Financial prudence and ME factor

I have a soft spot for IT and communication gadgets. I like to try my hand on new operating system. When my laptop with Windows 7 “died” on me, guess what… I got a new laptop with Windows 8. I waited eagerly for iPhone 5 and get it when it was launched. I know of a person who has a soft spot for ladies bags. She will check out new designs on the web and in the shops. Another likes cars, changing often with newer model. Are we not like that?

MAS introduced another measure to cool the property market, its eighth. This time, borrower of new housing loan must prove that his monthly repayment obligations of all his debts (housing loan or otherwise) is less than 60% of his gross monthly income. This is to prevent someone from borrowing beyond his capacity to service all his debts. MAS called it financial prudence.

This motivated me to write on financial prudence, high-sounding words. In simple term, can we afford to pay for acquiring assets? Do we need to borrow to pay to own assets? How much interest must we pay to borrow?

In the past, we search for paintings or art pieces to buy. I bought more watches than one needs. What happened now? These paintings are kept away in my store-room. Only few pieces adorn my walls. I just need only one presentable watch for special occasions and another one for daily wear. I do not borrow money for purchases. If I cannot afford it, then it is no go. Most time, we asked ourselves, do we need the item? In the case of iPhone 5, it took me four years to move from iPhone 3 to iPhone 5. That is financial prudence for me.

Can we live without modern conveniences? Owning a smart-phone or a laptop is not a problem. We need them for communicating with one another, to get information on the web and to conduct on-line transactions. These are necessary in modern living. The problem arises when one is obsessed with it and spent hours on the gadget. When the phone is lost or damaged, the world seems to collapse: The phone contacts are all lost! Hiya, there is a scratch on the phone. Clinging to gadgets is THE problem.

At the end of day, are we contented with what we have? Having more and more does not equate to happiness. Is pride and ego so important? Live with sufficient is good enough. Watch the greed and financial prudence come about naturally.

Copyright © 2013, limkimtong for Living Investment

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