Saturday, July 05, 2008

chinese peak oil prep!

From Lewis Geary's Rich Life letter, some really interesting facts about Chinese attitudes to money!

*** Being frugal is a virtue. Frugality is an integral part of the Chinese culture... it's a concept that's been taught for thousands of years. The classic Chinese text "Dao De Jing" states that the three greatest treasures one can have are love, frugality, and generosity.

*** Save as much as you can - The personal savings rate in China is incredibly high compared to the UK. Chinese households save around 30% of their family income every year, while according to The Guardian, in 2007, we Brits saved just 2.1% of our income.*** If you haven't got the cash - don't buy it! Credit cards are still fairly rare in China and most people pay for everything in cash.
Recently, the Chinese government relaxed rules on home ownership, and many ordinary Chinese people were able to pay for their properties in CASH! Teachers and factory workers were able to call upon 10-20 times their annual salaries in actual, physical money! Imagine how that would go down at your local Halifax...

*** Be wary of debt. Most Chinese people HATE to be in debt - hence the relative scarcity of credit cards and the reluctance to take on mortgage debt. That's a good thing. The less debt you have, the more financial freedom you enjoy.

*** Always look for a bargain - In China, haggling is a way of life. I've been told that if you ever visit China, it's expected that you ask for at least 50 to 75% DISCOUNT in stores.

You'll find plenty of shops and market sellers willing to negotiate with you, because bargaining is ingrained in the Chinese culture. Can you imagine how much more money you'd have if you only ever paid half-price for everything? Try it on your next shopping trip up the high street. Remember: don't ask - don't get!

*** Don't make your salary a secret - If you ask a Chinese person how much he or she earns, the chances are they'll tell you. It's not seen as bragging or a way to score points. It's actually seen as a way of getting to know another person.

It's not thought of as rude or bad form in Chinese culture to talk about money, and I believe that's a very good thing. We're way too guarded in this country about our finances and that can lead to jealousy, bitterness, envy and a reluctance to face up to financial problems.

*** Give the gift of cash! Every New Year and every birthday, Chinese children usually get cash from relatives in a red envelope. The tradition is that they save this money until they reach adulthood.

That might sound pretty unimaginative to you and I, but in China it's considered extremely thoughtful. It's not a bad idea when you think about how much useless (and expensive) rubbish we accumulate as kids that we discard after a few weeks.
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