Frequent Flyer Update

I love to accumulate frequent flyer miles. My main program is Asiana Club, a member of Star Alliance. Here's how I maximize my miles:

1. Fly any Star Alliance carrier. (Shanghai Airlines and Air China have joined the alliance.) Just show them your Asian card and you're good to go.

Also, there is a family membership plan that allows you to pool miles. When my mom came to Korea, I signed her up for an Asiana membership which gave me around 11,000 miles for her trip. So, join with your wife, brother, sister, etc. Life partners do not count.

2. Credit Cards. For Koreans, the best card is the Citibank Asiana card and the LG card. 1,500 won = 2 miles. (I'm jealous because I only earn 1 mile per 1,000 won from my Samsung Asiana card.)

3. LG Telecom. You can earn frequent flyer miles if your cell phone bill is around 35,000 won per month. Call LG Telecom and give them your Asiana frequent flyer number. LG has been giving me around 400 miles a month based on my 40,000 won a month cellphone bill.

4. Duty-Free Shop of the Korean Tourism Organization. Do you ever buy anything from the duty-free shop in Incheon? There are a lot of duty free shops there, but I only buy things at the KTO shop. 1 mile for every $2 (U.S. dollars in purchases)

5. Exchanging money. Kookmin, SC First Bank, and Shinhan offer 1 mile for every $5 in currency exchange. At Kookmin bank, if you're doing a wire transfer you'll get 1 mile for every $20. Transferring $5,000 = 250 frequent flier miles.

6. Hotels. Here is a list of worldwide hotels that will give between 100-500 miles for each night's stay. Best Western, Hilton, Starwood, Carlson, Hyatt, Intercontinental, Kempinski, Langham, Marriot, Okura, Raffles, Regal, Swissotel, and Worldwide. For hotels/resorts in Korea that earn 250-500 miles per night: Lotte Hotel, Mayfiled Hotel, Shilla Hotel, Seas Hotel, Paradise Hotel, Kumho Resort, Hyundai Hotel, Poonglim Resort, and Andy's 여관.

7. Breathing. (Some day I hope I can earn miles by just breathing.)

Addendum:

Asiana has recently added some member benefits.

1. 5% bonus mileage. So, if you fly 1,000 miles, they'll give you 1,050.

2. One discount coupon a year: For a Asiana Gold member, there is a 5,000 mile discount coupon for a free flight. So, if a flight to Australia costs 70,000, it would only be 65,000 with the coupon.

3. Two Business class lounge access coupons. Incheon has a really nice Asiana business class lounge. Free Internet, food, drinks, ice-cream, etc.
You can get two lounge access coupons a year, even if you're not flying business class. Sweet! I was inside there once, they also have beds. Much better than waiting outside with the rest of the cattle.

I'm getting close to Asiana Diamond membership, which means a 50% off mileage coupon every year. That's incredible. I could fly roundtrip to the U.S. for 35,000 frequent flier miles. And receive 10% bonus miles every time you fly. Diamond and Gold members also recieve priority baggage and check-in. I've been walking up to the Business Class check-in for years. There's hardly any wait. Avoiding the herd is good.

No !@#$#! Bailout

The Detroit "little 3" are panhandling for billions from the U.S. government (taxpayers). Since I'm a taxpaying American, I thought I'd chime in on this issue.

Here are the problems:

2007 Worldwide car sales
Toyota 9.37 million

GM 9.37 million

2007 Profit/Loss

Toyota $17.1 billion profit ($1,874 per car)

GM $38.7 billion loss (-$4,055 per car)

GM is better off not selling or manufacturing cars. If you can't make a profit selling over 9 million cars a year, why are you in business?

There is no vehicle from the "little 3" that I would actually buy. I thought the Pontiac Solstice was interesting, until I saw the interior. It looks like it was made in a toy factory.

Here are the cars that I would buy (in no particular order):

MINI Cooper

Mazda MX-5 (I own an earlier version of this one.)

Honda S2000

Volkswagen GTI

Nissan Altima

Hyundai Tiburon

There are other cars that I like, but they are unaffordable and also the maintenence costs are too high. Most German and Italian car companies fall into this category.

Why would I help a company that manufactures products I would never buy? I guess the joke's on me...

2008 Credit/Debit Card Tax Deduction

The 2008 Korea Credit Card Tax Deduction

A lot of misunderstandings and mysteries surround this deduction. I'm going to attempt to explain it. =) For 2008, the kind people at the National Tax Service are being more generous than in 2007.

First of all, go to the bank or contact your credit card company (via telephone or web) and get a 2008 total spending statement. Now let's get it started....

1. Let's say I spent 3,500,000 won in total on my Samsung card in 2008. (I spent 3,490,000 won on beer and 10,000 won for the subway.)

2. Multiply your total (gross) 2008 salary by 10% For example, if my total gross income was 10,000,000 won. 10,000,000 x .10 = 1,000,000

3. 3,500,000 (total credit card) - 1,000,000 (Salary x .10) = 2,500,000 won.

4. 2,500,000 won x .20 = 500,000 won (Tada!)

5. 10,000,000 - 500,000 = 9,500,000 won (This is your new taxable income.) So, instead of paying taxes on 10,000,000 won you would pay taxes on 9,500,000 won. Easy. Right? =) (I love tax deductions. Don't you have a warm feeling inside now?)

This is the 2008 NTS formula: [(Credit Card Transaction - Total wage and salary x .10) x .20] http://www.nts.go.kr/

*In 2007, the NTS used this formula: [(Credit Card Transaction - Total wage and salary x .15) x .15]

Balanced Development

One of the priorities of the Roh administration was balanced development. Hence, the attempt to move the capital from Seoul to an outlying region. When I first heard about his plan, I was skeptical.

Most people are familiar with Los Angeles or San Francisco, but did you know the capital of California is Sacramento? Or that New York's capital is Albany?

Population of Los Angeles: 4 million Sacramento: 475,000
New York City: 19 million Albany: 94,000 lol

The capital doesn't necessarily insure population growth or economic development.

What works?

Based on the history of California, if you want population growth and economic development outside of large urban areas, there are two options: universities and businesses.

Think of Silicon Valley, it was a barren desert until companies decided to locate there. However, Silicon Valley was initiated by Stanford University. Stanford built an industrial park in 1951. Then, they leased the office space to high-tech companies including: HP, GE, and Lockheed.

With the new law schools in Korea, students from Seoul are starting to move to provincial areas. http://joongangdaily.joins.com/article/view.asp?aid=2898245

Isn't this easier than moving a capital?

More Google Chrome Tips

Google Chrome has an "omnibar" which is really cool because you can just type your search term where the web address is usually located. However, the google search automatically changes depending on your IP address and the country where you reside.

Here's a simple fix if you want Chrome to always search in English:

Go to the options menu and under default search engine, click "manage."

After you click "manage," click "add." Then, type the following info.

Use name: Google

Keyword: Google

URL: http://www.google.com/search?q=%s

Next, click "make default."

That's it you're finished. =)

One of my only complaints about Google Chrome is the lack of the ability to export bookmarks. Well, the next update has fixed this. Thank goodness. However, this is not available to normal users. It's listed as a developer release. Here's what you have to do:

1. http://dev.chromium.org/getting-involved/dev-channel/.

Run the file and choose "developer" instead of user. Close the program and the next time you open Chrome it should update automatically. The developer Chrome releases updates sooner and more often than the general user Chrome.

My Top 10 Films of 2008

I'm kind of a movie buff, which means I've seen a lot of movies and I can remember the actors, directors, and lines from the scripts.  I probably watch 1 or 2 films a week.  

We're almost at the end of 2008.  Are you happy?  

Here are my favorite films so far from this year:

1.  Up the Yangtze (documentary)

2.  Wall-E (animation)

3.  Bigger, Stronger, Faster. (documentary)

4.  Planet B-Boy (documentary)

5.  Iron Man (action)

6.  Dark Knight (action)

7.  The Counterfeiters (drama)  

8.  Man on Wire (documentary)

9.  Mongol (drama)

10.  Tropic Thunder (comedy)

Have you seen any of these films?   If you want to find more information about any of these movies, just go to www.imdb.com (Internet Movie Database).   

Costco mp3 file

Like other news mp3 files. You can listen to it here.

Obama! Obama! Obama!

Now that Obama has won the election.

Here are some facts about him:

Obama is left-handed. (Yay! Me too.)

Obama had to quit smoking if he wanted to run for president. This was a demand from his wife.

Obama lived in Indonesia during his childhood.

Obama's mother had a Ph.D and worked in microfinance. From 1988-1992, Obama's mother helped build the microfinance program in Indonesia. Today, Indonesia is No. 1 in the world in terms of savers with 31 milion members.

Obama refused to use public funds (tax payer money) for the election. McCain accepted them.

Obama was opposed to the Iraq war from the beginning.

Obama likes to play basketball.

Obama was a professor of law at the University of Chicago from 1992-2004. He was invited to become a full-time professor, but he declined.

Education:

Obama graduated Columbia University with a B.A in political science.

He later attended Harvard Law School. Obama was the first black president of the Harvard Law Review. This is a legal journal published by you-know-which university. He graduated Magna Cum Laude. Michelle Obama also graduated from Harvard Law School, but they did not meet in school. Both Barack and Michelle borrowed a lot of money to attend Harvard. Barack Obama wrote two successful books and used the money to pay off their student loan debt.

Tax Policy:

The first thing my friends ask me is: "Aren't you concerned about paying more taxes if Obama is elected?" No. I'm not.

Obama's tax cuts:

1. 10% of mortgage interest up to $800

2. No more income tax for senior citizens making less than $50,000 per year.

3. No more taxation of unemployment insurance.

4. $4,000 of college expenses will be tax deductible.

5. Companies will be refunded $3,000 for each new worker hired.

6. Allow penalty free withdrawals from IRAs and 401ks of up to 15% of retirement accounts.

Tax Increases:

1. Capital gains tax of 20% for people earning over $200,000 a year.

2. Estate tax of 45% for estates worth over $3.5 million.

3. He will impose windfall profits taxes on oil and gas firms.

4. Publicly traded financial partnerships will have to pay corporate tax.

5. No itemized deductions for households making over $200,000 a year.

How will this affect me? In no way whatsoever. I do not earn $200,000 a year. I doubt my parents will leave me over $3.5 million in their estate. I'm not a college student or a senior citizen. With his proposed tax cuts for senior citizens, I'm beginning to understand why he won Florida. =)

Personally, I like McCain but I can't stand Palin.

I voted for this party. I like their credo: small government, lower taxes, more freedom.

Google Chrome Tip

Here's a cool tip. Instead of organizing your bookmarks on your computer, you can use Google Bookmarks. This saves time if your computer has a virus and you forgot to back up your bookmarks folder.

I really dislike Internet Explorer. Active X is a piece of crap.

ActiveX controls are also granted a much higher level of control over Windows than Java applets, making them both more powerful and dangerous. Malware, such as computer viruses and spyware, is often distributed as ActiveX controls in webpages.

Why use something inferior and more dangerous?

I'll celebrate when every web site in the world works with other browsers like Firefox or Chrome.

Here's an interesting article from The Korea Times. Micro$oft seems to have a firm grip in Korea.

20/20 Farm Subsidies

Mp3 files can be found here.

Hagwon Hogwash

Recently, the Korean government has decided to crack down on hagwons (local cram schools) that are "overcharging" students. Apparently, the Ministry of Education has developed a system to calculate "appropriate" fees using data on teacher salaries, revenue, and other expenditures.

To be honest, I don't understand why the Ministry of Education has any jurisdiction or right to control private education. This is why it's called private education and not public. Harvard University currently charges $47,215 a year. Should the U.S. Department of Education force Harvard to charge "appropriate" fees? I guarantee you if the enrollment at Harvard decreased, the university would lower tuition fees.

This is the same with hagwons. If the fees become so high that students stop attending, they will naturally lower the tuition. In addition, smart hagwon owners may decide to lower fees to wipe out the competition. This is the free market at work.

If the government decided to close all hagwons, students would go overseas in droves. In addition, cunning hagwon owners would set up shop in nearby countries where the Korean government has no control. In fact, I met a Korean hagwon owner in the Philippines. This is capitalism at work.

When public schools fail to satisfy the educational needs and requirements of students, private schools will rise. Businesses always emerge to fullfill a need. This year, the Korean government will spend 38.7 trillion won on education. Wow! (The U.S. spent 56 trillion won.) Perhaps the Ministry of Education should try to find ways to improve public education, spending, and management. Then, there would be no reason for hagwons to exist.

What do you think?

We all need more Energy

Recently, the price of a barrel of crude oil as plummeted. It's around $70 a barrel as I write this. This is a huge drop from where we were in the summer, when prices peaked at around $147 a barrel.

Unfortunately, this drop in oil prices means:

1. Alternative energy is dead. People are creatures of habit, when oil is cheap, there is no need to switch to other forms of energy. In addition, alternative forms of energy become cost prohibitive when gas is affordable.

2. When gas prices are cheap, people will drive more. When oil was at $147 a barrel, the parking lot at HUFS was almost empty. Now, it's full again.

3. Oil consumption will continue to rise. Based on my last post about crude oil, in 5 years crude oil demand may reach 94 million barrels a day.

This is more than the world can produce.

4. OPEC will reduce production. (They will do it later this month.) It's nice when you can dictate world oil prices.

Therefore, I'm bullish on energy stocks. Most of these stocks pay a 3-4% dividend. Patience is a virtue, but getting paid while you wait is even better.

Let's see if people around the world start buying gas guzzling SUVs again. Finally, I still see plenty of cars on the road.

Some Great Scenes

One of my favorite sitcoms is "Taxi." There are few characters funnier than Jim (a guy who drank too much and used too many narcotics). He's taking a driving exam here:



I also used to watch a lot of "I Love Lucy." No. I'm not 59 years old. This is one of my favorite scenes. She is working at a candy factory.


Here's a classic scene from one of the last great sitcoms - Seinfeld. Jerry's girlfriend is deaf, but she can read lips.

There are very few sitcoms on television nowadays. It's a shame. Has our society become so serious that we no longer enjoy comedies?

News mp3 files

I'm going to make it easy for my students to download some mp3 files.

60 Minutes - House of Cards mp3 files

Warren Buffett's Opinion

Warren Buffett thinks people should be buying U.S. stocks now.

This has only happened 3 times in history. On Nov. 1, 1974, he said: "Now is the time to invest and get rich." On August 6, 1979 he told people: "Those awaiting for a better time for equity investing are likely to maintain that posture until well into the next bull market." Finally, on November 22, 1999 he stated: "Investors in stocks these days are expecting too much." Historically, it seems Buffett is about 3-6 months early on his predictions.

Here's his article:

Buy American. I Am.

By WARREN E. BUFFETT

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?

A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.

Let me be clear on one point: I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower a month — or a year — from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.

A little history here: During the Depression, the Dow hit its low, 41, on July 8, 1932. Economic conditions, though, kept deteriorating until Franklin D. Roosevelt took office in March 1933. By that time, the market had already advanced 30 percent. Or think back to the early days of World War II, when things were going badly for the United States in Europe and the Pacific. The market hit bottom in April 1942, well before Allied fortunes turned. Again, in the early 1980s, the time to buy stocks was when inflation raged and the economy was in the tank. In short, bad news is an investor’s best friend. It lets you buy a slice of America’s future at a marked-down price.

Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.

You might think it would have been impossible for an investor to lose money during a century marked by such an extraordinary gain. But some investors did. The hapless ones bought stocks only when they felt comfort in doing so and then proceeded to sell when the headlines made them queasy.

Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. Indeed, the policies that government will follow in its efforts to alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts.

Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky’s advice: “I skate to where the puck is going to be, not to where it has been.”

I don’t like to opine on the stock market, and again I emphasize that I have no idea what the market will do in the short term. Nevertheless, I’ll follow the lead of a restaurant that opened in an empty bank building and then advertised: “Put your mouth where your money was.” Today my money and my mouth both say equities.

End.

No money? That's one of the first mistakes of every investor. They put all their money in at once. Investing gurus always leave cash available for opportunities in the future.

On Track

For students past and present that studied this video, I've uploaded all of the mp3 files. You can download all of them at http://andyteach.googlepages.com/ontrack.

The key to using these mp3 files is to listen and try to mimic or imitate the speakers. You can do this alone, but you can't do it in the library. You have to practice speaking if you want to improve your speaking!

So, listen for a few seconds and repeat it out loud.

Enjoy!

Is Sarah Palin a Moron?

Decide for yourself.  

Bill Maher definitely thinks so.  

Am I a Communist?

Recently, I've become less of a fan of democracy.  Although I've been brainwashed growing up in the U.S. that democracy is the best political system, I'm having second thoughts.  Now I feel like as long as there is a free market/capitalist system, the politics do not matter.  

Singapore and Hong Kong are fine examples of this.  Singapore only has 1 political party. However, the country is always ranked number 1 in economic freedom.  Hong Kong was basically ruled/governed by the British, but the region thrived based on no duties, free trade, free market principles.   Most people in Hong Kong pay no taxes or very little taxes.  The top tax rate is only 20% in Hong Kong.  The U.S. is 45%.   The maximum tax rate in Singapore is 20%. Korea is around 30%.  

Another example is Dubai.  No tax and free education.  However, Dubai is ruled by a king.  

In 2008, Hong Kong's government has a budget surplus of $13.5 billion.  What did the government do with the surplus?  They reduced property taxes and cut personal income taxes by 50% to give it back to the citizens.   In 2007, Hong Kong had about a $7 billion budget surplus.   Maybe their political system with economic feedom isn't so bad?  When was the last time the U.S. or Korea had a budget surplus.  And did the democratic government return the money to the citizens by reducing taxes or giving it back to the people?  

I'm slowly coming to the conclusion that I don't care about politics or government.  Just give me economic freedom.  A democracy doesn't necessarily help citizens, but economic freedom seems to do fine under any circumstance.  

Perhaps the reason for higher tax rates in democratic countries is because there are so many politicians that are greedy, and because the governments are so huge.  

Based on my research, one of the best times for U.S. companies and stocks is when there is a Democratic president and a Republican congress.   The theory is that nothing can get accomplished, so government cannot hurt anything.  Businesses are left alone to thrive without dumb new laws or government intervention.  

If democratic governments were good at management, then public universities and public education would be the best in the world.  However, most people prefer private universities and private schools.  Communist Cuba invests 10% of GDP for education.  Maybe that's why they have so many doctors.  For Korea and the U.S. it's between 7-8% of GDP.  

  

Bubbles Bubbles Bubbles

Warren Buffett believes it takes three I's to create a bubble. Innovators, imitators, and idiots. "Everyone goes along and you look kind of silly if you disagree."

It takes a lot of courage and conviction to go against the majority. I usually use Internet trading, and it can be difficult to click my mouse sometimes "to buy" because everyone else is selling. However, my best stock picks have been contrarian. I'm a little scared when everyone agrees with me on a particular stock. On the other hand, I feel more secure when everyone is depressed. I believe it is human nature to follow the herd. When your neighbor is making money from real estate or stocks, you feel like a fool if you're not involved. But, the last buyer always loses money.

George Soros believes that a bubble occurs when everyone believes a particular asset class cannot go down in value.

Bubbles are a part of life. There was a stock market bubble before The Great Depression. Most people can remember the Internet bubble of the 1990s. Now we're dealing with the aftershocks of a real estate bubble. There was also a mini-bubble in Chinese stocks over the last few years.

Joseph Kennedy, father of John F. Kennedy, famously sold all of his stocks after a shoeshine boy gave him stock tips. He figured at that point, everyone was invested in the stock market, and there was nowhere to go but down. Kennedy was able to save his money and invest in real estate during The Great Depression. In 1929, he had $4 million. By 1935, his wealth increased to $180 million.

I've noticed similiar trends with individual stocks. When the p/e (PER), price to sales, market capitalization, and price to cash flow ratios start getting insane. It's time to bail out. Warren Buffett sold his shares of PetroChina for around $160-$170 per share. Today, PetroChina trades at $97 per share. Just buy stocks and hold onto them forever? I don't think so.

(If you're curious, Buffett paid about $21 per share for PetroChina.)

Food For Thought

Most foreigners are shocked by the prices of fruit and other food in Korea. When I first arrived, I was surprised as well. Here are some prices of food in the U.S.

1 lb. (453 grams)

Bananas: 63 cents
Strawberries: $1.91
Broccoli: $1.60
Chicken: $1.18
Bacon: $3.66
Lettuce: 86 cents
Apples: $1.36
1 gallon of milk (3.75 liters): $3.79
(Source: U.S. Dept. of Labor CPI June 2008)

(Recently, Americans have been complaining about the soaring cost of food, because U.S. food prices have risen around 20-50% since 2006.)

For 1 lb. (453 Grams) of white rice:

Kuwait 64 cents
Australia 67 cents
Brazil 76 cents
U.S. 87 cents
Hong Kong 90 cents
Taiwan $1.00
South Africa $2.26
Germany $2.49

According to research done by a Canadian firm, Koreans spend 27% of household income on food, making food the largest expenditure category in a Korean household.

By contrast, the average American family spends about $280 a month on groceries.

Korea imposes tariff rates of more than 40 percent on table grapes, beef, apples, pears and some citrus fruits. Thirty percent tariff rates are imposed on certain meats, some fruits and nuts, many fresh vegetables, starches, peanuts, vegetable oils and some dairy products.

Also, South Korean consumers must pay a 243 percent tariff for imported honey, a 487 percent tariff on soybeans and a 630 percent levy on sesame, according to the Korea Rural Economy Institute.

Korea Development Bank wrote a report on consumer prices, "The purpose of our study was to answer why the general public perception is that our consumer prices are extremely high, but our study found that it is because our everyday necessities like rice, meat and fruits are high compared to major big cities," Kim said. "The results further reinforce the need for our country to further open up our market for basic goods."

Ram Garikipati, chief editor of the EU Chamber of Commerce, said weak consumerism also plays a role in the high cost of living. “It is not just supply and demand which determines the cost here but also the mentality of many citizens who do not really mind paying higher prices. Society has come to accept it,” he said.

If the government truly wants to "stimulate" the economy, then steps need to be taken to lower the cost of food. High food prices are a burden to all households and could be more damaging than high oil prices. The last time I checked, everyone needs to eat. Finally, I believe food prices around the world will continue to rise for the foreseeable future.

College Dropouts

I was curious after reading an article in The Korea Times today. According to the article, 44% of Korean students at top American universities drop out. The study tracked 1,400 Korean students from 14 American universities between 1985-2007.

Normally, about 1/3 of American students do not finish college, because of hardships, financial reasons, difficulties, etc. However, I'm surprised that the dropout rate for Korean students is higher.

The smallest class I ever taught at HUFS was 7. The class started with 15, but by the end of the semester only 7 students remained.

This may sound perverse but in order for people to succeed, others must fail. If everyone in the world had a college degree, would it still be valuable? Like everyone else, I can tie my shoes by myself, but no one has ever congratulated me or paid me for it.

Why do you think 44% of students are giving up?

Gym Subsidies?

According to Reuters, South Korea plans to help obese children pay for health club membership and other activities that can help them lose weight, an official said on Wednesday. 

Obese elementary school kids will receive 40,000 won a month.   These electronic vouchers can be used at designated gyms and health clubs.  

Gym and health club owners throughout Korea must be very happy.  =)   I'm not sure if this program will work.  Exercise is only one variable to weight loss   Losing weight requires a change in lifestyle and psychology.  For those that watched the "Science of Sleep" video, maybe these kids just need to sleep more.   

Also, will this program continue indefinitely?   95% of people who lose weight regain it.  This is based on a study from 1959, which really needs to be updated.  However, there are some facts that back this up.  

Here's the bad news: Fat cells do not disappear.  When you lose weight, they shrink.  When you become obese your body creates more of these permanent fat cells.  So, a kid who used to be fat can have double the amount of fat cells as someone who has always been normal.  Many scientists theorize this is the reason it's easy to regain weight.  

What happens once you stop exercising?  People usually regain the weight.  

Why do diets usually fail?  Because you regain the weight once you stop the diet.  

How do you lose weight and maintain it?  Diet and exercise have to become part of your lifestyle.  My gym is always busy before summer.  Most people say: "I want to lose 10 kilos, so I can wear a swimsuit at the beach."   Usually, after they lose the 10 kilos, they stop exercising.  What do you think will happen?  

Unfortunately, the majority of people think exercising is temporary.  We just try to get in shape for upcoming events. 

Is A Worldwide Recession Looming?

"The four most expensive words in the English language are, 'This time it's different.'" 
-- Sir John Templeton

A. Gary Shilling is predicting a worldwide recession caused by the housing crisis, credit crisis, and weak U.S. consumer spending.  From my last post, U.S. consumer spending is 20% of world GDP.  

He believes this recession will be the worst one after World War II.   

Recently, Japan has shown negative growth as they are an export nation.   Maybe it's already happening.   Europe is also starting to have problems.  

Shilling believes hotels, restaurants, consumer electronics, airlines, Starbucks, carmakers, fashion, etc. will all suffer.   Therefore, he doesn't recommend holding stocks in these companies.   

This makes sense.  If there is a recession, do you go to Hyundai Department Store or E-mart?   Will you sleep at an expensive hotel or take an expensive vacation?    

Be careful.  Stocks and other investments take a tumble during a recession.  

Be brave.   One of the best times to invest in stocks is also during a recession.  Not in the beginning though, you have to wait 6-12 months later when everyone realizes the economy sucks.   And everyone is feeling depressed.  Buy at the point of maximum pessimism, Sir John (Templeton) would insist.

What should you do?  Save as much cash as possible, because I also think a pretty bad recession is coming.  If you are going to graduate in 6-12 months, you better find a job as soon as possible.   Most companies do not hire a lot of workers before a downturn and freeze hiring during a recession.    

It'll Be An Empty Christmas

I think retailers and manufacturers will be suffering this Christmas.   

1.  In the U.S., banks are reducing credit limits on cards.   This is probably going to shock a lot of consumers.   Reduced credit limits = less spending.

2.  If the value of your house decreases, are you going to spend a lot of money?  

3.  If the value of your stocks or retirement account is falling, are you going to spend a lot of money?  

4.  U.S. consumer spending accounts for around 70% of U.S. GDP and 20% of world GDP.   lol 

(CNN Money.com)

6.  Exports account for 2/5 of the Korean economy.    

(Bloomberg)

7.  Debt and late payments affect FICO scores in the U.S., which in turn can raise your car insurance.  lol   Higher car insurance = less money to spend.  

8.  Gas prices are still high. 

9.  Food prices are increasing.

10.  Unemployment is close to 6% in the U.S.   South Korea's unemployment rate is around 4%.  

More people without jobs = less spending.

11.  In the U.S., mergers and acquisitions usually involve a lot of layoffs, which will increase the unemployment rate.  

12.  Housing has not bottomed.  Prices fell in July.  There are 4.67 million (and rising) unsold houses and condos in the U.S.   You need to have a great credit score and 20% downpayment if you want to buy a house now.  How many people do you know have that?  

13.  We will not have another Great Depression, but there are quite a few similarities.  One of the causes of The Great Depression was leverage.  People were putting 10% down to buy stocks --  thousands of shares of stocks.  Our current financial crisis is also due to leverage. People put zero down to buy houses.   In 1929, J.P. Morgan tried to save the economy by investing billions in certain banks.  In 2008, Warren Buffett invested $5 billion in Goldman Sachs.   J.P. Morgan was able to prop up the market temporarily before another crash.  Will Buffett be doing the same?  In the 1930s, private and corporate investment ceased.  Companies could not expand and had to consolidate in order to pay debt.  In 2008, banks are not loaning money as freely and companies are consolidating.  Finally, during The Great Depression, banks foreclosed on a lot of homes.  Unfortunately, no one had money to buy these foreclosed properties.  So, banks ended up with tons of properties but no way to get cash from them.  Sound familiar?  

Overall, I think a worldwide recession is unavoidable.   All this talk about China becoming a world economic power... but the U.S. still has the greatest impact on world economies.   

Do you know anyone that's going to be spending a lot this Christmas?   

Cannes Lions 2008

The Cannes Golden Lions are back in Seoul again.  You can see them at CineCube in Gwanghwamun from Thursday 9/25 thru Wednesday 10/1.   This will be my fourth consecutive year of watching these amazing ads.  If you've never gone before, I recommend a trip.  You can find more information here.   Some of the highlights from last year's festival can be found in this post.  

Here's a Golden Lion winner from 2000.  

 

Razor Commercial - More free videos are here

Why I Love Dividends...

Dividends are great, especially in a down stock market.  Since 1871, the S&P 500 averaged a 9.2% return.  That's a long time.  =)    However, dividends accounted for 4.8% out of the 9.2%.   Therefore, over half of the return is from dividends.  The rest is from capital appreciation (2.2%) and inflation (2.2%).  When stocks are down, you can sit back, relax, and collect your dividends.   The last time I checked, almost all of Warren Buffet's stocks pay a dividend.  Here are most of them:

Stocks (Symbol)        Dividend (%)

IR                                   2.10        

SNY                               4.60

BNI                                 1.60

KFT                                3.50

WFC                               4.40

USB                                5.10

UNH                                 .10

GSK                               4.70

JNJ                                2.60

NKE                               1.50

LOW                              1.40

HD                                 3.20

KO                                 2.80

AXP                               2.00

PKX                               3.50

In 2007, Buffet pocketed $1.6 billion in dividend income.  That's around $133 million a month from dividends.   lol   Is that why he's always smiling?

Whenever you look at a company's financial information, it can be confusing, arbitrary, and the numbers can be faked.   But you can't fake a dividend.  

Do your stocks pay a dividend?  

Wealthy, Thin, and Fluent

Saving money, losing weight, and learning a language all have one thing in common.  

In order to achieve any of these goals, you need to have discipline.  The root of discipline originates from "discere - to learn."   

People are naturally full of excuses.  I've heard everything (and also used a few of these myself):

My friend is having a birthday party.

I'm having a birthday party.

My friend is leaving for military service (party).  

My friend is graduating (party).

My friend is leaving to study abroad (party).

I don't have time.

I don't have any money.

I don't have any money or time.  

I'm too tired.

I'm sleepy.  

It's too early in the morning, so I'm sleepy at 9:30AM.

It's close too lunch time, so I'm tired and hungry at 11:30AM. 

 

I ate a big lunch, so I'm sleepy at 1:30PM.  

It's been a long day, so I'm tired at 3:30PM.

It's too hard.

I woke up late.

(Someone) passed away.  

I forgot.  

I missed the bus.

I missed the subway.

There's too much traffic.

It's raining.

It's snowing.

It's too hot.  

It's too windy. 

I broke up with my boyfriend.

I broke up with my girlfriend. 

My friend broke up with his or her girlfriend/boyfriend.  

I have a date with my boyfriend.

I have a date with my girlfriend.  

I have a blind date. 

It's Valentines Day.

It's White Day.

It's Black Day.

It's a holiday.  

It's Valentines Day. I met my girlfriend in the snow, but we missed the last subway and now I don't have time or money.  

Usually, when I hear an excuse I think:

1.  Have I heard this one before?

2.  Does this person need more self-discipline?  

"Do or do not...there is no try." - Yoda 

Is it a Google Earth?

Google Chrome reached 1.5% market share (of the web browser market) in one day.   That's pretty respectable for a new product. However, Google's real threat to take over the world is Android.  

Android is basically software for mobile phones.  Currently, each mobile phone maker uses their own software.  It's annoying when you buy a new phone, and you have to learn how to use it.  In addtion, it's difficult to transfer over your saved phone numbers and contacts.  Usually, workers at the cellphone store have to do this for you.  Google's goal is for every mobile phone to use Google's operating system - similar to how almost every computer uses Micro$oft Windows.   If they succeed, it will truly be a Google Earth. The cellphone market will become like computers with hardware makers and software makers.   If you want to know which one makes more profit, just think of Bill Gates.     

Will they succeed?  Google has $13 billion in cash.   lol  To put it in perspective, Samsung Electronics has around $1.8 billion in cash.  

In 2007, over 1 billion mobile phones were sold around the world.   Do you see the huge potential?  They only need to make a few dollars from each mobile phone sold.  My guess is that Google will initially give Android to mobile phone manufacturers for free.  Then, try to gain market share and begin to rule the earth.   

More info:

Currently, the Google search engine dominates the world.  They have a 65% market share of searches around the world.   There are approximately 400 million Internet users in the world.  

That means around 260 million people are using Google search everyday.  lol   

The founders of Google, Sergey Brin and Larry Page are both 35 years old.  They each have $18 billion.  lol  

Sergey Brin's father is a math professor at Maryland University.  

Larry Page's father is a computer science professor at Michigan State University.  

Google frills:  

A lot of companies offer their workers some benefits, but Google is extreme:

•	Food Hungry? Check out our free lunch and dinner – our gourmet chefs create a wide variety of healthy and delicious meals every day. Got the munchies? Google also offers snacks to help satisfy you in between meals.
•	On-site Doctor At Google headquarters in Mountain View, California you have the convenience of seeing a doctor on-site.
•	Shuttle Service Google is pleased to provide its Mountain View employees with free shuttles to several San Francisco, East Bay and South Bay locations.
•	Financial Planning Classes Google provides objective and conflict-free financial education classes. The courses are comprehensive and cover a variety of financial topics.
•	Other On-Site Services  At Google headquarters in Mountain View, there’s on-site oil change, car wash, dry cleaning, massage therapy, gym, hair stylist, fitness classes and bike repair.

•	Vacation 1st year 15 days 4th year 20 days 6th year 25 days
•	Holidays 12 paid holidays each year (sick days taken as necessary)

So, they have free food, free dry cleaning, a free doctor, a free shuttle service from your home to their office, etc.  lol  Not surprisingly, Google was rated as the number one company to work for.  

One of my friends started working for Google 8 years ago.  Today, he has about $4 million in Google stock.  He just bought his mom a $500,000 house.   

Do you think their employees are happy?  

Why didn't I major in computer science?  

Do you google?

When the name of a brand becomes the description for a product or service, it's called a genericized trademark.  Some examples of this are Kleenex, Xerox, Escalator, or Band-Aid.   Yes.  Escalator was once just a brand-name.  The newest example of this is Google, since they are the best search engine -- to google (used as a verb) means to search.  

Recently, Google released their new web browser"Chrome."   Most people (about 70% of the world) use Microsoft's Internet Explorer.   

Why do I prefer Chrome?  

1.  Since it is the most popular web browser, most viruses and trojans are written for Internet Explorer.  If you have no girlfriend, and you spend every weekend on your computer programming a new virus, then you want to reach the biggest audience.  

2.  Chrome is faster than IE.  You will be surprised how fast web pages load with the Chrome browser.  

3.  Chrome is smaller.  IE takes up so much hard drive space.  Actually, pretty much anything made by Micro$oft takes up a lot of space.  

4.  Chrome has a simple user interface.  It's simple and clean, which are my preferences.  

5.  Chrome is open source software and is more secure.   There are a lot of security features in Chrome.   

Finally, my favorite feature is the new "omnibar."  There is one space to enter web page addresses or you can just type in your search.  (The default search engine is Google of course.) 

I hope this new web browser gains market share, because I hate using IE.  

See how clean this browser looks?  

For those interested here are the Chrome shortcut/hotkeys: 

New Shortcuts:
Task Manager-------------------------------------Shift+Esc
New Incognito Window----------------------------Ctrl+Shift+N
Regular Shortcuts:
Bookmark This Page-----------------------------Ctrl + D
Bookmarks---------------------------------------Ctrl + B
New Incognito Window----------------------------Ctrl+Shift+N
Downloads----------------------------------------Ctrl + J
Help----------------------------------------------No keys
History-------------------------------------------Ctrl + H
Page Source--------------------------------------Ctrl + U
Print---------------------------------------------Ctrl + P
Refresh Page-------------------------------------F5
Refresh Page & Cache----------------------------Ctrl + F5
Save Page As-------------------------------------No keys
Back---------------------------------------------Alt + Left Arrow
Down One Line-----------------------------------Down
Down One Page-----------------------------------PageDown
File Open-----------------------------------------Ctrl + O
Find in page--------------------------------------Ctrl+F
Forward------------------------------------------Alt + Right Arrow
Home Page----------------------------------------Alt + Home
Jump to Address Bar------------------------------Ctrl + L
Jump to Search Bar(opens search bar in the address bar)--Ctrl + K
Page Bottom---------------------------------------End
Page Top------------------------------------------ Home
Stop-----------------------------------------------Esc
Tab Close------------------------------------------ Ctrl + W
Tab New------------------------------------------ Ctrl + T
Tab Next------------------------------------------Ctrl + Tab
Tab Previous-------------------------------------- Ctrl + Shift + Tab
Tab Select-----------------------------------------Ctrl + [1 - 9]
Up One Line--------------------------------------- Up
Up One Page---------------------------------------PageUp
Window Close--------------------------------------Alt + F4
Window New---------------------------------------Ctrl + N
Copy-----------------------------------------------Ctrl + C
Cut-------------------------------------------------Ctrl + X
Delete----------------------------------------------Del
Task Manager--------------------------------------Shift+Esc
Text Size Decrease----------------------------------Ctrl + -
Text Size Increase----------------------------------Ctrl + +
Text Size Default------------------------------------Ctrl + 0
Undo------------------------------------------------Ctrl + Z

Skip To My "Lu"

Recently, one of my colleagues inspired me to start jumping rope. You know that exercise that 8-year-old girls enjoy? Well, I'm officially an 8-year-old girl. =) I don't like treadmills or stationary bikes. So, this is a great alternative. In addition, my calves are always a weak point, so this helps me out. I started last week. I could only do 50 at first, but after a few days I'm up to 200. The human body has amazing adaptation abilities.

This "calories burned calculator" reveals that I burn around 140 calories in just 10 minutes of rope jumping. According to Men's Health magazine, 10 minutes of jumping rope is the equivalent of 30 minutes of jogging. I'm not a fan of jogging, so that sounds wonderful. If you jump fast, you can burn 1,000 calories an hour.

From Men's Health:

Balance

Your weight is on the balls of your feet, your knees slightly bent. Don't jump more than an inch. Keep your body upright, eyes front, and elbows close, and make small circles with your wrists.

The Jump

It's just a slight push, but it comes from the ankles, calves, knees, and hips. Push through the floor with the balls of your feet and point your toes downward as you lift off.

The Landing

Land softly by spreading the impact through your ankles, knees, and hips. Contact with the ground should be as brief as possible, your heels never touching the ground. Don't double bounce. That's too easy.

The Alternate Step

Jump with one foot. On the second turn of the rope, switch feet. Continue alternating feet (as if jogging in place) at a slow pace until you establish a comfortable rhythm. Lift your knees forward without kicking backward, which can cause your foot to catch on the rope.

A Program

With the basic bounce or alternate step, start with 10 sets of 10 jumps. Increase the number of jumps by 10 per set until you reach 100 jumps nonstop. Gradually work toward 5 to 10 minutes of continuous jumping.


Honestly, I like to imagine I'm Ali while I'm exercising.
I've already lost 500 grams (1 lb.) from this exercise.

There Is Hope

A lot of people want to be athletes or entertainers because they have fame and fortune.

I had to quit playing basketball when I was 16 because everybody else was faster, could jump higher, and taller than me. =( I was a decent point guard for a 16-year-old, but I'm not a naturally talented athlete like PhelpsFish or Jang Mi-Ran.

There's also no way I could have been an entertainer because I'm too shy (introverted) and average looking.

So, what are average people supposed to do?

Recently, I asked some of my older students (who have stable jobs), what characteristics are needed to get a job. The answers were: a good personality, punctuality, specialized skills, and the ability to work with others.

Here's the good news for the rest of us. The highest paid people in the world are managers (CEOs of companies). These people are not good-looking or talented athletes. Good management skills can be learned and promotions can be earned through hard work. It's nice to know that your brain is your most valuable asset.

Average salary of a CEO managing an S&P 500 company: $10.54 million a year

Highest annual salaries:

Larry Ellison (Oracle) $84.6 million lol That means he gets roughly $7 million a month.

John Thain (Merrill Lynch) $83 million Is he jealous of the first guy?

Kenneth Chenault (American Express) $50 million

Remember, these are just their salaries. They also get stock options.
By the way, Steve Jobs of Apple has the lowest salary: $1 a year.

One of my friends in Korea gets a salary of $2-3 million a year. He works for Credit Suisse Group. (Sorry girls but he's already married.)

Another friend in Korea makes $500,000 a year. He is a children's hagwon owner.

These guys are both average looking and in poor shape. So, we can stop focusing on our appearance and use our heads. =)