in foreign shares. Their value will rise simply based on the currency exchange. Meanwhile, you’ll be taking advantage of the opportunities that await you overseas.

Dissecting the Deal

Buffett’s firm, Berkshire Hathaway (NYSE: BRK-A – News), agreed to buy Burlington Northern Santa Fe Corp. (NYSE: BNI – News) for $100 a share valuing the deal at $44 billion.

Over the past year, Burlington’s stock price has lagged the performance of its peer benchmark, the Dow Jones Transportation Average (NYSEArca: IYT – News).

How much did Buffett pay?

The analysts surveyed by Bloomberg, say he paid 18.2 times Burlington’s 2010 estimated earnings, which is higher than the S&P 500′s multiple according to the same analysts. Not very Buffett like, especially considering he rarely pays a premium when putting new capital to work. The only other plausible explanation is that Buffett sees hidden value in Burlington.

A Consummate Contrarian

As a contrarian to the bone, Buffett decided to pull the trigger on a company within an ailing industry sector. Through the November 2nd market close, transportation stocks have lagged the entire U.S. stock market (NYSEArca: VTI – News) by a substantial margin of 15.94%.

The recent activity of rail traffic is depressed. This is a key barometer of economic health.

The Association of American Railroads reported that for the week ending October 10th, 2009, rail traffic declined 17.2% compared to the same week in 2008. The report also shows weak demand for the transportation of goods throughout the entire U.S. On the East coast, carloads were down by 19.7% and in the West they were off by 15.4%.

Interpreting the Deal

As an insurance executive, Buffett knows a thing or two about betting. And over the years most of his bets (at least the important ones) have paid off handsomely. Some, however, did not.

In the early 1990s, Buffett’s $358 million investment in U.S. Airways was virtually wiped out. In a letter to shareholders he quipped, ‘How do you become a millionaire? First, you become a billionaire then you invest in an airlines company.’

With this latest deal, even Buffett himself admits that the Burlington deal is a gamble.

‘It’s an all-in wager on the economic future of the United States,’ he said.

Conclusion

No doubt, analysts, fund managers and others with a bullish bias have already begun misinterpreting Buffett’s $44 billion gamble as a sure sign the worst is over. It’s time to break out the champagne!

A bedazzling 80% of economists now believe the worst economic recession of our generation is over. And around 100% of them never saw the recession coming.

Even though Warren Buffett’s latest buy may be viewed as an act of genius, it may not necessarily signal that a market bottom has been reached. This was recently covered in ‘What’s Next- Minor Correction or Major Collapse.‘

Regardless, the belief that Warren Buffett can do no wrong is an investment myth that won’t die soon. His billions prove that he’s always right, right?

It calls to mind the wonderful lyrics in a song from Fiddler on the Roof.

‘When you’re rich, they think you really know.’

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