Base on this cash flow chart, that said

rich man cash in FD -> 100k

poorman House loan BLR -> 100k


after 30 years


rich man cash in FD --> 209k (base on FD Rate 2.5% p.a)

poorman House loan BLR -->216k (jz finished paid loan)


In this case, means if u have cash then u will be rich and richer.
if u are poolman, ur money jz enough for paid loan.

This post has been edited by ericpee82: May 19 2010, 06:52 PM


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I think u mean poor man instead of poolman?

how about.. if rich man take his 100K and all gone to unker lim .. .it would be worse than pool man

TS never met a rich man before.

Seriously TS. Starting this thread only shows a poor people mentality inside of you.
Until you change your idea or you will remain the same for 30 years.


So any more worthy points to discuss in this thread?

Read 'The Millionaire Next Door' by Thomas Stanley.

Of course the rich gets richer and the poor gets poorer.

The rich keep on doing things that made them rich. The poor keep on doing things that made them poor (like buying cars and house they cant afford )

the chart is created by the TS i assume, because it doesn't make sense at all. you're compared FD with loan payments, of course the lines go opposite directions. if a poor man puts his money in FD he'll be making money as well.

so u suggest ppl dun buy house?

If you cant afford it, no.

If you can afford it, yes.

poolman will remain a poolman i think....no money can help him

how do u define can afford?

if my income 4k, i buy a 150k house, I can't afford it and borrow from bank, pay installment for 15 years

if my income 2k, i buy a 150k house, I can't afford it and borrow from bank, pay installment for 30 years


In both case, 2k or 4k salary also can't afford to buy a house with 1 payment ... but both also able to pay that long years, does it count as can afford or can't afford?

the definition of being able to afford something I believe lies in how well it allows you to grow your assets.

now, for both of your cases (2k and 4k) if you buy to rent and the rent is enough to cover your mortgage, the end result is a net gain.

but then you see people who earn 2k buying 60-70k cars which take them 9 years to pay off and by the end of that suffer a loss due to both the large amount paid for interest as well as the depreciation of a cars value. whereas, if you bought say a second hand waja for 25k paid it off within 3-5 years and used the extra cash to invest wisely, you would end up with both a form of transport as well as steady growth in assets.

the problem then is due to people living above their means, ie. changing cars every few years and renting apartments bigger than they need. I remember reading somewhere in the forum about a guy renting a 3 bedroom apartment for himself and wasnt willing to rent out the other rooms.

but then again, please correct me if im wrong. Im still a student who hasnt started to invest yet and my opinion is limited to the small amount of FQ that ive been trying to gain prior to entering the workforce

that is cash flow chart. if u loan that means u pay money reduct from ur money u will negatif and negatif. corect izit???
like u said, if poor man can put his money into FD. so he no need to borrow loan already. right? he consider is a rich man. then ur point cant make it.

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Added on May 19, 2010, 6:50 pmReWer, i agree v u. now is big gap betteew high income (boss) and low income (monthly salary).
that y the chart show rich more richer. poor more poorer.
with the low salary like u say 4k o 2k oso, all will paying to bank. in the end, banker is the winner...

This post has been edited by ericpee82: May 19 2010, 06:50 PM

the poolman makes money from the richman - cos he charges the richman for cleaning his pool

what is ts talking about?

is this captain obvious trap or what? doesn't it shows that the poolman have a fully paid 218k worth-of-cash house? poolman win!

I think the chart is not appropriate. After 30 years, the poor man will have an asset that worth more than rich man's FD.

If talk about cash flow, how could the cash flow decrease over the time when a employee salary will increase over the years and paying fix amount of loan?

agree with this... after 30 years... the value of the asset will increase...

and TS... u need to put inflation rate for wealth calculation... based on normal inflation rate (at about 6% per year) your cash saving will decrease its value by half in 12 years...

aiaks... do we need to be that "serious" in this chart created by ts ? +_+
guess this thread will not be going anywhere... mind to close it ?

According to my book, if your monthly payment for a 30 year loan is less than 25% of your salary after epf and tax, then you can afford the property.

So if you earn 4k, with 5% loan you can afford the 150k house

You own your house = good
Your house owns you = bad

http://www.rense.com/general63/newam.htm

nice sharing ~