Read? Playing The Game of Leverage (3)
The mind of an investor can easily change their perception of risk/reward when the investing idea for the SAME financial instrument is presented in different scenarios depending on the mind perceiving it as Greed, Doubt or Fear.
Let take DBS 6% NCPS as an example for such financial instrument
Scenario 1
I believe Investor easily has SPARE $20K that can be used for investing; but he rather keep it in bank or money market earning low return of 1% for whatever reasons or simply waiting for better investing opportunity to come.
If you ask him to invest this SPARE $20K in DBS 6% NCPS to earn passive income of 4%. He have to think hard whether is this a good idea or not?
Scenario 2
But for the same financial instrument, in this case DBS 6% NCPS can be thought to be a good candidate for leveraging for passive income.
To use your OWN money to invest in such financial instrument to earn passive income. NOT SURE.
To BORROW $20K and use it as leverage for passive income looked like a good idea. Really strange? Greed playing out in the investor's mind?
Posts
A Chasing Sunsets Fund – A Better Way to Plan Nice-to-Haves in Financial
Independence.
-
One of the spending needs that many of you would consider as part of the
income needs for your financial independence (FI) or FIRE, is to have
enough mon...
10 months ago
No comments:
Post a Comment