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insights by Andre Burnett

The social Effects of the

T

recession

he importance of money becomes much more apparent when that commodity becomes scarcer. We are told from very young ages that money isn’t everything but as we grow older we realize that without money even the simplest joys become that much harder to enjoy. When the bills increase and the income stays the same a trip to the country to visit relatives also comes with the consideration of the fuel cost, the toll, restaurant stops and of course the family tax. The world is currently on the backend of one of the worst financial crises in recent memory and most discussions tend to cover the impact that the loss of money has on businesses and economies, but what of the social repercussions? How are families and individuals affected by slowed income and the stresses that are almost assured to be in tow? When the bills increase and the income stays the same a trip to the country to visit relatives also comes with the consideration of the fuel cost, the toll, restaurant stops and of course the family tax. A figure that we often hear tossed about regularly during slowdowns is the unemployment rate and that usually paints a picture of how dim things really are. The problem is that unemployment numbers don’t take into account rehired workers who are now working for much less than they used to and of course self employed people whose businesses are still running but have had their revenues slashed. The result of this is that the possibility of two-income families turning into one-income families increases and as such the stress of deal-

turns usually produce healthier people in affluent countries. People drive less reducing accidents, spend less on tobacco and alcohol, cook at home more often and tend to sleep and exercise more. Of course, there are those who would prefer to drink and smoke their sorrows away but that’s what averages are for. One particular effect that was recorded from previous recessions is that they seem to produce a more prudent generation of offspring. In a 2007 paper entitled “Depression babies: Do macadvertisment

ing with this increases proportionally. In the United Kingdom figures show that personal debt plays a significant role in the breakup of families and at the same time a child from a broken home is 75% more likely to fail at school, 70% more likely to try illicit drugs and 40% more likely to develop debt problems. However those numbers would translate to our society that is already rife with single parents is questionable but the numbers are interesting. Consider entertainment and luxury options. People normally tend to have fond memories of times of hardships mostly because they found ways to circumvent the possibility of spending money. Nights spent at home or doing inexpensive bonding exercises can produce a stronger family unit in some cases although one could argue that this is wholly dependent on the psychological makeup of the people involved. Some people don’t deal with stress very well and others try to find that old proverbial silver lining. Strangely enough, apart from the requisite suicide cases, down-

roeconomic experiences affect risk-taking” shows that generations that grow up in periods of low stock tend to take a cautious approach towards investment. So, our teenagers might miss a couple good business opportunities but they’ll definitely make fewer mistakes. So it appears that as we exit the recession we take a long look at our families and try to forge stronger bonds that can weather almost any storm. yourmoney ezine


special

Kings of the court

our five favourite aquisitions of the decade Sometimes the best way to beat your competition is just to throw money at them. Yes, you read right, offer them some money to join you instead of trying to beat them. This week, Your Money picks 5 acquisitions in recent that were too big to ignore, simply brilliant or just made us go “wow”.

Scotiabank Jamaica acquires Dehring, Bunting and Golding (2006): The Scotia Group made waves when it picked up the flourishing investment house for approximately US$100 million. Later rebranding it Scotia DB&G, the entity has positioned itself as a force in the Jamaican business landscape while bolstering Scotia’s position.

Walt Disney acquires Marvel Entertainment (2009): The deal worth US$4 billion had entertainment aficionados in fear that Walt Disney would water down Marvel’s output by too strenuously censoring the comics and movies. Many fears were initially unfounded but it is still early days yet so keep an eye on this one.

AOL takes over Time Warner (2000): Quite possibly one of the biggest deals in American history combined the then top internet provider with the world’s largest media conglomerate. The deal that was worth US$164 billion dollars eventually turned out to be a colossal failure that stemmed from the bursting of the dot com bubble and the failure of the two companies to ever really integrate. The two companies split in 2009, custody was shared.

Pfizer acquires Pharmacia Corporation (2002): Even if the most you know about pharmaceuticals is how many aspirin to take, this one had to perk up a few ears. In a deal worth US$60 billion, Pfizer, the makers of Lipitor and Viagra, took over Pharmacia (formerly Pharmacia and Upjohn) a cutting edge company notably known for Nicorette and Rogaine. The implications and potential of the merger sent shockwaves through the continuously consolidating industry. Proven Investment Limited acquires Guardian Asset Management (2010): New kids on the block, Proven put its plan for success on the fast track with its acquiring of the asset management firm which it plans to rename “Proven Wealth Limited”. While not the biggest acquisition to take place in Jamaica, the ambition of Proven’s management is heartening in our economy.

yourmoney ezine


ym views Contributor

Where is

social marketing

T

going?

witter...Facebook...LinkedIn and countless other social marketing networks have become part of our everyday lives, both personally and in business. The question is where is it going? How prevalent will these forms of communication be? I spend lots of time honing my social marketing skills and have been observing countless experts and futurists so I can be informed, and in turn, separate the “wheat from the chaff ” so to speak. Facebook has become especially dominant. At a recent event I attended, Sree Sreenivasan, the Dean of Student Affairs at Columbia Journalism School, asked all attendees what their “ROI” was on their social media efforts. The answers were meager if anything. Mr. Sreenivasan, who teaches a social me-

dia course at Columbia - a sign of how seriously this medium is being taken, stressed that our “ROI” “is that we’ll all be in business in 5 years.” I agree. Social marketing will only become more dominant. Of course a personal recommendation from a friend has always been the most powerful marketing for any product or service. So now, imagine shopping online, researching online and surfing leisurely online and bringing your entire social network with you. Looking for a Realtor or Mortgage Broker? What if you visit their site and see 3 of your friends have “liked” them...that’s pretty close to a personal recommendation! Maybe comments have been left on the site. Our online reputations will become increasingly visible and important. Our own pictures and images will be accompanying all our online activity as well, adding a compelling aspect of legitimacy to a digital platform.

ing medium. It is a powerful, insipient way to reach and engage your clients and customers. If you haven’t already I urge you to get comfortable with these platforms. You don’t want to be left behind. advertisment

You have to be in the game. Grow your network, provide valuable information, services and/or products that distinguish you from your competition and be part of an explodyourmoney ezine


Your Money eZine  

September 1, 2010

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