After last week's rant about the banks, I thought I'd move away from all the doom and gloom of the recession and talk about a revolution that is predicted to change the way we do business. The Web.
The Electronic Revolution... Again
Well not quite the web. That's been changing the way we do things for more than a decade. It's the next level of the Web, what is becoming popularly know as Web 2.0. This form of the web is less about the transfer of data between computers and more about the exchange of information between people. This has come in the form of social networking, blogs and RSS feeds which not only allow people to express opinions to a wider audience but also to share knowledge and give advice.
What Makes A Web 2.0?
There is some debate as to what makes this Web 2.0? The answer lies somewhere between the latest advances in technology and the users eagerness to use and adapt that technology to meet their own needs. While Web 1.0 used mainly images and plain text to display information, Web 2.0 has used more innovative ways to get their message across. This has led to the creation of mash-ups, "tagging" and more and more user generated content.
And it's not just affecting the social patterns of the average Internet surfer. Businesses are also having to deal with the winds of change. For example, real estate and travel agencies are now in competition with independent sellers and content providers. And now even celebrities are using it to boost their profiles. Ashton Kutcher generated interest on his Twitter account by posting a picture of his wife undressing and used the attention it generated as an opportunity to advertise for his upcoming movie by posting a video of him getting his chest waxed in the film.
Let's just hope that Web 2.0 doesn't reach it's zenith with a chest-waxing video.
Sunday, March 29, 2009
Sunday, March 22, 2009
Recession? Not for These Guys
I recently heard about a bill that is being pushed through by Congress in the US, which will see them slap a 90% tax rate on the bonus' received by executives of any nationalised banks. This happened after there was a public outcry in America when the bankers who got us into this mess, not only got off scot-free, but received huge pay-off in the form of bonuses. Here's a video of the efforts being put in to retrieve bonuses that AIG executives were given:
Make Them Pay
Make them pay I say. We had to bail out the banks after the bankers bought dodgy loans because of the housing market boom. These are the very people who should have said "Hold on, is this really wise? We're putting all our eggs in one basket." Even without the dodgy loans they must have realised that the boom wouldn't go on forever. The bad loans simply made the fall even harder. After being paid good money to make this bad decision, instead of being fired from their jobs, they resigned. This is all well and good if it was your average employee, who would forfeit a severance package if fired, but these guys still got a pay package and what a package! With reports of bonuses totaling $200 million for AIG executives alone, most won't have to work another day in their lives.
And it's not just bank executives in the US that got bonuses; the same has happened here in Ireland. Michael Fingleton, ex-chief executive for Irish Nationwide, received a €1 million bonus pay package after the bank was nationlised. However, while Barack Obama proclaims that "no boss of a rescued bank should receive more than $500,000" and that they will "pursue every legal avenue to get it back" the outlook is not so rosy for Irish tax-payers. A spokesperson for the Department of Finance said there is no intention to introduce an Obama-style tax of 90% on bonuses of banking executives in institutions covered by a guarantee and Brian Cowen is projecting a negative outcome to the mess claiming that there's very little hope of recovering bonuses from executives who quit before the bank was bailed out. In relation to the other bonuses, the Taoiseach said that Minister Brian Lenihan "will decide, on that basis, what are the legal avenues available to him and what way can it be arranged that the issue can be dealt with satisfactorily". So no luck there either. The only silver lining is that no more bonuses will be paid out in the near future. Also, Fingleton's expected successor declined the role when it emerged that the head of Nationwide would get no more than €360,000. Peanuts really.
All in all, it looks like we handed out €7 billion to the banks so they could congratulate their executives on getting us into this mess. Makes you want to relocate to a low-tax country like Barbados where the weather is good and the government aren't the ones who rob you blind.
Make Them Pay
Make them pay I say. We had to bail out the banks after the bankers bought dodgy loans because of the housing market boom. These are the very people who should have said "Hold on, is this really wise? We're putting all our eggs in one basket." Even without the dodgy loans they must have realised that the boom wouldn't go on forever. The bad loans simply made the fall even harder. After being paid good money to make this bad decision, instead of being fired from their jobs, they resigned. This is all well and good if it was your average employee, who would forfeit a severance package if fired, but these guys still got a pay package and what a package! With reports of bonuses totaling $200 million for AIG executives alone, most won't have to work another day in their lives.
And it's not just bank executives in the US that got bonuses; the same has happened here in Ireland. Michael Fingleton, ex-chief executive for Irish Nationwide, received a €1 million bonus pay package after the bank was nationlised. However, while Barack Obama proclaims that "no boss of a rescued bank should receive more than $500,000" and that they will "pursue every legal avenue to get it back" the outlook is not so rosy for Irish tax-payers. A spokesperson for the Department of Finance said there is no intention to introduce an Obama-style tax of 90% on bonuses of banking executives in institutions covered by a guarantee and Brian Cowen is projecting a negative outcome to the mess claiming that there's very little hope of recovering bonuses from executives who quit before the bank was bailed out. In relation to the other bonuses, the Taoiseach said that Minister Brian Lenihan "will decide, on that basis, what are the legal avenues available to him and what way can it be arranged that the issue can be dealt with satisfactorily". So no luck there either. The only silver lining is that no more bonuses will be paid out in the near future. Also, Fingleton's expected successor declined the role when it emerged that the head of Nationwide would get no more than €360,000. Peanuts really.
All in all, it looks like we handed out €7 billion to the banks so they could congratulate their executives on getting us into this mess. Makes you want to relocate to a low-tax country like Barbados where the weather is good and the government aren't the ones who rob you blind.
Wednesday, March 4, 2009
Surviving the Recession
Now that people are starting to feel the effects of the "credit crunch", the big question is how do you avoid the backlash of the recession and continue living in the lap of luxury. The reality is you can't, but spending wisely will ensure that you feel less of a pinch then those who don't.
Weathering the storm
Desperate times don't necessarily call for desperate measures. Clear thinking and an awareness of the current situation can serve you just as well. If you're caught in a recession it's easy to start cutting costs in the obvious areas, but there may well be opportunities to save money being overlooked as a consequence. While I'm no Eddie Hobbs, here are a few of my tips to surviving the current economic conditions:
#1: Maximise Your Money
An obvious goal but there are certain ways of going about it. You could go out and rob a bank, taking the risk associated with that or go for a safer option: online banks. In a recession everyone tightens their belts and start cutting back on spending to save money, so if your going to have your money sitting in a vault you may as well have it earning the highest interest possible with the lowest fees. Because online banks don't have to pay for premises and other physical attributes usually costing a bank, they have less expenses than AIB or BOI.
#2: Make A Budget
Drawing up a cash budget should really be something you do anyway but it's vital in a recession. It gives you a broader view on your finances and also your liquidity. You shouldn't be spending money under the assumption that all your cash inflows will come through. After all you could lose your job and then what?! A budget will help you identify the areas where prompt payment is priority, like credit card bills, and where it can be put off for a time. It also gives you a better view of where you can make the cut-backs and how this will affect your disposable income (if you have any left!). One of the best uses of the budget is to identify and eliminate needless expenses ie. impulse buys. How you eliminate these expenses can involve a bit of willpower:
#3: Be Innovative
Think outside the box because since everyone is trying to save money, a good idea could give you that competitive advantage over the rest. We live in an age where globalisation is becoming more and more prominent and eBay is a great example of that. "One man's trash is another man's treasure" has never been more true with the explosion of this site's popularity. You probably won't be able to flog off that antique vase or the lock of Bono's hair you have, but there may be other objects of value. For example, a used games console would make an ideal birthday present for a recession stricken child.
#4: Bargain Bin
This needn't be as horrible as it sounds. My family have recently started shopping at Aldi instead of Tesco and when you look at the prices it's easy to see why. While the store lacks the recognised brand names, the quality is just as good and the price is certainly better. You can even treat yourself by buying luxury goods like sweets in bulk, and hardly feel the pinch. And for those of you who just HAVE to have the brands, they have started stocking some of the more popular names but at the same price as other stores. In relation to clothes, you can get a comfortable plain white t-shirt for €30 in Tommy Hilfiger or an exact replica for €8 in Dunnes Stores. The difference? A tiny rectangular crest that makes no different to the clothing itself. Again, its just a question of pride, something we can ill afford during these times.
Hopefully you can put these tips to good use and save yourself a bit of money. If not, then there are always the desperate measures mentioned earlier:
Weathering the storm
Desperate times don't necessarily call for desperate measures. Clear thinking and an awareness of the current situation can serve you just as well. If you're caught in a recession it's easy to start cutting costs in the obvious areas, but there may well be opportunities to save money being overlooked as a consequence. While I'm no Eddie Hobbs, here are a few of my tips to surviving the current economic conditions:
#1: Maximise Your Money
An obvious goal but there are certain ways of going about it. You could go out and rob a bank, taking the risk associated with that or go for a safer option: online banks. In a recession everyone tightens their belts and start cutting back on spending to save money, so if your going to have your money sitting in a vault you may as well have it earning the highest interest possible with the lowest fees. Because online banks don't have to pay for premises and other physical attributes usually costing a bank, they have less expenses than AIB or BOI.
#2: Make A Budget
Drawing up a cash budget should really be something you do anyway but it's vital in a recession. It gives you a broader view on your finances and also your liquidity. You shouldn't be spending money under the assumption that all your cash inflows will come through. After all you could lose your job and then what?! A budget will help you identify the areas where prompt payment is priority, like credit card bills, and where it can be put off for a time. It also gives you a better view of where you can make the cut-backs and how this will affect your disposable income (if you have any left!). One of the best uses of the budget is to identify and eliminate needless expenses ie. impulse buys. How you eliminate these expenses can involve a bit of willpower:
#3: Be Innovative
Think outside the box because since everyone is trying to save money, a good idea could give you that competitive advantage over the rest. We live in an age where globalisation is becoming more and more prominent and eBay is a great example of that. "One man's trash is another man's treasure" has never been more true with the explosion of this site's popularity. You probably won't be able to flog off that antique vase or the lock of Bono's hair you have, but there may be other objects of value. For example, a used games console would make an ideal birthday present for a recession stricken child.
#4: Bargain Bin
This needn't be as horrible as it sounds. My family have recently started shopping at Aldi instead of Tesco and when you look at the prices it's easy to see why. While the store lacks the recognised brand names, the quality is just as good and the price is certainly better. You can even treat yourself by buying luxury goods like sweets in bulk, and hardly feel the pinch. And for those of you who just HAVE to have the brands, they have started stocking some of the more popular names but at the same price as other stores. In relation to clothes, you can get a comfortable plain white t-shirt for €30 in Tommy Hilfiger or an exact replica for €8 in Dunnes Stores. The difference? A tiny rectangular crest that makes no different to the clothing itself. Again, its just a question of pride, something we can ill afford during these times.
Hopefully you can put these tips to good use and save yourself a bit of money. If not, then there are always the desperate measures mentioned earlier:
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