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Vending Machine Business

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silverstream
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Vending Machine Business

Postby silverstream » Fri, 20 Apr 2012 2:54 pm

Hello All,

I am thinking about setting up a vending machine business as a passive source of income, and still keep my day time job. Do you guys think it is doable? what is average time for getting breakeven?

Thinking setting up an elder care centre as well. but that may need full time engagement.

beppi
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Postby beppi » Fri, 20 Apr 2012 3:42 pm

I think you will find that a vending machine business, with purchasing the goods, delivering to machines at their locations, maintenance of machines, etc. will be a full time job if you have enough machines to allow making a profit.

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ecureilx
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Re: Vending Machine Business

Postby ecureilx » Fri, 20 Apr 2012 3:50 pm

silverstream wrote:Hello All,

I am thinking about setting up a vending machine business as a passive source of income, and still keep my day time job. Do you guys think it is doable? what is average time for getting breakeven?

Thinking setting up an elder care centre as well. but that may need full time engagement.


How much money do you have to invest ?

A wise man once told me that, to make sure your make profit, you must run your business, not leave it to others .. :)

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Postby silverstream » Fri, 20 Apr 2012 7:32 pm

I am thinking to throw in 50K-100K. But i don't want to quit my job until I am confident that the profit of some business that I could pick up can at least compensate my current salary. I have not discovered such business opportunity yet.

For vending machine, I also think of starting small first, see how it goes.

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Postby beppi » Fri, 20 Apr 2012 10:05 pm

For S$100k, you may get 10 - 20 vending machines.
You need to pay rent for their location. You need to have a truck and spend a few hours every day buying goods, refill each machine, take out the coins and bring them to the bank. You'll also have expenses for electricity, maintenance and repairs. You need quite some turnover at each machine just to cover these expenses.
On the other hand, investing the same amount in, say, A$ fixed deposits at 5% interest will give you over S$400/month with no extra expense and effort.

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Postby silverstream » Sun, 22 Apr 2012 5:02 pm

beppi wrote:For S$100k, you may get 10 - 20 vending machines.
You need to pay rent for their location. You need to have a truck and spend a few hours every day buying goods, refill each machine, take out the coins and bring them to the bank. You'll also have expenses for electricity, maintenance and repairs. You need quite some turnover at each machine just to cover these expenses.
On the other hand, investing the same amount in, say, A$ fixed deposits at 5% interest will give you over S$400/month with no extra expense and effort.


Do you know which bank gives 5% interest rate? the best I found is 4%.

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Postby beppi » Sun, 22 Apr 2012 6:37 pm

Fndsupermart.com offers Nikko AM Shenton ShortTerm Bond Fund (A$) with currently 5.32%.

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JR8
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Postby JR8 » Sun, 22 Apr 2012 9:36 pm

Cantral bank A has interest rates of 1% because it's economy is weaker than desired and it is trying to encourage borrowing, economic activity and growth.

Central bank B has interest rates of 5% because the economy is suffering inflation and the bank wants to rein it in. Inflation erodes the value of the currency.

Therefore I think it fair to say that you might be able to earn 5% on A$, but don't expect the capital to be worth as much when translated into S$ say a year later. In fact the interest rate differential between the two currencies is in material part the markets aggregate bet on their respective future values.

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Postby beppi » Mon, 23 Apr 2012 3:35 am

So far for economic theory.
Reality works differently, as shown by the constant rise of the A$ compared to other currencies over the last few years, despite consistently offering higher interest rates. How long this will continue, of course, is anybody's guess.
You can also bet your money in an Integrated Resort. Not more risky, but maybe more fun!

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zzm9980
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Postby zzm9980 » Mon, 23 Apr 2012 8:37 am

beppi wrote:So far for economic theory.
Reality works differently, as shown by the constant rise of the A$ compared to other currencies over the last few years, despite consistently offering higher interest rates. How long this will continue, of course, is anybody's guess.
You can also bet your money in an Integrated Resort. Not more risky, but maybe more fun!


Buy condo now lah...!! Singapore property value go down cannot~!

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aster
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Postby aster » Mon, 23 Apr 2012 10:06 am

There are also perpetual "bonds" from Genting, over 5% and denominated in S$ too.

Apparently the catch is that the issuer can - at its own discretion - suspend payments. Even indefinitely.

Is such a scenario quite rare in such situations, as I take it it would put the company withholding payments in a very bad light?

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Postby silverstream » Mon, 23 Apr 2012 10:44 am

Checked Nikko AM Shenton ShortTerm Bond Fund. The return is about 2% in AUD. the platform fee is about 1%. so the gain from the difference in AUD/SGD interest rates must be over 4% to ensure a 5% return in SGD. Given the risk and return, is it better to buy REITs?

BTW, I think vending machine business is out of window already.

Buy a condo now? sound like suicide for me.

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Postby JR8 » Mon, 23 Apr 2012 3:55 pm

ZZM9980 wrote:Buy condo now lah...!! Singapore property value go down cannot~!


I was thinking about this last week. Land and property prices are to a large extent managed by the government. Historically prices have risen solidly excluding a few years here and there where prices were beyond manageability. Rising property prices are a kind of tranquiliser to the people (owners), especially when they are born inherently greedy lol. How large does the government intend to make the population? How long can these perpetual rises go on for? In a longer term falling market people tend to become very agitated with the government 'losing them money'. I wonder whether that day will come in SG...


aster wrote:There are also perpetual "bonds" from Genting, over 5% and denominated in S$ too.
Apparently the catch is that the issuer can - at its own discretion - suspend payments. Even indefinitely.
Is such a scenario quite rare in such situations, as I take it it would put the company withholding payments in a very bad light?


Usually a company suspending payments is due to them already being in a very bad light, and so as such it is almost expected. Lloyds Bank and BP are two recent examples of companies that suspended divi payments whilst in the midst of deep crisis (I understand Lloyds still aren't paying one).

I have no idea how these Genting "bonds" work, but if they trade with a variable price, look at the 5-yr graphs of Lloyds and BP to see what happened to the share price when divis stopped!

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zzm9980
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Postby zzm9980 » Mon, 23 Apr 2012 5:12 pm

silverstream wrote:Buy a condo now? sound like suicide for me.


Yeah, it was a joke.

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Postby Splatted » Thu, 26 Apr 2012 1:22 am

silverstream wrote:Checked Nikko AM Shenton ShortTerm Bond Fund. The return is about 2% in AUD. the platform fee is about 1%. so the gain from the difference in AUD/SGD interest rates must be over 4% to ensure a 5% return in SGD.


How does that work with regards to tax? For non residents of Australia you would get slugged heavily, wouldn't you?


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