So guys, from 11th to 15th of August 2007, I went to Kedah to participate in Karnival Kokurikulum antara Matrikulasi (KAKOM) which my event was public speaking...wow, first time ma representing a college for public speaking...I had no experience but still I wanted to try out...huhuhu...so, below is my text for the prepared speech...its about financial independence...the theme was about defining independence...and me and my friends wanted to come up with a more focused interpretation of independence not like the independence that everyone talked about (merdeka)... read la and give comments... enjoy it..
WHAT IS FINANCIAL INDEPENDENCE?
A very good morning I would like to bid to the chairperson, honorable judges, timekeepers and all the members of the audience.
Today, I would like to talk about something that is getting more and more neglected nowadays. Time and time again we have heard on how we have been independent for a great 50 years.
You may have seen advertisement on the TV and newspaper on how far we have been since our first step on our own. How Tunku went up to the merdeka stadium and shouted MERDEKA! MERDEKA! But I think that independence is too broad a definition and please allow me to come up with a more focused interpretation of independence.
Ladies and Gentlemen, have you ever heard of the other side of independence? The side which does not get our attention during our good times, but during our bad times, we are the first to complain about it. You see, I’m talking about independence from a financial point of view, and why is it important because it affects our economy in various aspect, namely our own personal economy, the uses of credit cards, from businesses, the stock market and the national currency.
Ladies and gentlemen, allow me to bring up my first point, have you ever heard of Alongs and their victims? Well, I’m sure you have. Alongs or loan sharks are illegal moneylenders, and their victims are those who borrow money from them and fail to pay them back resulting in their property being vandalized. This is an example of a person being financially dependent. Financial independence is important for a person to choose their own course of life and what to do with their money. The ideal way to do this is to have a stable job, control your spending, stay away from taking loans and resist temptations.
The easiest way to do this is by being a more responsible spenders by controlling our expenditure and stick to our budget. Also we must start saving as they say “save it for a rainy day.”
Speaking of rainy days let me come up with the next point about the uses of credit cards. A lot of people say that credit cards are a lifesaver during a rainy day. Have you ever been to a restaurant and when you get the bill to pay, you noticed that your cash wasn’t enough? And then….TADA, you whip out your credit card and sigh a breath of relief. Now this is the very reason why people say that credit cards have so much dominance over our daily lives. This also means that we are dominated by the little plastic card and we are no longer financially independent.
Credit cards company usually charge ridiculous interest rates for those who fail to pay the bill on time. The interest then compounds and increases exponentially and the creditor could end up in a vicious cycle that increases in damages with every turn and eventually the creditor could end up in bankruptcy.
Credit card companies have also gone far by penetrating the younger generation by introducing them the prepaid credit card which has no strings attached and anyone can apply for one. This may sound great as there is no chance anyone would overspend with a prepaid card, but what would happen to the teenagers when they grow up? Will they be owned by their cards? Well, I’m sure you know the answer just as well as I do. I believe that they will not be financially independent.
Ladies and gentlemen, financial independence is also important for businesses just as it is for all of us. Financial independence from a businessman’s point of view is the ability for his company to make profit with any fear his company collapsing or going bankrupt.
Financial independence is important for businesses because what a financial crisis can do to our business entities in our country. Financial independence for a company would mean that the company needs not fear for his company going bankrupt and being bought by another person. This also means that the company doesn’t need to fear any economic crisis. Those that work under the company also not need to fear for their jobs because the company can still keep them employed and consequently less social problem occurs for our country. Now ladies and gentlemen, I hope you understand how important financial independence is for our businesses. In fact, most of us depend on private businesses one way or another. Financial independence is also necessary for businesses to absorb changes in the global market such as the stock market crashes and rapid inflations.
To illustrate my point on rising inflation, I want you to imagine what happens when the local Apek stops selling his soy bean milk because he went bankrupt. Well, the answer is simple; we don’t get to drink soy bean milk anymore, right? Ok then, what if the nearby hypermarket is still in business because they have the means to buffer any economic crisis. Hmm…we can still get soy bean milk in a box but then it would cost more than it originally was, maybe from rm2 to rm4, who knows?
Moving on, let me come up with my next point about the stock market. From a layman’s point of view, the stock market is where the rich people just dump their money because they want to get a lot of money in a short period of time. Ladies and gentlemen, the stock market is actually a mechanism which enables the trading of a company, collective shares, other securities and derivatives. In layman’s term again, it means that by trading on the stock market you can a share of a company. The money that you invest will then be used as a capital for the company to expand their businesses.
But now, I’m sure that most of you are guessing, what on earth does the stock market have to do with independence? Now lets see what would happen if foreigners starts pouring in their money? Well, some of you would say that this is good because more money means better economy, right? Well, the real answer is YES and NO. yes because our local companies could easily expand their business to the entire world but no because the company would then belong to the foreigners and the problem with that is they can pull out their money anytime they want because technically it still belongs to them. Let illustrate my point by giving you an example from the Asian Financial Crisis. During that time our nation was an Ideal investment region mainly from the stable political situation and the growth of the countries population. This attracted more money from the overseas especially the west. The money caused our economy to grow even more rapidly but then speculations set in and some claimed that our stock market was like a bubble that grows and grows and finally goes pop! Then in the 3rd quarter of 1997, the investors sold their Malaysian shares and quickly fled with the money. At first it was just a few people, but then a domino effect kicked in and the stock market collapsed. The KLSE crashed from above 1200 to below 400 and caused many companies go bankrupt.
Ladies and gentlemen, I’m sure that you all don’t want to see more and more companies go bankrupt, right? So that is why we as Malaysian’s must maintain our monetary independence by not letting the foreigners take over our stock market.
Ladies and Gentlemen, allow me to bring up my next point. A stable currency is the backbone of a stable economy. And it is very important for is to appreciate how our former leaders have done a fantastic job on holding our currency pegged to the US dollar for so many years. During the Asian financial crisis, our stock market was attacked by speculators who tried to devalue our ringgit and caused our ringgit to fall from 2.5 per dollar to 4.5 a dollar. At this time to the IMF stepped in and tried to solve our problem by offering loan to the Malaysian Government but also demanded massive changes in our economic policies. This made may people especially the former prime minister Tun Dr Mahathir Mohammad claimed that the IMF was threatening our independence in making our own decisions and decide our own policies. Because of this too made many people say that our government was undemocratic to against the IMF but in the end, it was them too who complemented Malaysia for the capital control policies. Doesn’t this show our independence from the west?
Ladies and gentlemen, before I step back and leave this stage to the next speaker, let me remind you that financial independence may not be as glamorous as shouting merdeka and waving flags but I’m sure you know that it is extremely important for us that even if the price of soy bean goes up to rm4, we can still afford to cover the increase in cost, all because we are financially Independence…
Thank you for listening and have a great day. Good bye.
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Assalamu'alaikum,
