Sohboonguan 1st Gear August 26, 2012 Share August 26, 2012 Debt or Saving? Mr A said that, he is going to clear his debt by the end of the month which is $200 dollars he borrowed from Mr C due to cash flow problem. Mr B that explained, that Mr A is not with debt, because he have bought a car fully paid, he can simply sell his car to clear the borrowing. Therefore, technically, his net worth denied him as with debt. In fact Mr B explained that Mr A in not with Debt but with saving even if he owed Mr C $200. Simply because of his investment in car which can be liquified to clear that borrowing, and that assest is also considered a form of saving. Conclusions: - Mr A own a fully paid Car - Mr A owe Mr C $200 - Mr A bank acocunt have no cash Now The Big Question is : Which Catagory is Mr A? 1. With Debt, With Saving 2. With Debt, No Saving 3. No Debt, No Saving 4. No Debt, With Saving ↡ Advertisement Link to post Share on other sites More sharing options...
Happily1986 5th Gear August 26, 2012 Share August 26, 2012 whether A has liquid assets is irrelevant. so long as you owe someone/some organisation money on paper, you are in debt. Link to post Share on other sites More sharing options...
Nzy Twincharged August 26, 2012 Share August 26, 2012 Yep. Just like if I have fully paid up for my house but have to take 10 year loan to get a car. I am still in debt. Link to post Share on other sites More sharing options...
Cavver 4th Gear August 26, 2012 Share August 26, 2012 Asset = Liabilities + Capital Capital is $$$ you put into bank + buying the car Asset is your car (bought value) and whatever amount you have in cash or in bank. Liabilities are what you owned like loan or credit purchases regardless of how much you have in cash/saving/asset, you still have liability (debt) . Link to post Share on other sites More sharing options...
Hqmcsmm Neutral Newbie August 26, 2012 Share August 26, 2012 No Debt No Savings. Link to post Share on other sites More sharing options...
Hotfavourite Neutral Newbie August 26, 2012 Share August 26, 2012 (edited) owe $200 pay $200..who cares u got car..? i not loanshark..but loan shark also say..sell your car yourself first then talk.but u owe me $200 interest free..whahaha..in your backside dreams...so i say.. got debt no saving...no debt..then all savings liao..clear first..so fundamental...ahhh..i still remember u owe people $200... 2nd hand car valuation or omv low one...the depreciation u calculate percentage..super drop.. so i wont say i got value.. i must say i got cash!.... ur horse run very fast no count, ur chicks haven hatch count all already...then COE..reverse become negative payment...otang kia ask u...are u going to sell or not sell or pay or not pay...haiz there is one case, this guy say he has house, no paid finish... sell got lots of money..ideally can sell...then the market valuation drop plus the resale down...and no buyers cos kanna spook by govt and negative newspapers..then eventually bankrupt...but u call he sell house like yaya until....l.l.l.l.l.l....repossessed..... this one real case..only 1 in the market....hp he lang after dunno waht appt he went. erm any better suggestions pls forward..so i can compare and upgrade my brain, thank you Edited August 26, 2012 by Hotfavourite Link to post Share on other sites More sharing options...
Throttle2 Supersonic August 27, 2012 Share August 27, 2012 Debt or Saving? Mr A said that, he is going to clear his debt by the end of the month which is $200 dollars he borrowed from Mr C due to cash flow problem. Mr B that explained, that Mr A is not with debt, because he have bought a car fully paid, he can simply sell his car to clear the borrowing. Therefore, technically, his net worth denied him as with debt. In fact Mr B explained that Mr A in not with Debt but with saving even if he owed Mr C $200. Simply because of his investment in car which can be liquified to clear that borrowing, and that assest is also considered a form of saving. Conclusions: - Mr A own a fully paid Car - Mr A owe Mr C $200 - Mr A bank acocunt have no cash Now The Big Question is : Which Catagory is Mr A? 1. With Debt, With Saving 2. With Debt, No Saving 3. No Debt, No Saving 4. No Debt, With Saving Obviously, this joker cant afford to fully pay his car. If anything happens, he has to start a fire-sale. And that willnot be to his advantage as we know. Plan your finances well.you need debt, savings and cashflow all at the same time. Just what proportion of each to best suit your situation. Link to post Share on other sites More sharing options...
Freestylers09 5th Gear August 27, 2012 Share August 27, 2012 belong to 3,since it's 200 not 2000 or 20000 Link to post Share on other sites More sharing options...
Joseph22 Turbocharged August 27, 2012 Share August 27, 2012 Obviously, this joker cant afford to fully pay his car. If anything happens, he has to start a fire-sale. And that willnot be to his advantage as we know. Plan your finances well.you need debt, savings and cashflow all at the same time. Just what proportion of each to best suit your situation. i think this define the real rich and the fake rich. real rich will have debt savings and lots of cashflow fake rich only have saving and just enough cash flow. Link to post Share on other sites More sharing options...
StefanK Supercharged August 27, 2012 Share August 27, 2012 I believe that Mr A is in debt but with savings, though it would be more accurate to term the savings as depreciating savings (is this an accounting term?). Link to post Share on other sites More sharing options...
Sga54g 1st Gear August 27, 2012 Share August 27, 2012 Belongs to 2. Unless he sells his car, and pay off his debt. Then his status will change to another one... Link to post Share on other sites More sharing options...
Showtime Neutral Newbie August 27, 2012 Share August 27, 2012 and i dont consider the car a saving as savings do not depreciate. Link to post Share on other sites More sharing options...
Iisterry 3rd Gear August 27, 2012 Share August 27, 2012 Current Assets Cash & Cash Equivalent - $200 Non Current Assets Plants, Property & Equipment - $50,000 (estimated value of car) Total Assets - $50,200 Current Liabilities Short Term Borrowings - $200 Total Liabilities - $200 Nett Equity - $50,000 Link to post Share on other sites More sharing options...
Skunk Clutched August 27, 2012 Share August 27, 2012 He must be very young. It's just a car, need to empty savings meh? Unless premium branded car...then he would be biting off more than he can chew... Link to post Share on other sites More sharing options...
Latka 1st Gear August 27, 2012 Share August 27, 2012 Car not considered investment to begin with. Link to post Share on other sites More sharing options...
Angchug 3rd Gear August 27, 2012 Share August 27, 2012 i think this define the real rich and the fake rich. real rich will have debt savings and lots of cashflow fake rich only have saving and just enough cash flow. He is wealthy but not rich. I learn this from an angmo long time ago . Wealthy = lots of assets. Rich = lots of cash. Some people are wealthy but no cash Some full of cash but. Little assets. Some live like millionaire but not wealthy Some are millionaire but lead a simple life. I do have a ex-colleague with over $10m worth of assets but still stay in a rented hdb flat with no car or hp. He save and invested every cents in properties n rent it out. Not sure what he see in life as he is already 60 with a Phd son. At 60 I rather cash in and enjoy life. Link to post Share on other sites More sharing options...
Hotfavourite Neutral Newbie August 27, 2012 Share August 27, 2012 whahaha... its not call liquid.la...when u call car liquid statement....wah kao..... then 2nd hand sellers damn liquid...got cash on hand no need buyers take furthermore...wad to say..loan..plus high interest...again say... ur liquid is true instant cash la..instant..call liquid...otherwise liquidity is how fast or how slow ...term is use to hood wink u...hahahaha wath they say..? cash is king....not u print singh is king..my sort of ott(over the top) neighbourhood people print on the car..self claim..cos no one.... will care...a bit abt them....anyhow say... then..owe $200..still cannot pay back..u think when..? 6 mths..? 1st mth already lao kui...go geylang ..bitch slap u..right?? i no iq..also say...quiet(shhhhh..) jin pai seh.... dun flame me..or answer me...k u dun owe me answer...$200 only wad.......... wad else? condom?? i got free doing door to door..at durex and balestier 2nd flr....the street i know ..the facts not reported ..welcome u to know...i not okt..(or kui tao.) Link to post Share on other sites More sharing options...
Sohboonguan 1st Gear August 28, 2012 Author Share August 28, 2012 Obviously, this joker cant afford to fully pay his car. If anything happens, he has to start a fire-sale. And that willnot be to his advantage as we know. Plan your finances well.you need debt, savings and cashflow all at the same time. Just what proportion of each to best suit your situation. Well, since it is already fully paid. It could also be fully paid for years before his have cash flow problem. I guess affordability is not a issue then. :P ↡ Advertisement Link to post Share on other sites More sharing options...
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