Excellent read!
It's interesting article by Yogesh Chhabria.
LATELY, I have been thinking a lot about the Lehman crisis.
Spending money that they didn't have and going beyond their means is one of the
main reasons for their situation today. In fact thatli is the cause for the
current economic crisis in the US.
When I see this entire happening, I can only remember the good old
days. Then, karz was bad. People looked down upon those who took loans. Parents
would not give their daughter's hand in marriage to a man with loans.
But of course, the times have changed now. Everyone I know has a
loan. The buzzword is EMI (equated monthly installment) . Today, you can buy
everything on EMI - a house, a television, an i-Pod. In fact I know of someone
who just bought a fancy BMW 3 series on EMI, instead of buying a cheaper car
outright with cash. I mostly prefer to take public transport, but then I am an
old man with old thoughts!
Anyway, coming back to what caused the crisis. Imagine having Rs 2
lakh in your bank account, no regular income, yet buying a house worth Rs 65
lakh, in the hope of selling it for a higher price. Even if the price of the
house fell by just 5 per cent (that is Rs 3 lakh), you will go bankrupt.
This is what Lehman Brothers did; with around USD 20 billion they
went and bought assets worth over USD 600 billion. Isn't it suicidal and simply
foolish?
I am sure things would have been different, had I been the head of
Lehman brothers. But who wants an old conservative man like me to head a
complex financial institution.
But there are a few lessons that we can learn:
1.Live a balanced life and avoid overspending.
2.Don't buy things we don't need.
3.Don't buy Branded good's.
4.Don't buy excess Food, Cloths, Cosmetics, Footwear, electronics
and Fashion accuracies
just think before you buy.
Tip: World still has a lot of growth ahead and the future holds
immense opportunities for us. Let us make the most of it and save and invest it
wisely instead of wasting our precious little on things we don't need.
5.Try to balance life with work (No one is happy to work in their
profession's) .
6. Don't stress out your self, after work try to do some extra
activities like swimming, yoga, walking, running where you can divert your mind
from stress.
A thumb rule: Health is more important than money.
7.Try to understand each other (Wife and Husband) in financial
matter's and help each
other.
Tip: As soon as you get your monthly salary, set aside a fixed
amount, usually 35 per cent, for insurance, savings and investments. You can
then spend the rest.
8. Not all loans are bad. Loans that are 'need based' (home loans,
education loans) can always find a place in your finances against those that
are largely 'want based' (Credit cards, personal loans, car loans).
9. Borrow only if repayment is financially comfortable.
A thumb rule: Keep EMIs within 35 to 45 per cent of your monthly
income
In that respect, there is one American who I really respect -
WARREN BUFFET. He has lived in the same ordinary house for over three decades,
drives his own medium sized car and leads an extremely regular 'middle class'
life. If that's all it takes for the richest person on earth to be happy, why
do all of us need to take extra stress just so that we can get things which
aren't even essential?
Best regards
"If I can help somebody as I pass along, if I can cheer somebody
with a word or song, if I can show somebody that he's traveling wrong, then my
living shall not be in vain."
