Another Beginning of the Whiteaura

Myths about money

1) Go to school
Going to school is important. It let us understand what we read. It enables us to read newspaper, read books to enrich ourselves. However, school only give us academic qualification. It increases the chance to become a better and highly paid employee. End of the day, still an employee.

2) Get a job
Getting a job gives us a sense of security. The kind of security that is dependent on ur bosses. If ur boss is incapable, u'll get out of job in no time. Or if there's economic crises, the so called stability becomes shaky.

3) Work Hard
Working hard is a virtue, but working smart is a better thing. Who do we work hard for? For ourselves, or for the company?

4) Save money
The current bank interest rate is less than 1%. POSB gives 0.1% at this time of writing. Standard chartered bank gives 0.25%. Inflation itself already kills off the interest that u earn from ur bank many many times. Save money is important, but invest ur money is more important.

5) House/car is an asset
This is the most ridiculous nonsense. A house is only an asset if it generate income for u. If u r staying in the house, it's never an asset. How much of our paycheck is thrown to the bank to repay the loan? A car is worst. It's a liability.

6) Live below ur means
A fren once told me:"If u wan something, make sure that there is something else that pays for it. The money should never come from ur own bank". Expand ur horizon. Instead of living below ur means, u should think what u should do to afford that.

7) Get out of debt
There are good debt and bad debt. A house loan can be a good debt if properly used. A car loan is definitely a bad debt. Debts that take money out of ur pocket is bad debt. Debt that puts money into ur pocket is good debt.

8) Put ur money in ur CPF account and it will get u thru retirement
CPF OA account gives 2.5% interest. SA account gives 4%.
Our current inflation rate: Nov 2007- 4.2%; Jan 2008 - 6.6%; March 2008- 6.7%; April 2008- 7.5%; May 2008- 7.5%; March 09- 2.9%; Sep 09- -0.4%.

posted by Whiteaura II @ 8:06 PM