DEBT Perception - - The Good and The Bad - Part 2

Ok, now that we have differentiated good and bad debt, how do we make them to good use?

We all know that borrowing is actually cheaper now due to the economic downturn. In order to keep our economy from going into a recession, government all around the world including Bank Negara has been lowering interest rates and we are further expecting more reduction in this rates at the end of the year.


For those that have existing mortgages, this year may actually be a good year to refinance. Firstly, check with your bank if your loan is still within the penalty period for refinancing. If it is, then try to talk to your banker if they could lower the rate. You may be surprise that some bankers may be willing to reduce it for you. However, do not expect a drastic reduction (but any reduction is better then nothing right?). Do take not that, if you are requesting for a rate reduction, most banker may require you to extend your penalty period. So if say, you have 1 year left for your penalty period, the banker may one to extend it another 4 years in exchange for a lower rate. They are doing business after all and it is in their best interest that you stay in debt with their banks rather then rival bankers.

If your not subjected to penalty then you options is wide open. All you need to do is browse around and find the most attractive rates out there. However, do note of other hidden cost when transferring such as legal fees, stamp duty and valuation.

Some people may ask, "how much do you really save if i refinance my loan?".

The answer - a lot


Lets give an example, your loan is RM200,000 and the offer when you first took up the loan was BLR-0.5% (BLR = 6.5%). If you then switch to a new loan package of say BLR - 2%, your total savings on interest alone would amount to RM50,000. I based this figures on a loan repayment of 16 years. This would translate to a reduction in your monthly payments and hence the extra money would help you consolidate on your bad debt (example - credit card bills). If you are already debt free, then the extra money from lower monthly repayment can be used for investments to promote even more wealth (example - insurance, endowment, business opportunities etc).

This is one of the many ways of putting good debt to good use.

DEBT Perception - - The Good and The Bad

I was reading an article in a local magazine the other day regarding debt as a tool for wealth. Of course with current economic conditions, one would say that you would be crazy to go into debt or even think of debt as a wealth producing tool. This group of people perceive debt as a cause of wealth destruction especially during the current tough economic climate.

Personally, I think both statements are not wrong. With the current drop in Base Lending Rate by Bank Negara (and probably more dip coming our way expected), one can build up asset and be debt-free sooner rather then later. On the flip side, with current economic conditions its also important to keep debt in check.

The above statement may seem confusing right?

Lets start by understanding debt which can be differentiated by good debt and bad debt.

Good debt is something that helps you achieve your goals and can actually help you when you plan it right. For example, you use the debt that's acquired for constructive purposes such as buying a house, starting a business or even to pay for your education. This is of course in view that the debt you undertook is something that is within your capacity to pay and is used as a tool for wealth accumulation.


On the opposite pole, we got the bad debts. This are dept that mainly serve to improve or enhance your lifestyle (something that is not really a necessity but a luxury). If one think that our total lifetime income is of a finite quantity, then what we spend now unnecessarily now, will eventually reduce our overall quality of life in the future.


Next entry - Ways to capitalize on good debts. Stay Tuned!

Female Driving Skills

This is so hilarious.

I am sure the woman out there can drive much better then this :)

Uncertain fate

When faced with times of uncertainty we should all have faith in our own ability and also the ability of others.

Things we cannot control we should just leave it to the powers that be.

Delicious, Bangsar Village II

I was at Delicious, Bangsar Vilage II last week for a pre-planned lunch. This is one of the 5 outlets that they have scattered in PJ. Apparently people say that the one at Bangsar Village II is also the best among the 5.

If your looking for fusion food with a mix of western and eastern touch, then this is a place to go. I would strongly suggest that you leave a little bit of space for dessert later on. You will not regret it.

Instead of saying how good this place is, I shall let the pictures do the work.

Cream Of Mushroom Soup

Gado Gado (Traditional Indonesian Salad with Peanut Sauce)

Thai Beef Salad ( Medium Rare Pan=Seared Steak with Mango Salad - a must have)

Seafood Pesto Lime Mayo (with Arugula on Ciabalt)

Seafood Spaghetti

Pan-Seared Crispy Skin Salmon (served with Coriander Relish, Asparagus & Fried Potatoes)

Chargrilled Grain-fed Sirloin Steak

Medium Rare... ROOAAARRR!!!~~

Marsala Lambshank (with Nasi Pilaf, Cucumber Raita & Papadum)

Berrilicious Chocolate Pavlova

Carrot Cake

Lemon Meringue Pie

Classic Chocolate Cake (with Vanilla Ice Cream)

The food was was really good, the desert superb. If your around Bangsar, do not give this place a miss. Even if your not hungry, go for the desserts.

You will come out a happy boi / garl.

Malaysia New Speedtrap

PDRM seems to have a new "weapon" in their fight to keep drivers in check.

Its cheap and pretty effective if you tell me.

At first glance it may look cheesy but mind you, if your driving 140 km/h this picture of a police holding a speed detector looks real enough for you to slow down.

Have you seen one of these in your area as well?

Paranoia

Here I am sitting in the office somewhat with a sense of uncertainty of some sorts.

Business is slow thus far for a typical Monday.

I was at the banks today, even the town seem rather empty with not as much traffic as its suppose to be.

A lot have been said that come February (After CNY), we shall see the impact of the current economic crisis hitting end users as more retrenchments are on the way. This would surely hit most of us, some bigger then others.

Fresh out from a real good 2008, I ponder how 2009 will perform. Deep inside, I will be thrilled if I can match last years figures but I doubt it and that's my dilemma. I get worked up when things do not hit my expectations. So far I have managed to achieved all that I have wanted to achieve and each target have always been higher then the last. Now however, I am looking at the prospect of downgrading targets and I am uncomfortable with that. With such unfavourable economic climate, its inevitable that figures would drop.

However, things have not yet turn southwards but as February creeps in, I got this uneasy feeling that things will change.

Maybe I am just being a bit too uptight and paranoia is getting the better of me..........

DVD Galore

Just back from 4 days 3 nights trip to Pulau Pangkor for my CNY.

So here's a belated Chinese New Year to you all if I have yet to tell you in person, sms, msn or any other kind of electronic media.

Not sure when I'll have time to edit all my pictures from Pangkor but I would just want to share what I did a week before the Pangkor trip that I had.

Bo* recommended me this kickass DVD peddler at Kota Damansara with heaps of cheap English Drama series (and they come with neat paper set boxes too!).

DvD movies are all guaranteed clear as well but they don't come with hard cover that comes with Drama Series.

I walked out of the shop a happy boi.........

Deterioration

I was talking to my ex-primary school teacher today.

She was lamenting about the state of my school in which total enrollment is an at all time low of roughly 300 students.

I was shocked initially since we had over 2k students when i left back in 1989.

How could the school loose over 70% of its student base in a mere 20 years? Totally astounding.

Probably I should go visit my ex-school one fine day to find out.

News : Two to be caned for drinking beer

As Reported by Malaysiakini

Two to be caned for drinking beer

Jan 13, 09 5:17pm

A religious court in Pahang has sentenced a man and a woman to six strokes of the cane for drinking alcohol, in a rare decision in the multicultural nation, a report said today. MCPX Mohamad Nasir Mohamad, a 38-year-old father of four, and 22-year-old waitress Noorazah Baharuddin, were separately found drinking beer in pubs in that state last year. A third accused, part-time model Kartika Sari Dewi Shukarno, a 32-year-old Singaporean permanent resident, has also been accused of the same offence and faces a decision on May 4. The New Straits Times said the Pahang Syariah High Court handed down the sentences Monday and fined the pair RM5,000 each. "The caning is to shame them and should be done at any of the prisons in the country," judge Abdul Rahman Yunus was quoted as saying by the daily in his ruling. He said the sentence was intended as a deterrent to other Muslims, who make up the majority of the population in Malaysia. The New Straits Times said this was the second time such a sentence has been handed down, after the same judge sentenced two Muslim brothers to six strokes of the cane in 2005 when they were caught drinking. However, the caning has yet to be carried out as the brothers are appealing the decision. While Malaysia is a predominantly Muslim country, with large Indian and Chinese minorities, alcohol is widely available and Muslims are rarely punished for consuming it. A reminder to the Muslims "It's rare but it's within the law and Muslims are subject to such law in this country," lawyer Pawancheek Merican, a syariah law committee member of the Malaysian Bar Council, told AFP. Salahuddin Ayub, a lawmaker and youth chief of the opposition Islamic party PAS said he "agreed" with the court ruling. "The ruling only concerns Muslims and it does not affect the non-Muslims. It is to remind the Muslims not to drink," he told AFP. Malaysia has a two-track legal system, with the civil courts operating alongside state-based syariah courts in which only Muslims can be tried for religious offences. In the civil courts, caning is carried out with a long, thick length of rattan which breaks open the skin and leaves lasting scars. "However, under the syariah law, the caning is more to teach and bring shame to the person rather than to inflict pain," lawyer Pawancheek said. The judge said in the New Straits Times report that the cane to be used on the convicted pair would be not more than 1.22 metres long and 1.25 centimetres thick, and that the offenders would be allowed to wear their clothes. -AFP

This sure is going to ring some bells