OPM: Good debt vs Bad debt

[Atrina_Boy]

Not clicking...

 

[stanlawj]

This is an often discussed topic. Older generation those conservative type want less debt as much as possible after see how loanshark harass debtors. The newer generation saw it as borrow at low rates and get monies to earn much more so after deduct still earn with capital provided by others. Nothing wrong with both sets of thinking. The problem come when how do one define in their own dictionary what is good or bad debt?

Those who use OPM have a LIFETIME steep learning curve to go through because it is a mine field where any wrong step can knock you out of the game PERMANENTLY (or for a very long time).

Yes, i got lucky and yours is true skill no luck involved.

Luck occurs when good preparation meets opportunity.

 

[DevilPlate]

Those who use OPM have a steep learning curve to go through because it is a mine field where any wrong step can knock you out of the game PERMANENTLY (or for a very long time).


Luck occurs when good preparation meets opportunity.

Btw, i still can sorta repeat the process….
i still qualify to take equity home loan to help my kids for downpayment or whack stocks when opportunity arises.

i took equity home loan to whack STI etf in 80/09 when it plunge to 16xx level
lucky? Maybe hehehe
* dont ask why i pick sti instead of spy/qqq….i explained my tot process before liao whahaha

 

[stanlawj]

Not clicking...

That's why your net worth is only where it is today?

 

[stanlawj]

Btw, i still can sorta repeat the process….
i still qualify to take equity home loan to help my kids for downpayment or whack stocks when opportunity arises.

i took equity home loan to whack STI etf in 80/09 when it plunge to 16xx level
lucky? Maybe hehehe
* dont ask why i pick sti instead of spy/qqq….i explained my tot process before liao whahaha

Aren't you actually the exit liquidity for the big boys?

In Singapore, the big boys make their money in developing and selling private residential homes (specifically OCR condos for today). There's no ABSD to invest in constructing thousands of residential homes with OPM, but you get ABSD for buying a second and third home onwards under your name?

 

[hwmook]

Ahem.. actual reason your debt is good is because your stock portfolio > $1.2M and can generate returns that exceed the interest payment?

My assets is over 4m, debt 1.2m so debt to asset ratio is less than 30% so I can sleep very well at night.

 

[DevilPlate]

My assets is over 4m, debt 1.2m so debt to asset ratio is less than 30% so I can sleep very well at night.

Like dat not good example of OPM liao.

whats yr peak peak debt ratio in your early days? 400%?

Last time can borrow up to 95% mortgage loan…..if someone really max it out would be 1900% whahaha

 

[DevilPlate]

Aren't you actually the exit liquidity for the big boys?

In Singapore, the big boys make their money in developing and selling private residential homes (specifically OCR condos for today). There's no ABSD to invest in constructing thousands of residential homes with OPM, but you get ABSD for buying a second and third home onwards under your name?

What toking u?
I said buy under my kids lah if i wana continue the game lolol.

PR pay 5% absd still OK…..anything more than 10% is a no no….might as well rent

By the way developer goto pay upfront 5% absd when buying GLS land and have to vomit out up to 35% if they cannot sell all within 5years
The ultimate winner is our garmen lah…..simi big boys
https://www.iras.gov.sg/taxes/stamp...development-of-five-or-more-residential-units

 

[hwmook]

Like dat not good example of OPM liao.

whats yr peak peak debt ratio in your early days? 400%?

Last time can borrow up to 95% mortgage loan…..if someone really max it out would be 1900% whahaha

Probably around 100% when I bought my first house. I have never over-leveraged so I can take a lot of risk in my investment. I take max mortgage loan and take my time to service the loan. I also take balance transfer and put in bank account, money market funds to serve as emergency funds. I take my own cash to invest in stocks and options. Options is already highly leveraged so no need margin.

 

[DevilPlate]

Probably around 100% when I bought my first house. I have never over-leveraged so I can take a lot of risk in my investment. I take max mortgage loan and take my time to service the loan. I also take balance transfer and put in bank account, money market funds to serve as emergency funds. I take my own cash to invest in stocks and options. Options is already highly leveraged so no need margin.

100% is so low for first house which means 50% downpayment.
maybe u married quite late?

normally 20% down so easily 300% leverage liao assuming got some cash buffer

 

[stanlawj]

Last time can borrow up to 95% mortgage loan…..if someone really max it out would be 1900% whahaha

This ... when was it? I only recall 90% for LTV. See this 2005 news release. Is this 95% LTV before 1996?
https://www.mas.gov.sg/news/media-releases/2005/mas-issues-revised-housing-loan-rules

 

[hwmook]

100% is so low for first house which means 50% downpayment.
maybe u married quite late?

normally 20% down so easily 300% leverage liao assuming got some cash buffer

Applied for sales of balance flat at 32, have enough cash and CPF to fully pay for the flat. I took max loan and invest my cash and remaining CPF OA.

 

[DevilPlate]

This ... when was it? I only recall 90% for LTV. See this 2005 news release. Is this 95% LTV before 1996?
https://www.mas.gov.sg/news/media-releases/2005/mas-issues-revised-housing-loan-rules

You are right….
i remembered only require 5% cash for downpayment so tot up to 95% loan.

My banker advised me to take 80% loan as buffer tho in case property value drop and bank might ask for top up of equity.

 

[stanlawj]

Applied for sales of balance flat at 32, have enough cash and CPF to fully pay for the flat. I took max loan and invest my cash and remaining CPF OA.

Good timing to max out the loan.

 

[stanlawj]

For the benefit of those who were not born before 2000, to appreciate the home residential property investment thesis.

 

[SBC]

OPM = other ppl's money

1. Property loans
2. Broker's margin
3. Investor money

How many Singaporeans actually use OPM safely? You have ideas like:

• Huge home loans
• Use margin to average down on stock
• Loans with personal guarantees, MLM, pyramid schemes

The line between good vs bad debt is very fine. Beware of those who promote OPM without understanding the risk of ruin.

I support OPM.

 

[SBC]

For the benefit of those who were not born before 2000, to appreciate the retail residential property thesis.

Any latest records?

 

[sohguanh]

I support OPM.

For some ppl they add one more condition behind. OPM and no need pay back haha I get this classic phrase from other forums

 

[SBC]

For some ppl they add one more condition behind. OPM and no need pay back haha I get this classic phrase from other forums

Haha. I am not tat lucky to enjoy the option of not paying back.
my OPM is via property mortgage only.

 

[sohguanh]

Haha. I am not tat lucky to enjoy the option of not paying back.
my OPM is via property mortgage only.

If yours is HDB and you become bankrupt can no need pay back correct? And banks cannot repossess HDB.