Debt is bad! At least that's what most people think. Are they correct? If not, is debt good then? Well, it really depends. Whether debt is good or bad depends on the reason for incurring the debt, and whether you can afford to repay it.
Debt is a complex concept. If you use debt carelessly and irresponsibly, you'll get into financial trouble. On the other hand, if debt is used in a calculated and intelligent manner, it can help you build tremendous wealth. Therefore, you must be able to distinguish between good debt and bad debt if you want to be successful financially.
What is the difference between good debt and bad debt?
People are getting more health-conscious nowadays. Their growing expenditures on gym memberships, fitness equipment, health supplements, organic foods, etc. are testament to this fact. Surely, it’s not difficult for you to find health-conscious colleagues and friends around you. While people are concerned about their physical health, they don’t really pay much attention to their financial health. Most people don’t have the habit of conducting regular financial health checks for themselves. They simply don't care, or don’t really know how to and where to start.
We are currently facing tough economic times. We get bombarded by overwhelming confirmation of rising debt and unemployment when flipping through the pages of newspapers, watching the news over television or listening to the news on radio every day. Governments all over the world are facing challenging times in their quest to address the country's economic problems. People are extending their retirements due to zero or insufficient savings. And more bad news seems to be added by the various media daily!
What can you do when confronted with such tough times? You can’t control what the world will become, but you certainly can control how you manage your finances. Hence, taking action to secure your financial future should become one of your top priorities in life. While money doesn’t grow on trees, it can certainly grow if you save and invest prudently. Saving and investing are keys to growing your wealth in order to ensure your future financial success.
Singapore is known for being one of the most expensive places in the world to own a car. At the time of this writing, a new family car like a Toyota Corolla 1.8L would have set you back by S$165,000 (about US$132,000). If the price of a basic BMW 7 series cost nearly S$400,000 (about US$320,000), try guessing the price of a new sparkling Ferrari!
Even with such exorbitant prices, exotic cars such as Bentley, Lamborghini, Porsche or the more common ones like Audi, BMW, and Mercedes-Benz are plying Singapore roads daily. While many believe the car you drive reflects the level of success you have achieved, the reality is far from the truth!
The world is ever tempting us daily. We're bombarded by advertisements from various media promoting easy credit, glorifying luxurious lifestyles and encouraging us to give in to our sense of entitlement. You're tempted every now and then to treat yourself with some nice things in life regardless of whether you can afford them. Yes, you often feel entitled. You believe you deserve to pamper yourself with some luxuries because of your hard work. This was exactly how King Solomon (known for his wisdom, wealth and writings) felt when he said: "I denied myself nothing my eyes desired; I refused my heart no pleasure. My heart took delight in all my labor, and this was the reward for all my toil" (Ecclesiastes 2:10).
According to the Monetary Authority of Singapore, more than 7.5 million credit cards (including supplementary cards linked to the principal cardholder's cards) were issued in Singapore in 2010. With market experts estimating eligible cardholders to be around 1 million, that would work out to each eligible cardholder owning 6 to 7 credit cards.
Are you worrying about your mounting credit card bills?
Are you making minimum payments on your credit card?
Are you taking new credit to pay off old credit?
Are you getting sleepless nights wondering how you can pay up existing debts?
If your answer is “yes” to even one of the above questions, you need to seriously look into getting out of your current debt situation. There are 3 steps to debt elimination:
Kelvin Wong is a millionaire investor and landlord. He currently owns a multi-million dollar property portfolio in Singapore, Australia and Malaysia. With his assets generating multiple streams of income to sustain his desired lifestyle, Kelvin became financially free at 39. He holds a Bachelor of Business (Dean's List) degree and a Diploma in Business Management. Kelvin writes about building wealth and achieving financial freedom in his free time.
Copyright © 2011 Kelvin Wong
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