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Saturday, February 15, 2014

Politics of corruption in Myanmar

By Larry Jagan 

YANGON - Signs of corruption are mounting in Myanmar, a crisis of confidence that threatens to derail President Thein Sein's ambitious reform program. Whether Thein Sein is willing to push through top-level prosecutions, including at the tainted telecommunications ministry, could make or break the country's transition from military to democratic rule. 

Underscoring decades of unaccountable military rule, Myanmar has consistently ranked near the top of Transparency International's global corruption rankings. Now, with financial reforms and economic liberalization measures promising to lure big new foreign investments and boost asset prices across the

economy, officials are increasingly leveraging their positions for personal gain, according to government insiders situated at the president's office. 

An investigation launched in January into alleged corruption at the Myanmar Posts and Telecommunications (MPT) ministry signaled wider mismanagement and graft at key economic ministries during a crucial juncture in the country's transition from military rule. While Thein Sein's office has championed reform, many line ministries continue to operate as they did under the former military regime. 

The probe into former telecoms minister Major General Thein Tun and other high-ranking ministerial authorities represented the first time top officials have been publicly accused of graft during Thein Sein's tenure. The move won plaudits among foreign investors, many of whom have called for greater transparency and rule by law before committing significant funds to the country. 

While Thein Sein has acknowledged the problem of endemic graft and has launched a high profile anti-corruption campaign - highlighted by the ongoing investigations into the telecommunications industry - other military-linked politicians have played down the extent of official corruption and its impact on the sustainability of reforms. 

In an interview in Naypyidaw, Union Solidarity and Development Party (USDP) vice-chairman Htay Oo dismissed allegations of rampant corruption, both now and during the previous military regime he served. ''We were all ministers then,'' he said, referring to the previous ruling military junta. ''And we were not corrupt. We are trying hard to reduce corruption in our country. The government is making a great effort to reduce corruption. The recent news of corruption has only emerged because of the government action, otherwise it would have stayed hidden.'' 

Indeed, other cases have emerged. A report published by The Voice weekly journal that quoted from an internal attorney general report indicated major corruption involving six different ministries, including at the ministry of mines. The newspaper's editor was charged with libel and forced to attend over 30 different court hearings before the charges against him were dropped. Nobody has yet been charged for the corrupt practices alleged in the attorney general's report. 

The anti-graft campaign threatens to engulf many high-ranking political officials and in the process deepen the political divide between Thein Sein and the powerful speaker of the lower house of parliament, Shwe Mann. Both played prominent leadership roles in the previous ruling junta and are now locked in a heated competition to represent the ruling USDP as its presidential candidate in 2015. 

Corruption charges were often used for political purposes under the previous military regime, including during the 2004 intra-junta purge of former intelligence chief and prime minister Khin Nyunt and his political associates. Now, some analysts wonder whether the probe into the telecommunications ministry, which threatens to ensnare certain of Shwe Mann's family members, could be a similar power play. 

More than 60 officials, nearly 20 of whom were temporarily detained, have been investigated as part of the probe, according to a government source familiar with the situation. Almost all of them, apart from Thein Tun, who remains under virtual house arrest, have since been released and reinstated to their posts. However, they are not precluded from future prosecution, the same source said. 

Thein Tun has threatened to implicate ''more senior people'' if he is formally charged and tried in court. Brigadier General Thein Zaw, a previous telecommunications minister and now the chief minister for Kachin state, is also under investigation, according to the government source. He also hinted that at least one former senior member of the Myanmar Posts and Telecommunications (MPT) ministry had turned state witness in the case. 

''We know everything now,'' said the official, who claims to be close to the still pending investigation. 

According to a police source familiar with the probe, a suitcase containing US$2 million in cash was allegedly found in Thein Tun's residence. Investigators are trying to establish whether the alleged funds may have originated from foreign firms, including major Chinese companies Huawei and ZTE known to be angling for potentially lucrative telecom contracts in Myanmar, according to the same source. 

Authorities are also trying to gain access to bank accounts in Bangkok, Hong Kong and Singapore where kickbacks to senior ministry officials may have been deposited, according to the same source. Both Chinese companies have voluntarily given investigating authorities documents related to their previous deals with the MPT ministry, including during Thein Zaw's tenure as minister, according to the police source. 

In a 2004 contract, ZTE provided a $150 million loan to the MPT ministry to build 300,000 fixed phone lines. That figure, a ministry official at the time estimates, was more than 10 times the real cost of the project. In comparison, he notes that ZTE later proposed to supply Nepal with a million telephone lines at a cost of just $7.5 million. 

Thein Tun has not made any public comment on the allegations. Because he is under virtual house arrest, he could not be reached for comment for this article. Both former ministers are believed to be close to former junta leader and now retired Senior General Than Shwe. 

Local telecom-related companies, including Htoo company subsidiary Elite and Red Link, are also under scrutiny, according to the police source. Red Link is owned by Shwe Mann's younger son, Toe Naing Mann. The company was formed in 2008 and provides internet services that it acquired from a joint venture with the MPT ministry. With less than 2% of the population on-line, Myanmar has one of the lowest Internet penetration rates in the world. 

Executive conscience
The fact that former finance minister Hla Tun, regarded by some as an anti-corruption crusader, is overseeing the investigation has been viewed by some as indication of the importance President Thein Sein has given the potential landmark case. Hla Tun is regarded as the ''president's conscience'', according to another source close to Thein Sein. 

Some analysts argue that if Thein Sein's anti-corruption campaign and wider bid to introduce greater accountability and transparency in government economic dealings, including with foreign partners, is to be taken seriously, then formal charges should be lodged regardless of the political consequences. To date, Thein Sein has yet to decide whether to proceed with charges against either or both former telecoms ministers, according to the police source. 

''This impunity will simply send a strong signal that economic reform is, in fact, just another way for the connected and the powerful to rip the wealth from country and the ordinary people,'' said Sean Turnell, a specialist on Myanmar economic matters at Macquarie University in Australia, about the pending investigation into the telecoms ministry. ''Corruption is a barrier to real investment and above all pervasive corruption undermines public support for the broader reform process,'' he said. 

Other investigations, including a probe that has implicated former fisheries minister Maung Maung Thein, have been launched only to later stall. In March, Khin Ko Lay, a senior bureaucrat in the fisheries ministry, was summarily dismissed on the president's orders for alleged corruption. He was reportedly ordered to pack his bags and leave immediately without returning to his office, according to an official who was present at the meeting. 

Current fisheries minister Ohn Myint could be next, according to government insiders. Thein Sein cancelled Ohn Myint's recently planned visit to France - reportedly organized and paid for by a private French company - for undisclosed reasons. His new role in peace talks with Kachin rebels, however, may give him a reprieve and explain the cancellation of his trip, according to the insiders. 

There have been other reports from the interior ministry that home minister General Ko Ko is also under investigation for possible corruption. His personal assistant, however, dismissed these as unfounded rumors fueled by reports on the internet. Others have raised questions about agriculture minister Myint Hlaing, including his promotion of an expensive rice hybrid imports that many experts believe is inappropriate for Myanmar's climate and terrain.

The opposition is pushing for top-level convictions. ''We all know about this corruption - all the country's citizens know about it,'' said Nyan Win, spokesman for the National League for Democracy in an interview at the opposition party's headquarters in Yangon. ''The ministers must be prosecuted. If the government has evidence of their corruption they should try them in the courts, even if it reaches up to the very top.'' 

Some political analysts, however, believe that the evidence that has been gathered - rather than form the basis of any future prosecutions - will instead be used to contain Shwe Mann's political ambitions for the presidency. ''They have all the evidence now, especially to use to black mail Shwe Mann,'' said a government source. 

Others believe the anti-corruption drive is part of a broad campaign to clean up the ruling USDP in preparation for the 2015 elections. Many of those being targeted are senior figures in the party but have been tainted by corruption claims, including when they served as ministers in the former military regime. 

USDP vice chairman Htay Oo dismisses such suggestions as political speculation. ''Of course there are differences within the party,'' he conceded. ''But these are being dealt with in a gentlemanly manner and will not disrupt the party.'' 

Larry Jagan previously covered Myanmar politics for the British Broadcasting Corporation. He is currently a freelance journalist based in Bangkok. 

(Copyright 2013 Asia Times Online (Holdings) Ltd. All rights reserved. Please contact us about sales, syndication and republishing.) 


No Clean Bill of Health Yet for Burma’s Anti-Money Laundering Drive

money laundering, Myanmar, Burma, Parliament, Anti Money Laundering Bill, Financial Intelligence Unit, AGD Bank, Ministry of Home Affairs, Tay Za, Kanbawza Group, KBZ, The International Governance and Risk Institute, Asian Development Bank, ADB, Financial Action Task Force, FATF, hundi system, casinos, anti-money laundering, Anti-Money Laundering Bill, Union Parliament
Piles of Burmese kyat currency are counted in Rangoon. (Photo: Jpaing / The Irrawaddy)
RANGOON — Burma looks set to get a new law to counter money laundering soon, but the country still faces numerous challenges in curbing financial crimes.
On Thursday the Upper House passed the Anti-Money Laundering Bill, which will next go to the Union Parliament, where Burma’s Lower House and Upper House sit in joint session. Once the bill clears the Upper House it will go to President Thein Sein for sign-off.
The bill suggests punishments of up to 10 years in jail and a 500 million kyats fine (US$500,000) for money laundering convictions, and is the latest in a series of financial reforms that aim to make Burma a more reputable investment destination.
Thurein Aung, a senior investigator at Burma’s Financial Intelligence Unit (FIU), part of the Ministry of Home Affairs, which led the anti-money laundering bill’s drafting, described the passing of the measure as significant.
“It is very important for Myanmar,” he told The Irrawaddy. “The old anti-laundering law [from 2002] contained a lot of loopholes and was not up to international standards.”
However, insiders say that as Burma’s financial system integrates more with the outside world, institutions such as banks and governments will need to be more cognizant of possible laundering from abroad.
“The money laundering monitoring system in Myanmar [Burma] is very weak, there are many ways to launder money in Myanmar,” said Soe Thein, executive director of the share management department at Asia Green Development Bank (AGD), when asked by The Irrawaddy whether he thought the anti-laundering bill would prove effective once passed into law.
“It is about enforcement as much as having a law,” he added, discussing the challenges of curbing money laundering. AGD Bank is owned by Tay Za, a Burmese entrepreneur who was close to the country’s former military junta and remains under US sanctions.
As well as legislative reform, there is a need for more awareness of possible laundering among officials and workers at financial institutions, and a firmer grasp of how to recognize the signs of possible financial crime.
“There is knowledge within directorates of government departments and upper levels banks, but it doesn’t always filter down,” said Sett Hlaing, legal counsel to the Kanbawza Group, the parent company of one of Burma’s main banks, KBZ, and a participant in a British Embassy-backed anti-money laundering training event in Rangoon.
Matthew Hedges, chargé d’affaires at the British Embassy in Rangoon, warned in a press release that Burma could be vulnerable to money laundering and other financial crimes.
“The UK is committed to preventing this—committed to working with you to ensure that the right systems are in place to protect your economic reform process,” Hedges said.
The training, which covered countering terror financing as well as anti-money laundering, was given to an audience of police, government officials and bank representatives by GovRisk, a London-based training and consultancy company, and followed a similar event held in the capital Naypyidaw.
But new anti-laundering measures aside, some of Burma’s other projected reforms could, in turn, attract would-be money launderers. A tourism blueprint drawn up last year by the Burma government and the Asian Development Bank (ADB) moots legalizing casinos—a possible pull for tourists akin to gambling draws such as Macau and Singapore—and part of government hopes to attract 7 million tourists annually by 2020.
“Casinos get special and high attention in any risk analysis,” said Gert Demmink, a former head of supervision at the Netherlands Central Bank and now managing partner at Philip Sidney, a firm based in the Netherlands which advises businesses on legal compliance.
Casinos have long been a feature of some of Burma’s ethnic militia-controlled borderlands close to Thailand and China, with the gambling dens functioning as a revenue source for groups that have fought the Burma Army off and on for up to seven decades, but they remain banned in areas under government control.
“If you are going to have casinos, you better make sure you are in line with FATF regulation first,” Demmink told an audience of businesspeople, bankers, lawyers and government officials in Rangoon on Friday, referring to the Financial Action Task Force.
The FATF is an intergovernmental body set up in 1989 that aims to “promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.”
There are other potential loopholes to implementing an effective anti-money laundering regimen in Burma. In the absence of a viable banking system, many Burmese—particularly emigrants remitting money from Thailand or Malaysia to family in Burma— have relied on informal money transfer mechanisms, such as the hundi system.
“I cannot say specifically whether it is a money laundering issue, but there should be licensing, oversight and supervision where money transfers are concerned,” Demmink told The Irrawaddy.
“Anything unlicensed or unregulated is a threat,” he cautioned, when asked about the hundi system.
Underground banking systems have their disadvantages, including lack of enforcement, said Thurein Aung of Burma’s FIU, discussing hundi. “For villagers and people in the countryside, how can they conduct with the formal banking system?” he added, saying that for Burmese, informal money transfer systems, such as the hundi, remain a vital lifeline for rural families who live far from any bank and depend on money sent back from family abroad.
There seems to have been international pressure on Burma during recent months to make progress with anti-money laundering efforts, and both Thein Sein and Parliament Speaker Shwe Mann have discussed the need to pass legislation.
An October 2013 FATF statement listed Burma as one of 11 countries with “deficiencies that pose a risk to the international financial system,” though it commended the country for improving its Anti-Money laundering (AML) and Combatting the Financing of Terrorism (CFT) procedures. The worst rankings were reserved for Iran and North Korea, countries described as causing “ongoing and substantial money laundering and terrorist financing (ML/TF) risks.”
Burma is not one of the 34 FATF member states, but is part of the Asia/Pacific Group on Money Laundering (APG), a FATF associate member. In November 2013 a joint visit to Burma by the APG and the International Monetary Fund (IMF) recommended the swift enactment of a new anti-money laundering law, which the APG said “would address many concerns expressed by the APG and the FATF in the context of the pace of Myanmar’s AML/CFT reforms.”
An official at the Attorney General’s Office, who spoke on condition of anonymity, said that getting the anti-money laundering bill passed into law was important given a Feb. 10-14 meeting of the FATF and whispers of possible sanctions by the task force against Burma if the country did not improve its anti-money laundering regime.
“It is not in law yet, but it was timely that the Upper House passed the bill this week,” the official told The Irrawaddy.

Sunday, February 2, 2014

Myanmar 22 risk of any coup attempts in 2014!

A worrying map of the countries most likely to have a coup in 2014

Click to enlarge. Data source: Jay Ulfelder coup forecasts for 2014. (Max Fisher/Washington Post)
Click to enlarge. Data source: Jay Ulfelder coup forecasts for 2014. (Max Fisher/Washington Post)
Coups are bad news for any country. They weaken the rule of law, throw governments into chaos, undermine or outright jettison democratic norms and institutions, and can lead to violence, oppression or worse. They can also be tough to see coming, particularly since the people looking for them tend to focus on a single country, which can lead them to overemphasize local events and understate the broader dynamics that make coups happen, or not.
That's a big part of why political scientist Jay Ulfelder has, for the past three years, maintained a mathematical model to predict the likelihood of coups in almost every country around the world. By tracking over a dozen variables – from political system to years of independence the presence of absence of an "elite" ethnic group – Ulfelder's model roughly estimates the likelihood that each country will experience a coup this year. He "trained" the model by applying it over the years 1960 to 2010, further developing its ability to predict future coups by looking at past ones.
Ulfelder kindly shared his full dataset with me, which I've mapped out above. The redder countries are at higher risk for a coup and the yellower countries at lower risk. You can read his post here for much, much more about how he designed this model and what makes it work.
Here are a few notes to help you read this map. First, even the most extreme cases are well below a 50 percent likelihood of a coup, meaning that a coup probably won't occur. Those would be the West African countries of Guinea and Mali (26.5 percent and 22.7 percent likelihoods of coups) and Madagascar, at 23.9 percent likelihood. Those numbers are high enough, though, to be appropriately alarming. Second, the numbers drop off quickly, with the vast majority of countries less than 5 percent likelihood of a coup, and half of them less than 1.5 percent. So the difference between a dark red country and a light orange or yellow country is very significant.
There are a few immediately obvious trends in the data. First, it doesn't look good for sub-Saharan Africa, which has the top nine most at-risk countries. Not all of Africa, to be clear, much of which is quite stable, but the risk is heavily concentrated in Africa's Sahel region (that east-west strip just below the Saharan desert) and in West and Central Africa. There are complex political, ethnic and post-colonial reasons for this,which I wrote about here. Looking forward, political instability and competition risks holding back a part of the world that is otherwise poised for long-overdue economic growth.
Here is a chart Ulfelder put together showing the 40 most at-risk countries. For each country, he's run two different models and then averaged the results. That bold dot is the average score:
The 40 countries most at risk for a coup in 2014 (Jay Ulfelder)
The 40 countries most at risk for a coup in 2014 (Jay Ulfelder)
The stand-outs beyond sub-Saharan Africa also tell some interesting stories. The highest-ranked non-African country is Thailand, with a projected 10.9 percent likelihood of a coup this year. By some measurements, Thailand has more coups than any other countries on earth (here's why) and is currently experiencing another round of protests and political turmoil. Afghanistan and Pakistan are at high risk, though for different reasons (deep ethnic and political competition in Afghanistan, an independent-leaning military in Pakistan, weak civilian governments in both). Egypt, which saw a coup in 2013, has a projected 9 percent chance of another this year. Further afield are Haiti and Ecuador, the only two countries in the Western hemisphere with significant risks for coups, with 9.2 and 8.5 percent projected, respectively. (This is why I wrote, in June, that NSA leaker Edward Snowden would be wise to turn down Ecuador's offer of asylum; the next government could change its mind.)
It's also worth pausing to appreciate the luxury many countries have of not worrying about coups. A lot of democratic as well as authoritarian states, rich as well as poor, have strong enough rule of law and institutional norms that they don't have to worry about coups. Ulfelder's model predicts only a 0.15 percent chance in the United States; many Western democracies show similar scores. So do some countries experiencing political turmoil, such as Greece and Cuba (0.14 and 0.21 percent risk, respectively). Iran, for all its problems and political infighting, only rates a 1.43 percent chance of a coup. That's probably great news for the United States: even if we don't like the Iranian government, it's preferable to chaos, and a government that can negotiate without worrying about a military coup has a freer hand to accept any U.S. nuclear deal.
For more on coups, what makes them likely or not, and the implications of this data, bookmark Ulfelder's blog, which will be revisiting these topics throughout the year.


Saturday, February 1, 2014

How to Remotely Wake a Mac from Sleep with Wake On LAN from iPhone

Change Passwords Now; Yahoo! Mail Got Hacked Again

Antivirus software provider Bitdefender urges users to change passwords immediately, after hackers breached Yahoo! Mail services again. The world’s second-largest email service provider identified a coordinated effort to gain unauthorized access to users’ accounts, according to a blog post.
The series of usernames and passwords used to execute the attack was likely collected from a compromised third-party database. Yahoo! already sent e-mails prompting affected clients to reset passwords. Notifications are also sent via SMS texts if mobile numbers were linked to the accounts.
Change Passwords Now; Yahoo! Mail Got Hacked Again
“We have no evidence that they were obtained directly from Yahoo’s systems,” said Yahoo’s SVP Platforms and Personalization Products Jay Rossiter. “Our ongoing investigation shows that malicious computer software used the list of usernames and passwords to access Yahoo Mail accounts. The information sought in the attack seems to be names and email addresses from the affected accounts’ most recent sent emails.”
The tech company is working with federal law enforcement to find and prosecute the hackers responsible for the attack. In July 2012, more than 450,000 e-mail addresses and passwords were stolen from Yahoo! after hackers managed to breach the service.
“At Yahoo! we take security very seriously and invest heavily in protective measures to ensure the security of our users and their data across all our products,” Yahoo! said at the time.
After the latest attack, the company said: “We regret this has happened and want to assure our users that we take the security of their data very seriously.”
Bitdefender researchers recently spotted several bad ads injected in Yahoo! Insider through malvertising techniques. In May 2013, Yahoo! Mail also got blocked by browsers in a complex malvertising chain reaction.
Users are advised to reinforce their passwords and change them regularly. They may also enable two-factor authentication, which requires a code texted to their mobile phone whenever a login attempt is made from a new computer.
In January, the word “password” was ousted by “123456” as the most popular (and worst) password in 2013, after two years in the spotlight.

Are You Holding Yourself Back From Financial Success?

By Julie D. Andrews of LearnVest, January 30, 2014

This article is from our friends at LearnVest, a leading site for personal finance.

Five years ago, a running buddy and I were rounding Central Park’s loop when I blurted out, in utter defeat, “I’ll never pay off my debt.”
I thought nothing of striding six miles, but I couldn’t imagine ever triumphing over my grad school loans and maxed-out credit cards. I felt overwhelmed and hopelessly tamped down by mounting expenses.
“You can, and you will,” said my friend. “Stop thinking of this as a mountain to climb. Start chipping away, little by little.”
That day, buoyed by her words, I bought a little notebook that changed my life. In it, I scribbled down all the scary numbers and faced the hard facts. It gave me exactly what I needed—a starting point.
When I received a letter in the mail two years later, confirming that I’d paid off a $26,000 loan, pride washed over me. What’s more, I had deleted all $12,000 of plastics debt and even plunked $10,000 into a mutual fund. What had kept me from doing it earlier? It wasn’t the debt itself—it was my misguided thoughts about money.
“Our words are our world,” says Noah St. John, professional development expert and author of The Book of Afformations. “It cannot be overstated how much what we think and say affects us.”
I slowly replaced my paralyzing refrains with productive thoughts, and so can you. To figure out the best way to rescript your brain for positive, actionable thinking, we asked St. John, along with two other experts, to highlight seven toxic money thoughts you should replace today.

1. “I’ll Never Be Rich”

Why it’s Destructive: “I’ve heard this belief countless times,” says St. John. This kind of thinking is harmful, he explains, because your beliefs guide your actions and, as such, become true. Say it and believe it and you will be forever saddled with debt. You won’t be disciplined enough to manage your finances and get ahead. Ultimately you’ll feel—and stay—stuck. “It’s straight-up self-sabotage,” he says pointedly.
What to Say Instead: “I’m reliable and hard-working, and I will be rewarded with prosperity.”
Why it Works: The point is, you can only be as wealthy as you believe you can be, and there’s no reason, if you work hard, that you won’t get there.
But, adds St. John, you also need to decide what “rich” means to you. Does it mean having an emergency fund big enough to cover a potential disaster? Does it mean saving enough for retirement that you won’t have to worry? By putting good habits in place now, you’ll set yourself up to build wealth, and keep it.
And if you don’t believe you can be rich, simply having more cash won’t change that. “Money acts like a magnifying glass,” says St. John. “Having money doesn’t change anything—it reveals everything.” By believing you’re worthy of wealth, you’re off to the right start.

2. “Saving Enough for Retirement is Impossible”

Why it’s Destructive: When it comes to money, there are few things that are actually impossible. “Thinking like this leads to frustration,” says Judy McNary, a CFP with Colorado-based McNary Financial Planning. “If you’re focused on the negative, it creates a downward spiral, where you might very well end up putting your head in the sand and ignoring the need to save.”
And just because you’re ignoring the need to save for retirement doesn’t mean that need will go away—in fact, the biggest mistake you can make when it comes to retirement is not getting started today. If you let yourself get overwhelmed by the thought of Retirement-with-a-capital-R, it’s too easy to scare yourself into paralysis—and that’s the worst thing you can do.
What to Say Instead: “I’m going to start saving a little bit today and watch my money grow.”
Why it Works: The best thing about saving for retirement is that most of us have years to let our savings build, which means we don’t have to have all that money in hand right now.
If you invest your savings in a 401(k) or IRA, the interest will compound, meaning your money has the potential to literally grow over time. Consider, for example, that someone with 40 years until retirement would need to save only about $5,009 a year to end up with $1 million when he retires (assuming a 7% market return)—that’s a little over $400 a month. But if that same person waits until there are only 20 years left until retirement, he would need to save nearly five times that much to reach that same million! That’s not to say you can’t start later if you must, but it will be infinitely easier if you start today.

3. “When I Have More Money, I’ll Be Happier”

Why it’s Destructive: It just doesn’t work like that, says Joseph Duran, author ofThe Money Code: Improve Your Entire Financial Life Right Now and the CEO of wealth counseling firm United Capital. “The perfect amount of money is always just a hair more than you have, no matter the amount.” Research has shown that, beyond a salary of $75,000, money simply doesn’t buy more happiness.
After all, that’s the idea behind the common expression. “More money, more problems.” For most people, a higher salary means a bigger house, or a fancier car, or sleepaway camp for the kids, and it’s awfully hard to scale back once you get used to a new lifestyle. Hence lifestyle inflation, the budget-buster of would-be savers everywhere.
What to Say Instead: “I know what I want my life to look like. Money would allow me to do more of those things—but I can start doing them now.”
Why it Works: If money can’t buy happiness, there’s no point in waiting to do the things that make you happy, whether that’s spending time with loved ones, learning to paint, or working for a nonprofit. “The goal is not just to have more money,” says Duran. “Rather, it’s to figure out our purpose and meaning in life and set goals for the future. Now is the time to be who you want to be—on whatever scale is realistic.”

4. “I’ll Always Be Stuck in This Job”

Why it’s Destructive: This thinking limits your reality to what you currently know, rather than letting you dream of what could be. “It’s about giving yourself permission to succeed,” explains St. John.
It’s all too easy to get blinders on when you’re not happy in a job. When you’re overworked, under-earning, or saddled with a bad boss, the light at the end of the tunnel may seem far away indeed. Remember: Whatever you don’t like that’s going on in this moment is only temporary—if you want it to be.
What to Say Instead: “I can have the career I want—I just need to start asking for it.”
Why it Works: Even if it’s easier to complain about where you are now, you want to pick your head up, start networking, and recognize what skills you have and what’s important to you in a position.
Once you have an idea of where you’re headed, whether that’s to the corner office or into another industry entirely, it’s up to you to start making it a reality. “Nobody owes us anything, but in my career—and this is common among Gen X and Baby Boomers—I always assumed I wouldn’t get what I wanted, so I didn’t ask,” recalls St. John. “You have to say, ‘This is what I want.’ It’s that simple.”

5. “Nobody Can Afford College These Days”

Why it’s Destructive: Simply put, it’s defeatist. Yes, today’s college prices will give you sticker shock, but that simply means you need a plan. And there are many ways to skin the cat called paying for higher education. Instead, you may want to pose a larger question: How does paying for college fit into my overall financial plan?
Remember the safety instructions you hear on planes—you’ve got to put your own mask before helping others? The same logic applies, says McNary. “I work with parents who will eat rice and beans for the rest of their lives in order to pay for their kids’ college—it’s a core value that’s hard to mess with,” she says. But what’s more crucial is taking care of your own basic financial health first. “We often say that the government gives loans for college,” she explains, “but they don’t give loans for retirement.”
What to Say Instead: “There’s a college experience for my child that fits our budget, and I’ll find it.”
Why it Works: Saving for college isn’t impossible, and it’s not all on your shoulders: Scholarships and financial aid exist for this reason exactly, as well as state-sponsored, tax-advantaged saving programs like 529 accounts (which accept contributions from friends and family as well). Before surrendering to the fear that paying for college is an insurmountable goal, start getting strategic about how you’ll make it work for your family.

6. “I’ll Never Be Able to Pay Off This Debt”

Why it’s Destructive: Telling yourself you’ll never be able to eradicate your debt keeps a constant cloud over your head, McNary explains, but it doesn’t keep you from spending!
She finds that when debt starts exceeding five digits, many clients no longer feel the urgency to pay it off. “Again and again,” she recounts, “I’ve seen people wonder ‘What’s the difference between $30,000 I can’t pay and $40,000 I can’t pay?’ They simply can’t relate to such big numbers.” By thinking your debt is permanent, you may very well keep digging yourself deeper into a hole.
What to Say Instead: “I can be a person who lives within my means, and that’s a good start.”
Why it Works: To turn it around, McNary advises, you need to start thinking about what you can do, whether that’s taking a side job, consolidating your loans, or attacking your highest-interest debt first. “The ultimate goal is to live within your means: If you start now, putting the extra money toward your debt, you’ll reach the point where you’re free. And the one thing everyone I’ve worked with who has paid off debt has in common is that they never plan to go back.”

7. “I Always Go a Little Over Budget”

Why it’s Destructive: You can count on the fact that you’ll always be $50 over budget. It’s part of your charm, right? Wrong. Duran finds this kind of thinking particularly insidious. “Whether it’s overspending again or not saving for a vacation, this negative thinking suggests you’ve accepted these mistakes as your DNA and aren’t changing,” he says.
What to Say Instead: “I can choose to make better decisions about my money.”
Why it Works: Being financially responsible is all about making choices, Duran says, and there’s no end to your opportunities to make better ones. “We’re not rocks,” he explains. “We’re always changing.” Will you increase your retirement contributions or spend $50 on iTunes? Will you set a savings goal or put off saving for your dream trip to Argentina until next month? Your money choices aren’t like your eye color—you can always change your mind.

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