I have written about a post in 2021, this is an article that discusses how I park S$100k with a very old friend of mine to get high-interest income every month. I did it out of greed and I wanted to have a fast-track passive income plan to help me pave my way if I need to get out of my job with cash flow to tide through.
Fast forward to 2023, with all the various telltale signs, I knew things were falling apart. Firstly, the interest per month was cut by half without mutual agreement. Then you know this is a red flag. Let’s rewind to when I was about to take out the money and park with my old friend. He gave a personal guarantee on the loan amount. Mrs questioned what assets he owned to back up his guarantee in the event of default. I asked him what instrument he was using the funds for, he simply brushed it away. I asked how they generate such a high return and my question was brushed off again. My gut sent me a negative vibe. I should have heeded it.
From this incident, my old friend and I learned a lesson hard. It is important to grow rich slowly. He took funds from several parties and put them into a money scheme and the key guy made off with all the money. He is buried in debt. He took on more debt and invested in another scheme to cover the losses. In the end, that went belly up as well. This is like you are in the casino, you lost your asses then you borrow more to show your hand again hoping to fight back your losses. End up, you are twice as deep in debt. This is a very painful lesson for him as he needs to fight back from negative net worth. Thankfully he has other businesses and an HDB that can generate cash flow for his family.
I learned that when you see the promise of high returns beyond what the market can normally deliver, it is a scam. Run away from it. It is a money scheme or a Ponzi. I have a high school friend who put money into an FX trading platform that automatically generates >10% return a month. He did not take out his profit regularly and the platform shut down and he lost his capital. His original plan was to take back the principal and let the profit roll. His approach was the same as my old friend. Both end up losing their money. The best is to stay away from this.
My helper will be leaving us before Chinese New Year, she will complete 2 years of her contract. She is our 3rd helper and she is another helper who has achieved her financial independence. It is the power of growing rich slowly. How did she grow rich slowly? It is through saving all her income. I think her S$750 salary each month is all saved and used to buy assets. She built 2 houses in her kampong. She built her farm which house 5 lambs, chickens, and a pond with fishes. Each lamb during Haji can be sold for S$400. The lambs are like a perpetual money machine for her. She bought scooters so that she could rent them out for Gojek’s operation. She has bought a better future for her family by sacrificing time away from her family. Kudos to her hard work and helping out with our family.