What is Liabilities

What is liabilities? Is it good or bad?
Depends on which side you are in. If you have liabilities it's not good.

Why? Because liabilities is something that you need to pay to the other party. And don't forget that the sum of money that you need to pay comes with interest.

Example of liabilities: your credit card bill, you HDB / Condo / house loan, you personal loan or debt, and etc. And those liabilities comes with interest which is quite high
.
It is a good practice if you can put all those liabilities in a list, put the amount and also the interest rate montly. Ex. Name | Amount | interest rate

By listing it you will have a greater picture of your finance. Try to review your liabilities from time to time. Reduce tour liabilities whenever it's possible.

Factor in with the assets that you have, if let say you have a credit  card bill of S$20.000 and you don't have enough savings to pay that at the end of the month. Maybe you need to take of some of your assets to cover the liabilities if the assets return is lower than the liabilities.

So the $20000 interest rate is 5% montly
while your fixed deposit let say S$30.000 only yield 2,5% p.a (per anually).
So if you calculated your fixed deposit you gain S$30.000 x 2.5% / 12 = S$ 62.5 monthly. While your credit card bill's interest rate is S$1000 montly.

It's more make sense to break your fixed deposit to pay off your credit bill rather than paying the credit card interest rate which is killing you.

So try to reduce your liabilities (by selling some of your assets) whenever your assets can't cover the liabilities.

Think before you spend!