CJH Financial Planning

Last year, the Dow Jones Industrial Average hit a record high of 16,588, totally overshadowing the previous high of 14,000 in 2007 (pre-financial crisis). Does it mean that the US economy is out of the woods? US Markets Hardly so. As we all know, the Federal Reserves has been printing more the US$3.5 trillion of fresh money over the last 5 years to try to revive their struggling economy through their 3 tranches of Quantitative Easing (or ‘QE’ in short) programmes. Also, Federal Reserve has set its interest rates to almost zero, allowing institutions to borrow more and cheaply, in a hope that more spending would spur the economy. As such, there are lots of ‘hot money’ floating around, waiting to be deployed. And it is no surprise that most of this ‘hot money’ are in the hands of banks. 

I fondly remembered my primary school days when my mother would give me a dollar a day for pocket money. It seems like very little now, but those days it was enough to get through lunch and still have money left for some tidbits after class. And then there was this $2 note which was perpetually hidden in a little-used compartment of my nylon-and-Velcro wallet. This was my 'spare money'. Money to be used when my pocket money runs out, and I need buy something urgently. I couldn't just spend the money as I wish though. To top up the spare money, I would need to account to my mother what I spent on and whether it was necessary. She is probably the most frugal person in the world and getting past that inquiry wasn't exactly easy. The money was hardly used though, simply because it was so hidden that I often forgot it was there. But it was always there, always ready to save me in times of emergency. I am grateful that since young I have been inculcated this habit o...