Monday, December 28, 2009

Introduction To My Book YOUNG MONEY

This book has been written for one simple reason: the education system does not prepare students for financial success after graduation.

People do not learn anything about personal finance, budgeting, saving, investing, stock markets, real estate, debt, interest rates, inflation, taxation, rates of return and other financial formulas and ratios. Even students studying economics, accounting and business do not learn anything about how the various concepts they learn in the classroom apply to their personal finances, or how they can use them to succeed financially.

People go to school with the hope of getting jobs which will provide them with income in the form of salaries and wages. All the decisions they will make every day after school will be determined by the amount of money they have. What they eat, what they wear, where they go, and where they live, will all depend on the amount of money they earn or have, and what they do with it.

It is therefore really unfortunate that school is silent on this vital area of life. It educates by providing students with information with which they will hopefully get salaried jobs, but does not empower them with the information and skills they need to succeed financially. The result is that young people leave the school system academically literate and qualified but financially illiterate.

Academically bright people therefore become so messed up in their financial lives, spending more than they earn, living in habitual debt, chasing fast money through all forms of gambling, and hanging onto their jobs as the only source of life, slaving for others all their productive lives.

We used to live in a duplex in one of Port Moresby’s suburbs in the late 1980s. In the next flat lived a financial controller with a major oil company and his family. The man was highly educated and highly paid, but was obviously having financial problems. Most of the afternoons he would come home drunk. His wife would sell ice blocks and betel nuts to raise money for their daily food. We witnessed him complaining about the food, beating the wife and chasing her and the children out of the house on a regular basis.

Here was a highly educated person who knew how to look after his employer’s money as he had learnt in school, but could not even manage his own finances. Could the reason for this be that he never learnt anything about personal finance in school?

The main premise of this book is that academic excellence and professional success does not automatically guarantee financial success. Most people think otherwise. They assume that bright students will do well in life. Students think that because they do well in school, they will get high-paying jobs and earn high salaries, and therefore succeed financially. This may be true in some instances, but not in most cases.

Most students who do well academically find that the world is different from the classroom. In the classroom, bright students may be held in high esteem by their teachers and other students who are not so bright. They may have an advantage over others in getting jobs too. But getting jobs and succeeding financially are completely different matters altogether.

The sad fact is that many people who did well in school are not necessarily successful later in life. The story of the financial controller related above is probably typical of many highly educated people all over the world. They are academically bright and smart in their professions, but fail miserably when it comes to managing their own finances and succeeding. They know how to manage other peoples’ money but not their own. They are academic and professional successes, but financial failures.

The contrary is true as well. Many people who did not do well in school are more successful than their mates who were bright and academically more qualified. I know of several of my school mates who dropped out of high school who today are successful businessmen, earning more than most working class people and employing those who are more educated than themselves.

Some people have even never been to high school but are wealthy and financially successful. I can think of 2 men in my town who dropped out of primary school who are now millionaires in their own right. One owns several coffee plantations, two hotels and many properties which he rents out, while the other owns a chain of retail shops, a hotel, several lodges and even an airline. I have also heard rumours that they have properties in Australia.

Most people also think that people who are successful in their professions are financially successful as well. They think that if a person is successful in their job, they must know how to manage their money, and therefore they have a lot of money.

This is a mistaken belief. My experience is that most seemingly successful employees actually struggle financially. They are highly indebted to banks, finance companies and informal money lenders. They do not have their own houses. They cannot afford to buy their own vehicles and so depend on public transport all their working lives. Most do not have any savings. And most are one or two fortnights away from bankruptcy.

To be academically qualified and professionally successful does not equate to financial success. This fact really comes to light when people approach their banks for financial assistance. Banks do not ask to see peoples’ academic transcripts, for instance. They do not care whether you possess a degree, diploma or a certificate, which educational institution you attended, and what position you hold in an organisation. They do not even want to know whether you are educated at all.

The first thing that banks want to establish is how much you earn, what you spend your money on, and what assets and liabilities you have. In other words, your personal financial statement and net worth are what the bank wants to know, not your academic qualifications or professional standing. Your credit worthiness is what the bank wants to establish. You might have been a straight “A” student in school and a high-flyer in your profession, but an “F” person as far as your finances is concerned.

The book is set out as follows. Chapter 1 discusses your salary and other terms and conditions of employment, and the impact of income tax and other deductions on how much you take home on a fortnightly basis. The chapter highlights the fact that personal income tax is one of the largest single expenses faced by workers in the country. It alerts you not to be fooled by the seemingly attractive employment packages which employers offer. What matters is what you take home at the end of each fortnight, and whether you succeed or fail financially depends on what you do with that money.

Chapters 2 and 3 focus on budgeting and cashflow management. Most people do not make budgets and so end up spending their money anyhow. These chapters encourage you to make budgeting a habit, so that you can control the flow of money coming in and going out of your life. Budgeting is about having a plan for your money. If you don’t, your money will fall into other peoples’ plans. Cashflow management is about taking control of the money that falls into your hands and applying it purposefully.

Chapter 4 discusses your personal financial statement. The important point on the discussion is that whereas grades are important in school and when it comes to getting jobs, they are not even considered when it comes to determining how financially successful you are. Your financial statement is really your report card after school, and this is what banks look at when assessing your creditworthiness.

Chapter 5 should be read closely, because it discusses the differences between needs and wants, and assets and liabilities. Most people fail financially because they fail to distinguish between these four things. Therefore they buy wants instead of needs, and liabilities thinking they are assets. The inability to distinguish between needs, wants, assets and liabilities has been identified as the main reason the majority of working people fail financially all over the world.

Three ways of living are discussed in Chapter 6: living above, below and within your means. Readers are urged to form the habit of living below their means if they want to succeed financially.

Most working people fail financially not because they do not earn enough, but because they have bad money habits. Six of the most common bad spending habits are discussed in Chapter 7. If you want to succeed financially, you must avoid these habits.

The importance of saving is discussed in Chapter 8. You are introduced to the concept of “paying yourself first.” You are urged to make saving a habit in life, and to save for investment purposes, not for consumption. You also read about two important concepts in finance: the time value of money and the power of compound interest.

In Chapter 9, the book discusses the 4 different types of income people earn: earned income, passive income, portfolio income and residual income. You are encouraged to invest your take-home pay or earned income so that you can earn passive and portfolio income, which require little if any physical effort. Investing is presented as a way of taming or harnessing money and making it become your servant or employee.

Most people tend to think that in order to succeed financially, they must hold back as much as possible. This is not so. According to the law of sowing and reaping, giving is in fact one of the most powerful ways to experience financial success. So in Chapter 10 you are encouraged to give, but with discretion.

The next chapter discusses lending, and how you can operate like a bank and lend to banks, the government, businesses and other people. It is another way of making money become your employee. What you lend goes out and returns to you with more money.

Chapter 12 looks at the issue of debt, and the difference between good debt and bad debt. The point is that contrary to popular thinking, not all debt is bad. It discusses the causes and effects of bad debt, and encourages readers to use good debt to get ahead financially.

Gambling is covered in Chapter 13. This is an important chapter, because Papua New Guineans spend at least K100 million every year on poker machines alone, not taking into account lottery tickets, horse racing and other forms of gambling. It also discusses fast money scams, and encourages you to avoid gambling as if you would avoid a plague.

Chapters 14 and 15 are very important. While Chapter 14 encourages you to act daily with your financial destiny in the long term in mind, Chapter 15 encourages you to put into practice the principles and ideas contained in this book if you want to succeed financially. Reading and knowing is one thing. Actually doing what you know is another. The point is that knowledge only has potential power; utilised knowledge is powerful.

Here are 6 main ways people have become rich throughout the ages all over the world:

• By inheriting wealth and riches from parents or other benefactors;
• By getting married to rich people;
• By gambling and becoming lucky;
• By getting compensated for misfortune or the acquisition of their possessions for public purposes;
• By stealing through corruption, bribery, white collar crime, drug trafficking, money laundering, extortion, etc; and
• By working hard, saving and investing.

Which way do you think the majority of people followed to become rich? If you said they worked hard, saved consistently and invested their money, you would be right. That is the way you too can become financially successful, wealthy and rich. The basics of what you need to know and do to become successful are contained in this book.

In case you think I have written this book based on things I have read, I want to assure you that I have seen the power of using the information in the book in my own life. Several years ago I was a struggling working class person like most others in the country. I struggled to make ends meet, lived beyond my means, and got into debt regularly. I do not drink, smoke and gamble, but even then I struggled from fortnight to fortnight.

If you have read Success After Graduation, my first book, you would know that I was unemployed for 8 months after I left my last job. It was during this period that I regretted having misused all the money I had received over the years when I was employed. I wished I could find a job again, and if I did, this time I would save my money and invest it instead of squandering it. After unsuccessfully searching for jobs, I decided to become self-employed and work for myself. Having felt what it is like to be without a job and regular pay, I have come to appreciate the importance of saving and investing.

They say that old habits die hard, and that is so true when it comes to money habits. I still struggle with the bad habits I developed when I had salaried jobs, but I have made several attempts to save and invest what I have made from what I do as a self-employed person. I am glad, but not afraid or ashamed, to tell you that even though I am not rich and wealthy yet, I am financially independent today. In other words, I do not need a salaried job to live. I can survive without a job.

In fact, my mentality and attitude to paid jobs has completely changed. To me, a job is a waste of time. I am not saying you should leave your job. But I am saying that for me personally, I can earn more working for myself than waiting for an employer’s fortnightly pay. I can earn more in a day than most people earn in a fortnight.

I am now more imaginative and creative as a self-employed person. I have already written 6 books over the past 4 years, and several more are on their way. I can combine some of these books with seminars and have several streams of income. I would not do these things if I were working for a salary. I would be too busy looking after my employer’s business.
Recently I purchased a house with a big yard in one of the prime residential areas of the town I live in. I know that I would not have been able to buy the house if I had continued my old habits of using money anyhow. I also know that I would definitely not have bought the house if I were working for a fortnightly salary.

When I recall back, I remember that I worked for a fortnightly salary for 12 years and I could not afford to buy a house. I could not even come up with the equity contribution required by the bank. But I could buy the house after only 6 years of being self-employed. This personal story holds lessons which I cover in detail in Be Your Own Boss!, my third book, which is on the subject of self-employment.

Having seen the power of making money work for me through prudent management, saving and investing, my outlook on the future is very positive. My mind is more open than it was before when my only source of livelihood was the employer’s pay cheque. Today I can see many ways of making money. In fact, I see so many of them that sometimes I run out of breath just thinking about the possibilities. It is like living in a different world.

It is my sincere hope that students, young people and even working people reading this book will take the message of this book to heart, and use the information contained in it to become financially successful in life.

As I have stated above, people go to school to get jobs and earn a living. But the school system does not equip them with the knowledge they need to succeed financially. The result is that the majority of people may have been academic successes but are failures as far as their financial lives are concerned.

I hope that this book helps an increasing number of people in Papua New Guinea as well as other parts of the world to become financially successful. It is my prayer that many people who have read this book will testify in future that their lives and destinies changed after they read the book and applied the ideas contained in it.

Saturday, December 19, 2009

Preface To My Latest Book Titled YOU CANNOT SERVE GOD AND MONEY

This is probably the first ever attempt by a local pastor to discuss the issue of God and money. I say this because I have never heard, much less read, anything on the subject in my many years of involvement in the church. I have heard many sermons and pleas for financial support for all kinds of needs over the years, but never a sermon on stewardship of money and material possessions.

I have probably heard several sermons on honouring God with our wealth, but these have invariably been in relation to giving for some cause. I have also heard perhaps several sermons on stewardship, but again, these have been in relation to giving – never with respect to saving and investing to make more money and thereby increase one’s capacity and ability to give more.

I find it amazing that today, the world revolves around money; it takes money to preach and propagate the Gospel around the world; it takes money to send missionaries and evangelists; it takes money to develop projects; it takes money to organize and attend conferences; not to mention payment of wages for pastors and other church worker; yet, we hear so little about money in the church.

Money as a subject seems like a taboo in the church. People love it and work hard for it, but nobody wants to talk about it in church. It is probably because of this that the subject is not discussed at home either. For some reason, Christians feel that we should not talk openly about money. Some may even consider it a sin to talk about money in church or at home.

Yet, financial problems are at the core of the many problems Christians face as individuals and families on a daily basis. Many Christian families break up because of financial problems. The flip side is probably also true: Many Christians turn their backs on God in pursuit of material possessions. They find it untenable serving two masters. Sadly, they turn to money and turn away from God.

I worked in several organizations before I became self-employed. I remember that we used to receive many letters from churches asking for financial assistance for projects, crusades and meetings. The organizations helped in some instances, but generally, the managers would be so fed up with such requests that they would throw the letters into the bins without reading the contents. You know why they did that? Because they knew it was another request for financial assistance. As a Christian, I felt embarrassed many times, because I am part of a church that says that God owns the silver and gold of the earth, then we turn around and beg from the world to finance His work. The church has misrepresented God to the world in the very important area of finances.

I believe that it is about time the church turns around and starts giving to the Government and the rest of the community. The church must be a blessing, not a curse; it must be an asset, not a liability. We are connected to the source, so we should draw out of Him and begin to bless the world. It makes absolutely no sense to worldly people when we tell them the God we serve owns everything, then we turn around and beg and borrow to finance His work. But imagine if the church started giving to development projects. It would completely turn the prevailing mindset on its head. And I believe many people would surrender to the Lord. They would want to be a part of a church that is prospering. As it is, people of the world do not want to darken the doors of churches because we portray a poor church, and therefore a poor God.

I accept that the absence of preaching and teaching on financial matters may be due to genuine oversight on the part of church leaders. There are so many other more important topics to preach and instruct people about than money. But, if what Pastor Joseph Kingal says in the foreword that there are more than 2,300 verses in the Bible concerning money, wealth and material possessions is true, how can the church bypass the subject? Why did the Lord Jesus Christ use a lot of financial and business terms in His parables? If God talked a lot about these matters in His Word, the subject must be important.

I suspect that pastors are reluctant to talk about these matters for fear that they might encourage people to go searching for these things at the expense of their souls.
I also suspect a feeling of uneasiness because money is referred to by the Bible as “filthy lucre” and the love for it is “the root of all evil”. Pastors feel uncomfortable talking about something the Bible calls “filthy” or “dirty”. They jump at the opportunity to handle it, but they don’t want to teach the people about how to make more of it.

I am not blaming anyone here. I realize that many pastors probably want to teach their congregation about money, but they lack confidence because they do not have personal experience in working for salaries or starting and running businesses. They feel that because they have not dealt with financial matters, run businesses and invested, or received training in that area, they are not qualified to talk about it. “You can only lead others as far as you have gone yourself,” they think.

This is unfortunate, because in reality, apart from their relationship with God, financial matters are probably the next most important subject for Christians. I don’t think I would be wrong if I said that more than 90% of peoples’ time and mental effort is taken up by financial issues on a day-to-day basis. This applies to both Christians and the heathen.
I am aware that many pastors, leaders and Christians have been reading books written by international evangelists, world-renowned pastors and Christian leaders. This is fine.
But this book is based on a developing country perspective, in particular, a Papua New Guinea perspective. In Chapter 6 of the book I attempt to explain why I think believers in Papua New Guinea are well-positioned to become prosperous for God’s glory and for the extension of His kingdom both within the country and elsewhere in the world. I have heard of prophesies that Papua New Guinea will one day finance the preaching of the Gospel. I believe this. But it will not happen until Christians rise up, get their minds renewed, and take possession of what is rightfully theirs.

I hope that readers will find this book inspirational. I also hope that the book generates interest in the subject of financial management and investing (or stewardship) within church circles.

In light of the developments that are taking place with respect to mineral, oil, gas, forestry, fisheries, large-scale agriculture and carbon trade projects, Papua New Guinean Christians will certainly have a lot of money pass through their hands. I hope that this book helps Christians to position themselves right to become active participants and not passive observers. I hope that when the wealth is in their hands, that they will give God His rightful place instead of getting carried away by greed and the pursuit of material possessions.

I also hope that pastors and other church workers will be able to use this as a handbook in the course of preaching to and counseling congregation members and others in the body of Christ on the important subject of personal finance and stewardship.
Finally, let me make this admission: I am just a layman pastor. I have not been to Bible College or seminary, so my knowledge of the Word of God and basic doctrines is quite inadequate. I have been trained as an economist, so although I know that the information I have packaged in this book is quite sound as far as the world’s financial and economic systems go, it may fall short in many ways from a Biblical perspective.

Thursday, December 17, 2009

This Is The Preface To My Book "Young Money"

A study was conducted in the United States several years ago by the Social Security Office, which tracked thousands of people at graduation from university to retirement from work at the age of 65. The results were that out of every 100 people:

• 36 were dead;
• 54 were broke, dependent on pension and charity;
• 5 were continuing to work past retirement age;
• 4 were financially secure; and
• 1 was wealthy.

The study concluded that generally in the US, 5% of the working class was financially successful while 95% was unsuccessful. The 95% had all been to university, had good jobs and received high salaries. They had succeeded academically and professionally. But when it came to the management of their finances, they had nothing to show for all the money they had earned during their working lives.

A similar study by the Australian Bureau of Statistics showed that 96% of the population at retirement age ended up dead, broke or on pension. Only 3% became financially independent and only 1% became financially free and rich.

The story is generally the same for most Western countries including New Zealand, UK, Canada, and Europe.

There are no similar statistics on Papua New Guinea and other developing countries, but I would be surprised if it was different. In fact, the proportion of financially unsuccessful people in the developing world is probably closer to 99%.

What is the main reason for this? The answer all over the world is financial illiteracy which results in bad money habits. It is not that people do not earn enough. It is that they do not know how to harness the power of money and make it work for them, and because of that lack of knowledge, they develop and have bad habits when it comes to using their money. They may be good at managing other peoples’ money wisely but not their own.

At least two developed countries have become alarmed at the acute lack of financial education among the population, and have recently taken steps to address the problem. The United States Government enacted the Financial Literacy and Education Improvement Act in 2003, on the basis of which a Financial Literacy and Education Commission was established. The Australian Government established the Consumer and Financial Literacy Taskforce in 2004, which strongly recommended the establishment of the Financial Literacy Foundation.
Both organisations have been tasked with the responsibility of educating consumers on financial matters in relation to spending, budgeting saving, investing, borrowing and risk management. Their strategy is to educate people through the education system, starting at primary school upwards.

If highly developed countries like the United States and Australia can see a real need to educate their people on personal money management after the hundreds of years of people having dealt with money, don’t you think developing countries need to do likewise? I think it is imperative. In fact, it is essential.

Developing countries, which have entered the cash economy relatively recently, really need to educate their people on how they can manage their finances so as to become successful at their own level. I believe that developing countries like Papua New Guinea cannot advance and become developed unless and until their people learn how to manage their money well.

The need for financial education has arisen for two main reasons. Firstly, it has been realized that schools teach students to work for money, but not how to make money work for them. So people go to school, strive for good grades, get jobs, work for their employers, and pay their bills and debts, but do not have much to show at the end of their productive lives. Only a few break out of this vicious circle and become financially independent, free and successful. The majority may have been successful academically and professionally, but are failures financially. They end up broke soon after retirement.

Secondly, the world has changed from the Industrial Age to the Information Age. In the Industrial Age, jobs were very secure. People went to school and got jobs which they held for life. After they retired, their employers continued to support them through pensions. With the advent of the Information Age and other developments such as globalisation, jobs have become insecure. You can have a seemingly safe and secure job today but lose it tomorrow. And generally pensions and superannuation fund savings are not sufficient to maintain your pre-retirement standard of living.

Job insecurity and financial insecurity go hand in hand, because for most people, the pay cheque is their only source of livelihood. When jobs are removed, financial problems arise immediately. You can tell that by the chorus of complaints which working people kick up after missing just one fortnight. Most people are in fact a few fortnights away from bankruptcy.

That is why educating people on personal financial management is essential. You cannot afford to cling to your job and your pay cheque for your livelihood. A job may be what you need in the short term but in the long term you really need to be financially independent. You must know how to use what you earn from your job in a manner that ensures you maintain your current standard of living even if you lose your job.

My first book, Success After Graduation, was about how students can succeed professionally after school. It discussed the job market, how to get a job and keep it, the fact that there is no job security, the need to plan for early retirement, the importance of financial security and marriage, self-employment, and the fact that life is a school from which there is no graduation.
his second book is on how young people, those who are entering the workforce and working people, can succeed financially. I have written it to provide advice and guidance on how they can manage their personal finances so as to succeed financially – something which they do not learn in school or at home, and something which the majority of working people have not been able to achieve.

I have written the book because the education system does not teach students anything about personal financial management. The education curriculum covers literacy and numeracy but not financial literacy. In other words, students learn English and Mathematics but not how to read and use financial information for their own benefit.

Most teachers and lecturers have not been taught anything about management of personal finances when they were in school. They do not know much about how to manage their finances, and even struggle to make ends meet, even though they are academically qualified. They are therefore not in a position to educate their students on matters related to personal finance.

The result is that most working people are financial failures because they have not had the benefit of becoming educated on financial matters. Most professionals do not know much about how to manage their finances and succeed, with the result that they live in debt, are constantly broke, and struggle all their lives.

This book is my contribution to educating young people about achieving financial success after school. It is aimed at young people, but I believe that working people will find the book useful too. In fact, as the book is based on my experience as an employee and many examples are about those who are already in the workforce, working class people will find the book speaking directly into their lives.

The crux of the book is that academic and professional success does not guarantee financial success, as the studies quoted above show all over the world. In other words, good grades in school and high-paying jobs do not automatically translate to personal financial success. The evidence for this again is the large number of educated and seemingly successful working people who struggle financially all their lives the world over.

My hope is that young people will be prudent in the way they spend their money when they leave school and enter the workforce, by putting into practice some of the ideas contained in this book.

The choice is yours: You can either be one of the 95% who fail all over the world due to bad money habits, or among the 5% who succeed financially through wise management.

My advice is: don’t follow the crowd – the millions all over the world who struggle financially because of bad money habits, the major ones of which are discussed in Chapter 7. Chart a different course for yourself and discipline yourself. It will be hard going against the tide of instant gratification which drives most people towards financial ruin, but in the end you will succeed.

Times have really changed. In the past, our ancestors did not need money to live. They used various items like shells, pigs and traditional salt as currency for trade and exchange purposes, but not for their daily livelihood. They lived on their garden food and water from creeks and rivers. There were no schools to send their children to. There were no electricity bills or rent. Today, we are part of the modern cash economy where money is essential for living. Even water costs money.

In 21st century Papua New Guinea, or wherever in the world you may be reading this book from, financial success is so vital that if you fail financially, you fail in every other area of life. Think about that statement, and you will agree with me. If you fail financially, there is a high chance that your marriage will become unviable. If you fail financially, it is certain that your children will not receive a good education. If you fail financially, you will spend most of your life working for those from whom you have borrowed money. If you fail financially, it is certain that you will not leave much by way of an inheritance for your children.

I really trust that this book helps you to succeed and not fail. I hope that working people will take a long pause after reading the book and make the changes they know are necessary to come out of the financial struggles they have been living in. I hope that the book helps people to make the hard decisions that are required of them in order to become successful in future.

Saturday, December 12, 2009

The Papua New Guinea LNG Project: A Financial Tsunami?

The PNG Government and the developers of the giant LNG project signed the Final Investment Decision (FID) on 8th December 2009 as initially planned. With this, the project is set to go ahead. The US$16 billion project is set the transform the economic landscape of the country.

I am however sceptical about the project’s impact on the people of PNG, in particular the owners of the traditional land upon which the gas will be piped, all the way from the Southern Highlands through Western and Gulf Provinces to the processing plant in the Central Province. Hundreds of millions of kina will be paid out to these landowners in royalties over the next 30 years.

My fear is that the people are not emotionally and psychologically prepared to handle this money, so the money will actually become curse rather than a blessing.

We just read this week that the landowners in Southern Highlands went on a drinking and shopping spree after the Licensed Based Benefits Sharing Agreements (LBBSAs) were completed. It was reported that all the liquor outlets were emptied of stock, and many road accidents happened. I believe this is a sign of things to come.

I fear that the following will happen in the project areas:

• Drunkenness and associated social problems will increase;
• Most marriages will break up as men become polygamous;
• HIV/AIDS will increase, especially as men with money seek to satisfy their lust;
• Many children will refuse to go to school;
• Churches will close their doors as commitment levels drop;
• Disputes, quarrels and even all-out wars within landowning groups will intensify as the leaders of these groups, driven by greed and selfishness, benefit more than the rest of the members;

In a nutshell, when the project expires in 30 years’ time, it will be as if a tsunami had swept through the project areas. It will leave a lot of broken lives and social problems in its wake.

Why do I say this? It is basically because Papua New Guinea is a nation of consumers. All we know about money is spending it. We don’t have a saving culture. And investing money is a foreign concept.

Given that this is the situation, what will happen when people who have dealt with only small amounts of money in their lives now have thousands available to them? I believe that they will not hesitate to spend the money. The thinking will be: “Why think about saving and investing when there is a continuous stream of money coming for the next 30 years?” It will lead to a situation where money gets spent faster than it comes, resulting in the majority of landowners getting into debt to sustain their lavish lifestyles.

I understand this is what has been happening with landowners at Ok Tedi and other gold mines, as well as landowners of oil palm and forest projects. Landowners at Misima lived like this and are suffering today. The gold rush at Mount Kare led many landowners to spending lavishly. There were stories of some of them buying brand new vehicles in Mount Hagen with cash, getting them smashed and leaving the vehicles on the roadsides as they returned to the car dealers to buy new vehicles!

It is based on these observations that I am saying the LNG project will not do much good for the landowners. I may be wrong. Only time will tell.

Monday, December 7, 2009

Response to Speeches

I made 2 speeches at Mount Hagen Secondary School and Hagen Park Secondary School, during the graduations of their Grades 10s and 12s for 2009. Both speeches were well-received by the students, teachers and parents.

The speech at Hagen Park had a big impact on people. I had several people come up to ask me for copies of the speech. One young man actually told me that he was weeping as I went through the speech. One student I met a day later told me that all her mates were impacted by the speech. A gentleman told me that the speech was really for the people of Western Highlands Province, not just the graduating students. Three boys from the village sent me text messages while I was on the stage after delivering the speech, to tell me that the speech was powerful. They later informed me that people in the crowd were talking about it. The High School/Secondary School Superintendent for the province told me that the speech was the best he has heard in his life.

To God be all the Glory!

Speech During Combined Grade 10 and 12 Graduation - Mount Hagen Secondary School, WHP

I attended the combined Grade 10 & 12 Graduation of the Mount Hagen Secondary School on Wednesday 3rd December. I was not the Guest of Honour but was one of the speakers. Below is the speech I presented.


My short speech is titled “You’ve Got What It Takes To Succeed In Life.”

Have you ever wondered what are the basic ingredients which you need to become a successful person? Many people think that to be successful, you must be educated to university level and hold a high-paying job. Others have other ideas.

What I want to tell you today is that every one of us possesses the basic ingredients necessary for success. What are they? The first is time. All of us have 24 hours in a day – 12 hours of daylight and 12 of night, or 8 hours for sleeping, 8 for working and 8 hours of free time.

Secondly, we have sound minds. Our mind is the greatest asset which is totally underutilised. Scientists say that the average person uses only 10% of their brain capacity between the time of birth and death. 90% goes to the grave unused. We think we think, but we don’t really think. Henry Ford, founder of Ford Motor Corporation said that “Thinking is the hardest work there is, that’s why not many people engage in it.”

Related to our minds is common sense. All of us basically know what is right and what is wrong; what is good for us and what is bad. Common sense is what we are born with. You certainly don’t learn it in school!

Fourthly, we have health and strength. Many of us take our strength for granted and apply it wrongly. But we need to realise that every night we go to bed very tired and worn out, but each morning we wake up with new strength to face the day’s challenges and take advantages of the opportunities each day presents to us.

On top of these four – time, mind, common sense and health – in PNG we are very fortunate to own land. We are among a few countries in the world where nearly 100% of land is owned by the people. In most other countries land is owned by the State. And when you consider that land is the basis of wealth, we Papua New Guineans are born rich and wealthy!

Students, I am telling you that if you combine your time, mind, common sense, physical strength and land, you can become successful in life. You have all these ingredients available to you right now.

Notice that I have not included education or money as ingredients for success. Let me take education first, and say this: To succeed, you don’t need a university degree. How do I know this? By observing that the majority of university graduates are failing financially and in other areas of life, while the relatively uneducated are succeeding. That tells me that being highly educated does not equate to being successful.

You see, the purpose of education is not to enable you to get a paying job. So many of us make an automatic connection between school and jobs. This is wrong. And this is why we have so many young people becoming frustrated all over the country because they cannot get jobs. No. The purpose of education is to provide you with information and knowledge. When you possess knowledge, your mind becomes open to the many options that are out there, that’s all. Getting a paid job is just one option, not the only option. In fact, if you want to make a lot of money in life, a paid job is the last option you would consider, not the first. Why do I say this? Well, if you look around, the people making the most money are not employees; those who make the most money are those who work for themselves. And many such people are uneducated.

In my list of assets you have to possess to succeed, I did not include money. This is because money is just a by-product of applying your mind, time, common sense, strength and land. Many people think they need money to succeed, but this is incorrect. If you combine what you have, money will come. You don’t need money to make money; you can make money without money – particularly in Papua New Guinea.

As some of you may know, I am an advocate of self-employment. I have written a book on the subject called Be Your Own Boss and I have been sharing my ideas in the newspapers. I am glad to report today that many Papua New Guineans are catching the idea and are starting their own businesses. I believe that is the way to go. The country needs many small business people who create jobs. We have too many job-seekers. We need to take our economy back from large multinational corporations and foreign businesses that are mushrooming all over the country.

With the LNG project and other resource developments taking place all over the country, the environment is right for us local people to start small businesses. Let us not leave the playing field wide open for Asians to play the game. We must not complain when they succeed under our noses. We must get in, play the game and beat them.

So my friends – students, parents and teachers - I am sorry if I have messed up your minds by what I have said today, but before you dismiss it and stick to the way have been looking at things, I urge to you think about what I have said.

I would even go so far as to suggest to you that if you do not make it to Grade 11 or a tertiary institution next year, be very glad, not very sad. Take it as an opportunity to do something with your time, mind, strength and land. Don’t rush to upgrade your marks or look for other options to further your education. Consider the option of starting a small business instead. Be committed to it, and I can assure you that in 2 -6 years time when your colleagues who have continued up the educational ladder start looking for jobs, you will be a few years ahead of them. When you have the money, you can always go back to school if you feel you need it.


To graduating students, CONGRATULATIONS! To everyone, A MERRY CHRISTMAS AND HAPPY NEW YEAR! God bless you all!