Irresponsible Spending

The last few years, I've been involved in helping one of my relatives with their spending habits outcomes.


RM 100K+, consisting of:

  • car loan RM 45,000+
  • credit card loans RM 39,000+
  • personal loan RM 28,000+

This is on top of their student (PTPTN) loan, daily spending etc.

I can't tell you how vicious is this cycle, because...having such a bad loan, they can only try to loan more money from family, friends, institutions in order to pay of the minimum, but barely.

And it's so vicious, because they feel so bad, they think/feel that they need to feel better, so they spend what little/nothing they have left, and that brings them deeper into debt.

To make matters worse, they couldn't secure or keep a stable job.

Yep - imagine the horror.

As they start to break psychologically, they feel the need to relieve their stress, so they justify adding a new debt...then they take on the new debt that they actively sourced...and then they think "shit" and feel bad, and feel more stress...and the vicious cycle goes on.

In between interviews and jobs, they turned to doing Uber, and even that, is on an ad hoc basis "because there are good times to work and bad times to work" on Uber.


They don't cover their loans, expect others to chip in.

After trying to help solve this problem for some time, one day, they used their mobile phone account to buy credits on Steam wallet and iTunes. When prompted they replied they did that because "they were bored".

Annoyed, told them that wasn't a smart move, and they asked me

Nigel, are you mad at me because I spent some money?

I said, I don't mind spending if one earns more than what one spends.

But clearly, they don't understand this basic concept, and that's why they're in that situation right now. (To put things in context, despite having RM 100K+ debts, they can choose to leave jobs or not worried about getting jobs because the job was bad - like the debts wasn't worrisome).

This relative of mine had always pursued "societal riches for sake of flaunting" eg they would aim and actually buy luxuries like:

  • BMW cars
  • Expensive watches that are five-figures
  • Going to restaurants

And using the famed credit card and loans that obviously shouldn't be done if one cannot afford it.

This is a very clear case of irresponsible spending that leads to bankruptcy, no assets and no money. A very sad state of living.

responsible spending leads to passive income and wealth

They don't get this fact: buying luxuries directly from one's loans and income is very limiting, because it's limited

  • to how much one actively earns
  • how much one saves
  • how much one is able to save after deducting such loan/credit costs
  • and the problem if one loses their job

That's why I highly recommend that assets pay for luxuries and lifestyle.

Two different examples:

#1 A takes home nett RM 10,000 per month, but spends it all on food, credit card loans, personal loans, car loans etc. At the end of every month, he has a car, some nice toys - but reality checks in, and he knows that he is actually very, very broke. All he does is work in hopes/looking to his next paycheck so that he can pay his bills and maybe eat something "nice". If he loses his job, he's in deep trouble as he has years of bills to pay for the toys that he had bought in advance.

#2 B takes home nett RM 5,000 per month, and she decides to pack aside RM 2,500 a month to dividend stocks/index funds/fixed deposit, which gives her back a fixed 5% per year. She does this for 5 years, and she realizes at the end of the 5th year, due to compound interest, she had amassed RM 212,345.83. She then decides to take half of the 5% dividends, which translates to RM 5308.65 per year to spend on whatever she wants - guilt free. AND SHE KEEPS HER ENTIRE PRINCIPLE AMOUNT and still gets to reinvest the 2.5%.

Which do you think is more sustainable?

Well, obviously person B's approach.

Enjoyed this article? Share it with your friends by clicking one of the buttons:

Even better - share your thoughts and comments below:

quick links

Back To Top

Search In NigelChua

What I'm Working On

Online Business & Marketing Tools I Use

Solo Build It

GetResponse Email Marketing


The Hoth SEO Specialist

Google Mail/Suite

Supplements & Stuff I'm Using For My Health

Total Balance Men's Premium

Kiwi Klenz

Lipi Rite

Bee Pollen Energy

Omega QH Ultra

Neuro Natural Serenity

Male Rejuvenator

Green Lipped Mussel Powder Capsules

Aquasana AQ 4000 Counter Top Water Filter

Cryptocurrency Exchanges I'm Using

Quionex Exchange (Fiat - BTC/ETH)

Qryptos Exchange

Offline Hardware Wallet To Secure Your Crypto-Assets Such As Bitcoin


Cryptocurrencies I'm Invested In

Bitcoin (BTC)

Qash (QASH)

Rock Token (RKT)

Ethereum (ETH)

Zencash (ZEN)

Cindicator (CND)

Vechain (VEN)

0x (ZRX)

Golem Network (GNT)

Stellar Lumen (XLM)

Cardano (ADA)

Funfair (FUN)

Gifto (GTO)

Nebulas (NAS)

Electroneum (ETN)

Digibyte (DGB)


Smartcash (SMART)

Tierion (TNT)

Loopring (LRC)

Deep Brain Chain (DBC)

Zeepin (ZPT)

Zilliqa (ZIL)

Snip (SNIP)

Bitjob (STU)

Siacoin (SC)

Xperience Coin (XP)


Myriad (XMY)

FidentiaX (FDX)

Dentcoin (DENT)

Reddcoin (RDD)

Bitbean (BITB)

Dogecoin (DOGE)

Books I'm Reading

Holy Bible

Tribe Of Mentors

Seneca Letters From A Stoic

Seneca On The Shortness Of Life

See my full book/read list here.

Blogs I'm Following

Tim Ferriss

Pat Flynn

Tony Robbins

Ramit Sethi

My Personal Goals

SGD 2,000,000 invested in dividend stocks with average 5% returns per annum by 45

SGD 2,000,000 in cryptocurrency

Owning, affording and living in a landed property in Singapore (or relocated to another country without worry of money) by 40

Publish at least one book by 40 years old

Online businesses serve readers and clients well (ie readers make more money, have happier/freer life etc), and website makes SGD 10,000 per month

Ongoing: spend more quality time with children, wife, family, bible, God.