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!

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

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 )

If you cant afford it, no.

If you can afford it, yes.

If I, I will ask this question to myself.
How can I buy with little money and later that house will pay by itself?

Couldnt agree anymore.

A richman will never buy house that couldnt afford. If they have 5million, they probably buy a 300-500K house and leaves the rest into investment.

if the richman has 5 million in CASH, unless it is a one-off lottery win, I bet he has the ability to generate an insane amount of monthly income.
300~500k house is too cheap a house for this man.

It's hard to do that if you dont plan on renting it out

We spend less than 10% of our income towards our own little home. It wont pay by itself lah since we're living in it

vincentlee,

1) My uncle is a multi-millionaire.  His house is worth less than 500K.  Yes, he could afford a more expensive house but why should he do that??

2) One of the nice perk of being a multi-millionaire is you no longer need to care about OTHER PEOPLE'S OPINION of how to live.  You could live in whatever life style that you choose.

Only those that are NOT truly rich need to show off how rich that they are. 

Dreamer

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)