On Mr. C And Leveraging

A very nice commenter left a message on one of the posts asking for more of Mr. C’s story. While he had found what I had previously written, I think that there is one major point that I never did highlight in my last post on Mr.C’s success.



Mr. C uses leverage heavily in his investment stratagems. For every dollar that he invests from his own pockets, he invests two to three dollars of other people’s money. Yes, that’s right. He borrows to invest. He concedes that there is no other way he could have made such big leaps in wealth accumulation if he had stuck only to what he could afford in cash.

Cue the “Debt is BAAAADDDD!!!!” chorus.

But wait.


Mr. C asks:

  • ·         What are your goals?
  • ·         How fast do you want to achieve them?


See, for Mr. C, wealth is not just a means to an end, but an end in itself. He sees it as a challenge to see just how much he is able to accumulate in his lifetime. It is a passion with him, just like how longer and longer marathons are with some runners. To meet his goal of making the most by the shortest time possible, he is realistic enough to realise that he has to be willing to take risks – hence the leveraging.


And for those who are not willing to take on the debt and are willing to modify their goals and timelines accordingly, Mr. C (and I, of course) thinks that is perfectly fine. But we confess to not understanding those who refuse to consider leveraging (or “debt” if you will), but continue to lament how impossible it is to accumulate substantial wealth by a certain age on a meager salary. Look, some people have done it, but there is no gain without pain.


He also acknowledges that leveraging means risk, but he contends that many people just bandy the word about without differentiating between calculated risks and non-calculated ones.


  •       What are the worst case scenarios in your investments?
  •       Under what circumstances will they come about?
  •       Is it something within or outside your control?
  •       What are the possibilities of these scenarios happening?
  •       How will you feel if they came to pass?
  •       Do you have a plan for that?
  •       What will you do next if investment goals are achieved?

Mr. C makes sure he has detailed answers for each of the above questions, before he jumps onto anything, including heavy leveraging, and he backs up his investments with a lot of homework. Is there risk? Yes. But he knows what they are and are prepared to deal with them. In fact, he has dealt with them – 1997, the year of the Asian financial crisis; the year he lost half a million in assets. But, are you?

Just for information, I, too, have answered those questions, and come out with somewhat different answers. Except for my massive mortgage, I find it difficult to use leverage in my other investments because I am not prepared to spend time and effort to mitigate the downsides.


But that doesn’t mean leveraging, or debt, in itself, is wrong. Leverage and debt are just neutral tools. It is how one uses them that make all the difference.


NB 1. And by the way, in case anyone wonders, Mr. C is one of the happiest people I know. I don’t know why people think that the pursuit of wealth and happiness cannot coexist.

NB 2. In case any one is interested, Mr. C has no consumer debt. All his debts are investment-related. He has mad negotiation skills, and borrows at around 1.5 to 2% APR and he easily beats that with his investments.


2 comments on “On Mr. C And Leveraging

  1. How’s the Sing property market doing this year btw? Slowed down yet? I shoulda bought some Marina Sail Flats back in 2002!

  2. Miss JJ says:

    The SG property market can basically be divided into a few sectors:

    1) Public housing, aka HDB flats. I believe these are doing as usual. I haven’t heard really breakthrough pricing recently.

    2) Mass market condos. This area has been stagnating a little and I think it is going to get worse as there is an oversupply. Rental yields may also take a hit in the coming couple of years, I suspect, especially since the government is looking to restrict foreign labour inflow. I happen to own in this sector and I am pretty worried.

    3) High end luxury condos (like the Sail). Prices are somewhat depressed at the moment. My mentor thinks there will be good potential in this sector if one can afford to hold on to the units for the next 5 years. He is eyeing this sector for his next acquisition.

    4) Landed property have soared like nobody’s business over the last couple of years and we think they are still flying. Land is limited in SG and there are few, if any, landed homes being built. Limited supply, so you can see where prices will go. Too bad non-Singaporeans are not allowed to buy. I have a Chinese friend who gave up his PRC citizenship and became a Singaporean just to get his hands on these properties.

    Too bad you didn’t snatch up a unit of the Sail 10 years ago. My Chinese friend mentioned above bought four of them. He sold one and the profit made from that one is almost enough to pay off the other three. You probably could have retired a good 5 years earlier, haha! But hey, you are doing great now anyway!

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