As from April 2013 my Journey in Investing is to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

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This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

"For the things we have to learn before we can do them, we learn by doing them." - Aristotle

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Thursday, 21 January 2010

Are Loan Good or Bad?

When is your loan actually good and not necessary bad?

First, we look at net worth of a person:

Net Worth = Assets - Liabilities

*Assets exclude your residential home as everybody need a roof over their head.

When you are net worth positive, then all your loans can be considered as good loans in the current low interests environment. You should be able to generate higher returns to pay off the interests payable.

Net worth positive means that you have enough assets to repay your debts fully if you are pushed to the corner to do so.

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