BOND THREAD

[propertycarrots]

Thanks for the advise, I did consider both the worst case and the risk of no returns, I guess it is about the stock you are buying which in this case is the 3 china banks.
Do allow me to further elaborate on my situation as I will be using mainly USD funds for any of such investment (due to the nature of my biz which I am receiving in US dollars). This is also to bid time for a more favorable exchange rate to convert back to SGD once the US fed hike its interest rates
As I dont do stock trading, the main aim is really to get some returns in the low interest rate environment since I am holding in US dollars

Take note the worst case & the risk
Worst case: Capital will be converted to the worst performing of the 2 underlying shares counters at strike price.
y
Risk: Capital loss if the underlying shares drop below strike price and full capital loss if the underlying shares goes to zero.

Base on the strike level, it is quite attractive strike price. But the coupon is not high. Not worth to take the risk as the maturity date is stretch to Nov16. If US interest rate start to move more from Mid 2016 onward. Not sure will there be a serious deep correction for ASIA. Right now, there is quite a few structure note on HK Hang Seng , S&P & Japan Nikkei 50% barrier level (12 mths period) . I am abit worry when the bank come out with these deep barrier 50% on HK , S&P & Nikkei index especially the issuer are from UBS , Morgan Stanley & Goldman sach (big white shark).




I did this DAC (Daily Accrued Coupon) on China life insurance + HK AIA when the the market is very volatile.It maybe this is one of the reason why the coupon is 12% P.A. So far so good. I chose insurance stock as I am more comfortable it due to their biz in insurance sector.

1st payout US$2500 (guarantee)
2nd Payout US$1875 (fixing 15/9)
3rd payout US$2200 ? ( Fixing on 13/10)

==============================================================================================
Underlying: China Life Insurance Co Ltd - 2628.HK (2628 HK) [email protected]
AIA GROUP LTD - 1299.HK (1299 HK) [email protected]

Trade Date: 07-Jul-2015
Payment Date: 21-Jul-2015
Fixing Date: 19-Jul-2016
Maturity Date: 21-Jul-2016
Tenor: 1-Year

Strike: 82.09% of HKD30.80 = HKD25.26
82.09% of HKD50.26 = HKD41.26

Knockout %: 100.00%
Max Coupon %: 12.00%pa
Total Notional: US$250,000
Indicative LTV: 60.00

[cbsh38584]

Thanks for the advise, I did consider both the worst case and the risk of no returns, I guess it is about the stock you are buying which in this case is the 3 china banks.
Do allow me to further elaborate on my situation as I will be using mainly USD funds for any of such investment (due to the nature of my biz which I am receiving in US dollars). This is also to bid time for a more favorable exchange rate to convert back to SGD once the US fed hike its interest rates
As I dont do stock trading, the main aim is really to get some returns in the low interest rate environment since I am holding in US dollars

When U want to invest in structure product like DAC (daily accrued coupon). Price entry is very important.

On 27th May15, My banker told me they already launched DAC on China life insurance (HK2628)+ AIA (Hk1299)
min amount US$100k for individual to add on to invest. I rejected it as the spot price is simply to high as mention
below. I probably will only get the 1st month guarantee 1%. The rest of 11 mths will more likely to be low coupon
or even worst ZERO if it keep falling below the strike price of $31.98 or $43.46

Coupon 12%
HK2628 Spot price HK$39 X 82% = ($31.98) strike price
HK1299 Spot price HK$53 X82% = ($43.46) strike price

Base on the above strike price. This is a lousy trading ideas from the bank as investors did it
when China life ins & AIA at high SPOT price on 27May15. Now (9/10/15) price is HK29.35 & HK$44.65.
So it is zero coupon daily a 1 stock (China life) did not stay above the strike price (HK$31.98 ).
AIA is above strike price. Too bad both MUST stay above the strike price.

====================================================================================
When China life ins (HK2628) starts to drop from $39 to $30.80 & AIA drop from $53 to $50. I start to ask my banker to launch it.
But none of his clients want to invest during FEAR time. I finally decide to do it on my own @US$250k in order for the bank to launch it.
If I did it 1 or 2 days later, I think it will be a much better price entry for HK2628 (HK$29) & HK1299 (HK$48).


Coupon 12%
HK2628 Spot price HK$30.8 X 82%= ($25.28) Strike price
HK1299 Spot price HK$53 X82% = ($41.26) Strike price

1st mth coupon $2500 (guarantee)
2nd mth coupon $1875 (5 times below strike price @HK25.28)
3rd mth Coupon $2200 ( 3 times below strike [email protected])
4th mth Coupon likely to be US$2500 (fixing date 10th Nov15) as HK2628 @HK29.35 & [email protected] above the strike price.
Just hope that US will delay the interest rate hike to Mar or Jun16.

=================================================================================================
If U have the intention to convert your USD to SGD. The best time is during FEAR times as USD is a carry trade currency.
They borrow USD to invest in high return equity or HY bond , commodities etc all over the whole. When of US Fed hike rate,
they will probably have to sell away the high return investment & return their loan back in USD.
This is where the world especially ASIA stock will have deep correction & currency depreciate a lot which happen just weeks ago.

There is another way to convert your USD to SGD. FX accumulator. My biz friend did it when they want to change their on
hand USD CASH to SGD at a better rate. It was recommended by their banker. I think min US$200k. U can check with your
banker. Find out more in detail & make sure U understand the RISK well .No leveraging. Purely CASH on hand.

[propertycarrots]

Hi cbsh38584,
Thanks for the advice, much appreciated

[cbsh38584]

Just bought another US$100k of Vendanta resources convertible USD bond 5.5% @94 today.
YTM12%. LTV70%. borrow USD @1.35%.

Bought 3rd lot (US$100k) @ 93.70 of Vendanta resources convertible USD bond 5.5% (LTV 70%) due July16.
A total of US$282k. If everything goes smooth without default (not likely). Capital gain US$18k +
Coupon US$14k = US$32k.

[starrynight]

Hi,

If there are any forummers here which are holders of either of the 2 Trikomsel bonds, you might want to email [email protected] to get in touch with the other bondholders to share info, discuss, possibly take joint action, etc. There are already more than 10 people in the group.

Please email with the following information:
1. your contact details
2. how much of which (i.e. maturity 2016 or 2017) bond you are holding

Thanks

[cbsh38584]

Hi,

If there are any forummers here which are holders of either of the 2 Trikomsel bonds, you might want to email [email protected] to get in touch with the other bondholders to share info, discuss, possibly take joint action, etc. There are already more than 10 people in the group.

Please email with the following information:
1. your contact details
2. how much of which (i.e. maturity 2016 or 2017) bond you are holding

Thanks

It is very sad that Trikomsel decides to suspend the coupon payment till further notice. This is really a big surprise as Japan Softbank had
just invested hundred of millions into Trikomsel this year in Apr15. Some private banks recommend a buy for 2016 bond (not 2017) due to
Softbank 19% stake in trikomsel & did give high LTV of 60%-65%. It maybe a long process to get back the $$$. Let hope for the best & be
prepared for the worst. I have 2016 bond & my banker from CS will do all the communication with Trikomsel & will update once info is avail.
Junk bond always carry high risk. Especially from emerging mkt. According to my friend(SGX website), Will know the result in Jan16 or Feb16

The strength of USD & SGD against Rupiah currency (US FED rate hike ) & continuous low Oil price & commodities price is one of the major
contributing factor to a poor Indonesia economy.

[Citizen]

Understand your feeling, high risk high return. I invested bonds as well . So far my bonds are local companies. Hope everything will be fine. Good luck . Last but not least , I think if got holding power, invest in tangible products like property is still the best.

[cbsh38584]

Understand your feeling, high risk high return. I invested bonds as well . So far my bonds are local companies. Hope everything will be fine. Good luck . Last but not least , I think if got holding power, invest in tangible products like property is still the best.

Just hope for the best (100% back) & prepare for the worst (50% back).
Hopefully it will not be a long wait for Trikomsel to restructure their debt.

[cbsh38584]

Just sold my Amtek engineering 6.9% bond due 2019 @1.01.
Bought in Mar14@100.
Sold Oct15@101.

Just concentrate more on DCI (dual currency investment) & less on junk bond especially illiquid SGD denominate currency bond.
Pair SGD/AUS below $1.00. EURO/SGD 1.60 & SGD/USD @1.37. Tgt yield 4%-5% one tenor.


rdgs,
Vic

[Arcachon]

Cheaper to loan from Bond than CPF and Bank, MAS really know how to print money.

Anyone know this money become M1, M2 or M3 money.

http://business.asiaone.com/news/hdb...-bonds-snapped

HDB's up-sized issue of S$1.2b five-year bonds snapped up

The Housing & Development Board sold a jumbo S$1.2 billion in 5-year bonds on Tuesday, upsized 50 per cent from an initial S$800 million issue due to strong demand.

It was HDB's first issue following receiving an AAA rating from credit rating agency Moody's - its highest rating - two weeks ago.

The coupon offered for the bonds was 2.10 per cent - lower than two bond deals sold last year - reflecting HDB's triple A rating, said fixed-income bankers. The coupons for the May 2014 and September 2014 issuances were 2.223 per cent and 2.288 per cent respectively.

"HDB should be applauded for being the first statutory board to obtain an explicit international rating, and this has allowed it to deepen its investor pool while achieving its tightest- priced deal, in terms of credit spread since 2010," said Winston Tay, head of Asia bond syndicate at RHB Securities Singapore.

HDB has joined the ranks of AAA-rated issuers like Temasek and supranationals like the Asian Development Bank in accessing the SGD bond market, he said.

"This new issuance was timed to perfection given the recent inflows of funds to safe-haven assets due to the ongoing market volatility and the scarcity of highly rated issuers," said Mr Tay.

DBS Bank, OCBC Bank and RHB Securities handled the bond sale.

The lower pricing is an "interesting phenomenon", said Clifford Lee, DBS head of fixed income, referring to HDB's statutory board status.

"It's the same risk but gives you 32.4 points more - good value when compared to the Singapore Government Securities (SGS) 5-year tenor," said Mr Lee.

SGS 5-year bonds on Tuesday were quoted at 1.776 per cent.

HDB's triple A rating means banks now can buy the bonds for their liquidity requirements as well as certain funds which have restrictive investment mandates, said Mr Lee.

Under the Singapore Banking Act, HDB's bonds can now qualify as "Level 1 High-Quality Liquid Assets", which do not require a haircut under the calculation of the liquidity coverage ratio (LCR), said Terence Lin, iFAST regional research manager - bonds & portfolio management.

Previously, the lack of a credit rating meant banks were required to employ a 15 per cent haircut on HDB bonds in the LCR calculation, he said.

The Level 1 qualification effectively means that investors, particularly bank asset liquidity management desks, are incentivised to consider increasing their appetite for such issuances, while minimising any issues like single-name limits, added RHB's Mr Tay.

"From a liquidity coverage ratio perspective, Singapore financial institutions should now be indifferent about holding SGS or HDB bonds, and with HDB bonds still offering a slight spread over comparable-maturity SGS, it makes sense to trade up to the marginally higher yields on HDB bonds," said iFAST's Mr Lin.

[Arcachon]

SINGAPORE: The second issue of the Singapore Savings Bonds has closed, with only about 20 per cent allocated to investors. This is lower than the one-third allocation rate in the first issue.

Excluding applications that exceeded allotment limits of S$50,000 per bond issue or up to S$100,000 worth of total bonds, the Monetary Authority of Singapore (MAS) said S$257 million worth of bonds will be allocated. This is compared to the S$413 million in applications for the first tranche, also capped at S$1.2 billion. Both issues were capped at S$1.2 billion each.

Investors can apply for the Singapore Savings Bond through an ATM. However, an individual Central Depository, or CDP account is needed too, alongside an ATM card and a bank account. Financial advisors said the target group for the Singapore Savings Bond is less likely to have a CDP account.

A CDP account, commonly known as a trading account, can be opened in person at the Central Depository, or via mail. According to financial advisors, the target group for the bonds are retail investors, who are looking for a safe, long-term savings option.

These can be investors that are more risk-averse, or those with simply less spare cash to set aside for retirement planning.

SingCapital CEO Alfred Chia, said: "Based on our ground feel, many people are still unaware about the Singapore Savings Bond or have the CDP account, which is why I think there should be a lot more awareness.

“A lot of people probably are still not familiar with this. But those who are following all this news, who are more savvy, probably they are expecting the yield to be higher."

This group of investors - betting on global interest rates to go up - are most likely to have redeemed their bonds.

Data released by the MAS on Wednesday showed that bondholders applied to redeem S$9.3 million worth of bonds. This will be effected on Nov 2. The Savings Bonds will be issued every month for at least the next five years.

http://www.channelnewsasia.com/news/....html?cid=FBsg

[Kelonguni]

Devaluation cum bond buying?

Really mind blowing strategy to thrive during downturn.

Head I win, tail you lose.

SINGAPORE: The second issue of the Singapore Savings Bonds has closed, with only about 20 per cent allocated to investors. This is lower than the one-third allocation rate in the first issue.

Excluding applications that exceeded allotment limits of S$50,000 per bond issue or up to S$100,000 worth of total bonds, the Monetary Authority of Singapore (MAS) said S$257 million worth of bonds will be allocated. This is compared to the S$413 million in applications for the first tranche, also capped at S$1.2 billion. Both issues were capped at S$1.2 billion each.

Investors can apply for the Singapore Savings Bond through an ATM. However, an individual Central Depository, or CDP account is needed too, alongside an ATM card and a bank account. Financial advisors said the target group for the Singapore Savings Bond is less likely to have a CDP account.

A CDP account, commonly known as a trading account, can be opened in person at the Central Depository, or via mail. According to financial advisors, the target group for the bonds are retail investors, who are looking for a safe, long-term savings option.

These can be investors that are more risk-averse, or those with simply less spare cash to set aside for retirement planning.

SingCapital CEO Alfred Chia, said: "Based on our ground feel, many people are still unaware about the Singapore Savings Bond or have the CDP account, which is why I think there should be a lot more awareness.

“A lot of people probably are still not familiar with this. But those who are following all this news, who are more savvy, probably they are expecting the yield to be higher."

This group of investors - betting on global interest rates to go up - are most likely to have redeemed their bonds.

Data released by the MAS on Wednesday showed that bondholders applied to redeem S$9.3 million worth of bonds. This will be effected on Nov 2. The Savings Bonds will be issued every month for at least the next five years.

http://www.channelnewsasia.com/news/....html?cid=FBsg

[Arcachon]

MAS have become MAS Bank. I wonder what they do to the money.

[Kelonguni]

MAS have become MAS Bank. I wonder what they do to the money.

Invest overseas I think. Look for businesses to acquire.

Build local infrastructures as well. Many announced these few days.

[cbsh38584]

The AUD is a currency play with a commodity sector. The AUS dollar weakness is due to China & the world weak demand for commodity .
Australia is a huge country. It has so much of things to sell (Tourism , plenty of land , Beef , wine , wheat , hard commodity etc ).
So if Aus dollar dips below 1SGD, I guess it is probably the best time to hold some Aus dollar equity or buy AUS$ bond.

Waiting for RBA next decision on rate cut this coming Aug15 before deciding to add more Aus bond.

1 AUS=S$0.96 (Jan 2009)
1 AUS=S$1.26 (Feb 2010)
1 AUS=S$1.31 (Apr 2011)
1 AUS=S$1.08 (Mar 2015)
1 AUS=S$1.008 (Jul 2015)


1 AUS=US$0.65 (Mar 2009)
1 AUS=US$0.98 (Oct 2010)
1 AUS$=US$1.08 (Apr 2011)
1 AUS=US$0.78(Mar 2015)
1 AUS=US$0.738 (Jul2015

For the past 3 mths I have been reducing my bond holding. Start to concentrate on doing more Dual currency investment.
So far so good for pairing SGS (base) against Aus$ at range of 0.975 to 0.99. yield between 4% to 6%.

rdgs,
vic

[cbsh38584]

Bought Parkson retail USD bond 4.5% @93.5 on 30th July15.
Sold @93.7 on 30th Oct15. Start to concentrate more on DCI.

rdgs,
Vic

[Forest ang]

wow...i am hold on to OUE bond, CMA 3.8% bond, Aspial 5.25% bond and the latest Perennial 4.65% bond...Shall i liquidate?

[Forest ang]

they were all bought at $1 par when it was issued

[cbsh38584]

wow...i am hold on to OUE bond, CMA 3.8% bond, Aspial 5.25% bond and the latest Perennial 4.65% bond...Shall i liquidate?

I am reducing my bond holding so as to reduce my leveraging. SGD borrowing rate is getting expensive 2.2%. Maybe raise to 2.5% in 2016.
It was only 1.1% in Nov14. USD loan may start to move up from 1.32% to 1.6% to 1.8%?. So it is not so attractive to leverage on bond next
year due to raising interest rate in 2016 & also high risk for illiquid junk bond on a raising rate. I maybe wrong. But I need to protect my hard
earn profit I made during the last 5 yrs (2010-2015).

OUE 3.8% & CMA 3.8% are quite safe. Perennial 4.65% short dated 3 years bond due 2018 should be OK. U need to be careful on 5.25% Aspial.
I believe U bought the retail bond during IPO. So the amount you invested (without borrowing) is not big enough to stress U out (sleepless nite)
if another crisis comes.

The recent Indonesia Trikomsel default causes many investors from private bank many sleepless nite as the amount is $250k per lot. That is a lot
of money. I am one of the trikomsel investor. Initially very stress out but as times passes I console myself that I am only making less if trikomsel
really DEFAULT to zero which is unlikely.

High yield Junk bonds carry high risk. That why I trade in/out (so far 50 times) & try not to hold till maturity.

[Forest ang]

thank you for your advice! I have learnt my lessen in the share market. When market is good, most appreciate by mere cents. But when the market is bad..it can drop by tens of cents...esp the penny stock. Even big names like Keppel n Wilmar not spared.
Thats y i turn to bonds. no monitoring needed and safe as long as hold till maturity. OUE is $250K. the rest are via IPO. amt not that huge. None on borrowed money. But still if anything happens..no matter wats the amount...it is still devastating as they are hard earned money! Will definitely re look at Aspial based on your advice. Thank you again.

[Citizen]

Quality Bonds investment is quite conservative, mainly for you to beat inflation, unless you buy high yield bonds or highly leverage. But bear in mind many punches also lost to one knock out. Questions to sell or not depends on : 1) do you believe interest rate will hike soon . 2) can you find a better investment better than your current yield. I sold my olam bond half year ago and thinking interest rate hike in sep. I lost 5 mths yield while waiting. To me the best investment is still in property but of course without those CMs

[Werther]

For the past 3 mths I have been reducing my bond holding. Start to concentrate on doing more Dual currency investment.
So far so good for pairing SGS (base) against Aus$ at range of 0.975 to 0.99. yield between 4% to 6%.

rdgs,
vic

Hi Vic

Once again, thanks for your sharing. Yes, I am also thinking putting 50% of my saving into dual currency once my fd matures, as i have missed our on the uptrend on the stock market recently. so sad.

wow, i didnt know the interest rate is so high now...i.e. 4-6%...

[cbsh38584]

Hi Vic

Once again, thanks for your sharing. Yes, I am also thinking putting 50% of my saving into dual currency once my fd matures, as i have missed our on the uptrend on the stock market recently. so sad.

wow, i didnt know the interest rate is so high now...i.e. 4-6%...

U need to know the movement of the currency. If not, U will likely to get converted at a unfavourable strike price.
Give U a example. Many investors did DCI on SGD/AUS when it is range betweem 1.15 to 1.25 & many get converted.
Now SGD /AUS is 0.995. Almost 15% to 25% paper loss depending on your conversion high price.

I believe doing SGD/AUS below 1.00 is quite safe. I maybe wrong. Another pair worth looking at is SGD/NZ. When China
govt announced yesterday that they are going to abandon One-child policy & allow to have 2. Danone (milk producer)
initial stock reaction is positive. China import a lot of milk power from NZ. Maybe can pair SGD/NZ. Right SGD/NZ is 1SG=0.94NZ.
It was 1NZ= S$1.15 in 2012/13.

The best get your good banker advise before you do DCI. Don't pair the wrong currency. Many get burn by the AUS , NZ, Euro , swiss & Yen
trade.

[cbsh38584]

Quality Bonds investment is quite conservative, mainly for you to beat inflation, unless you buy high yield bonds or highly leverage. But bear in mind many punches also lost to one knock out. Questions to sell or not depends on : 1) do you believe interest rate will hike soon . 2) can you find a better investment better than your current yield. I sold my olam bond half year ago and thinking interest rate hike in sep. I lost 5 mths yield while waiting. To me the best investment is still in property but of course without those CMs

Quality bond is still the safest. Can sleep well even in crisis times. HDB , LTA , SIA , SMRT , Capland , capmallAsia, etc.
Property is still the best provide U don't leverage too much.

[Citizen]

Yeah when credit become bad debt it is toxic indeed. But everything been equal. Bond will not have high capital gain as compare to property. Paper asset can become zero suddenly even you can afford to hold. Govt use CMs for property and SSB for Fixed Income.

[Arcachon]

http://www.channelnewsasia.com/news/....html?cid=FBSG

Sing-dollar corporate bond market faces rare default
Earlier this week, Indonesian phone retailer PT Trikomsel Oke warned that it will likely default on its S$215 million bonds - a first for the Singapore bond market in six years.

SINGAPORE: Driven by yield-hungry investors, retail demand for Sing-dollar corporate bond sales has surged in recent months. So far, about S$13 billion worth of corporate bonds have been issued this year and according to asset management firm Schroders, almost half is taken up by retail investors.

However, there are risks involved when investing in corporate bonds. Earlier this week, Indonesian phone retailer PT Trikomsel Oke warned that it will likely default on its S$215 million bonds - a first for the Singapore bond market in six years.

In October, property firms Perennial and Oxley rolled out retail bonds to subscription rates of about four times, which means demand for the bonds amount to about four times the planned issue size.

With annual payout rates of 4 to 5 per cent, corporate bonds are attractive to yield-hungry retail investors, especially private banking (PB) customers, who are often dangled generous rebates. Perennial's three-year bonds have an annual payout of 4.65 per cent, while Oxley is offering an annual payout of 5 per cent for its four-year bonds.

Mr Raymond Chia, head of credit research, Asia ex-Japan in Schroders, said: "There are one or two deals where the retail investors take up 95 to 100 per cent of the deal.

“One thing to highlight is that a lot of the banks, when they want to sell the bonds to retail investors - they tend to offer them PB rebates. So the PB rebates, based on our calculations, ranges around 20 cents on average, but there are some PB rebates which is as high as 75 cents to even S$1."

However, investor appetites may be changing. Ratings agency Standard and Poor's said it expects investors to become more selective, as they watch out for Trikomsel’s default, as it struggles to service debt obligations due to refinancing costs rise on falling consumer demand and Rupiah weakness.

Standard & Poor's Asia Pacific Director of Corporate Ratings Xavier Jean, said: "Between 2010 and today, companies across the region, whether it's Malaysia, Indonesia, or even Singapore, have taken the opportunity to raise so much debt, because it was so cheap. When things slow down, as a result, they have to service bigger debt amounts."

Many Sing dollar corporate bond issues - like Trikomsel's debt - are not rated by major ratings agencies. As a result, analysts said investors will need to do their own homework before. One will have to carefully study the business model, as well as how the debt is structured.

Depending on the outcome of Trikomsel's restructuring, analysts said Singapore could see a slower rate of bond issuances going forward.

- CNA/xk

[Arcachon]

Don't understand, why convert a piece of IOU (money) to another piece of IOU (bond).

You not only print once, you print another time.

Can I take it that there are more more money printing.

[Citizen]

Sometime when you don't understand is better than you thought you understood.

[Amber Woods]

Don't understand, why convert a piece of IOU (money) to another piece of IOU (bond).

You not only print once, you print another time.

Can I take it that there are more more money printing.

A company issues debt (bond) to invest in asset or business. Instead of paying off the debt, the company borrows even more by issuing more bonds to finance its business and coupon payments . If the asset or business turns bad, the company will default.

It is similar to an individual who borrows too much to invest in property or other securities. When his investment is not getting the desired returns such as low rental return or devalued asset or securities, his debtors will be after him to top up his margin account or loan to meet LTV. He may has to force sell his property or securities especially if he is highly leverage.

People can get rich through borrowed money. However, never over leveraged unless you are very rich with cash.

[Kelonguni]

So what is the risk if CPF OA fully covers the monthly mortgage?

A company issues debt (bond) to invest in asset or business. Instead of paying off the debt, the company borrows even more by issuing more bonds to finance its business and coupon payments . If the asset or business turns bad, the company will default.

It is similar to an individual who borrows too much to invest in property or other securities. When his investment is not getting the desired returns such as low rental return or devalued asset or securities, his debtors will be after him to top up his margin account or loan to meet LTV. He may has to force sell his property or securities especially if he is highly leverage.

People can get rich through borrowed money. However, never over leveraged unless you are very rich with cash.