Sep 16 2009, 02:30 PM
QUOTE(dreamer101 @ Sep 13 2009, 07:07 PM)
jasonhanjk,
<<If the debt you are borrowing will generate income for you,>>
To be precise, POSITIVE CASH FLOW. If the income is not big enough to cover the debt payment, it is NEGATIVE CASH FLOW. NOw, it may or may not work out for NEGATIVE CASH FLOW situation.
<<one of them is a oil palm plantation.>>
By the way, given that bank typically only loan people 30% of the plantation value to buy palm oil plantation, it is usually NEGATIVE CASH FLOW. No, I am not saying that it is NOT a good deal. But, a person need to have enough reserve and other cash flow to fund this.
In my brother-in-law's case, he refinanced and mortgage his house to buy Palm Oil Plantation. The interest rate is low enough now and the yield of the Palm Oil Plantation is high enough for the calculation to work out. It is STILL NEGATIVE CASH FLOW. But, he has other business to generate cash flow to finance this.
Dreamer
Dreamer, who is ur bro in law ? i am in palm oil too. refinrey. which platation he in ? if location wise, i can buy the fruits from him.<<If the debt you are borrowing will generate income for you,>>
To be precise, POSITIVE CASH FLOW. If the income is not big enough to cover the debt payment, it is NEGATIVE CASH FLOW. NOw, it may or may not work out for NEGATIVE CASH FLOW situation.
<<one of them is a oil palm plantation.>>
By the way, given that bank typically only loan people 30% of the plantation value to buy palm oil plantation, it is usually NEGATIVE CASH FLOW. No, I am not saying that it is NOT a good deal. But, a person need to have enough reserve and other cash flow to fund this.
In my brother-in-law's case, he refinanced and mortgage his house to buy Palm Oil Plantation. The interest rate is low enough now and the yield of the Palm Oil Plantation is high enough for the calculation to work out. It is STILL NEGATIVE CASH FLOW. But, he has other business to generate cash flow to finance this.
Dreamer
i owned palm oil plantation too, about 40 acres in teluk intan, are you trying to say i am a silly person to buy ?
in your bro in law case, i will say, refinance and buy palm plantation is not a very wise move. Dreamer, you have to understand that an acre of palm plantation will only generate you about 1 tonne of fruits in about 20 days. 1 tonne, before expenses is about rm 400 nowadays.
some other big player, which they allocate from 1000 acres of land is due to they have the positive cash flow and most importantly, they have their own refinery factory.
by the way, palm oil industry in malaysia is a long story. will talk unfinished.
regarding JASON,
I do agree completely with you that if you make good use of debts, it will generate you more income. GOOD DEBTS are important. for the persons that do not understand GOOD DEBTS, they are just some conservative people, with no business mind.
one more thing, if you want to make huge sums of money with good business prospect, the only solution is OWE THE BANK.
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