Why do Rich get Richer while Poor Get Poorer?

Why do Rich get Richer while Poor Get Poorer?
Singapore just celebrated its 42nd birthday. One concern
raised by Singapore's Prime Minister is the widening income
gap between the Rich and the Poor.

If you look around, you may realize that there is a trend
that the Rich Get Richer while the Poor Get Poorer. Why?

Actually Singapore is currently having one of its best
golden years in history, with opportunities abound, it is
possible for someone who is not Rich to BECOME Rich.

Can someone who is NOT rich become Rich? Yes, it is
possible. One of the SECRETS why the Rich get Richer is
that the Rich UNDERSTAND and USE Other People's Money
(Financial Leverage).

How can you use Other People's Money (OPM) to become Rich?
One possible way is to use good debt wisely.

The Good Debt that almost everyone has access to is a
Housing Loan.

P.S. please avoid all bad debt. My definition of bad debt
is any debt that you incur which you do not have a chance
of making more money than the interest you pay is bad debt.

What is my definition of Good Debt? Good Debt is any debt
whereby it is possible to get a higher return than the
interest you pay on the Loan.

If you really think about it, Housing Loan is the CHEAPEST
Loan anyone can ever get. Currently in Singapore, Housing
Loan interest rate is 3% to 4%, while Car Loan is about 6%,
Renovation Loan 8% and Credit Card 24%!

Actually, if one seriously think about it, it is very
difficult for people to FAIL to beat Housing Loan interest
rates. Why?

Imagine even if you know nothing about investing. Just
putting money into Endowment savings plans gives you annual
returns of about 4% over a 20 years period.

What about investing during crisis? Typically, a crisis
comes by every few years and at least once in 12 years.
During the last Asian crisis in 1998, DBS's share price was
only $5, if someone only invest during a crisis when share
prices are depressed, it is almost definite that the
returns he earns will beat the interest rates charged on
Housing Loans. Today, this person can easily sell off DBS's
shares at over $20 (or 400% returns over 10 years or annual
COMPOUNDED returns of 14.86%.

Let me show you an example:

A person has a $200,000 loan with 20 year loan period.
Assuming he pays 4.5% interest on Housing Loan, total
interest paid over 20 years is ONLY S$105,515.

If he has $200,000 Cash/CPF and use this money to earn 3.5%
interest rate, in 20 years, total interest he earns would
be S$168,453.20!!!

Because most people forget that Housing Loan interest is
calculated on Reducing Balance Basis while your savings
Compounds (interest is added on interest)!

I have to reiterate that from my observation the reason why
many people end up retiring with a fully-paid house and
little Cash/CPF are:

1. they commit to buy TOO big a house (more than they can
afford).

2. they keep using their Cash to reduce/pay off their
Housing Loan whenever they have excess cash on hand.

They would get ahead financially if they instead FOCUS on
making their Cash/CPF work harder for them.

By doing so, it's possible for an average Middle Class
Singaporean to accumulate S$1 million dollars by age 40.

Anyone who has excess Cash now I would advise you against
using the money to reduce your Housing Loan outstanding. In
my opinion, the next Global Financial Crisis can be 3
months to 2 years away and when the crisis comes, you would
then realise it is very easy to make 50% to 200% returns on
your capital. I've already shown you actual record of share
prices in the previous Asian crisis to prove that it had
happened before. The only question you need to ask yourself
is when a crisis comes, will you have cash to invest then?
You can move up from middle class to become Rich in the
next crisis if you keep your excess cash instead of use it
to reduce your loans now.

----------------------------------------------------
Dennis Ng is a Certified Financial Planner with 15 years of
Bank Lending experience. He is known as a Housing Loan
expert and often quoted in newspapers. He founded
http://www.HousingLoanSG.com - a leading mortgage
consultancy in Singapore. You can send him your comments to
dennis@HousingLoanSG.com or call him at 65 6737 8801.

Discover The Secret To Building A Wealth Team When You're Just Starting Out

Discover The Secret To Building A Wealth Team When You're Just Starting Out
Are you a lone wolf? It means trying to do everything
yourself. This is very ambitious and not an efficient way
to accelerate your wealth.

How do you stop being a lone wolf? Tap into your current
family and friends experiences, expertise's, or networks.
Take out a piece of paper and make a table with 4 columns.

The first column heading is "Wealth Building Activity".
Write down 3-6 wealth building activities you want to
accomplish this year. These can include items that you
already have in process, are incomplete, or haven't been
started yet. For example, you can list "Develop a lead
generation process", "Buy a duplex rental property",
"Invest in the stock market", "Outline tax strategies for
my business", or "Put together my personal financial
statements (balance sheet, cash flow statement, income
statement)".

The second column heading is "Who Can Help?" List people
you ALREADY know who have skills to help you start or
complete the wealth building activities. These people
already know you and are very willing to give advice. If
these people are unable to help, they may be referral
resources for someone else who could help you achieve your
goals and accelerate your wealth. Examples of people you
already know can be your family (Mom, Dad, sisters,
brother-in-law), friends (college, parents of your
children's friends, health club), neighbors or people from
work. Go through your address book for additional people
who can help.

The heading for the third column is "Ask or Call? When?"
Determine ahead of time if you will be requesting a
face-to-face meeting or requesting for help via a phone
call or email. To hold yourself accountable, identify the
date when you will call or meet with the person. It is
critical that you follow through on making contact with the
people you've identified to help you out.

The last column is entitled, "When Can We Start?" Assume
your family and friends say "yes" to your request for help.
You need to find a time for both parties to meet and
review the items with which you need the most help.

When you meet with these people, be honest, direct and be
prepared ahead of time by stating your goal or desire and
asking the person how they can help you achieve this goal.
Ask them, "What they would do to accomplish the wealth
building task?" Take notes, ask questions and discuss what
your actions will be to move you closer to achieving your
wealth building activities. In your discussions, make sure
you are clear about the next steps. If you're not clear,
then keep asking questions until you are confident you know
the next action step. This also is a perfect opportunity
to ask your family or friend if you can request additional
information or help from them in the future.

You will be amazed at how quickly you can begin to build
wealth once you lose the lone wolf syndrome. Tap into
resources you already have and build your wealth team. You
will achieve your wealth building goals faster, more
efficiently, and with more confidence once you have people
around you who support you and your goals.

----------------------------------------------------
Sharon Marsh, Ph.D., entrepreneur and wealth coach, is the
founder and owner of Professional Wealth Solutions, LLC. Go
now to http://www.buildwealthmakemoney.com for Free Wealth
Building and Money Making tips. Take your wealth building
program to the next level.

Funding Freedom Provides Equal Opportunity For Spanish Property Investors

Funding Freedom Provides Equal Opportunity For Spanish Property Investors
No longer is Spain a destination reserved for the rich and
famous. Significant changes in the Spanish property market
have resulted in funding options opening up to allow
financing not only of 100% of the sale price of the
property, but the additional taxes and costs incurred such
as those for VAT, lawyers, and stamp duty as well.

Where previously you needed a 30% down payment on a Spanish
property plus up to 14% for the additional taxes and costs,
in many cases, now you need nothing!

Amid qualms that the market is suffering, seasoned
investors know that the Spanish property market - like
anywhere else, including the UK - goes in swings and
roundabouts.

Currently the emerging property markets in Bulgaria and
Romania seem to have the edge over that of the staid
Spanish one. However, it's important to keep things in
perspective.

Whereas there is an abundance of information available
online about Spain and the Spanish property market, the
property markets of Bulgaria and Romania remain fairly
unknown and poorly-promoted, beautiful as the areas may be.

An incredible amount of money is pouring into Spain to
upgrade its facilities, including the Malaga airport and
seaport, the Malaga-Fuengirola railway, the marina at La
Cala de Mijas, and the AVE line from Madrid, to name but a
few. In Bulgaria and Romania, they have yet to rouse the
interest of foreign investors on a large scale.

Spain also boasts the most golf courses in Europe, sunshine
for almost 90% of the year, and a solid infrastructure,
which is the envy of many other countries in the region!
Eastern Europe's emerging property markets have none of
these...possibly why it is so much cheaper to buy there
than in Spain at the moment.

But is getting a property at the lowest price really ALL
you want? Part of the appeal of the Spanish property market
is that it is so well-established. There are regular
flights in and out of Malaga airport, a fairly substantial
ex-pat community in most resorts, and a reputation that's
hard to dispute. Proposed plans for a Disney theme park has
done nothing but entice the family tourist market more.

It is true that various disreputable goings-on have marred
the Spanish property market a little - off-plan developers
not giving quite what was promised and the like - however
that happens everywhere - even in the UK, so not really a
surprise. There is always going to be someone who gets a
little greedy and ruins it for the rest. A pity, but that's
life.

The key is to be careful. Astute investors use everything
to help them with their investments. This includes
conversations with the neighbours of the proposed property,
which now - thanks to the new approach by developers
regarding no deposit - could be Catherine
Zeta-Jones or Cilla Black, as equally as it could be Joe
Bloggs from the northwest.

For those who have been trying in vain to save enough for a
deposit on a place in Spain, this new trend in the Spanish
property market is a blessing in disguise.

I mean, where else in the world can you buy property
without putting even a cent down?

----------------------------------------------------
Steve Magill is the author of numerous articles on the
topic of Spanish real estate. He is a partner in
http://www.buyspain.co.uk and a Fellow in the British
Association of Entrepreneurs (FBAE). He is also an
internationally renowned Spanish property expert.