Tuesday, 22 November 2016

"True Happiness" with EMIs

I had a chance conversation with a fellow traveller in a train once. He was mentioning that a lot of people go through a lot of pressure in life because they go ahead and buy cars, homes, etc on loans and then have to carry the burden of paying EMIs for years together. This can reduce the money available at home for other expenses that may be necessary, saving for children's future etc.
Look here, we need to be wise about some things. Buy a car only if and when you need one. You have nothing to prove to anyone in society. So there's no need to buy car(s) just to impress anyone. You can put the same money to better use for yourself and your family. Plus a car's value comes down real fast. So monetarily speaking its a poor investment anyway. Then all the expenditure on fuel and maintenance. It's a total waste unless you actually need a car.
I had a car for two years. Realized I didn't really need it so I sold it way back in 2010 and invested my money in a fixed deposit scheme. I'm still happy with the decision. My money is quietly growing instead of getting wasted.
So if you have car(s) that you don't really need, my advice would be to sell and invest the money in a reliable scheme. Play safe when you invest. Don't take unnecessary risks for quick returns. That would be my advice.
Secondly, if you do need a car ask yourself if you really need a new car. A used car that's in good condition may a better option. Again, you save money that you can invest or use for better purposes. Likewise for a whole lot of other stuff: furniture, TVs, sound systems... If one can get good quality used stuff at a lower cost then I think it makes good economic sense to take that option.
It's not that I'm against buying new things. But perhaps its better to do so when you can afford them instead of going under debt. So if you like to buy new stuff either save enough money first or climb high enough in your career and earn enough to be able to afford it. And do so honestly. No point trying to live a "good life" while being in debt or at the expense of your ethics and values. Your economic freedom (i.e. being as debt free as possible), long term financial security (i.e. saving the necessary amount of money for your future needs as well as for your children's education, etc.) and living a life of spotless character are far more important that owning fancy stuff to satisfy short term desires or impressing others. Doing things the right way and at the right time always brings fulfillment. Always. So have patience and work steadily towards your goals.
Same thing for buying houses. My advice would be to not over stretch and get into unnecessary debt. Buy when you're ready and buy what is within your reach. Even if you have to take a house loan keep it under control. Better to buy a smaller house and grow slowly instead of taking up too heavy a debt.
PS1: I think we need to stay aware of the possibility that there are entire establishments and advertising industries out there that want to sell us an idea of a good life and what all we need to buy so that we are "truly happy" - all that so that they can get richer. We need to stay sharp and alert. At each step, think carefully: what do I actually want and need? Is it wise to spend money on this or that? We need to stay very intelligent and live sensible lives.
PS2: I've observed in recent times that there are times when the ladies of the house push for an "immediate rich life". Now now ladies...what'ya doin'? We men be on the spoilter side of the balance anyway. You need to be tellin' us: "No honey, savings for our children's college education and our old age now - Hondas, Hyundais and Lamborghinis later, that family vacation to Hawai: maybe at the 25 mark, and all that gold and diamond stuff you be spendin' money on for me...you know you don't need to do that...just love me back, that be enough."

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