Topic: How to Eliminate Yourself from Bad Debt

[A7x]

Take steps to eliminate your bad debt. Download "Freedom from Bad Debt" eBook for FREE for a limited time: https://www.mediafire.com/?4mrr2f6w2o1oa6j

[-=Kurabo=-]

sa akin the best way to avoid bad debt is to avoid credit card as much as possible but a debit card will do as a replacement.. so far sa tagal ko ng nagtratrabaho debt free ako pero at the same time nabibili ko gusto ko hindi nga lang mabilisan para makasabay lang sa uso, one example is yung nagloan ka ng Cellphone tapos after 3 yrs to pay, samantala kung nagipon ka at binili mo ng cash.. mas makukuha mo ng mura at the same time wala ka ng problema na may bayaran ka pa.. pero ang sikreto diyan is disiplina at iawasan masyado ang pasosyal

[tigerwing]

Imho, a debt only becomes "bad" when you dont have the ability to pay it or you have to sacrifice something in order to pay it.. simpleng simple lang naman yan eh. Eh di wag ka umutang ng hindi mo kaya or mahihirapan kang bayaran. Alam mo nmn siguro kung mag kano ang kinikita mo buwan buwan..

Madami nagsasabi na iwasan ang credit card. Sa totoo lang wala namn masama sa credit card basta alam mo kung pano gamitin ng tama.. actually beneficial pa nga ang pag kakaroon ng credit card. Mabibili mo ang mga bagay na gusto mo ng hindi ka nabubutasan ng bulsa.

example.. gusto mo bumili ng bagong smart phone sabihin na natin na 30k ang presyo.. kung babayaran mo yan ng cash isang araw lang wala na yung 30k. Pag may card ka pwede instalment 12mos to pay.. given na mas mamahal yung babayaran mo in the long run, pero may 30k ka parin sa bulsa. 30k na pwede mo gamitin sa negosyo at patubuin. Yung kinikita nung 30k mo yun pambayad mo sa mothly credit card bill mo. After 1yr bayad na yung smart phone mo pero may 30k ka parin sa bulsa bka nga nadagdagan pa.

same principle sa pagbili ng big ticket items gaya ng kotse. Kesa icash mo ng say 1m yung oto mo i loan mo nlng.. yung 1m pwede mo pakitain. Pag katapos mo bayaran yung loan mo may pambili k na ulit ng bago.

[-=Kurabo=-]

Imho, a debt only becomes "bad" when you dont have the ability to pay it or you have to sacrifice something in order to pay it.. simpleng simple lang naman yan eh. Eh di wag ka umutang ng hindi mo kaya or mahihirapan kang bayaran. Alam mo nmn siguro kung mag kano ang kinikita mo buwan buwan..

Madami nagsasabi na iwasan ang credit card. Sa totoo lang wala namn masama sa credit card basta alam mo kung pano gamitin ng tama.. actually beneficial pa nga ang pag kakaroon ng credit card. Mabibili mo ang mga bagay na gusto mo ng hindi ka nabubutasan ng bulsa.

example.. gusto mo bumili ng bagong smart phone sabihin na natin na 30k ang presyo.. kung babayaran mo yan ng cash isang araw lang wala na yung 30k. Pag may card ka pwede instalment 12mos to pay.. given na mas mamahal yung babayaran mo in the long run, pero may 30k ka parin sa bulsa. 30k na pwede mo gamitin sa negosyo at patubuin. Yung kinikita nung 30k mo yun pambayad mo sa mothly credit card bill mo. After 1yr bayad na yung smart phone mo pero may 30k ka parin sa bulsa bka nga nadagdagan pa.

same principle sa pagbili ng big ticket items gaya ng kotse. Kesa icash mo ng say 1m yung oto mo i loan mo nlng.. yung 1m pwede mo pakitain. Pag katapos mo bayaran yung loan mo may pambili k na ulit ng bago.

pero siyempre dapat iconsider mo din yung burden na may bayaran ka monthly pero unless mayaman ka or financially capable ka, why not? mas safe at mas convenient yun pero kung ordinary office worker ka lang, masakit sa bulsa yung bayaran monthly plus consider yung interest. wala siyang epekto kapag buhay binata ka pero malaking factor yun kapag may pamilya ka na

[tigerwing]

pero siyempre dapat iconsider mo din yung burden na may bayaran ka monthly pero unless mayaman ka or financially capable ka, why not? mas safe at mas convenient yun pero kung ordinary office worker ka lang, masakit sa bulsa yung bayaran monthly plus consider yung interest. wala siyang epekto kapag buhay binata ka pero malaking factor yun kapag may pamilya ka na

dito po papasok yung sinabi ko na wag ka uutang ng hindi kaya or mahirap bayaran.. kung simpleng empleyado ka alam mo naman siguro kung magkano ang sweldo mo monthly. Dapat alam mo din ang monthly expenses mo at kung magkano lang talaga ang kaya mo ibayad buwan buwan. Nasa tamang pag bubudget lang yan. Ang hirap lang kasi sa iba porket kasya pa sa credit limit ng credit card eh sige sige lang, parang hindi ata iniisip kung kaya pa ba nila bayaran yung monthly bill.

[A7x]

Good Debt vs. Bad Debt

Ask most people on the street if debt is good or bad, and they will likely tell you that debt is bad, plain and simple. However, this is only partially true. In fact, there are different kinds of debt, and not all debt is necessarily bad. In general, debt can be divided into two main groups: good debt and bad debt.

Good Debt is debt that is used to finance new sources of income. For example, a loan to purchase an apartment building to provides rental income could be classified as good debt. Or getting a loan to start a business might also be considered good debt. This does not mean that you should just get a huge loan and go buy apartments.

By taking out an extra loan to finance an investment, you are also taking on more risk. If the investment goes bad, you will owe even more money than you did before the investment. In other words, debt can create a sort of financial lever. If the investment pays off, it will amplify your earnings. But if the investment fails, the debt will also increase your losses. You must do some research to determine if the potential reward is worth the risk.

Bad debt is the type of debt you usually hear people talk about when they discuss debt. Bad debt is debt that has little to no potential for making more money than you started with, and usually ends up as a loss. If you get a loan to buy a new car, that is bad debt. Buying a new stereo system and putting on your credit card is also bad debt.

In general, there are a few types of debt that are virtually always bad:

Credit cards.  Even a “good” rate on a credit card is still very high. Credit cards aren’t always a bad thing, as we will discuss later, but the debt that goes onto them is almost always bad debt.
Payday loans. Payday loans have very high interest rates, and are not good debt. Period. Stay away from these loans.
Car Loans.  Car loans are also bad debt. Cars decrease in value very quickly, especially new cars, and are not a place to invest to build wealth. If you need a car, fine. Just realize that it will not make money for you, and plan accordingly.

What about home loans? Buying a house will require a substantial amount of money, and most people will need a loan if they ever want to buy a home. But does a home loan fall under good debt or bad debt? This is a point of debate between financial advisors, because it is not a clear yes or no.

Some people, most notably Robert Kiyosaki, argue that home loans are bad debt, because the house doesn’t create any income. That, plus maintenance costs, insurance, and other expenses, make the house a money sink.

Others, however, claim that your house is your greatest asset, because those house payments are being turned into value in the form of a house. The house can then be sold for a profit if property values go up.

In the end, it depends on why you are buying the house in the first place. If you are buying it solely as an investment to fix it up and resell it, then it could be considered good debt. But if you just want a place to live, then it is probably bad debt.

By understanding the difference between good debt and bad debt, you can make smarter decisions about when to get a loan or when to just save your money.

[tigerwing]

If you follow the "good debt-bad bebt" principle then you will severly limit your purchasing power and make it hard to actually own anything.

 Again, nothing wrong with debt as long as you're able to pay it with no problem what so ever. you dont have to make money out of everything.
 Whether you buy a car or a house in cash or if you loan it, chances are it will lose value. It wont be "bad debt" but a bad investment instead.
So what now? Never buy a car? Dont own a house? Cmon... life is not all about making more and more money.. im sure even those financial gurus take on so called bad debts from time to time..

[A7x]

If you follow the "good debt-bad bebt" principle then you will severly limit your purchasing power and make it hard to actually own anything.

 Again, nothing wrong with debt as long as you're able to pay it with no problem what so ever. you dont have to make money out of everything.
 Whether you buy a car or a house in cash or if you loan it, chances are it will lose value. It wont be "bad debt" but a bad investment instead.
So what now? Never buy a car? Dont own a house? Cmon... life is not all about making more and more money.. im sure even those financial gurus take on so called bad debts from time to time..

Really?? Understanding the difference between the two limits one's purchasing power to own anything?? How can you say that?? I understand you have your own principles in life when it comes to dealing your own debts. And listening to financial guru's people doesn't make any sense to you. I respect that, however not understanding the difference between the two types of debts will not make you financially smart in life and that's a sign of low financial IQ.. If you download the ebook I posted and read it then you will I understand what I am talking about but I guess you won't.

Now let's get educated here, Why cutting up your credit cards won't make you financially free? While that is sound advice for people who are not financially responsible, it is inadequate advice for anyone who wants to become financially free. In other words, just cutting up your credit cards will not make you rich. What does make you rich is financial education...unfortunately a type of education we do not receive in school. If a person has a solid financial education, they would know that there are two kinds of debt...good debt and bad debt. A person with a sound financial education would know how to use good debt to make them richer faster...much faster than a person who only saves money and has no debt.

[tigerwing]

Really?? Understanding the difference between the two limits one's purchasing power to own anything?? How can you say that?? I understand you have your own principles in life when it comes to dealing your own debts. And listening to financial guru's people doesn't make any sense to you. I respect that, however not understanding the difference between the two types of debts will not make you financially smart in life and that's a sign of low financial IQ.. If you download the ebook I posted and read it then you will I understand what I am talking about but I guess you won't.

Now let's get educated here, Why cutting up your credit cards won't make you financially free? While that is sound advice for people who are not financially responsible, it is inadequate advice for anyone who wants to become financially free. In other words, just cutting up your credit cards will not make you rich. What does make you rich is financial education...unfortunately a type of education we do not receive in school. If a person has a solid financial education, they would know that there are two kinds of debt...good debt and bad debt. A person with a sound financial education would know how to use good debt to make them richer faster...much faster than a person who only saves money and has no debt.

Lets put things in a better perspective shall we??

Have you ever bought, a car before? If so, did you pay for it in cash? If you're just an average Filipino middle class can you really afford to buy a car in cash? Maybe you could.. you could start saving now and buy one 2-3yrs down the road OR you could simply take a loan right now and pay for it in 2-3yrs.. Yes, it would be more expensive in the long run BUT, you will be driving a car NOW and not after 2-3yrs.. If you can afford the monthly bill, if paying for it is well within your budget then what is so "BAD" about it? This is what I mean by severely limiting your purchasing power. Don't take a loan and it would take you several years before you can afford what you can actually get right now.. I hope you see my point..

Also, please see my previous post about purchasing in cash vs. taking debt.. To put it plain and simple, Why would I pay cash upfront and slash a big chunk from my bank account when I could pay for it slowly and easily? Then, I could use the money I have as capital and use the profit from it to pay for my monthly bill. In the end I get the thing that i want without depleting my treasury. Is that bad? 

Finally, this so call "BAD DEBT", avoid it like the plague right? from your definition, Bad debt is debt that has little to no potential for making more money than you started with, and usually ends up as a loss.

My question is, do you really have to make money all the time? When you see something you like, do you turn your back and say "that wont make me money, that's not good".. Do you really live your life like that? Wont you purchase something simply because "YOU WANT IT AND YOU CAN"? Again, If you can pay for it, what is so wrong with using a credit card? whats so wrong in taking out a loan? By your definition even if you can actually afford the monthly bill with no problem at all that's still is bad debt. By avoiding your so called bad debt, you are actually making it difficult for you to own something..

And financial education? Tell you what, majority of it is just plain COMMON SENSE.. Avoid being buried in dept, saving & investing, "good debt". All that boils down to using your head when spending your money. The only technical part of Financial education is learning the ways of the financial system and taking advantage of it..

Oh and GOOD DEBT, I believe the proper term for that is LEVERAGE. 

[A7x]

Allow me to use financial education with your example "BUYING A NEW CAR" if you don't have financial education, this will not cross your mind and even an average person who uses common sense will never thought this idea is possible.

I will apply a method here, "purchasing an asset to pay my liability".  A car, an expensive one and not on my regular " monthly expense list."  Instead of using my precious savings to buy that car or paying that car in full, I will think of an asset that produces cashflow and the money that I received from that asset, that, I will use to pay for that car..So I saw a "House for Sale" ad which is a foreclosed one and has 4B 2CR. After doing proper due diligence, I found out that it's a good deal. I borrowed money to buy the house and decided to rent it out. Now, the money that I earn from the house on a monthly basis, I divided it into two parts. One for the House loan and the other for the car loan. In time, I will have both the house and the car. I still earn money from renting the house after my two debts are cleared or I will have to decide if I'm going to sell it or not..

You see the difference? Instead of buying a car with my savings is considered a "bad debt" I didn't. Now borrowing money to buy the house is considered a "good debt" because I was able to earn money while acquiring a liability which is the "CAR". A house is just an example of many assets that you can think of if you have this so called FINANCIAL EDUCATION.

Understanding the two types of debts is very critical because if you do not know the difference, you will never get ahead in life..
     

[BlueAlphaZero]

Speaking of financial education, might I ask whichever one of us Espiyas who already downloaded the e-book if they would please kindly re-upload it (preferably on Mediafire or some other non-pay-per-click host) so that we can all download it free at our convenience?

[A7x]

Speaking of financial education, might I ask whichever one of us Espiyas who already downloaded the e-book if they would please kindly re-upload it (preferably on Mediafire or some other non-pay-per-click host) so that we can all download it free at our convenience?

As you requested, http://www.mediafire.com/view/99ei459o25hhaks/Freedom_from_Bad_Debt.pdf

[A7x]

And oh, I almost forgot. With your question "Why do you always have to make money all the time?" My answer is,because I understand that what I will be buying is a LIABILITY so I have to compensate it by acquiring an asset to pay for that liability and what I gained? Both the house and the car.. Did it hurt me financially? The answer is NO! I became wealthier by just purchasing that expensive car. That's what you called financial intelligence.. Can I apply that to all types of liability I will be acquiring in the future? YES!! That kind of mentality is what separates the rich from the poor and middle class..

[tigerwing]

And oh, I almost forgot. With your question "Why do you always have to make money all the time?" My answer is,because I understand that what I will be buying is a LIABILITY so I have to compensate it by acquiring an asset to pay for that liability and what I gained? Both the house and the car.. Did it hurt me financially? The answer is NO! I became wealthier by just purchasing that expensive car. That's what you called financial intelligence.. Can I apply that to all types of liability I will be acquiring in the future? YES!! That kind of mentality is what separates the rich from the poor and middle class..

aha! And there you are contradicting your self again. What you said is actualy the exact same thing ive been saying from the begining here.. Taking a loan to buy a car instead of paying for it in cash and using your money instead as capital for something that would earn and actually pay for your loan. Did that ring any bells? Isnt that similar to your "financial inteligence"? BUT by your definition, taking that loan to buy a car, taking on a LIABILITY, thats bad debt. That should be avoided according to you. And now your saying liabilities is part of your equation?

[tigerwing]

One more thing. About your method:

You want to buy a car. But instead of directly applying a loan for that car, you apply a loan for a house that you plan to rent out. the money you get from it will be used to 1) pay for the house loan and 2) your car that you decide to purchase after seeing to it that you have an earning asset.. Did I get that right?

BUT, and this is a big BUT. Did you even consider the RISK that you are going to have? You are going to take on TWO liabilities at the same time. It may all be well and good when your house-for-rent is occupied but what if its not? What if your tenant suddenly decides to leave? what if in 1 year your property was occupied for just 6 months? where will you get the money to pay for the house plus your car during the months that your asset is not earning and is therefore a liability to you? You will have to pay for it directly from your pocket. You will be losing money and possibly end up losing both your house and your car.

My take on this, If you want a car and you can afford it, go get one. Its that simple.. You don't have to over complicate your life with all this so called "financial education" of yours. As I've said, you just have to use your common sense. Buy what you want when you want it (if you can), Invest or acquire assets when you see fit. you don't have to burden yourself by good debt vs. bad debt and how you can make a good debt that will in turn cover your bad one. DEBT IS DEBT its something you will have to pay for in one way or another. If you have the capacity to pay for your debt then its not a problem and its not really "bad". 

[A7x]

OMG! You still don't get it do you?.. I was always consistent in emphasizing that the CAR LOAN is a bad debt.. It will always be a bad debt.. Now, the fear of taking risk is higher if you don't have financial education.. I'm not sure how you define "FINANCIAL EDUCATION" but for me, financial education is the ability to make financial decisions with low or without risk by acquiring knowledge and wisdom gained from educating yourself or financial education.

The difference between you and me in handling "RISK" is that I know how to read a financial statement. By knowing how to read it, you will be able to assess if the car is a Good Debt or a Bad Debt. Also you will be able to identify the risk at hand and be prepared how to deal with it because you can see the flow of the money..

I will give you a an illustration how that "Car" transaction looks like in my Financial Statement..



As you can see, in this diagram I was able to illustrate how the cash flow in my CAR transaction.. It's like driving a car is risky but driving a car with your hands off the steering wheel is more risky.. Financial Education is not just a common sense but as you call it but increasing your financial education it will increase your confidence in money and investing..

[tigerwing]

OMG! You still don't get it do you?.. I was always consistent in emphasizing that the CAR LOAN is a bad debt.. It will always be a bad debt.. Now, the fear of taking risk is higher if you don't have financial education.. I'm not sure how you define "FINANCIAL EDUCATION" but for me, financial education is the ability to make financial decisions with low or without risk by acquiring knowledge and wisdom gained from educating yourself or financial education.

The difference between you and me in handling "RISK" is that I know how to read a financial statement. By knowing how to read it, you will be able to assess if the car is a Good Debt or a Bad Debt. Also you will be able to identify the risk at hand and be prepared how to deal with it because you can see the flow of the money..

I will give you a an illustration how that "Car" transaction looks like in my Financial Statement..



As you can see, in this diagram I was able to illustrate how the cash flow in my CAR transaction.. It's like driving a car is risky but driving a car with your hands off the steering wheel is more risky.. Financial Education is not just a common sense but as you call it but increasing your financial education it will increase your confidence in money and investing..

I believe its you who's not getting the point.. Your are working under the assumption that there will be a "Rental Income" at all times.. What if there is none? And trust me when I say that tenants come and go. (my family owns several apartment units, this is coming from experience mind you)

Yeah according to you CAR LOAN is bad debt and yet you took it anyway, see the irony there? I thought you should avoid bad debt? And not only that, you took the unnecessary risk of owning and operating a rental house just for the sake of being able to get a car. Putting your self in a situation that when your House-for-rent is not making you money, you're in big trouble. How do you plan on paying that house and car mortgage when your so called asset is not earning? Please enlighten me here.. Are you going to beg your lender to please delay collection because you cant pay? well good luck on that. 

And why did you took that risk again? Right, you just want a freaking car. See why I say your actually making it harder for you to own something? You're making your life way to complicated with this "financial education" of yours.

Its very simple really. Want a car? Take your pick, determine how much your monthly amortization will be, check your monthly cash flow and determine whether you can realistically afford it. Go ahead and continue with your purchase if you can, don't if you cant. Better find a way to increase your income first. Get a car later, there might be some good investment around that you can make money for you..

But taking a loan and hope that it makes enough money to pay for its self as well as another (car loan). Really? that sounds like a good financial move to you.. Maybe you should reassess the level of you so called financial education

[A7x]

The point I wanted to make with the strategy I mentioned above is that, "Instead of making myself poor by just purchasing the car which is a liability and avoid worrying about anything else or not bothering to look for a house or an asset, I decided to prioritize by adding an asset rather than adding a liability." It's a matter of discipline, if you have that in life you will make it easier for you to buy anything you want without hurting your financials/ Do you think that's financially smart to just dive in and focus on the car itself? Why would I take this risk when I just wanted to buy a car? Well. lets just say that I wanted to be smart in acquiring liabilities in my life and that I don't want to wake up one day SHOCKED!! That my liabilities are eating my assets away when I look at my financial statement.

I am a real estate investor myself to let you know that I know what I'm talking about and I own a couple of boarding houses and house for rent that's why I used "house" as an example, I can't believe you focus on the "house" and not the whole picture or the idea I am presenting. Like I said a "rental property" is just one of millions of assets out there. Real Estate, is a broad topic and I don't want to go that far. However, for the sake of this conversation I will answer your question about the risk of buying that "HOUSE FOR RENT."

Yes, I understand that in every investment there is always a risk that's why, but I do believe that educating yourself with proper knowledge will eliminate the fear of risk. I also understand that by acquiring that house for rent there is a possibility that I will lose a tenant thats given, but what I learn being an investor is that "A true investor, doesn't care if the market goes up or down because that can still make money either way." If ever, I lose a tenant, I will not panic instead I  will re-assess if I need to change market or either convert that house into room for rent or bedspacer. As an Investor you have to be flexible.. If the area where your house is located is not good for students, maybe you need to change market like look for employees or a family perhaps..In short, make sure before you buy either the car or the house you already made your due diligence...

The reason why I said CAR LOAN is an example of a bad debt,because that's always the case if you know the definition of bad debt. If you don't compensate it with adding an asset, then expect the worse financially in the long run. Re-assessing my financial education? I don't think it's necessary. Maybe you have to check yours too.

[BlueAlphaZero]

Pardon my financial confusion (as someone quaintly put it) but might I ask why I shouldn't just comparison-shop for a car that meets my needs and falls well within my existing budget? Wouldn't that take just as much time as or maybe even less time than having to hunt for an asset with which to pay for the car I originally wanted? I might even find better alternatives that don't require taking out an auto loan.

[tigerwing]

And my point is you are creating an unnecessary problem..

As Ive said, if you are fully able to pay your debt in time every time, then what is so wrong with that? Want a car? Get one, just make damn sure that you can pay for it. And when I say you can afford it, that means that you don't have to worry about your payments because your cash flow is large enough to permit you the purchase. That means you wont get SHOCKED nor will it eat away any of your assets. If you can accomplish that then whats the problem?

Will a car loan make you poor? Is it better to pay in cash instead? I say take a loan..
If properly executed it actually has very little or no impact at all to your financial status. In fact that's the whole point of a loan. To lighten your load and not burn a whole in your pocket.

What if you cant afford a car at the moment? Then don't buy one. This is the time that you should be looking for opportunities to increase your income. If you want to take leverage to buy a house that you can turn into an earning asset then by all means do so. When you already have several rental houses that guarantee you a stable cash flow month per month. Then perhaps you could consider getting the car you wanted.

But not you,  you want to first take a loan for a house (i use house because its what you give as an example). rent it out then take a loan for a car and then use the rental income to pay for both. In doing so you double your risk, take on 2 loan at the same time, double the amount you have to pay monthly and give your self a possible scenario of losing money in case your venture didn't work the way you expect it to. Seriously, do you really, honestly think that's a good thing to do?

And do you really have to do that at all? You just wanted to buy a car, a car that you can actually afford in the first place. Do you really have to complicate things that much?   

[A7x]

And my point is you are creating an unnecessary problem..

As Ive said, if you are fully able to pay your debt in time every time, then what is so wrong with that? Want a car? Get one, just make damn sure that you can pay for it. And when I say you can afford it, that means that you don't have to worry about your payments because your cash flow is large enough to permit you the purchase. That means you wont get SHOCKED nor will it eat away any of your assets. If you can accomplish that then whats the problem?

Will a car loan make you poor? Is it better to pay in cash instead? I say take a loan..
If properly executed it actually has very little or no impact at all to your financial status. In fact that's the whole point of a loan. To lighten your load and not burn a whole in your pocket.

What if you cant afford a car at the moment? Then don't buy one. This is the time that you should be looking for opportunities to increase your income. If you want to take leverage to buy a house that you can turn into an earning asset then by all means do so. When you already have several rental houses that guarantee you a stable cash flow month per month. Then perhaps you could consider getting the car you wanted.

But not you,  you want to first take a loan for a house (i use house because its what you give as an example). rent it out then take a loan for a car and then use the rental income to pay for both. In doing so you double your risk, take on 2 loan at the same time, double the amount you have to pay monthly and give your self a possible scenario of losing money in case your venture didn't work the way you expect it to. Seriously, do you really, honestly think that's a good thing to do?

And do you really have to do that at all? You just wanted to buy a car, a car that you can actually afford in the first place. Do you really have to complicate things that much?

Your questions are like, why do I need to exercise everyday when I am not fat? Why do I need an insurance papers for my car? I know you know the answers to those questions if you take it literally since you like doing that.. But the big question here is WHY?? Like most people do they want it simple when buying expensive things in life like houses, cars, etc..But money wise? I don't think that's a good idea. As an investor, I always go the extra mile of learning ways how to keep my money intact and not to spend a single centavo without an ROI. In business they called it OPM or using Other People's Money to buy. The example I gave which is the "RENTAL PROPERTY" is a good example of that. If I make it a habit of saying, “I can’t afford it so I won't buy it".One is a statement, like what you are trying to stress out. In my opinion, I think that's a sign of mental laziness. Then "If I say, how can I afford it? this one is a question which means that you are exercising your brain. The stronger it gets, the more money you make.  One lets you off the hook, and the other forces you to think.  What I'm trying to say here is about exercising your mind, the most powerful computer in the world.  It's like there are alot of ways how to shoot the ball to the basket, you can either dunk it, do a layup or shoot beyond the arc. If you keep on practicing how to shoot the ball, even if its in a 3point line you know you can knock it down easily. The point is, you can learn how to manage risk with proper education instead of fearing it. I am confident because I tried it and it worked for me.

[tigerwing]

If you like to make your life more complicated than it has to be then be my guess. Good luck to you and more power. I just don't see the reason why you have to.

As I've said  having debt will not always make you poor as what you like us to believe, even your so called "bad debt". Manage your cash flow wisely and it wont put a dent in your finances. So i really don't see why you have to over complicate simple things like buying a car.

As an investor, I always go the extra mile of learning ways how to keep my money intact and not to spend a single centavo without an ROI ----- You call this being "financially educated". Are you sure its not jut you being greedy?

[A7x]

I think being greedy is different from being smart.. It's like you are looking at an ice berg without looking what's underneath it. Same thing with buying a liability if you focus only on purchasing that car only. A liability is a liability, it's taking money out of your pocket every month if you only focus on the price of a car then you are doomed. How about the car maintenance, the insurance, the losing value you are paying all those stuff!! Do you really have to set aside money or budget your own personal money just to maintain a liability?. Do you think that's smart enough? If there is a way wherein you can buy a liability without really have to spend anything on it at the same time you are teaching yourself how to be a wealthy person by acquiring an asset. Do you think that its GREEDY of me or am I just being SMART with my money?? Yes there are risk but the rewards at the end would be great..

Parang panliligaw lang yan eh oo may risk na baka ma basted ka at ma embarass kung magkamali ka pero what if nag try ka, nag effort ka, gumastos ka sa tingin mo hindi tumaas ang chances na sagutin ka?? Or hahanap ka nalang nang mga easy to get na ka relasyon kahit alam mo sa isip mo na hindi sya lasting...

Tandaan mo malaki ang chances na umangat sa kahirapan yung mga taong "Risk Takers" kasi gumawa sila nang hakbang kesa dun sa mga tao na "Play it safe" at ayaw sumubok nang bago sa buhay nila dahil takot silang ma fail..

[tigerwing]

Meh, I'll invest when I want to invest, take risks when I have to take risks.. But take risks just for me to be able to have something like a car? I don't know about you but that doesn't sound good to me.

I don't like making my life complicated. I have no problem taking debts, I did so several times in the past. Is it making me poor? No, on the contrary, despite having some debt and using my credit card every time I go to a mall, my net-worth is still increasing every year. 

And If you're saying that what you preach is what separate the rich from the poor and the middle class. Well, I've encountered many different kinds of people. From the filthy rich to the dirt poor. The rich people I've met, while most of them are indeed very meticulous in spending their money, they have no problem taking some of your so called "bad debt" either. They take liabilities simply because the can afford to have them. And  last time I checked none of them turned poor yet. No offense but this mentality of yours, In my perspective its more like the mentality of the poor desperately hoping to someday become rich.

[A7x]

Meh, I'll invest when I want to invest, take risks when I have to take risks.. But take risks just for me to be able to have something like a car? I don't know about you but that doesn't sound good to me.

I don't like making my life complicated. I have no problem taking debts, I did so several times in the past. Is it making me poor? No, on the contrary, despite having some debt and using my credit card every time I go to a mall, my net-worth is still increasing every year. 

And If you're saying that what you preach is what separate the rich from the poor and the middle class. Well, I've encountered many different kinds of people. From the filthy rich to the dirt poor. The rich people I've met, while most of them are indeed very meticulous in spending their money, they have no problem taking some of your so called "bad debt" either. They take liabilities simply because the can afford to have them. And  last time I checked none of them turned poor yet. No offense but this mentality of yours, In my perspective its more like the mentality of the poor desperately hoping to someday become rich.

Well that's good for you if you are not poor with that kind of mentality that you have, if you think, buying liabilities rather than adding assets since you don't want to complicate your life is what makes you rich like Henry Sy or any other RICH people out there maybe I should start doubting my financial education then. I also kinda doubt with those rich people that you know if they have the same mentality as you do that buying liabilities is more important than adding assets because they want it simple they avoid complications. I'm not sure how you really define RICH and Middle Class. 

Is this mentality I have is for poor person? How sure are you? Have you really tried it? Or you are just assuming yourself. The last time I check, I was able to buy a 300sqm lot near the public market and 2 foreclosed houses and they are products of poor mentality that you are saying. Why am I saying this? Because I tried it, and if it worked for me I think it will work for others too. I'm not forcing you or asking to do the same. My point is, there are smarter ways out there to buy liabilities you just need to get out of your comfort zone and you will be amazed how wonderful it is..