1 May 2019 FT — Articles to Read

1 May 2019


Question: According to MSN: Money, how much money should you actually save for retirement?


Arab youth rank living costs and jobs as leading concerns – Pg. 3

–          Unemployment has reached more than 30% in many countries across the Middle East and north Africa, and the IMF says this year’s projected regional growth of 1.3% is insufficient to create enough jobs for the 2.8m youths joining the workforce annually

–          Two-thirds said religion played too large a role in the Middle East, while half said religious values were holding the region back

–          The share of young Arabs regarding the US as an enemy has almost doubled since 2016, yet Russia’s standing ahs risen, with 64% seeing it has an ally.  Two-thirds view Iran as an enemy with a third seeing the Islamic republic as an ally (Prof Note: Some of my best mates are Iranian!)


Oil price hits economies more than markets – Pg. 4

–          A spike in the oil price has preceded every big meltdown in the world economy since the 1970s.  So a 45% price rise within five months would generally be cause for alarm

–          There are two main explanations for the apparent lack of concern…First,…recent price gains reflect an improved outlook for global growth…Second, many energy economists say the transformation of the oil market since 2010, with falling production costs and rapid growth of US shale production, means future supply shocks will be smaller and more shortlived

–          The Eurozone is likely to be less vulnerable, since consumption and production have become less oil intensive

–          …the most significant change in the past decade has been the link between oil prices and US growth.  US interest used to be clear cut: a rise in gasoline prices rapidly high GDP through its effect on consumers.  The 2014 oil slump could have been expected to add about 1% to output growth.  But research….showed the net stimulus was close to zero, because gains for consumers were offset by a dramatic decline in investment by the oil sector


Investment alone cannot save distressed communities – Pg. 9

–          Investors across the US are salivating at the tax incentives announced recently for investing in depressed “opportunity zones”

–          Many of these depressed communities are in semi-rural areas, but some are also found in thriving cities

–          What has changed is that the information technology revolution has now made a very good education or highly developed skills prerequisites for well-paying jobs.  It is much harder for young people to acquire them as social institutions collapse in communities hit by economic adversity, and the quality of local schools deteriorates.  The most able people escape, leaving the rest even more deeply mired

–          The praiseworthy objective of the opportunity zone initiative is to channel economic activity directly to these areas in an attempt to halt, and even reverse, the vicious cycle of hardship and social decline

–          Funding is important.  Untied government funds can be devolved to the local community giving it the equity to seed necessary projects.  Private capital, drawn by opportunit zone incentives, can augment these funds.  But it has to be built initially around the community’s own development plans

–          If the tax incentives granted to opportunity zones support bottom-up policymaking, they can work well (Prof Note: Opportunity Zones are a way to marry investor’s financial goals with their philanthropic ideals)


FX experts caught out as Fed shifted direction but dollar did not – Pg. 19

–          The US dollar index, which measures the dollar’s strength against a basket of other major currencies, powered to its highest level since May 2017 last week.  The euro, its most traded counterpart, has slipped to a two-year low


Answer: (Prof Note: I am not providing the “answer” to this question as the question is a perversion of retirement and I want to make a point!  It is NOT how much you have but how much passive income assets generate.  Decide the lifestyle desired, the cost in income require to maintain including healthcare, etc, and work backwards.  Passive Income Baby, Passive Income!!!)