Saturday, 24 July 2021

Strategy Of Owning Multiple Properties- Opportunity to Grow Very Rich?

Back in August 2020, I mentioned that I have been haunted by Germaine Chow whenever I watched You Tube Videos. Recently when I was watching Facebook videos, to my utter horror, Germaine Chow appeared again. Personally, I think this is an overdose and over-exposure for her. I actually prefer her hubby who explains technical stuff better and carries himself better in terms of investment marketing....oophs...no offence but this is just my personal preference.






Why is "Principal Paid" a profit?

Why is "Positive Cashflow" defined as a Profit?

Anyway, I am extremely puzzled by Germaine's assertion that property investment doesn't just have one way to make profit but a total of 3 major sources, namely, (i) Capital Appreciation, (ii) Principal Repaid and (iii) Positive Cashflow. As an accountant, I think what was posted seems a bit strange in terms of basic Singapore Financial Reporting Standard definition. While I agree that "Capital Appreciation" is a profit (fair valuation increase), I am not sure why she asserts that Principal Repaid and Positive Cashflow are profits? That is a blatant flagrant foul from accounting technicalities.

Principal Repaid is actually just a repayment of bank loan liability from cash assets generation. This item is never a profit component by itself and is already part of the previously mentioned capital appreciation (if any). 

As for "Positive Cashflow", this is actually another totally different creature altogether in any business and to argue that cashflow is the 3rd way of making profits is a gross misrepresentation of basic accounting. What I think Germaine is trying to say, maybe, she is referring to renting out your investment property and earning a rental income. One should not be confused over "Positive Cashflow" and " Rental Income". The latter (rental income) is a profit item but never Cashflow. Let me elaborate more, you may record a profit from rental but if the tenant delays paying up, your cashflow will be affected. "Positive Cashflow" is thus not the same concept as profitability assessment.

Actually, the above new advertisement is considered not too bad already. My personal worst dread is the other advertisement whereby Germaine Chow is doing make up in front of a mirror putting powder on her face while she does a Q&A on property investing with a camera following her from her make-up room to another room upstairs. Can iQuadrant perhaps try to change model or switch to a guy instead?  In Economics, there is a concept known as the Law Of Diminishing Marginal Utility. That's all for my post today. If you guys know of any way to customise Facebook showing Germaine Chow from suddenly showing up, please let me know ya. 

Thanks for reading! 

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