A Young couple married for 5 years had a 3 year old kid. They love to live life and do not think before borrowing to buy a car they can ill afford and a house which need not be so big or in a locality which is very expensive to begin with. These two EMI's apart, they lead a liftestyle which has pubbing every weekend, 3-4 times a week using the food delivery app despite having a cook, driver, household helps, online shopping is rampant and a foreign trip once a year.
The younger generation wants a good life while the parents continue to live modestly. This is the story of young India. Most of them live beyond their means and the younger families are much deeper into debt than their parents, all because they want to stay or upgrade their status. Nothing wrong in aspiring for a better quality of life but if its coming at the cost of huge debts, are we living right ?
There is no doubt that the great Indian middle class is falling deeper into the debt trap to maintain a lifestyle. While the cost of cars, education, houses and medical care have become super expensive, income have largely remained stagnant. And filling this gap between earning and spending, there has been an explosion of finance into nearly every corner of the consumer economy.
The sucide of CCD founder, brings to the fore the dangers of debt. And he could not handle it despite being a billionare, having more assets than liabilities. Financial restriction can be the biggest killer, not just sucide but gives to other issues within the body and mind. Thus nothing holds more relavance today than living within our means.
Taking a debt for buying a house(considering housing loan is the cheapest) or for funding for a college degree is wise as it will boost earnings in the long run. But borrowing for everyday consumption or for liabilities like car that lose value makes it harder to save and invest in equities which is a real wealth creator in the long run.
Consumer borrowing widens the wealth gap. What was true for our parents and grandparents holds true even today - sacrifices are the key, it needs lot of patience but in the end it will pay.
The younger generation wants a good life while the parents continue to live modestly. This is the story of young India. Most of them live beyond their means and the younger families are much deeper into debt than their parents, all because they want to stay or upgrade their status. Nothing wrong in aspiring for a better quality of life but if its coming at the cost of huge debts, are we living right ?
There is no doubt that the great Indian middle class is falling deeper into the debt trap to maintain a lifestyle. While the cost of cars, education, houses and medical care have become super expensive, income have largely remained stagnant. And filling this gap between earning and spending, there has been an explosion of finance into nearly every corner of the consumer economy.
The sucide of CCD founder, brings to the fore the dangers of debt. And he could not handle it despite being a billionare, having more assets than liabilities. Financial restriction can be the biggest killer, not just sucide but gives to other issues within the body and mind. Thus nothing holds more relavance today than living within our means.
Taking a debt for buying a house(considering housing loan is the cheapest) or for funding for a college degree is wise as it will boost earnings in the long run. But borrowing for everyday consumption or for liabilities like car that lose value makes it harder to save and invest in equities which is a real wealth creator in the long run.
Consumer borrowing widens the wealth gap. What was true for our parents and grandparents holds true even today - sacrifices are the key, it needs lot of patience but in the end it will pay.
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