Of Being In Debt

For some reason, it really struck me only now that I am, strictly speaking, in debt.

Not a little debt. A big debt. A huge debt. 1.2 million worth of debt. If all the debt bloggers were to have a pissing contest right now on the debt size, I’ll probably win hands-down.

Paying the mortgage normally, my debt free date would be at….lets see…..73 years old. Hahaha. No, not a joke.

I have ambivalent feelings towards the debt.

I really hate the idea of being in debt, especially since I have taken care to lead a debt free life to date. I feel guilty when I think about it, and if I am truthful, somewhat ashamed. It feels like I have gone against some unwritten commandment in the PF world – Thou shalt not owe.

And then there is the other part of me that goes “B-b-but….that is a good debt.” The condo is my investment condo. The rental income covers the mortgage and most of the costs of ownership. There is a good potential for capital gains. I have equity.

And then the debt-hating part will retort “There is no such thing as a good debt”. We could be in a real estate bubble. Look at the Americans. I could end up being underwater and have to sell at a loss. At least I should start snowballing the mortgage and build equity faster.

And the investment prone part will insist that I should not accelerate the mortgage payments because I’ll be putting all my eggs in one basket. My normal cash flow should be used to generate other streams of investment income. “What is the point of real estate investment if you can’t leverage?” And Singapore is not America. Look, the Singapore government got people paying tens of thousands for a piece of paper giving them the right to own a car. And for that they get paid millions of dollars. The condo will be fine.

And back and forth, and back and forth.

So until one part manages to bludgeon the other to death, I guess I’ll just have to live with this ambivalence.

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One comment on “Of Being In Debt

  1. anon says:

    hi,

    looking at the singapore household balance sheet
    http://www.singstat.gov.sg/statistics/browse_by_theme/hhld_sector_balance_sheet.html

    and tax statistics
    http://www.iras.gov.sg/irasHome/uploadedFiles/Quick_Links/Statistics/IIT_AI%20of%20Individuals%20by%20Income%20Typ_YA04-YA12.xls

    may help to ease your concern over a bubble as you will see singapore households as a whole are very well capitalized and the proportion and sheer number of people earning a good 12k or more has grown a lot.

    in any case, the government can still reverse out the many rounds of cooling measures to support the property market and has stated a sustainable property market as one of its objectives.

    hope that helps you feel better about your mortgage debt. (:

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