September 14, 2012

Going to JAMAICA...and learning of its money woes firsthand.

Jamaica is a wonderful and beautiful country - and I had a blast!  The culture there appears to be very friendly and welcoming (although I stayed to the "tourist" part of the island).  Although I had a great time, I couldn't help but research the financial state of Jamaica, and try to find reasons as to why the country remains an impoverished, third world country.

I wanted to find the answers to why Jamaica is not an economic powerhouse?  Or why isn't the country considered a part of the "emerging markets" like that of Brazil, Russia, India, and China?  What is keeping the country down and the majority of its citizens in a state of servitude?

My discovery was that the country owes an absurd $4.5 billion US dollars to various international organizations including the IMF.  Now if you've never been to Jamaica you probably would not know that $1 = approximately $89 in Jamaican currency.  So if the country owes $4.5bn US dollars, this is the equivalent of $402billion Jamaican dollars or JMD.  How will they ever pay this debt back in a country where at least 17% of its citizens are at or below the poverty line...and/or they work in labor/service roles their entire lives. Also, I don't recall any major corporations moving their headquarters to the island.

The government is forced to apply pressure in the form of taxes on its citizens and its main source of revenue (tourism), in order to unsuccessfully pay back its debt to the IMF, WorldBank, and other organizations.  On a side note - our Federal Reserve states that inflation remains low, but in Jamaica, a gallon of gas costs $1.36 USD.  Which is the equivalent of about $121 JMD!  Imagine the effect of QE3 on Jamaica and other nations across the globe (since oil is priced in USD)!!  Jamaica's gas prices could easily go from $121 JMD to $210 JMD!  ($2.36 USD)  Imagine you lived in Jamaica and you had to pay $210 JMD for a gallon of gas!

Is the government doing a good job for its citizens who remain in poverty?  What can Jamaican citizens do in order to BE FREE?  What are some ideas to lift the country out of poverty and repay its debts?

Just to be fair - there are some very nice establishments in Jamaica and there are parts of the island where people are doing very well.  I went to a few jazz clubs and was pleased with the night life and live entertainment.  Most Jamaicans take great pride in their work, country, and deliver high standards.

Here are a few pictures from the local newspaper:


Just had to drop a line today concerning the incessant devaluation of our currency and the exportation of inflation performed by the private institution known as the Federal Reserve.  The announcement of QE3 is basically the government forcing our economy to work by making our money just a tad bit more worthless than the next country.

There is a currency war amidst.
One of the best books I've read!


How do you protect your money?  The stock market has not been working in your favor lately.  Why?

Because the "hot market" is not in the stock market.  The hot market is in Real Estate!  Prices in real property are still 40-50% off and rental rates are very high.  Why put your money in the stock market when you can generate a relatively consistent income from rental properties?

You may say:  "I'd love to get into real estate, but the banks aren't loaning any money!".
I say: "Go out and ask friends and family for money, the banks will accept 20% down if you have the cash."

You may say:  "My friends and family do not have any money, or they're not willing to lend it to me."
I say:  "Use money from your 401K for a down payment.  Take a loan from your 401K with the intent to pay it back and go buy yourself a property.  The rental income you will eventually receive within the next 2 years should generate enough to pay your 401K loan."

Due to our country's soon-to-be defaulted debt level and the consistent increase in the money supply at zero percent interest rates, an increase in taxes and reduction in entitlements is sure to come about.  Therefore, I think the best resolve is (and always has been) to increase your passive income.  Those who work the hardest will be taxed the most...those who have multiple and passive streams of income will actually have wealth to pass on to the next generation!


PS - I apologize for not posting my articles in a while - but I've enrolled in a commercial real estate program to study and learn about how to buy my first multi-family property.  Some of you may remember that I was going to buy my first residential property - but this deal fell through at the very last minute.  I'm looking to hopefully acquire a property by next month and possibly a second within a year or two.