Comments on: Get Rich with Excessive Debt

By: KCLau

KCLau — Thu, 03 Sep 2009 03:57:41 +0000

if not mistaken, some companies bought their machine with hire-purchase.

By: brandon

brandon — Tue, 01 Sep 2009 19:42:55 +0000

Hi KC,
can i make hire purchases a good debt? If possible, how?

By: KCLau

KCLau — Tue, 24 Mar 2009 03:29:13 +0000

HI Byron,

Thanks for your insight. I have simplified the matters just for illustration purposes.
The easy part is to think like the rich. But to act like the rich, it is another story. For example, buying a property worth 500k and renting out 3k/month is not an easy task.
If you can do it, you are on your way to become rich. In fact, there are people who can do that. Look at some real examples from Real Estate Investment Blog.

By: Byron

Byron — Sun, 22 Mar 2009 11:20:19 +0000

hi KC,
in order to be more convincing in the scenario 2 you quoted, more realistic assumptions should be used. it would ended up worse than original state but will be realistic.
example, you can’t assume “no down” deal (in contrast to scenario 1) and the rental is too good to be true (3k/mth for a 500k house? anyone would have bought the house rather than rent it. this kind of illogical case only can happen in renting singapore HDB where the singapore gov policy “slaughter” foriegners)

By: Byron

Byron — Sun, 22 Mar 2009 11:20:01 +0000

hi KC,
it order to be more convincing in the scenario 2 you quoted, more realistic assumptions should be used. it would ended up worse than original state but will be realistic.
example, you can’t assume “no down” deal (in contrast to scenario 1) and the rental is too good to be true (3k/mth for a 500k house? anyone would have bought the house rather than rent it. this kind of illogical case only can happen in renting singapore HDB where the singapore gov policy “slaughter” foriegners)

By: marxy

marxy — Wed, 31 Dec 2008 14:46:27 +0000

FAtduck & Peter,

Split your (maximum attainable) capital resources, then buy two houses(with maximum spread in the purchase price) at one go. Maximize the good-debt (mortgage of the investment unit) and minimize the bad-debt (mortage of own-stay unit). Make your good-debt pay for your bad-debt.

By: KCLau

KCLau — Fri, 27 Jun 2008 02:41:07 +0000

it is unavoidable if you want your own home.
We only have three kind of relationship with money – earn it, spend it, or save it (invest).

Buying our home is more towards “spend it” category.
That depends on your own priority.

By: peter

peter — Tue, 24 Jun 2008 13:06:39 +0000

interesting point here.. however isn’t it unavoidable if i need to buy a house when i get marry (first home)?

By: Financial Security: How you feel it? | KCLau's Money Tips

Financial Security: How you feel it? | KCLau's Money Tips — Sun, 23 Mar 2008 23:05:15 +0000

[...] Get Rich using Excessive Debt [...]

By: KCLau

KCLau — Sun, 02 Dec 2007 18:04:00 +0000

Hi Fatduck,

If you are referring to Scenario 1 – buying a bigger house, that’s exactly the way how poor people get poorer.

Scenario 2 is the way to get rich. The rich spend money to acquire assets. The poor spend more money for own consumption.

By: FAtduck

FAtduck — Sun, 02 Dec 2007 17:10:41 +0000

If you cant afford to pay for the mortgage of your current home, how do u expect to pay the mortgage of a bigger house.. What if what i earned is just enough to pay the mortgage and support my family, then your plan of buying a bigger house wont work. the bank definitely wont loan u money as u wont be able to pay the mortgage of a bigger house.

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