A day at a conference

The other day, after Steve's birthday (we had party with a few friends) i went to BABSON College , Massachusetts for Annual Executive MBA Economic Conference. During the conference, i was invited to be one of the speaker to represent Asian Pacific Economic Blocks, and i am suppose to give a talks on key economic development , except that i was distracted with another issues and going on talking some other things (typical lecturer!). This is one part of my nonsense.

Consider this!

" national average annual percentage yield for savings accounts in June 2009 was a mere 0.72 percent. With inflation at about 3.5 percent and savings at 0.5 percent, savers were losing roughly 3 percent each year.

So i asked the audiences ! "why save?" then continue

This is exceptionally depressing.

You have to have a savings and a long term plan to live in poverty.

So, What's Banks never tell you?

Banks never told you that they makes tones of money out from your money!

" then why save?" i ask again!, everybody seems uncomfortable, they grumbles. Specially those MBA grads who is working with the Banks.

Then i quoted a statement from WashingtonPost

" You have to be rich to be poor. That's what some people who have never lived below the poverty line don't understand. The poorer you are, the more things cost. More in money, time, hassle, exhaustion, menace. This is a fact of life that reality television and magazines don't often explain" continue..


Even if the poor or working-class family was able to save money in order to invest in these higher-rate savings plans, one has to consider what happens to the money in the meantime. Consider: You're poor, but you're putting away $20 a week. It's a real hardship, but you do it. You put the money in a savings account. By year's end, you've got $1,200 to put into a Certificates of Deposit (CDs).

But wait: In the meantime, you've lost 3 percent of the value of the money you just saved! You're already in the hole! Oh well. Put the money in a CD anyway...



But then you have another problem. CDs require that your money to be tied up for certain amount of time. One, three, five, seven, 10 years -- it varies. The longer the tie-up, the higher the yield. The current yield on a one-year CD is a mere 3.48 percent. On a five-year CD it is 3.93 percent.


So is our fictional consumer better off saving using CDs? Not really. A one-year CD doesn't increase your savings at all! It merely keeps you even with inflation. A five-year CD does slightly better, but only just. And if inflation rises even a half-percentage point, the consumer is in big trouble again.

So, Moral of the story is! Never call a Professor to give an impromptu talks or speeches. We will generally end up with different facts, figures and ideas which may not be suitable to public.

I rest assured that the Executive Committee of the Conference will never ever call me on stage for few decades! hehehe.

In the good hands, i was offered for the post of Associate Dean for Graduate School of Business in Babson. I will think about it!. (Ada aku kesah)