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Saturday, May 11, 2013

Life on EMI's

Want Home loan ? Want to buy i - phone ? Want to buy a new car this year ? Want education loan? Want Personal loan? 

Guess what is common in all of these !! The easiest, the quickest and the most convenient tool to turn dreams into reality, the mother of all Aladdins called  the 'EMI' . This magical wand can help you procure any goods to the permissible extent of deductions that you can afford from your take home salary. Such is the pervasive web of this offering that no matter how big a teetotaler you are, i am sure you too have 2-3 EMI's running currently. So where does it really start ?

Planning finances prudently
Planning Finances Prudently
Gone are the days when parents could within their limited means raise 2-3 kids, provide them quality education, get them admitted to reputed colleges and provide them 'EMI free future'. In the present times school fees , college fees , skilled and specialized courses, all are a package that you buy on the day one. However big a financial juggler you might be, there is no way you can escape funding education for kids , spouse or even self without the tool called EMI.  It's the supply and demand curve that one rides where he pays dearly while acquiring education and haggles for salary when he has to make use of the same learning. Whatever the scenario might be, it is most likely that you have fixed yourself a monthly debt even before earning a dime.

Let's move ahead and assume that you have a fairly satisfying and respectable paying job only if the comparison is made between haves and haves not. The acquisition spree will first start from gadgets and vehicle, be it an i -phone , tablet , laptop , fridge , washing machine, microwave, AC or a Car. The list is endless as the lure to acquire electronics comes with the a promise of interest free loan and cheap EMI's . Do your mathematics and choose any 4-5 necessary evils out of these and calculate the interest free burden. The prospect of buying will always look as simple as the projected numbers until they are analysed carefully. I bet half of your take home goes into collecting these machines, as the necessity to buy is instant , compelling and they are made easily affordable. The trap is set and one acquires another set of EMI's.

The bigger investments like housing dream cannot be much behind and one will be forced to plan for them, later or sooner. Now this is a tricky phase as the cost of ownership of these assets is costly and having utilized fully one's EMI potential it is hard to fund these wishes. Couples start thinking of additional incomes , dual incomes , job switch , going abroad to fuel this planned expenditure. Once you have stretched yourself to the maximum permissible limit and collected all your savings to invest, you again meet Cheerleaders like Banks , Builders ,Brokers and all sorts of Financial institutions. The moment they sniff your capability you will be swarmed by offers, projections and dreams that look so well within reach. Yes they indeed are or could be and as always one invisible force stands to gain in all your transactions. The monster called 'EMI' that brutally snatches all your money on the day one of the month and one helplessly resigns.

I am no different and also living 'Life on EMI's '. My model of  financial commitments leveraged on borrowings with the assumption that job , personal life and family all will go well is same as yours. I have also not discounted unseen events , failures , job losses , unplanned exigencies to the extent they should have been.  Since we Indians live every day on hope , dreams and unrealistic propositions this gamble will also be played till the end and lives will be poised on EMI's. 

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