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Tea with KenjiFX: 3 types of people who borrow money.

Friday, October 31, 2014

There are many types of people who borrow money (from friends and family) and here are 3 types listed by KenjiFX (AKA KenjiWealthMgt in FB):

1. People who borrow and want to repay the loan but lack the ability to do so.

2. People who borrow and never intend to repay the loan even when they have the ability to do so.

3. People who borrow continually.

For example, borrow $50, repay $20, borrow $70 later to round up outstanding loan to $100, repay $30, borrow $80 to round up outstanding loan to $150 and it goes on to a point when they really can never repay the loan in full.

Perhaps, we know some people who fall into the three categories above?

It has to be said that getting into debt is easy while getting out of debt could prove to be really difficult.

Credit Counselling Singapore (CCS) revealed the following reasons for Singaporeans having debt problems:

 49% all debtors helped by CCS blame overspending!

"Just because our friends or family members have a car (or two) or a condo (or two), it does not mean that we should have them too..."
From: If we are not rich, don't act rich.

“We need much less than we think we need,” Maya Angelou.

Related posts:
1. Lending money to someone you care about?
2. An easy way to improve cash flow in life.
3. The secret to avoiding financial ruin.

Tea with Matthew Seah: A pâtissier on financial freedom.

Thursday, October 30, 2014

Regular readers know that our guest blogger, Matthew Seah, is a good investor but I dare say that none of us knows that he is also an aspiring pâtissier (pronounced "pah-tee-syay"). In this guest blog, Matthew shares with us what the processes used by an investor and a pâtissier have in common:

I have been making tiramisu for years in a very specific order:

1. Separate egg whites from yolk. Make sure yolk is not broken.

2. Beat egg white till firm.

3. Add liquor into egg yolk.

4. Mix mascarpone cheese into yolk mixture, a little at a time.

5. Fold beaten egg white gently into yolk mixture.
And the result?

Note: I am NOT trying to boast here nor am I promoting my culinary prowess…

Having tasted my healthier choice tiramisu (no additional sugar was added, all the sweetness come from the ingredients alone), my friend wanted to try making one. So I hastily came up with a soft copy of my recipe for him.

Over the weekend, it took him 2 tries to get a good looking tiramisu, but it tasted a bit different from what I made although still delicious.

Having talked through the process, I found some critical mistakes in my recipe such as:

  • An alternative is to place the biscuit on the cream, then pour coffee over each biscuit.
    My friend did as per recipe and poured too much coffee in his first tiramisu such that the cake came out wet and soggy.
    My intent was to pour 2-3 tablespoons of coffee over the biscuits.

  • 1/4 cup of liquor
    My friend measured ¼ metric cup of rum and the cream turned out runny and the cake reeked of alcohol.
    This is actually an estimate, as typical Singaporeans would say, “agar agar” What I meant was about ¼ of my coffee cup, but it was interpreted as a standard ¼ cup measurement (1 cup = 250 ml).

(Ok, I am a frog in a well for not knowing a standard cup is 250ml… I have cups of all sizes at home and I don’t have a metric measuring cup -.-“)

On a side note, I was lazy once and combined steps 1 – 5 together. I beat the hell out of the mixture, but I never did get the same fluffy texture.

Through these examples, I have learned a valuable lesson which I believe most culinary experts would agree: The quantity is just as important as the order of ingredients.

And since AK blogs about personal finance and food, why not have both in the same guest blog? What am I saying? There is a connection with what I learnt in the kitchen and in personal finance!

You see, just as anyone can make the same tiramisu by following the same recipe, financial freedom can be achieved by anyone too as long as they follow the steps in an orderly fashion.

Regardless of your income, you can attain financial nirvana when you choose to follow the basic steps to financial freedom:

  1. Get educated.
  2. Start saving.
  3. Get insured.
  4. Invest in income generating assets.
  5. Repeat step 4 until financial freedom is reached.

Some of you may disagree and can still be financially successful if you do not stick to this order. However, you certainly increase your odds of success when these steps are followed in proper order.

Some people jump straight to step 4 due to lack of patience, and they usually lose a significant amount of money that may dissuade him/her from investing ever again. 

So, how about following step by step so that you can get more interested in your own personal finance and ultimately achieve financial freedom?

Related posts:
1. Tea with Matthew Seah: Financial freedom.
2. Be a millionaire next door.
3. Free e-books by AK: Financial security.
4. How to be one up on wall street?
5. Tea with The Minimalist: Personal finance & investing.

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