Acquired symbolic value of money

Are you feeling down and out, desperate, helpless, rejected, dejected and discarded? Most people at some time or the other feel so, or even worse. And there are those persons who always feel the worst of all kinds of negative energies downing them. If you are ruled by these negative feelings, chances are you might experience failures in most of the ventures that you enter into, no matter how intelligent or skillful you are. There is a way out of this psychological hell – count cash! It is sure to elevate your state of mind from ‘the down-and-out’ to the happiest and most successful person.

Recent research shows that counting cash makes people feel better about them, lessen pain, and ease the social stigma of having no funds and friends. The psychological benefits increase feelings of internal strength, fearlessness, confidence and make people succeed in whatever they are doing.

In a research conducted at Sun Yat-Sen University in China, researchers recruited 84 students of the university as volunteers and divided them into two groups. One group was asked to count 80 $100 bills. The other group was asked to count 80 pieces of plain paper.

Then all the volunteers were asked to play the online video game, Cyberball, in which, using game controls, they could throw a ball and play catch with other players. But without the knowledge of the volunteers the game was manipulated so that after 10 throws half the students would never get the balls thrown to them while the next half of the students continued to play catch.

After the game, the volunteers who were rigged of their catches rated their level of social distress and how strong they felt. But those who had counted money before being excluded reported lower levels of distress than those who had counted only paper. Also, the volunteers who had counted money reported greater feelings of inner strength and self-sufficiency.

The researchers conducted another experiment in which the volunteers were asked to dip their fingers into very hot water, of about 122 degrees Fahrenheit. Those who counted money said they experienced less pain than those who counted paper.

Then one group of volunteers was asked to write about their past month's bills and another group was asked to write about the weather. Those who wrote about their bills reported social distress, and that distress got worse when they played Cyberball or dipped their fingers into hot water.

Now the facts: whether the volunteers counted $100 bills or paper, logically, it should not have made any difference to their moods as none of them gained anything as $100 bills were not owned by them and those who counted paper also should have no change in state of mind.

But those who counted cash seemed to believe they owned the money and their moods were elevated to a state of happiness, felt more endurance power in them as they felt less heat of the hot water and less dejected as they lost catches. Those who counted paper felt more heat and felt more dejected when losing catches.

Social rejection as well as ideas of physical discomfort fuelled volunteers’ desires for money. A series of research which tested the symbolic power of money proved that although it may not buy anything, it does have a strong effect on our emotions and confidence levels.

Researchers also found that money has the power to change perceptions of feelings in a negative way. Also it showed memories of recent spending made people report higher levels of both mental and physical distress.

The study leader Prof Kathleen Vohs of Minnesota University said that these effects speak of the power of money, even as a symbol, to change perceptions of very real feelings such as pain. Co-researcher Dr Roy Baumeister of Florida State University said that the study published in Psychological Science offers a possible solution for landing a new job, as it might be handy to sit down and count a stack of money before going out to the job interview.

The new findings have great importance for the social system of the present times that is characterized by wide disparities in financial well-being. The researchers suggest setting up a screensaver that shows money so that it might help ameliorate some of those feelings of being rejected. Counting cash before a night out could also help men approach women in bars, because improved self confidence may help them succeed and if rejected by women, they won’t be disappointed much. The study shows how acquired symbolic value of money can influence responses to both emotional and physical pain.

Invest in gold to beat inflation

The gold price on Tuesday broke the symbolic $1000 an ounce mark, and settled at $1007. Before early September, the highest 2009 price was on February 20 when gold price fixed at $989. It has traded in the range $870 to $993 since then with an average price over that period of $879. The present price rise shows an annual increase of more than 21% on the average price in September 2008, which was $829.93 an ounce.

The price of gold over $1,000 an ounce, for the first time in six months, follows a sustained rise in price over the past seven years. As against gold, the US dollar, which often moves in the opposite direction to gold, has been declining during that same period. Since April 2001 the gold price has more than tripled in value against the US dollar.

In the last century, major economic crises such as the Great Depression, World War II, the first oil crisis and second oil crisis lowered the Dow/Gold ratio substantially. During these difficult times, investors tried to preserve their assets by investing in precious metals, most notably gold and silver.

The stability in the gold price over long term insulates the price from eroding in any category or country, because gold is not closely linked to industrial output or consumer spending.

Investors who are less convinced about the strength of the economy recovery are moving into gold, which is usually sought as a haven from economic downturns.

More and more individual and institutional investors are now turning to gold as an independent asset class to ensure that their investments are properly diversified so that risk is minimized. In recent times, leading economists have been warning of rising inflation as a result of governmental measures pumping enormous funds into the economies as stimulus packages to rescue recession-hit economies. In inflation-hit economies, investment in gold is a sure means to retain the value of one’s real wealth.

Though gold’s real value can vary in the short term, its purchasing power has remained stable over centuries. The US dollar, the world’s main trading currency, has been fluctuating and weakening dollar. The dollar, having traded at highs earlier in the year, has weakened against the Euro, Sterling and many other major currencies in recent months. Against this, gold is a statistically proven hedge against fluctuations in the US dollar.

Though there is considerable improvement in equity market performance in recent months, there are still doubts being expressed about its sustainability. This concern over the stock performance is also encouraging investors to look to gold’s unique wealth preservation qualities to underpin their portfolio strategies.

World Gold Council, funded by the world’s leading gold mining companies, identified short term reasons for the recent gold price rise, such as recognition of gold as an asset class, continued fears over future inflation, the weakening dollar and, concerns about whether the recent rise in equity markets is sustainable.

Gold is measured and sold in troy ounces. One troy ounce equals 31.1035 grams or 480 grains, or one troy ounce is equal to 1.09711 avoirdupois ounce, which is widely used to measure weights in the US and UK.

Most investors feel that gold is celebrating because the day when inflation hits back is getting sooner than later. Investment in gold should not be more than 5 to 10 per cent of your assets. One can invest in gold by buying jewelry, gold coins, gold bars and exchange traded funds (ETFs). While investment in jewelry has aroused concerns about purity and jewelry making charges, coins come at a price and banks/financial institutions selling them charge a premium of 5% to 15% over the gold price. ETFs take care of all these issues and the charges are roughly 0.5%. ETFs also take care of the storage and they are the most preferred option for investment in gold.

Now is the time for buying homes

Reports of market rates coming from most countries show that home prices are one of the lowest in recent times, mostly, because of recession-induced low demand for homes and more and more people are trying to sell off homes to get rid of debt-traps. In other words demand is less and supply is more. Another important trend that is emerging is the low rates on mortgages or other types of home loans. For example, in the US, interest rates for a 30-year fixed rate mortgage (FRM) averaged 5.08% from 6.35% a year ago. Fifteen-year fixed rate mortgages also dropped to 4.54% for the week ending September 3 from 5.9% a year ago.

The above trend indicates that ‘now’ is the best time for those who are interested in buying their own homes, because interest rates are the lowest and home prices are the most affordable in recent times. So, it makes sense to go for a home mortgage or home loan rather than paying rent. For example, taking an average of interest rates for different types of loans, or countries, for a home loan for $200,000 with a fixed yearly nominal interest rate of 6.5% for 30 years, the fixed monthly payment is about $1260. This, or even a higher amount, is what most people of middle income groups pay as rent every month in most developed countries and some developing countries. So, instead of paying $1260 as rent, if a person purchases a home paying the same amount monthly, it is a sound financial decision as he will become the owner of the home. It is even better for lesser periods like five-year, or for adjustable rate mortgages (ARM) for which average interest is down to 4.6% compared to around 6% a year ago.

As a result of lower interest rates and increasing home demands experienced recently, as in USA, sales of homes have been rising for the last seven months, and July's sales were the highest since June 2007. Whether you opt for a fixed rate mortgage, or type of loans for which the interest rate may change or float, it is only a question of making the basic calculations to find out what it actually costs you per month for a home loan or mortgage. There does not seem to be any significant difference.

Fixed rate mortgages can be costlier than adjustable rate mortgages in most countries, mainly due to the inherent interest rate risk long term loans are associated with. They may have, sometimes, a higher starting interest rate too. But if interest rates rise, the ARM cost will be higher while the FRM cost will remain the same, in which case FRM becomes a wiser option.

Fixed rate mortgages may offer the option to repay the principal or capital earlier than the agreed mortgage period without any penalty. If it does, and if you exercise the option, early repayment will reduce the total cost of the loan, and it will reduce the loan period. Sometimes, interest rates may drop further. In that case the entire loan amount can be repaid through refinancing to reduce the overall costs.

This opportunity can be used effectively to make fat profits if you have money locked down in low-paying investments, or loss making ventures. Just dispose of such investments and utilize the funds on homes or other real estate portfolios. As statistics show, the recession is arrested in countries like Germany, France, Japan, Hong Kong, etc., and the US economy is recovering very fast. It otherwise means the cost of homes will rise soon! So, even if you resell the property on a later date, you can pocket a tidy sum by way of profit.

Earn more with Google-certified ads

In the above video Google explains the concept of how Google-certified ad networks appearing on AdSense publishers’ pages can vastly increase their earning potential.

Google has been accepting display ads from third-party vendors for over a year ago. This will help AdSense publishers earn the most profit for every ad that appears on their sites, whether the ads come from AdWords advertisers or Google-certified ad networks.

Google-certified ad networks themselves are ad agencies and companies that partner with advertisers and publishers to buy and sell ads on sites they don't own. So, by getting the opportunity to place ads in Google AdSense publishers’ sites they gain a vast network of sites where they can display their ads. They have to bid as AdWords advertisers bid and this will increase competition. Also Google-certified networks’ ads appear in AdSense publishers pages/sites just like other Google ads. Also, Publishers will have full control over which ads and ad networks can appear on their pages.

Some Google certified ad networks use their audience data to target more relevant ads to users. If you want you can opt out of such ads using the third-party ads preferences settings in your AdSense account.

Google certified ad networks placing ads on AdSense publishers’ sites must agree to and follow Google's standards for user privacy, ad quality, AdWords policies, etc. It means the AdSense publishers will have the same assurances of ad quality as usual. Besides, Google-certified ad networks who want access to your AdSense ads must adhere to third-party ad serving standards.

Payments for publishers run through AdSense as always, ad formats will be the same, and publishers can have control over ads on their pages, and they can choose to opt out of receiving ads from any particular network or all third-party networks.

Currently this feature is available to publishers in North America and Europe only, though Google has plans to cover more places in the future.