Every now and then someone will ask you for a loan. The problem with helping a "Friend" is that ever so often YOU will end up having to chase the very friend you trusted with your money....FOR YOUR OWN MONEY BACK. This can be a nightmare filled with anxiety. On one hand, there is your friendship to consider but on the other hand you are filled with frustrations knowing that he isn't even treating you fairly as a friend by honoring the loan he promised to repay. Heck! You may not even have charged him a cent of interest!

Here is some simple RULES you can follow to guarantee that any friend who needs a loan will be the one chasing after you in order to REPAY the loan he took.

Always Ask for a Collateral 

A Collateral is an object of equal or greater value which a borrower must hand to the lender in order to secure a loan. This will guarantee that in the event the borrower defaults, the lender has an object of value to liquidate in order to get the cash he loaned back.

You are the innocent party who have always managed your money well and have a small savings saved up to one day buy a home or a car. Its only right that the person who approaches YOU for the loan will incur the full risk of his actions. We personally recommend that you hold an object of value like GOLD, SILVER or any object that can be liquidated almost immediately for CASH.

For Instance, If an the lender hands over a Collateral consisting of Gold Ear Rings worth $300 in Gold value based on market price. We highly recommend lending only a sum of $200 and below. The Safe zone for a loan is always to lend no more than 2/3 the value of the collateral. This will ensure that once the dateline for the agreed payment lapses, the Gold Earrings is now YOURS. If the borrower chooses to buy it back from you it MUST be at the full price of the value of GOLD.

This will guarantee you never have to chase the borrower ever again. In fact the borrower will be under pressure to chase you and repay the loan before the dateline.

Note : Some "Friends" whom you demand a collateral from will whine about how you are not giving him the trust needed. This is a huge warning sign that he will never intend to repay the loan as he does NOT want to incur risk. Note that YOU are trusting him with your hard earned money and its only right that as a sign of goodwill he entrust you back in return with something of value. NO COLLATERAL means NO loans period. 

Always Charge Interest

By lending Money to anyone, YOU are incurring time and risk. You deserve to be rewarded. A pawn shop charges around 2% interest a month. You may as a friend choose to charge an interest of around 1 to 1.5% a month.

For instance, you lend a friend $1000 with an interest of 1% to be paid each month before the 5th of the month. As long as your friend pays the $10 each month he can continue holding the "$1000 loan". It must be clear that once the dateline lapses for any loan installment the collateral is now your property. This is called the "Interest only payment" type of loan. 

Another good method for interest payments is the "Repayment Installment method". For instance a loan of $1000 to a friend for a period of 12 months will have the following calculation method.

Loan = $1000
Tenure = 12 Months
Interest = 1% a Month
Total Interest = 12 X 1 = 12% = $120
Total Sum to be repaid = $1000 + $120 = $1120
Installment to be paid each month on the 5th = $1120 / 12 
                                                                                       = $93.33 Each month

Issue an IOU

Like any legal contract, have two copies of an IOU prepared and signed by both parties. Having two witnesses or more that are unrelated to both parties is always important. This is NOT a compulsory act as you are already holding a collateral. 

When taking over a collateral always ensure both parties understand that although this is understood to be a collateral, in legal terms you are actually "BUYING" his valuables as a used second hand goods. 

When he redeems or pays installments to repay you, he is "BUYING" back the item in question. The item is legally yours the moment money is given to him in exchange for the item and he has every right to choose to repay you and rebuy the item or let you the new owner liquidate the item as you see fit. 

Personal Loans should be fun and non risky

Now that you my dear reader have became more street smart, a new life awaits you. Loans should never be the only way money is earned as this above article is purely to protect those whose friends continuously hound them for loans. The ideas above are to ensure that you walk away the winner every time. 

As with all things in life, there is always risk involved in any transaction no matter how you try to protect yourself. With cash you can deposit it in a bank for interest payments. With collateral the risk is losing the item as unlike cash you cannot hand it to your banker. You are by your own agreement with your friend obliged to hold the item for safekeeping until such time the loan lapses and the item is yours or the item gets redeemed. As time goes by and your number of loans increase to people, so will the number of collateral that you hold. It would be wise to buy a safe to put the items. Some or many of these items will in due time have you as the proud new owner so its always wise to have  the foresight in keeping these items in the best condition possible.

All that being said and before you go off with high ambitions to become your own "AH LONG" please remember to always advocate financial literacy to people as borrowing is never a long term solution but wise money control is a skill for life.

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Wannabe Wealthy or Crazy Rich Asian Wealthy? Let the ones who hold your money decide if YOU are in the gang. These cards separate the Men from the boys and I mean to even qualify for even some of these cards, you must be in the top 1% of the 1%....literally.

1. UOB Infinite Reserve Metal Card
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You can'apply for this one. Its a strictly Invite only card that the Bank offers you only if you are Somebody or Someone in this world. If you do get offered, you are officially in the Elite of the Elite. Word in the circles where bankers meet is that you can get invited if you making at least $500,000 a year.

Gentlemen forget flashy cars and branded clothing which anyone who takes a loan can easily buy, Women will swoon over you because any man who holds this card has officially Made it. Being in this Invited Club is a symbol of your Success and Banks will go all out to woo customers like you.

Here are the Benefits 

- Up to $2,000,000 Dollars in Standby Credit for your use. With a simple wave of this card, you can be the proud owner of an exclusive condominium in most areas of Singapore...theoretically speaking.
- Private Yatch for your Exclusive use and you may party with up to 14 of your Specially Invited Friends who are lucky enough to be in your Inner Circle. Complimentary Champagne is thrown in for you.
- Exclusive travel Deals on a specially tailored for you and your partner will see air miles literally being poured down your throat with 5 miles for each dollar spent.
- Users of this card have seen hotels and resorts upgrading them for free just to woo you for repeat visits.
- Loads of exclusive access to members only clubs like the China Club and the Tower Club of Singapore and some of the most exclusive clubs around the world like the Eight Members Club in the UK

Annual Fee : $3852 (No waivers and No Compromise) but hey look at it this way, there are country clubs that cost even more and this card does give you assess to many exclusive clubs around the globe.


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2. DBS Insignia VISA Infinite Card
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To qualify you need either an annual pay of $500,000 a year or have up to $3 million in Assets with DBS. Not as strictly invite only but normal applicants have been turned down like myself who can't wait to get my greasy hands on that $1 million dollars in Credit limit.

- You get up to $1 million dollars in credit limit so basically its almost limitless.
- $1 to 2 mile for oversea spending and $1 to 1.6 miles for local spending
- 1000 airport exclusive lounges worldwide await your patronage and rightfully so as you are given exclusive access to them.
- Immigration fast track where applicable
​- 100,000 free air miles as a welcome gift.....that is enough to send you on a round ticket to most places on this planet in case you are wondering what 100k of air miles can do...

Annual Fee : $2000
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3. OCBC Elite World Card

Compared to the other cards, the barriers to entry are lowest with an annual Income of $250,000. It will open you to a world of exclusive privileges which OCBC reserves specially for their most treasured customers.

- Exclusive access to their special conceive service which will fulfill any request you may have like sending your business contacts birthday gifts to having a special booking for a dinner reservation made for you and the someone special.
- Be invited to special close door events specially reserved for the elite
- Access to prestigious golf courses which have previously hosted PGA tours.
- Each time you fly you will be met by their "Meet and Greet" agent who will bring you specially to an expedited check in and even carry your bags for you
- Specially for those in the Premier Banking circles only

Annual Fee : $1605


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4. American Express Centurion Black Card
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Not just in Asia but if you hold this card, you are very well one of the most elite on earth. It has been compared to Thor's hammer by some as only the most worthy can wield this card. Certainly a Thor's hammer of the modern man. So exclusive that even the Bank's website says nothing of this.

- As far as it goes, there are NO credit limits
- To qualify you need $250,000 in annual spending
- VIP Access to 600 exclusive travel lounges worldwide
- First Class Flight Upgrades
- Personal Travel Agent
- Host of benefits open to the card holder

Annual Fee : $7490 and you must hit $250,000 in Annual spending to stand the best chance of being Invited.


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5. Citibank Ultima Card
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First to qualify you need to accumulate $5 million dollars worth of Assets and it has to be all managed by Citibank. Once that happens your name may just pop up on their radar before they give you the call and offer you this exclusive card.

- Women who have a guy holding this card don't just have any guy...they have the Ultimate Guy...with the Citi Ultimate.
- You will have a personal relationship manager to serve your every need including source for that rare mink fur which you always wanted to buy your wife or to source for that rare watch used by the British nobility before it went on the market.
​- Private concierge that can book private planes for you or even book you a cruise on a private yacht.
- Tons of prestigious stuff that only the elite have access too.

Annual Fee : $3888 

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