As we begin 2009 with dampened enthusiasm and dentened optimism, some of our dreams and hopes are diluted by the financial illness that has infected the world! Every new year, Warren Buffett adopt a couple of old maxims as his beacons to guide his future. This self-prescribed therapy has ensured that with each passing year, Warren Buffett grow wiser and not older.
This year, Warren Buffett invites you to tap into the financial wisdom with him and become financially wiser.
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I’m sure you have probably read about the recent world record when AIG makes history for US$62 billion loss! The American insurance giant’s quarterly loss was the biggest in corporate history, topping the previous record of $45 billion set by Time Warner Inc. during the 4th quarter of 2002.
How Severe Is It To Lose $62 billion in 92 days?!
1. It’s more money than Bill Gate’s net worth of $57 billion as of last Sept (according to Forbes magazine’s “400 Richest Americans” list that had Gates as No.1
2. AIG was losing nearly $470,000 a minute for the past 92 days!
3. AIG lost more in the 4th quarter of 2008 than it made from 2001 to 2007, when net income totaled more than $58 billion.
4. US government provided $62 billion for immediate relief and rescue efforts in the months after Hurricane Katrina in 2005.
5. If $62 billion was spread across the US population, Americans could each get about $200.
6. AIG’s loss amounts to 92 percent of the $67.4 billion that Americans spent at world’s largest retailer Wal-Mart Stores Inc. in the fourth quarter, which includes the holiday season.
7. It would take a person spending $1 million per day, everyday, the next 169 years to spend as much money as AIG lost during the fourth quarter, which lasted just 92 days.
There was an old movie called “Paying the Piper” illustrating the story of a father’s challenges raising his teenage daughter. In one of the scenes, the girl asks permission to attend the high school dance with an older guy. Reluctantly, the dad allows her to go, though remains protective, not wanting anything in the “real world” to harm his little girl. Waiting up for her on the night of the dance, the father is faced with his worst nightmare, when his daughter doesn’t return home. And as he opens his front door to the faces of two policemen, he learns that she and her boyfriend had been drinking and carelessly drove off of a bridge. Both died instantly.
The father is confused. “How could any restaurant, bar, or liquor store, sell alcohol to a minor?” So determined to find the culprit, he spends endless time and money investigating the crime, only to find himself more upset from a failed search. Slumping in his living room chair, the father decides a drink wouldn’t hurt his own tired nerves at this point. But opening his liquor cabinet, he’s stunned to find his bottle missing, replaced by a note that said the following: “Dear Dad, I know you would like your scotch to help you celebrate. I thought you wouldn’t mind sharing it with me.” Read more »
For the past few months, many had been asking “With all investment vehicles down, what is the best investment possible anyone could ever make in his life?”
Let’s check out how’s the market has been performing for the past 1 year.
With gold, commodities, equities and even real estate going at such a discounted price, I personally believe that the Number 1 investment anyone could ever make that will bring them unlimited wealth and financial success again and again and again is to INCREASE THEIR FINANCIAL INTELLIGENCE!
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It is really difficult for anyone out there these days with money, isn’t it?
When the concept of diversification was introduced, most people thought that it was troublesome and that the LARGEST or BIGGEST financial institutions were the BEST PLACE to park their money.
But look at the number of bank, insurers and money managers failures now, think about Citibank, AIG, Lehman Brothers or even Madoff!
The losses from the alleged $50 billion alleged Ponzi scheme that federal prosecutors say Madoff perpetrated have touched bold-faced names in the worlds of business, philanthropy, and entertainment—along with many smaller investors and institutions that had some portion of their assets in Madoff’s hands. Here’s a look at some high-profile victims exposed to Madoff’s alleged fraud.
Arpad Busson
Founder of Swiss hedge fund EIM
Amount reported lost: $230 million
Busson, who is engaged to actress Uma Thurman, had $230 million in client assets invested with Madoff, Bloomberg reported.
Jerome Fisher
Founder, Nine West
Amount reported lost: $150 million
Nine West Group mogul Jerome Fisher reportedly lost $150 million, according to unnamed sources in the New York Post.
Mort Zuckerman
Chairman of Boston Properties and publisher of The Daily News in NY
Amount reported lost: $30 million
Zuckerman told cable network CNBC that his charitable trust had $30 million, or about 10% of assets, invested in Madoff without his knowledge.
Elie Wiesel
Nobel Laureate, author, and professor
Amount reported lost: $15.2 million
The Elie Wiesel Foundation for Humanity, established by Wiesel and his wife Marion after he won the Nobel Peace prize in 1986, had “substantially all” of its assets under Madoff’s management, the foundation disclosed in a note on its Web site.
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Garnering from books, magazines and newspapers that we cover, the following are what we learn from events this year. Read more »
What Happened to Citigroup?
Shares of Citigroup hit a low price of $3.80 before rebounding to $6, a breathtaking slide from its year-high price of more than $35 a share, roughly a 90% decline, and an even steeper falloff from the $50+ share price it sold for in 2007! Many people were tempted to buy believing that eventually, this banking giant will survive and recover. So, is this a good buy?
This is a massive chopping down of the once-mightly financial company’s market cap from $275 billion to $25-$35 billion. With government action on the horizon, it may be tempting to buy Citi at these prices as a potential value play, but there is good reason to hold off.
Wall Street tumbles again on investors’ deepening economic fears
Posted: 21 November 2008 0543 hrsNEW YORK: Wall Street shares tumbled on Thursday as panicked investors made a frenzied rush out of stocks and into bonds in the face of more weak data and a breakdown in efforts for a bailout for automakers.
The main broad-market indicator sank to an 11-1/2-year low as investors ran for cover to the bond market, sending yields to all-time lows.
The Dow Jones Industrial Average sank to a fresh five-and-a-half year low, losing 444.99 points (5.56 percent) to end at 7,552.29 a day after a 427-point slide.
Yeah! Financial Crisis, So what?
Many just sit around and wait, and let their heartbeats rise while world markets fall!
In the latest Sunday Times, Thomas Mathew was interviewed on how he achieved Financial Freedom & Success!
Thomas Mathew made his first million in 1994 – when he was just 34, in his 3rd year as a Life Insurance Agent with Prudential. Back then, his sales commissions and bonuses totaled a hefty $800,000. He was also paid $5,000 a day for speaking engagements at training seminars.
He admits that he spent freely then.
“I lived lavishly, bought one luxury car after another – a BMW 7 Series followed by a Mercedes Benz – and owned houses in Singapore and Malaysia. My training business was making $1.2 Million a year in 1996 and 1997,” said Thomas.
Things started going downhill when his training business in Malaysia was hit by the Asian Financial Crisis. At the same time, the Indonesian subsidiary of his training business was forced to shut down when rupiah dived dramatically.
He was on the verge of bankruptcy. He had lost a training business that he had founded, was divorced and saddled with a $400,000 debt, on top of $4,000 monthly alimony payments.
This week, Nick Vujicic spent 2 nights in Singapore, sharing with the congregation of Heart of God Church. The church was packed when I was there on the first night with the line flowing outside the church doors.
Just a little introduction about Nick. He was born without arms or legs and given no medical reason for this condition. His life was filled with difficulties and hardships. Being bullied at his school, Nick grew extremely depressed, and by the age of eight, started comtemplating suicide. After begging God to grow arms and legs, Nick eventually began to realize that his accomplishments were inspirational to many, and began to thank God he was alive. When he was seventeen, he started to give talks at his prayer group, and eventually started his non-profit organization, Life Without Limbs…
Published: October 16, 2008
THE financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary.
So … I’ve been buying American stocks. This is my personal account I’m talking about, in which I previously owned nothing but United States government bonds. (This description leaves aside my Berkshire Hathaway holdings, which are all committed to philanthropy.) If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities.
Why?
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