Trapped By Lure Of The High Life

[GoalHome 1]

there's no definite must be figures. but try not to take gross pay as a guideline, better to take net pay as a base. for myself, i save more than 50% of my take home pay.

for couples combined, it will be good if can save up at least one income. the other income should be comfortable enough for expenses.

the above percentage is just an illustration of spending within one's means... as the chinese saying goes 量力而为

Edited April 4, 2008 by GoalHome

[l_club23 0]

there's no definite must be figures. but try not to take gross pay as a guideline, better to take net pay as a base. for myself, i save more than 50% of my take home pay.

for couples combined, it will be good if can save up at least one income. the other income should be comfortable enough for expenses.

the above percentage is just an illustration of spending within one's means... as the chinese saying goes 量力而为

I save nothing... everything tied up in investments both long and short term... risky...

[binzz 10]

there is such a thing as good debt and bad debt. to me its all about balance.

i swipe swipe swipe my CC whenever i need to or can (meaning unless small amt or must pay by cash lah) but i also pay the bills without fail each month. and i feel happy whenever the gal/guy over the counter asks me 'mdm, do u wanna use your Uni$'.. or when i redeem my rewards...vouchers, gifts etc. makes me feel that someone else is paying my discounts for me. haha..

I agree so much with you, I am also one who keep swiping my CC, use it to pay for all the bills, conservancy charges for myself and my parents. My mum is also used to consolidate all the bills for me to pay and everything, after a few months, i will redemn cake vouchers, watson vouchers for her to use. She uses her supp card to pay for everything too... Happily redeeming the uni$ everytime the counter person ask her.. We too will clear the credit bill the same day we received as well..

[Phantom 1]

My own preference would be to keep the cash and invest it - if you can find the opportunities. Or use it to build more reserves for further security.

Are you on a HDB loan? If yes then the cost of funds is pretty low so do consider the relative opportunity costs between using your capital elsewhere and recovering the interest from the housing loan.

Leveraging on low Cost of Funds to invest elsewhere to get a nett gain of return is a financially savvy move. In some ways I find it similar to arbitraging.

Having said that, there will be people who 1) lost money as they took more risks 2) are adverse to the idea of paying interest on a loan even if the nett rate of return can be assured.

Generally I agree on leveraging and what another forum member has said on good debt and bad debt.

One example.

1.5m SGD property can be fully paid but a loan of 66% is taken.

meaning the COF for the 1m SGD free cash is between 2%p.a. to 3%p.a.

as long as an annualized gain of above 4%p.a. is achieved, it makes more sense in the longer run.

1) Interest charged on mortgage is daily rest and reducing. Lesssor interest is charged as the years go by.

2) Gains on free cash are compounded and increasing.

[GoalHome 1]

I save nothing... everything tied up in investments both long and short term... risky...

That's investing in the future. The savings i refer to does not means cash only... Of the amount saved, it would be best to apportion it into investment and cash deposits based on one's risk profile. Generally, it's between 40-60% for investments.