Comments on: Never invest using other people’s money

By: Alvin Lim

Alvin Lim — Fri, 23 Jan 2009 02:13:24 +0000

@ Damien
One can hardly escape from using OPM actually, esp when it comes to big purchases. However, it’s not recommended to use OPM to invest or to do something which you are uncertain. I know there are people who still do that, but it actually makes the entire process riskier than it should be. If i’m using my own money, then I have no problem since I’m responsible for my own mistakes. But if i’m using other people’s money, then things might get complicated if i screwed up.
But if i’m a heartless person who don reli care about other people’s money…..i don think it matters.

except for the interest charges.

By: Damien Tan

Damien Tan — Fri, 23 Jan 2009 00:13:04 +0000

I like this post. The OPM (other ppl’s money) principle is only there because people do not want to lose their own money if things go wrong. It may sound bad but interestingly OPM usually happens with the permission of the parties concerned. With strings attached of course, such as interest or profit sharing.

We are all guilty of OPM. When we take out a car or housing loan, we are using OPM – money from other ppl’s savings account. Same thing with credit cards. Banks are the kings of OPM. They take your money as deposits, roll it in the market, and give you back 1.5% interest. Your savings (assets) is their liability, but they are supposed to have enough to cover it in any eventuality.

Where there is interest charged, there is OPM. Our entire economic system thrives on OPM. We often don’t realize we are party to it as well.

By: Alvin Lim

Alvin Lim — Wed, 21 Jan 2009 00:47:29 +0000

@ Harmony
Yeap, it’s just too risky to do so.

By: Harmony

Harmony — Tue, 20 Jan 2009 06:35:40 +0000

He's right, use your own $ is the best way to avoid having to do a payout later. Harmonys last blog post..Plane Crashes into Hudson River