Horror Part 2

According to the President of Credit Counselling Singapore, Mr Kuo How Nam, nearly 4 in 10 Singaporeans roll over their credit payments. As of June 2008, Singapore has some 1 million credit card holders. If the average holder has 2 cards, some 800,000 cards are earning interest for card companies. I believe not all roll over their payments because they cannot afford them. There is a significant group who can pay but are more willing to go into debt so that the cash they have on hand can be used for "other pursuits" in the name of opportunity costs.

The "opportunity costs" I learnt in school was explained to me in this way.
Say, you are a brilliant surgeon who makes $10,000 a day and you also have a passionate hobby in carpentering. You know you are so good at woodworking that you will probably do a better job than the average carpenter. When you want a cabinet built in your study, you're better off commissioning the average carpenter to do the job than doing it yourself despite knowing you'll come up with a better cabinet, because of your "opportunity costs".

As we've gotten that phrase out of the way, here's a sobering thought: 6 in 10 considered playing 4D as a leisure activity. The hope starts with getting more out of less and ends up with wanting something out of nothing; despite all of us being taught there is no free lunch. These are the opportunities people are seeking. Marketing text teach that a lipstick that costs less than $1 can be sold for $40 because it is selling "hope"!

The fraction that I teach my son says 4 in 10 can be replaced by 2 in 5. My wife and I both don't roll over our credit payments (our bills are too small; not because we're rich). So if we walk into 3 adults, 2 of them are credit revolvers! It is indeed an uncomfortable world. The rich man is not one who can afford a lot, but one who needs little.

"Rich" people don't have horrors, so strive to be "rich".