MASTER MIND FINNASSET: EMI Pain

Friday, June 09, 2017

EMI Pain

He was 30. He decided to take a loan and buy a house like the rest of his friends.

For the next twenty years he paid an EMI of INR 50000.However, this EMI of his became an impediment in his investment path and because he failed to do an SIP.

After 20 years, he at 50 is without a job. He lives in the same house and can't sell it.

Life has come a full circle as he stands at the crossroads of life wondering what to do.

A wife, parents and two children with just a house to live and a few lakhs in the bank with a long life ahead.

These are those rare moments when one wishes for a shorter life.

As he stood there wondering what went wrong, he could see something very clearly.

"His EMI had hurt his progress?"

Had he lived in a rented house which in those days would have cost him INR 20,000 and had he invested the balance INR 30,000 in an SIP instead, the wealth he would have made would have been INR 6 cr. instead of the few lakhs that he currently had.

Even if he were to live a lifestyle of INR 200,000 per month for the rest of his life till the age of 80, he would just need INR 3.6 cr. out of the INR 6 cr.

With a residual INR 2.4 cr, he could have even opened an orphanage which had been his dream and thereby left behind a legacy.

He realised at that moment; the moment of truth that "EMI is slow poison & SIP is the key to Financial freedom".

(Above scenario is just an example. Rest depends upon Cash Flow of an Individual)

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