Do not make difficult times more difficult for ourselves.

When I was blogging more actively, advocating prudence and reminding readers to be careful of overleveraging financially was something I did on a pretty regular basis.

I also said that we should always have an adequate emergency fund and do not think that we can always depend on lenders to extend a helping hand.

We should develop a crisis mentality and do not think that we are invincible.

Remember that bad things do happen and when they happen, it is often without warning.

See this blog and the related posts:
Husband lost his job and my savings is zero!

The COVID-19 crisis is not just a bad thing happening as it is probably the worst thing to happen in many decades.

We are probably familiar with the saying "spare the cane and spoil the child."

Sounds heartless but it works.

I am one such beneficiary or victim. ;)

I believe that people do learn better after a painful lesson or a few and the COVID-19 crisis has probably left some cane marks on most of us.

Unless we are very rich, we cannot afford to feel invincible.

Just because some people we know are buying a second home or an investment property, it does not mean we should too, especially if it means having to borrow large sums of money and having a harder time to make ends meet.

Why risk so much for something we don't really need but maybe want?

So, when do we know we are overleveraged?

Do some stress testing and imagine losing our jobs or our business doing badly resulting in income going to zero.

How long would we be able to last financially in such a situation?

Ah, I have passive income!

Some wonder why I have such a big emergency fund even though my passive income seems more than adequate. 

The COVID-19 crisis is probably eloquent enough to provide the answer.

Dividends can be suspended or reduced and that's what happened during this crisis.

See this blog: An unbeatable level of certainty...

So, what triggered this blog?

An article on investing in properties in Iskandar, Johor and how difficult things are for some.

This is a topic I blogged about before as well.

"The Johor skyline is now dotted with empty condominium units, due to an oversupply in the market and lack of foreign buyers.

"When Singapore business owner Jonathan Gan purchased a four-room condominium at Lovell Country Garden in 2018, he thought he had clinched his dream retirement home.

"The freehold apartment located near Johor Bahru’s city centre was twice the size of his three-room HDB flat in Singapore, but the cost was only half of the latter when he bought it directly from the developers.

"Just three years after he purchased it, Gan, who bought the unit at around RM1 million (US$242,000), is having a hard time trying to sell it, even though the asking price is a fraction of what he paid for it.

"Property analyst Debbie Choy, who is director of Knight Frank Malaysia’s Johor branch, said the situation is particularly bad for condominiums and serviced apartments, of which there is an oversupply in the Iskandar region.

"Even owners of the more premium, newer developments in Johor Bahru are having problems trying to attract tenants.

"In its report, Henry Butcher Malaysia highlighted that Johor was the state with the highest proportion of unsold residential properties in the country, even before COVID-19."

Source:
CNA, 12 June 2021. 

Remember not to ask barbers if we need a haircut.

When the tide goes out, we will find out who have been swimming naked.

In a more recent blog, I said that some people have nothing to risk but everything to gain when asking us to part with our money.

Even people we think of as friends who are not property agents might be getting a commission when they recommend that we buy a property.

Remember to be careful with our money as nobody cares more about our money than we do.

For sure, external factors are making things financially more difficult for many of us. 

If we have made the situation worse because of bad decisions we have made in the past, learn the lesson and avoid making similar decisions again in the future.

Do not make financially difficult times more difficult for ourselves. 

References:

1. Buying property in Iskandar, Johor.

2. Two questions to ask when buying a property.

3. Use CPF savings for homes and investments.