Playing The Game of Leverage (3)

Read? Playing The Game of Leverage (2)

The story continues ....

After pocketing the difference of 4% by leveraging on his borrowed $10K from the Banker, the Investor happily told his Wife that he has finally found a new way of leveraging for passive income. She listened attentively to him and thought deeply for a while and said: "Honey, your Banker has short-changed you by paying you only 1% per annum. Why not you keep your $40K with me? I will double the Bank rate and give you 2% per annum."

Investor: "Wow, That is a Good Deal and I will pass $40K to you!"

She then invested $40K in DBS 6% NCPS to receive dividends.

One year later year, the Wife received 6% Returns from her $40K investment in DBS 6% NCPS from DBS. She passed 2% to her husband and pocketed the difference of 4%. Investor was lagi happy as he too pocketed 4% difference by leveraging his $10K borrowing and has received an extra 1% by lending $40K to her Wife. His wife was most happy as she made the highest returns by leveraging on her husband's $40K without any capital of her own. Couple was very happy with each other investing performance on receiving passive income.

Investor said to his Wife: " Since this wonderful strategy of Leveraging for Passive Income is working so well for us. We shouldn't be too selfish and keep it to ourselves. Let us share it with Uncle Billy and Auntie Cilly too."

The moral of the story ....

It is how the mind may play out when the greater Greed take control over it.

Do you believe the couple is happily leveraging for passive income with their newly discovered strategy? Yes?