Re: Debt free life? So we all agree than that talking 'Meaningful loans' is viable and good.....Home Loan, Education Loan, Business Loan (with planned business course) and to a certain extent a Car Loan (which has become a necessity today).
But what I would call a debt free life for myself is life without Bad Loans. Period. And these are Personal Loans with monster interest rates, Credit Cards and Loan Against Security (it comes with sleepless nights).
I'LL SHARE MY STORY:
4 years back, I took a Loan against my only investment flat on the outskirts of the city which I bought with my own hard earned money and was quickly given 70% of the loan on this property by a local bank with the option of putting in interest only (not too much, 10.75% annual compared to 2% monthly on credit cards) on the money used at the end of each month. I thought wow this is so convenient, I can keep investing the surplus money that I could save and withdraw money for my personal needs (just like we do with credit cards, coz this one came with a debit card too!). I realised that sooner than later I had reached the upper limit of the loan and when I looked back I had spent 2.5 times per month almost of my usual expenses, for 2.5 years. Why? Free money at my disposal which wasn't actually free and had to be paid back sooner than later! Because this flat was an investment, I asked the Loan Manager that I intend to sell it....sold off and paid bank their dues and kept the small surplus with me. And realised that I could have been living on my means easily and with a flat in hand too.
I cross that flat every third day and every third day of my life I realise that because of the metro station coming there shortly its value has gone up by almost 17 lacs and still growing! Now, havent I done a big mistake and burnt my fingers!
But as my mom says, you dont get in life what is not in your destiny. Best was that I moved on towards a debt free life pretty early in my age and now again stable in life. But I know another such mistake has a potential to financially dent and demotivate me.
Lessons I have learnt from my little experience are:
1) Never spend beyond your means
2) Never take loans for leisure, banks will leisurely take them back from you!
3) Invest! Invest your surplus be it only 500 rs., not only because it grows that ways, but it also prevents you spending right now in unnecessary things and most importantly prevents you from taking loans in rainy day.
4) Dont take good loans also beyond your capacity!
5) Learn from your financial mistakes if you have managed to get over them....they won't forgive you the next time. |