Spending more than what one earns – how young Singaporeans end up in debt

[drifter]

Saving money is, technically speaking, deferred consumption. You'll eventually spend the money anyway. You can't make money grow just by not spending it.

thats right . even if you dont use the money you save ...your $10 note after 20years cant even buy you a plate of chicken rice so saving money is bullshit !!! not realistic at all .

ps: of course i dont mean that one should spend every single cent . use money to make money is the correct way .

 

[Leongsam]

so saving money is bullshit !!! not realistic at all .

If you put a $10 note under your pillow, nothing's going to happen but if you give your bank $10 x 100 notes and leave it there for 20 years, your account will grow to $2,653.30.

Don't underestimate the power of compound interest. I have a good portion of my investments in cold, hard cash in various currencies which yield reasonable returns.

 

[drifter]

If you put a $10 note under your pillow, nothing's going to happen but if you give your bank $10 x 100 notes and leave it there for 20 years, your account will grow to $2,653.30.

Don't underestimate the power of compound interest. I have a good portion of my investments in cold, hard cash in various currencies which yield reasonable returns.

i dont believe in compound interest at all .

1) imagine one day if you really need money ..how ?

2) why should i trust the bank to handle my money and give me just a tiny interest ?

when i use my own money and invest in my own biz ...the return are higher then those pathetic interest rate , although the risk of losing your money is lower when you park it inside your bank . im a kind of person who take calculated risk .

ps : dont forget ..theres a thing call inflation . that $10 note in your hand that can buy 2 plates of chicken rice become one plate

 

[Leongsam]

when i use my own money and invest in my own biz ...the return are higher then those pathetic interest rate , although the risk of losing your money is lower when you park it inside your bank . im a kind of person who take calculated risk .

I've already done that a few times over. My first business venture turned $5000 into $50,000 in less than 2 years. No bank will give you these sorts of returns.

However, money is the measure of all business pursuits and ultimately, you need to turn the business back into cash to reap the rewards. You then need to put the cash somewhere. It can't be locked up in business ventures forever.

My cash gives me sufficient returns to run my life on a month to month basis. Without my cash deposits, I'd be a lot busier managing investments and businesses in order cover living expenses.

 

[drifter]

I've already done that a few times over. My first business venture turned $5000 into $50,000 in less than 2 years. No bank will give you these sorts of returns.

However, money is the measure of all business pursuits and ultimately, you need to turn the business back into cash to reap the rewards. You then need to put the cash somewhere. It can't be locked up in business ventures forever.

My cash gives me sufficient returns to run my life on a month to month basis. Without my cash deposits, I'd be a lot busier managing investments and businesses in order cover living expenses.

you must have millions inside your bank account to have that kind of interest to live on every month . if i wanted to retired ..i will do that ..but not at the moment now . yes , i do agree with you that money can't be locked up in business ventures forever .

 

[Ash007]

Mazda 3 cost more then $100K in Singapore? That's how much a porche here cost!!

 

[BuiKia]

Kaopeh all you want.

MIW will continue to milk the people and give unrealistic stats to say that everything is okay, You just have to eat less or lower quality food (eg, change from fresh meat to frozen), buy smaller houses and take public transport.

 

[babuSingh]

Sadly to say a good way to avoid going into debt is not buy car, take taxi. Live with parents and give them a comfortable monthly allowance. Use parents sub credit card and make investments eith your yearly bonus. Thats why the women are getting richer and the men are getting poorer lol

 

[streetsmart73]

BAD MISTAKE.

Don't want to get in debt? Here are some tips:

1) Don't get married.
2) Don't have kids (including out of wedlock).
3) Don't buy a car (car loan debt and drains your monthly disposable income).
4) If you can, stay with your parents for as long as possible.

P.S: Try and do a marriage proposal when you are jobless, and let's see how the 'marriage is love' theory hold up. Good luck!

hi there


1. honest, i have kosong sympathy on such daft sheep doing such things.
2. using future monies without doing enough homework!
3. i do have friends just like them back in the 90s.
4. slaves to hbd, banks & financial institutions forever!

 

[streetsmart73]

Kaopeh all you want.

MIW will continue to milk the people and give unrealistic stats to say that everything is okay, You just have to eat less or lower quality food (eg, change from fresh meat to frozen), buy smaller houses and take public transport.

hi there


1. fat kid, bingo!
2. miw encourage all daftter sheep to build more whiter castles in the airs mah.
3. in no time, there shall be 7 out of 10 dafter sheep millionnaires in the airs.

 

[Charlie99]

I believe it is not unique to the youth and younger generation in Singapore.

In Toronto, Canada, we used to joke that many people are spending what they earned, what they can charge on their credit cards, and whatever that they can borrow. May be they do not understand the burden of the 18% per annum (some are as high as 28%) on credit card debts.

Worse, the consumer/spending lifestyle is not restricted to the middle class, the rich and the not so rich. There are many professionals who spent what they earned, before income taxes, which have made quite a number insolvent, when their oncome taxes pile up after several years.

The key is to spend less that what we earned, after taxes, so that we will not be in debts, except for the mortgage on the house. Over spending is the cause of the present problems amongst human beings, as well as many countries.

 

[singveld]

Mazda 3 cost more then $100K in Singapore? That's how much a porche here cost!!

half a million

 

[chonburifc]

Morning guys. An interesting thread title cos' know quite a few friends who living very well but on closer look, they barely have much left at end of the month after paying the housing loan, car loan and all various credit line by the banks and finances. Most have been like this since I know them but some only recently got into such mess.

Think zero savings is a no no. My thinking is to have at least cash equivalent to 6 months pay to standby for any emergencies, like falling sick, retrenched, car kena kissed or kissed others' car.

 

[Ash007]

Elizabeth Warren's two-income trap highlighted this.

http://www.amazon.com/The-Two-Income-Trap-Middle-Class/dp/0465090826

[video=youtube;8GHg3GAeQ1Y]http://www.youtube.com/watch?v=8GHg3GAeQ1Y[/video]

The way to avoid financial ruins also involve buying insurance, not over committing.

Morning guys. An interesting thread title cos' know quite a few friends who living very well but on closer look, they barely have much left at end of the month after paying the housing loan, car loan and all various credit line by the banks and finances. Most have been like this since I know them but some only recently got into such mess.

Think zero savings is a no no. My thinking is to have at least cash equivalent to 6 months pay to standby for any emergencies, like falling sick, retrenched, car kena kissed or kissed others' car.

 

[chonburifc]

One book that really change my life is "The Richest Man in Babylon", a book by George Samuel Clason. It's written in a simple way without all the financial jargon but the concepts and ideas are applicable in real life. In a nutshell, this book is all about personal finance management. I got mine in Kinokuniya many years ago and passed it to a friend as I felt he need it more than I.

Thanks to this book that I was able to go into semi-retirement.

 

[saratogas]

When I purchase my expensive HDB flat with my parents... I am already spending more than what I can earn!

 

[Leongsam]

you must have millions inside your bank account to have that kind of interest to live on every month .

2.5 million is a comfortable amount. It yields about $10,000 per month at 5%.

 

[Ash007]

And how much of that 10K amount do you have to pay back in tax to the NZ govt?

2.5 million is a comfortable amount. It yields about $10,000 per month at 5%.

 

[Leongsam]

And how much of that 10K amount do you have to pay back in tax to the NZ govt?

Because I've put the sum in a family trust and structured it to be "tax efficient" [a term in vogue nowadays in NZ], I'm paying about 8% in taxes on that sum.

All these sorts of details are taken care of by qualified accountants. I encourage everyone to use the services of professionals. The right ones save you far more than you have to pay them.

 

[red amoeba]

in this age and time, throw the notion of hard work out of the window. thats why the government wants you to do, stand in line, shoulder the yoke and till the fields.

work smart, invest your money. start investment young and demand your money to give you returns.

check the job markets constantly and jump if there is a better opportunity. check out business opportunities. one will neber get rich being an employee. unless you r PAP.