Posts Tagged ‘Mark Zuckerberg’

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Time was when 2.7 billion seemed like quite a lot of people. That is how many of us are on the internet. But hold on, if the population of the world is around 7.1 billion, what about the remaining 4.4 billion of us? Never fear, Facebook’s founder Mark Zuckerberg has a plan.

Actually, according to the Facebook press release, the plan is to get another five billion people online. It is not clear how Zuckerberg will manage this, given that – according to the maths expressed above – there are only 4.4 billion people on this planet who are not online, and some of them are babies, but hey this Mark Zuckerberg. He is very clever. Maybe he is including family pets or Martians in his projections. More likely he is projecting growth in the population into his targets.

Then again, it is not just Zuckerberg who is at it. He has set up a company called internet.org, which Facebook describes as “a global partnership with the goal of making internet access available to the next 5 billion people.” In addition to Facebook, Ericsson, MediaTek, Nokia, Opera, Qualcomm and Samsung are all signed up to the project.

Some are cynical, and say Zuckerberg is only doing this because he wants more users for Facebook. But so what if that is the case.

Sometimes monopolies can be a good thing. A social media tool such as Facebook is a natural monopoly. It just won’t work as well if some of the people you want to connect with are on a rival platform.

Facebook won’t last forever. History tells us that dominant businesses lose their dominance as technology changes. It is called innovators’ dilemma. Kodak has been a recent victim. It looks as though Microsoft may well be. Facebook will be one day.

But just imagine for one moment what it will be like if the world – that’s the whole world, or at least the human bit of the world, let’s exclude the animal kingdom – was online at the same time, logged on using say 5G, giving them pretty much instant access to all knowledge and anyone else on the internet.

What a very different world that will be. It is one that may be less than a generation away.

© Investment & Business News 2013

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As you know, we are ageing. We are all literally ageing, of course; there are no real life Benjamin Buttons out there. But as a country and as an economy we are ageing too, and that means there could be a pension problem in the future. The solution is obvious. We all have to save more, throw more money at our pensions. Or do we? A new report suggests that this approach may be flawed.

According to EuroFinUse: “Recent OECD statistics have cast a dark shadow over the aspirations of private pension savers. Over the last 5 years, real returns from private pension funds (after inflation) have been negative in many EU Member States. They have failed to hold their purchasing power, setting a gloomy outlook for tomorrow’s pensioners.”

In fact the real return (that’s after inflation) on five years’ pensions across Europe has been just 0.1 per cent over the last ten years and negative and minus 1.6 per cent over the last 5 years – at least that is what the OECD shows on the products and countries it covered.

EuroFinUse stated: “Despite such concerning results, the OECD still strongly recommends that citizens should make a greater contribution to personal pension provision. When advising people to save more, public authorities should bear in mind that pension saving products are in many cases destroying real value of citizens’ savings. This is why providers and public authorities should seek to protect the long-term purchasing power of savings, before advising citizens to increase those.” See: The Real Return of Private Pensions 

Actually, when you think about it, the report should not really come as a surprise. Many pension funds in an attempt to meet solvency laws, have been flocking to bonds, even though such bonds pay out lower percentage yields than inflation.

The truth is that many pension funds have been paralysed by the regulator into becoming so risk adverse that they threaten to bring down the economy. The economy needs risks; there is no such thing as risk free. The obsession with risk free in recent years has ironically created more risk.

That is why investing under your own steam, privately rather than via a pension fund is interesting.

And here is a thought to leave you with. A recent article in ‘Fortune’ magazine quoted London’s Tech City CEO Joanna Shields as saying that not so long ago her employees scoffed at stock options. They wanted pensions. She says that today that they all want to be the next Mark Zuckerberg. See: What London can teach Silicon Valley 

If you want a secure retirement, saving for a pension may be a partial answer, but stock options and investing directly, without the straitjacket of a pension fund and its requirements, may provide a better alternative

© Investment & Business News 2013