Monday, 27 July 2015

Baby Economics

If you have followed my blog, you must have known that I am actually a very new parent myself. Only after being “promoted” to fatherhoods, I got to learn that a child really takes up a lot of my time and also money.

With the arrival of the new baby, I have to be smarter with the household budget, I am trying to understand the baby economics; The fluctuation price of diapers & milk formulas which the price vary from different stores and the effect towards the behavior of the customer. I have been thinking lately of trending those item so my budget on my baby’s stays at a fixed cost.

Raising a child in Malaysia can be expensive. A calculations made found that it would cost RM1 Million to raise a child and have that child finish university in the country.

As parents, it is natural to want what is best for the child. This includes the best in education, the best in nutrition, the best in exposure, the best in skills… you get the picture. Let’s not even go to the best of the bests; let’s look at basic childcare costs.

During first 6 months, your baby will be breastfed and/or fed milk formula. Looking at the figures, a total of RM547.58 is the minimum required each month to feed your baby. When your baby is ready for more solid food options, you will have to pay more in addition to the list on top. Although the list above isn't comprehensive, it gives you a peek at some of your baby's most important monthly expenses. So, be prepared to prioritise these items in your budget list.

In’s article “How Much Does It Cost To Have A Baby?”, it was estimated that the total cost for the first year of a baby was RM24,500 if the baby was sent to a day-care or babysitter and RM15,500 if it was not sent to a day-care or babysitter. The article goes on to say that the cost can come down if pre and post-natal check ups and the delivery are done at public hospitals. As per below:-

Having a child is a life-long commitment. As they grow older, you will need to consider other costs such as their education and hobbies. However, it will be worth it as Nicholas Sparks, a famous author once said, “What it’s like to be a parent: It’s one of the hardest things you’ll ever do but in exchange it teaches you the meaning of unconditional love.”

Saturday, 4 July 2015

Malaysia another Greece or Enron?

Greece is a classical example to nations, which are bent to spend and spend with no controls in place, exposing their financial vulnerability and susceptibility to external economic threats and with no savings in hand to off-set their careless spending pattern. 

I hope the government of the day will learn from Greece to be careful, prudent, circumspect and sagacious with our money, which tax-payers have faithfully contributed since taxes were imposed on wage earners as long as we can remember.

However Malaysia fate is not really another Greece. It’s more like another Enron.

Google Enron and you will find why they collapsed - high value infrastructure projects, creative accounting, auditors took a long time to finalise accounts, cash flow issues, political involvement, huge expenditure for public relations, etc, etc. Sounds familiar?

1MDB for example is one of Malaysian corporate crony capitalism, framed and flourishing ethnocentrically and laced with economic fascism continue to take root, fashioned after the ethos of America’s Enron Corporation which was said to be too big to fail yet fell like a house of cards that turned into ashes after an internal combustion of a self-immolation.

Malaysia Government made use of its complex group structure as well as structured products and special purpose vehicles in lightly-regulated offshore centres to allegedly conceal borrowings and liquidity shortfalls. Like Enron, the failure by the gatekeepers of the financial system to curb fraud resulted in the transfer of risks to end-clients without their knowledge.

The establishment of special purpose vehicles by the government to perform investment is an act that betrays transparency since there is no direct line of accountability and hiding behind the veil of incorporation.

The establishment of this entities is usually correlated to weak lines of reporting and unclear channels of accountability.This entities are being audited by audit firms that have vested interest in their business due to the level of other services rendered to them.

The auditor general will not look into this entities since it falls outside the scope of their duties, hence it has technically fallen into a zone of low accountability.When there is limited accountability and dubious accounting treatment of the entity, it clearly indicates that there is an issue.

What is alarming too is the Auditor-General’s Annual Report which indicates many fraudulent purchases and mismanaged spending that runs into millions and the masses through different means have voiced their concern many times over but little was done to ensure accountability, chargeability and explainability were the order of the day.

Malaysia is only now moving towards accrual accounting from cash accounting system, this means that the true debt and actual losses will soon be realised by the public who are the ultimate principals in this agency issue.

The government is an agent of the public and should act in the best interest of the public.The channelling of funds and use of government guarantee to raise funds for dubious investments may bring into question the integrity of the whole system.

We have allowed careless speeding and bad investments to take place under the nose of those who sit in the pinnacle of power. Those badly perceived investments are still under investigation and only time will prove whether our money was rightly invested by those we have trusted and placed into office to govern and to manage our national coffer

Ignoring the examples provided, Malaysia can most likely go much, much deeper in debt. Malaysia. If these aren't managed with integrity or intelligence, Greece might be a reality for Malaysians today.