SINGAPORE: A man who failed to secure employment and has thus ventured into entrepreneurship took to Reddit to ask fellow locals whether taking out debt in order to survive might be a good idea.
In his post on the r/askSingapore subreddit on Wednesday (Aug 5), the man explained that the job market had been “terrible” to him and he’s now down to his “last month worth of savings.”
Though his business is now up and running, he reckons it’ll still be some time before money comes in.
As someone who is particularly wary of falling into a financial disaster, he’s been rather hesitant about taking out debt to finance both his daily expenses and business.
“I’ve been actively avoiding taking out loans and stuff. I’ve always thought that me going into negative money means I’m in a really dire situation,” he wrote.
Still, with the situation he’s currently in, he doubts there is another way out. He also said that he’s perhaps considering it, knowing many Singaporeans have debts.
“I heard about how every other entrepreneur has debts and how every other Singaporean person has a housing loan to pay off. A memory also resurfaced back when I was a reservist; I heard that someone refused to come back for ICT because he ‘had debts to pay off.’”
“I’m just wondering if it’s ‘normal’ here for people to have debts (do loans count as debts?). I don’t know whether to resort to it as well just to keep going.”
“Try to borrow from a family member”
In the discussion thread, many Singaporean Redditors assured him that debt is totally normal.
One said, “Yes, it’s normal to have debts. Look at how many car owners there are in Singapore. Same goes for homeowners. Most of them are still paying off their loans.”
Another commented, “Some of the most successful businesses have debts. If you don’t, you are not doing it right. It is called leverage.”
Meanwhile, a third user explained the concept of good versus bad debt, telling him: “It’s normal to be in good debt and foolish to be in bad debt. Good debt would be like a housing loan—interest rates are low, and it allows you to own a relatively safe asset class that can appreciate over time.
They added, “Bad debt would be credit card debt and high-interest debt. Business loans can be either, depending on if one is successful with their business venture or not. It really depends on the acumen of the business owner, luck, and other factors. Plus, credit facilities help with cash flow.”
Still, despite the reassurances, some users urged him to avoid taking on debt wherever possible.
One told him, “Don’t spend money you don’t have.”
Another shared, “Singaporean here. I was in debt for a student loan for 5 years, was guarantor for my sister’s loan, and helped my partner with her reno loan. But since early last year, I have been debt-free. It felt so good the day I realised this.”
“It won’t last long, I think, as I plan to buy a house for myself. But other than a mortgage, I am avoiding loans unless I absolutely need them. Try to borrow from a family member, as it will avoid incurring interest?”
Others suggested that he work for food delivery services or take on any other part-time job in the meantime, giving himself another source of income while he works on his business.
“Just do odd jobs like grab delivery just to tide over this difficult period,” one said./TISG
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