Page 44 - Banking Finance September 2024

ARTICLE

Be an Owner

not a Loaner

Rahul Chandalia
Volatility Coach
Ratni Finserv
New Delhi

The rich cultural heritage of India is visible in the omnipresence of Forts across the Indian
landscape. These structures reflect a larger-than-life style of living of India's richie rich. Even after
centuries, this craze for physical asset prevail.

T he rich cultural heritage of India is visible in Asset created House Property Mutual Funds
Mr. Credit
Mr. Investor
the omnipresence of Forts across the Indian
landscape. These structures reflect a larger-
than-life style of living of India's richie rich.
Crores#
(@ 6%)
Even after centuries, this craze for physical asset prevail. Value after 30 yearsINR 5.74 Crores *INR 22.09
Difference INR 16.35 Cr
Here's the point, We're living on steroids of borrowed
money. A 25 yr old dreams of buying his first car. But, ^78,670-20,000 = 58,670/-; *Future value of 1 Crore
succumbs to societal pressure into buying a Home early home in 30 Yrs @ 6%; # Future value of monthly SIP of
in career, which paves way into being a Loaner for life. 58670 @ 13% for 30 yrs

Example: Mr. Credit (30), took 1 crore home loan at Clearly, Mr. Investor creates 3.8 times more wealth &
8.75% for 30 yr paying INR 78,670 as EMI. His friend stays an Owner.
Mr. Investor (30) opt to rent @INR 20,000 and invests
There are non-financial consequences to it:
the balance. Let's see this: -
1. He maintains higher liquidity during these 3 decades
Mr. Credit Mr. Investor 2. Affords riskier decisions to switch jobs, being an
entrepreneur
Monthly EMI 78,670 /- --
Rent -- 20,000/- 3. Mr. Credit is trapped as a loaner & under constant
pressure
Investment -- 58,670 ^
Period 30 yrs 30 yrs
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40 | 2024 | SEPTEMBER | BANKING FINANCE