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My friend keeps telling his friend that he is not rich and that he is using leverage to improve his cash flow. My friend got fed up with his friend on one occasion and told him to stop whining and to do something about his life.
Make changes and be richer.
This calls to mind a recent blog post of mine which asked "Do you want to be richer?"
Apparently, this person in question is in his early 30s and has a comfortable salary of $6K a month. He is single, stays out and spends quite a bit of money having a good life.
So, to me, for him to become richer, he does not really have to work much harder to increase his income. He should work at reducing his expenses. He should think of planning for the next stages in his life.
For a person like him, if he is willing to listen, I would tell him that there are many roads to Rome and there are many roads to becoming richer. I have a couple of blog posts which were written with this in mind: "Roads to wealth creation in the stock market" and "Seven steps to creating passive income from the stock market".
For sure, there are many more ways to make money and my friend has found his own way to do so and that is to invest in real estate and renting them out for cash flow, taking advantage of the very low interest rate environment. It is something he does well and something he is comfortable with.
For me, a personal experience at a very young age of twelve when my family was on the verge of bankruptcy taught me that banks are fair weather friends and I try my best not to owe the banks large amounts of money if I can help it.
I do understand the need for leverage sometimes in order not to miss out on money making opportunities but I would try to repay my debts in the shortest time possible.
What am I saying? Everyone is different. Certain methods which are comfortable for some might not be so for others.
Finding the most comfortable path which would meet our goals in life is most probably a journey of self-discovery. Having reliable guides on this journey would be most helpful but decisions have to be made ourselves.
Ultimately, we have to find our own way.
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10 comments:
Hi AK71, so now know a little bit more about your background.. we should meet up for some kopi sometime... meeting of the pigs! lol
Coming back to your post - its all about different folks different strokes. As we are all the sum of our experiences in life, it also shapes our appetite for risk and the way we think. Totally agree with u on the banks - giving out the umbrella on sunny skies but taking it back when it rains.That whining individual is clearly suffering from one thing - no inertia to take massive action! Why? I use this analogy - A dog is sitting on a nail and keeps whining, so why doesnt it just stand up? Cos the pain isnt enough to warrant for it to stand up (i.e take massive actioN) so wld just sit on the nail and whine away. We can only help those who first want to help themselves. Long comments as i've been quiet for a while. lol
Keep up the good postings! Am vested in SAIZEN/Golden Agri also.
Hi Jason,
It is good to hear from you again. Been a while. :)
I agree that it usually takes really earth shattering events to push people out of their comfort zones. In such cases, their comfort zones usually cease to be comfortable. ;)
Congratulations on your long position in Golden Agriculture and you might need to be patient with Saizen REIT. :)
Meeting of the pigs? Haha.. One day, maybe. ;)
Some are born Rich
Some Achieve Richness ($$ in bank A/C)
Some have richness trusted upon them.
I only respected the 2nd lot. The others, so so lah.
Each is different but something can be common. By my measurement, it is what you have as liquid asset that counts (e.g our REITs, FD and a fat bank account). Not with everything on 10 years instalments (which is owned by the finance company, not us).
Was stupid on my motorcycle and car loan. Then dreaded the HDB loan which I worked very hard to pay off in record time. My motivation was a Taiwanese girlfriend who told me that she aims to payoff her condo in 2 years. Thats before she got a boyfriend and got married. My other TW friend and I were wide eyed when we heard that. Sounds like big talk. Yes, when it is my turn, it is possible. Just have to watch your income & expenses and it can be done. She congratulated me when i told her that I did it too. 3.5 yrs, a bit too long and costed me a little. Would have been faster, had I not been distracted with a relationship then and all those pak-tor expenses that came with it.
Yes, (a lot) less party and new LCD tv / laptop but still makan, still go on short holidays and enjoy life.
I wish your sunken friend that he wakes up to the fact that he is already there and just need to watch his expenses a bit and recharging bank account, isn't that difficult.
Everyone Huat ah
SnOOpy168
Hi SnOOpy168,
Thanks for sharing your personal experience with us here. :)
Well, this person is a friend's friend. I am not in the picture and I have no wish to be in the picture. Haha..
My friend did introduce his friend to my blog and a few other resources but I doubt very much that the person is interested. Good luck to him. ;)
So interesting that when one earned $2,000, we survived. When the pay increased, the savings did not improve significantly. It ain't inflation though. Lifestyle inflates too.
Hi Lizardo,
Yes, you are right. Lifestyle inflates! :-)
I guess it is really up to the individual if he would save more when he makes more.
George Soros still takes the Subway to work!
Yes Lizardo. Lifestyle inflates too. So does our egos and face.
@$2k, we just managed to pay the simple bills, simple hawker centre food and the insurance+tax bills.
@$6k, we just managed to pay the instalment of the new car, new condo, new baby's expenses & he maid and still eat at simple hawker centre (hey, this is Singapore's advantage) but skimp paying the coupon for the parking..... living from payday to payday.
Yes, as we earn more, we deserve to enjoy a bit more isn't it ? To what end will the pleasure ends ? End of the paycheck's last $1 ?
Had I known about ASSI in my earlier working years (if AK started blogging then), perhaps I would have a different set of wealth, instead of fanatically trying to pick & build up it up quickly. While I still have this job....
A friend recently screamed out loud that she wants to look rich and has a certain budget to do so. Looks are skin deep but she insist that in the world of portfolio management (a China-owned securities company in HK), looks are very important.
The budget for this and is from her own pocket. HK$200k or about S$30k ! I was just thinking. Give me this 30K and I park it in a REIT like Fortune (in HK$) let it grow and compound the 2nd & onwards dividends by reinvesting. With the 1st year's dividends, get some lower brands (like Samsonite & TagH, instead of ) and look smart & elegant in it. Not look rich - which is so Big6 and perhaps all items mistaken as A-grade fakes from Shenzhen.
So much for portfolio management....
SnOOpy168
Hi SnOOpy168,
I believe that if a person did not have the will to make changes, no amount of persuasion would work. I just hope that my blog would be that force which would tip anyone on the brink of awareness to do the prudent thing. :)
Your female friend needs to do some rethinking, perhaps. Having said this, I am not in her industry. So, I cannot say if she is right or wrong to think that looking good is important. I am sure being an actor or singer, looks might be very important to ensure success. ;)
Thanks for sharing your experience with us. I enjoyed reading it.
To: SnOOpy168
Portfolio management - where you make others money work for you.
So I guess for a portfolio manager to look good, could be part of their marketing necessity, to attract more business.
But borrowing a leaf from "Rich Dad, Poor Dad", these posterior applicants are just more expenses and do not contribute to the build-up of Assets, aside from above consideration that it could be part of the marketing of one's job in attracting others to make their money work for you (i.e. the portfolio manager).
I do liked to look ordinary and with the positive asset base in my name. I am not sure of my friend, if she is from monied family. Anyway, it is her $$..
Looks can be deceiving & never judge a book by the cover... so they say...
SnOOpy168
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