tag:blogger.com,1999:blog-6897513886211197509.post3076984471043535031..comments2024-03-29T16:34:17.069+08:00Comments on Singapore Man of Leisure: Good and Bad Debts - My practical applicationSingapore Man of Leisurehttp://www.blogger.com/profile/13774067113884418001noreply@blogger.comBlogger16125tag:blogger.com,1999:blog-6897513886211197509.post-46984601476944735052011-11-29T11:22:04.819+08:002011-11-29T11:22:04.819+08:00wealth888888 made a good point. drop dead!
having...wealth888888 made a good point. drop dead!<br /><br />having debt is saying you have the ability to pay (with interest) in the future. do you? someone say buy insurance on your bad debt? so can get more debt and more insurance? haha.<br /><br />my answer is no one has, not even warrent baffet (if he has debt). i make my life easier and simpler. why so complicated? after tasting it, cherry so nice mah? but for those who have not teast it, including the margin traders, you have to try it and find out yourself.<br /><br />note, the effect of the poison always comes much later.coconuthttps://www.blogger.com/profile/09479603768240288905noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-19987962571274174822011-11-27T17:09:59.152+08:002011-11-27T17:09:59.152+08:00Opps! I must apologize to Tong!
First time come h...Opps! I must apologize to Tong!<br /><br />First time come here, and I go off tangent again...<br /><br />Sorry Tong!<br /><br />You must be thinking... I just woke up, teeth haven't brush, face not washed yet. I only said hello... I have nothing to do with Federation talk! LOL!Singapore Man of Leisurehttps://www.blogger.com/profile/13774067113884418001noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-63279231421921371112011-11-25T21:15:21.386+08:002011-11-25T21:15:21.386+08:00Welcome Tong!
It's nice to see a new friend t...Welcome Tong!<br /><br />It's nice to see a new friend to this blog :)<br /><br />Ah! A practical comrade close to my heart. <br /><br />No debt = no lending. <br /><br />No lending = no banks. <br /><br />No banks = either we emigrate overseas; or we ask our "brother" to take us back into the Federation on their terms... We lose our sovereignty :(Singapore Man of Leisurehttps://www.blogger.com/profile/13774067113884418001noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-57779850303798739752011-11-25T21:02:04.245+08:002011-11-25T21:02:04.245+08:00debt is debt, there is no such thing as good debt....debt is debt, there is no such thing as good debt. leverage is also a form of debt. If banks tell you all debt is bad, then who will borrow from banks.It is good to meansure the risk against the reward before getting a debt.tonghttps://www.blogger.com/profile/14654599952888823699noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-53884190341195687012011-11-25T16:39:15.569+08:002011-11-25T16:39:15.569+08:00I like that quote.
"Do or do not. There is n...I like that quote.<br /><br />"Do or do not. There is no try."<br /><br />For property investment, it rings so true. They say property investment is perhaps the single most expensive investment of our life time.<br /><br />It can help us plan for our children's future education.<br /><br />It can help us retire if done right.<br /><br />It can help our family if we have mortgage insurance, which is better than buying more life insurance or ILP.<br /><br />It can be a form of annuity as we age and not working.<br /><br />Unlike the stock market, we can modify the risk profile and control the level of risk. <br /><br />Lest I am mistaken for a property agent but now is not the time to invest in property, I feel. Catch the right timing and we can ascend like the wind. Catch the wrong timing and we can end up facing the full wrath of financial hurricane, even if we want to buy and hold.<br /><br />Then other factors come in. So location, planning, risk minimisation, plan B, plan C, emergency funds, cash holdings, etc should all be worked out. <br /><br />Do or do not....there is no try in our lifetime.financialraynoreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-17801806055326189862011-11-25T15:21:49.748+08:002011-11-25T15:21:49.748+08:00CW8888,
That's why the rules of bankruptcy is...CW8888,<br /><br />That's why the rules of bankruptcy is one of the best invention of capitalism!<br /><br />Without it, there will be less risk taking and entrepreneurship ;)<br /><br />And of course insurance...<br /><br />Like the automatic hosing loan insurance when you take out a housing loan. <br /><br />Be careful if marry a gold-digger who encourages you to buy a big house or multiple properties that you can barely afford. When you "gone"; she get everything for "free". <br /><br />Ah! The magic of insurance! You win when you lose; and you lose when you win ;)Singapore Man of Leisurehttps://www.blogger.com/profile/13774067113884418001noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-49768605714728706022011-11-25T15:14:27.423+08:002011-11-25T15:14:27.423+08:00Hello financialray,
There you go! Without the ben...Hello financialray,<br /><br />There you go! Without the benefit of hindsight, we won't know whether an action is good or bad.<br /><br />So it's back to do or do not, there is no try. <br /><br />Who knew a little muppet can have such wisom? LOL!<br /><br />Oh sorry! I apologise to science fi fans. Yoda is not a muppet (sound a lot like Grover in Saseme street to me), he is the Jedi master!Singapore Man of Leisurehttps://www.blogger.com/profile/13774067113884418001noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-50631133662972598662011-11-25T11:20:52.883+08:002011-11-25T11:20:52.883+08:00Hi uncle 8888,
very good thought.
this "bac...Hi uncle 8888, <br /><br />very good thought.<br />this "backside" must be covered for sure.<br />good thing about property investment is that we can buy mortage insurance which is a form of term insurance.<br />For 1 to 2 k a year, one can be covered for up to a million dollars for death or total permanent disability.<br />So if nothing happens over a 20 to 30 year loan, the investor will have the loan repaid and the property to his name.<br />If he drops dead or has TPD, he gets a property FOC for his next of kin.<br /><br />If can leave this world with family well taken care of, it is good karma.<br /><br />Hope that answers your question. No need to go Bukit Timah Hill.financialraynoreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-59118195404811319432011-11-25T10:54:26.048+08:002011-11-25T10:54:26.048+08:00We may be very financially savvy and know how to g...We may be very financially savvy and know how to generate good returns on our debts. <br /><br />But, we may drop dead suddenly, have we seriously think over whoever take over our debts are financially savvy enough to move on with our debts?<br /><br />If the answer is No, still a good debt? <br /><br />Go up to Bukit Timah Hill this weekend and think over it.<br /><br />It is better for us to suddenly leave the mortal world as debt free. No meh?Createwealth8888https://www.blogger.com/profile/08563834016250153049noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-52377829124127924142011-11-25T10:30:27.616+08:002011-11-25T10:30:27.616+08:00Now to make things more complicated.
When you sig...Now to make things more complicated.<br /><br />When you sign up for an MBA and pay lots for sch fees, it is bad debt till you use the MBA upon graduation to earn a high salary, there upon your bad debt has become good debt.<br /><br />When you buy a property to make rental income and has positive cash flow, that is good debt. However, when you cannot find a tenant and there is no rental income for a period of time, the good debt has soured and become a bad debt. <br /><br />So when we sign up for a course or degree, we must make sure the returns justify the means.<br /><br />Similarly before we buy a property for investment, we assess all the risks involved and cover all the "backsides". On leverage, a poor property investment will be a terrible setback but if done well, financial freedom awaits. So location must be good so as to secure a long term anchor tenant for many years to come.<br /><br />Just like stocks. It is good investment when it gives good dividends and prices keep going up. For property investment, we just ensure positive cash flow and let time bring about capital appreciation. They don't make land anymore in Singapore, heard shortage of sand and limits to reclaimation. <br /><br />So good debt and bad debt, theory liao liao. What is important is we reached our financial goal/freedom.financialraynoreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-53083951218559918092011-11-24T20:48:19.391+08:002011-11-24T20:48:19.391+08:00I am with you financial ray!
We both love our cak...I am with you financial ray!<br /><br />We both love our cakes and cherries!<br /><br />Dividends and rental income are sweeteners to reward me while I patiently wait for the big capital gains :)<br /><br />I'm a growth and income guy!Singapore Man of Leisurehttps://www.blogger.com/profile/13774067113884418001noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-8790935810746274502011-11-24T20:42:40.724+08:002011-11-24T20:42:40.724+08:00That's cool LP!
Looking at Good debt Bad debt...That's cool LP!<br /><br />Looking at Good debt Bad debt from the bank's (or lender's) perspective!!!<br /><br />Now it puts a new spin to things :)Singapore Man of Leisurehttps://www.blogger.com/profile/13774067113884418001noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-2472197580357904222011-11-24T20:31:36.195+08:002011-11-24T20:31:36.195+08:00Hi smol,
Good post, as usual : I'd like to gi...Hi smol,<br /><br />Good post, as usual : I'd like to give my views on good debt vs bad debt. I really agree to the fact that when you do not need the money, you'll find it easiest to borrow. Banks are smart, they only want to lend to people who can pay back.<br /><br />My definition of good debts are debts that you can pay it back sometime in the future, either using cashflow every month or one lump sum. Everything else is subjective. Some would say that good debt is when you buy a house and bad debt is when you buy a car, but really? You really have to start worrying when the debts that you get is far too high for you to repay back.<br /><br />Does the intention in which you borrow the money for matters? If you have money to pay the car in full but you choose to borrow because you want to stay liquid to take adv of market conditions necessary bad? If you borrow money (at low cost now) to get a property to make passive income necessary a good debt? <br /><br />I would like to follow how a bank lends to pple, in order to define good debts. A bank only wants to lend to pple who don't need the loan now. That, to them as a lender, is a good asset and therefore a good debt to you, as a borrower. If you can afford to pay back the loans, it'll be a good debt.la papillionhttps://www.blogger.com/profile/01372278083694506953noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-48934313878094059612011-11-24T20:20:50.748+08:002011-11-24T20:20:50.748+08:00Yes I agree. From an investors' point of view...Yes I agree. From an investors' point of view, I cannot afford to wait for that one project to turn the tide around. I would have drowned in the financial tsunami much earlier before the one money spinner that comes along and change my life around.<br /><br />Positive cash flow however is important but it would be nice to have my cake and eat it with a cherry on top when capital appreciation comes along. Similarly, we want dividends in our stocks and of course, we want to buy low and sell high too.financialraynoreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-87854038479621148962011-11-24T19:04:20.631+08:002011-11-24T19:04:20.631+08:00Hello financialray,
I do like the way Robert Kiyo...Hello financialray,<br /><br />I do like the way Robert Kiyosaki helped changed the mindset of most property investors by using his cashflow example. <br /><br />But I would not push the pendulum to the extreme end.<br /><br />In the Singapore context, most property investors make their money via capital gains - not via via rental cash flows. If I invest in Singapore properties, I would go for the capital gains route ;)<br /><br />Rich Dad and Poor Dad is one of my favourite personal finance book. <br /><br />My main take away is that it would be best if I can be a Business Owner. If cannot, being an investor is the next best thing - at least we still can leverage on OPM and OPT.<br /><br />As for negative cash flows, that's how most start-ups and big companys who invest in R&D operate. Cash burn, cash burn - but 1 project succeed will more than make up for all the previous loses combined :)Singapore Man of Leisurehttps://www.blogger.com/profile/13774067113884418001noreply@blogger.comtag:blogger.com,1999:blog-6897513886211197509.post-85338705146719583932011-11-24T18:47:53.751+08:002011-11-24T18:47:53.751+08:00I still like Robert Kiyosaki's definition.
Goo...I still like Robert Kiyosaki's definition.<br />Good debt is something that will comes with an asset that will give you money and positive cash flow.<br />Bad debt is something that will take money away from you.financialraynoreply@blogger.com