The World So Wide, Getting Stressed Out of Two Unturned Stones

Lately I am having some problems in the business that really captivate my emotion and mind, not good problems, rather toxic problems which lead to taking things personally. I found the following

  1. Money can’t do a thing to set me free from those problems that binding me, I can’t pay it to go away, I can use it to redirect the problem, but to expel the lingering thoughts from my mind and emotion, it score zero. I should decide on myself to reject, to choose my response and not being reactive, and this is independent on whatsoever of material things I possessed, whether a gazillion of money, a powerful position, social status recognition, years or decades of experience, it all came down to whether I will let the reaction control me, or I control the reaction and keep the lingering thought at bay. “A man that can control himself is stronger than one that conquer a city.”

On the grand of scale of everything, “star therapy” that Tim Ferris said, when we let our mind try to comprehend and see the stars above, so many galaxies, stars, planets and the unlimited space, our problems are just microscopic specks that don’t matter, the world won’t stop, the sun will keep on shinning the milky way will still travel 1/3 or 2/3 speed of light, amazing fact if I might say. The outcome of my problems are negligible, it’s not so that I can throw away the responsibilities of the problems, but to see it just as another problem to be processed in the queue of so many things to come. This too shall pass, and not to put them on a scale of a global nuclear threat.

When the pressure on mind or emotion became toxic, my decision making pattern became abnormal, after releasing the pressure and balancing them to a proper level, I can function better.

I also read a about several businesses that can generate big income that are related to what my current industry, I noticed that I am getting tied up by the current project, I squandered my time and resource just for this while it can be used for a lot of things.

Focus on things that can be leveraged and scaled, digital based!

Back to Back Credit Facility – Certificate Deposit backed


Back to back credit line is credit facilities backed by certificate deposit as the collateral, they bank will hold the deposit as the underlying asset for the credit line given to debtor, the credit limit can reach the amount of the certificate deposit.

This scheme is safe for the bank because it hold liquid cash asset and can immediately liquidate the certificate deposit when the credit line defaulted. For the debtor, this provide them better interest from certificate deposit compared to putting it in the saving account, while also can use the credit facility.  The bank charge spread between the certificate deposit and the credit interest. So putting certain amount in certificate deposit and also take the same amount from the credit facility will still be negative interest, and especially considering the deposit interest tax deduction. Provision and administration fee are also charged, but can be negotiated if the deposit amount is large enough.

The certificate deposit interest related to back to back credit facility, usually take the standard rate if not lower rate from the central bank rate, while other certificate deposit might provide higher interest rate, so there is also the potential loss of moving to certificate deposit related to back to back credit facility.

Symptoms: Problems, Questions, Dilemmas

The case background is using the back to back facility for a company

  1. On what condition should company use the credit line?
    1. What type of expense should use and not use the credit line? operational, investment, all kind of expense?
  2. How much money should be put between the back to back certificate deposit and higher interest certificate deposit?
  3. How much money should or can be used from the credit facility? maximum limit, half or certain point
  4. What scheme should we use for the certificate deposit and interest payment?
    1. Automatic interest rollover or put the interests for payment of the credit facility?
    2. Paying interest monthly or paying annually?

Possible Solution, Factors, Consideration

  1. The credit period: how long will we plan to use the loan and payback period
  2. Due to spread between deposit and credit interest, there will be a number which the credit amount and the deposit amount resulted in negating each other interest, ex: deposit gained +100 and credit charged -100.
  3. Paying the credit interest with the principal or just the interest
  4. The difference of certificate deposit interest between back to back and premium placement which become the potential loss when moved to lower interest rate.

Hypothesis & Test

  1. Scheme A1: Rollover deposit with annual interest payment
    1. Paying the credit interest once a year
    2. This mean we cannot use 100% of the credit facility, we should left some amount so that the credit interest can be deducted from the left amount
  2. Scheme A2: Rollover deposit with monthly interest payment
    1. Paying the credit interest every month when the interest being charged
    2. This mean we can use 100% of the credit facilty
  3. Scheme B1: Deposit interest used as payment and the rest of credit interest will be paid annually
    1. The deposit’s interests are transferred to the credit account to pay for interest or principals.
    2. If the credit interest is larger than deposit then the rest will accumulated and paid annually.
    3. There is possibility when no credit is used causing potential loss of the deposit’s interest (it could work on compounding)
  4. Scheme B2: Deposit interest used as payment and the rest of credit interset will be paid monthly
    1. The deposit’s interests are transferred to the credit account to pay for interest or principals.
    2. If the credit interest is larger than deposit then the rest will be paid on the same date.
    3. There is possibility when no credit is used causing potential loss of the deposit’s interest (it could work on compounding)


Attached in the excel file


  1. The criteria for using the credit line
    1. For operational expense
      1. if the expense can be paid back within 12 months, so it will fall on short term loan and preferable if the amount under the Break Even Rate
        1. The logic is to let the money collect compounding interest
        2. And short term loan can easily repaid and we still got compounding interest for next year
      2. if not then don’t use credit line, while it is also a sign of problem, when your operational cost doesn’t have or lacking of revenue stream for the next 12 months to cover itself.
      3. if this happen then the credit line should be liquidated or be covered by other fund to avoid paying unnecessary credit interest. A loss is a loss and don’t add more loss from the credit interest.
    2. For investment expense
      1. Medium and Long term loan can also be used for this as long as the investment or other source of income can pay for the monthly credit interest.
        1. The logic is to acquire credit with the lowest interest rate as possible and having flexible principal payment, though the payment should also be scheduled
        2. For investment it is preferred to expend directly from the credit account, avoid transferring to reserve account to avoid paying unnecessary interest
        3. If investment defaulted then the credit line should be liquidated or be covered by other fund to avoid paying unnecessary credit interest. Especially if none of the investment can be recollected. A loss is a loss and don’t add more loss from the credit interest.
      2. If the investment is in property
        1. If only the down payment then the nett credit interest is very low and should be scheduled for payment so that it reach the Break Even rate
        2. If used to fully purchase the property then we can get additional credit facility using the property as the underlying asset, which is a double benefit: low interest rate and having more credit facility from the property (still need to consider the cost for property based credit facility: provision, notary, insurance, etc)
  2. The ratio between certificate deposit for the credit facility and higher interest
    1. CD for credit facility should at least can meet 6 months expenses if it used for operational  cost or the cycle of account receivable.
      1. Don’t put too much money in CD but use it, Due to potential loss of 1-2% / year.
      2. If additional fund needed, add another account or increase the existing limit by adding more certificate deposit
    2. The amount can be bigger if used for investment purposes.
  3. The maximum amount that can be used from the credit facility
    1. Using under 60% of limit if the spread is 1.5% is under the Break Even rate.
    2. Using maximum 100% also can be done as long as
      1. It can be covered within 12 months or
      2. The investment can yield more than the nett interest rate, preferably at least 5% above the credit interest
  4. The best scheme for certificate deposit and credit interest payment
    1. Certificate deposit should use the Automatic Rollover to maximize interest compounding effect,
    2. Credit interest should be paid monthly to avoid compounding credit interests, and the payment should be arranged to be met on time with credit interest charge date.
    3. This condition will maximize the income and make the expense in constant and even reduced when principals get paid.


Self Imposed Limit VS Boundless/ Gravityless

I am taking a moment of silence, being observant, not full of self or caught in the noise, excitements, fears, worries, opportunities, feeling of imminent danger. Well the last one, imminent danger, fortunately, there are none on sight or indicating as such.

Being still both in mind and body enable me to see things more clearly, like years ago when I observed people on doing their businesses, I can see inefficiencies and thought of a lot of ideas on how to solve them, without being tied up, or having walls of limitations that I should avoid. The only limitation that I considered were whether the solution can be learnt / teachable and would it cost a lot. If the solution is can be learnt and affordable then why not?

But as experiences and learning of others passed, having met the same problems myself, I came to the conclusion that almost all things that looked possible, in reality were very hard or require a lot of resources, physically, financially and mentally which I didn’t had.

Having that conclusion in my sub conscious really restrict on what I think are possible to do, which is not good, I’m becoming the naysayer pessimistic old dinosaur.

I’m trying to revive the attitude of possibilities instead of limitations, using the knowledge of limitations as an asset, not as the biggest hurdle that I need to climb up. Side step them, make them irrelevant, confront and change them, change the way how I see them.

New businesses always came up, outgrowing the established giants, disruptive business models that change the whole landscape of how we do business, such as: electricity, phone, mobile phone, internet, electric car, robotic automation, internet of things, sharing economy. All of those are done by people not bound on limitation and avoiding problems, they see how to change the problems or even make them irrelevant.

So, what will I am going to do today? And couple of years ahead?