Olympics 2012 in London officially kicked off yesterday. The three hour opening ceremony was breath taking at times, and dull at the same time. Aside from a spectacular fireworks display, Mr. James Bond, and the display of British literature, not much else was over the top. But once the celebrations subside, the reckoning will begin. Last time the Brits hosted the Olympics was 1948, the games became famous as the “austerity games” in a far more debt-burdened Britain than 2012.
Despite over the top opening ceremonies, the modern Olympics have turned into a financial monstrosity. It’s nice to see over 10,000 athletes compete in such a spectacular event, however the Olympics have become nothing more than a bloated political and economic circus that has lost touch with the originality of Olympics.
Holding the Olympics in London will cost the Brits $13 billion, representing 0.55% of annual GDP, or 1.4% of the British government revenue. According to experts, a significant portion of these costs will be recovered over time through the sale of land and buildings. (Source: Turd Bank)
We don’t have to go very far back into history to see a country in a financial disaster, less than 10 years ago since they hosted the 2004 summer Olympics. The Greek economy is still struggling to recover from the 2004 Olympics in Athens. Costs ran out of control. The bill totaled $7.2 billion or 56 per cent more than the initial budget. Due to the staggering final bill, the Greek budget deficit expanded to 6.1 per cent of gross domestic product in 2004, more than twice the permitted level for members of the Euro region. (Source: The Age)
Now the Greeks are paying for it as the Greek government continues to raise taxes. The world economy is struggling as they stand by and watch the Greeks in despair, and the European Union is on the verge of going into non-existence. There have been no discernible benefits to the Greek economy since the Olympics in 2004 and tourism has declined steadily in Greece since the same time.
Canada hosted the 1976 Olympics in Montreal, and it left Canada in a $1.2 billion deficit. In 1984 the LA games managed to turn a $355 million profit. Seoul had an operating profit in 1988, though the next three Olympic cities – Barcelona, Atlanta and Sydney – just broke even. (Source: The Age)
However, not all is doom and gloom. There are some positives for the host countries for hosting the Olympics. The Olympics make the city more attractive and interesting for tourists around the world, which is certainly a big plus for local businesses. Property values generally increase, because in Los Angeles after the Summer Games in 1984 the average price of property increased by 25%, and in the nearby town of 15%. A similar situation was recorded in Atlanta after the 1996 summer games. The games also strengthen the national currency, stock market jumps at the announcement of the host country, more jobs are created for the games and all the years leading up to the games.
Despite all the possible upsides to hosting the Olympics, the downsides are equally demoralizing. Countries such as China, Greece, and Australia are still reeling almost a decade later. It’s only a matter of time before the final numbers come in for London, and whether the Brits will end up on the upside or the downside is yet to be seen. Let’s hope it’s the upside for the sake of all us, because we certainly don’t need another economic powerhouse in recession mode.
So, enough about the Olympics, let’s switch gears and get into some great reads from the world of personal finance that you might have missed from the past week.
What is your ideal income based on your ideal amount of work-time a week? A very valid question that Sam asked in hist post; What’s your ideal income and amount of work a day? For me it would be $110k with a forty hour work week, even though I’m still young and not far off from my ideal, I’m happy with my present income for a single income household.
Passive Cleaning Income
You can realize almost 90% savings in your phone costs by switching your small business to Voip telephone services according to Glen Cooke who wrote a really nice post on PCI called; Voip for small business.
Give Me Back My Five Bucks
Every year, my goal is to increase my income, and I’m sure it’s probably your goal too. Asking for a raise can be stressful for anybody, but if done right the end result can be pretty rewarding. Krystal wrote a nice, encouraging and detailed post on how 20-somethings should ask for a raise.
Work Save Live
For the weight conscious like my self, here’s a very simple and healthyrecipe on making turkey enchiladas. BTW, since Jason is quite the chef, I’ve asked him to start up a food delivery service. We’re still trying to figure out the whole customs thing. Keep you posted. :)
My Own Advisor
Mark answers a reader’s question on why he doesn’t just buy and hold a dividend ETF instead of individual stocks? He goes into great detail on why he invests the way he does, but the long and short of it is that ETFs offer moderate management fees.
Are you in the market for a new car? If so, here’s 3 tips for your next car purchase; Get a head start, buy new-used vs. new, and always negotiate over the phone.
Cents to Nonsense
Here’s another argument on blogging anonymously vs. not being in hiding. LF makes some valid points on why she’s choosing to stay anonymous, even though this is a personal choice, I still believe that blogging openly has much more upside. I use my blog to market my self better with intertwining it with my career through LinkedIn and my resume. Thus far it has paid dividends.
Making Sense of Cents
The topic of children comes up a lot in Michelle’s life and of course in her personal finance blog world we well. She discusses the topic of having children, and the cost of having kids. It’s no secret that having kids is expensive, and one needs to be in the right frame of mind to have some, even with a solid dual income. Read her post; Dual income no kids.
A habit is a recurrent, often unconscious pattern of behavior that is acquired through frequent repetition. Little things like your morning coffee, exercise, getting up early, reading or watching TV are all habits. It’s hard to keep positive habits in a negative habit environment. Here’s Larry’s post on habits, and how important they are in our life.
Canadian Budget Binder
A newlywed couple in their early 20’s trying to live on one income, and doing it successfully might I add, are living debt free (except the mortgage) and only on a single income. Check out the post called; Newlyweds: How We Avoided Debt on One Income.
Moving costs money but it is up to homeowners how much they will spend on this endeavor. If you have someone do all the work, it will cost you a pretty penny, if you choose to do it your self, you can save money while moving.
Budgets Are Sexy
Reduce, reuse, and reciprocate – that’s the pickup truck theory of life. You don’t need to own a truck – you just need to know someone who owns a truck. Or a TV set. Or a car. Or maybe all of the above. That’s what friends, family members, co-workers and neighbors are for.
Thanks for being part of this weekend’s Finance Fox Weekend Recap. We hope you enjoyed this week’s seven super-duper reads you might have missed, and see us again right here next weekend where we’ll do it all over again.
Have a great rest of the weekend.