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Play now and pay later !

Better be a ploughman (worker) on your legs than a gentleman on your knees (seemingly rich but in debt) – Benjamin Franklin

Muthu recently wrote a blog on what is short and long term http://wisewealthadvisors.com/2015/05/24/short-term-and-long-term/

thought i will expand on it a bit.

Short Term : Play now and pay later

Long Term : Think & decide

a hoarding screams

The above hoarding is an example of play now and pay later, in this case EMIs for 24 months.

Now this is clear, if you want to play now, you can as from cars to phones everything is available at zero or low down payment, but do remember, you definitely will have to pay later along with interest.

So, what is long term thinking here: first think. Every financial expense means you are borrowing from yourself in future as you alone have to pay the bills later.  An investor thinks the opposite, invest now to get more later.

After thinking if your decision is to still spend money on buying stuff, please go ahead but only with money you have.If you don’t have the money, you can not afford it so find an alternative till you can afford it.

A reminder here, i’m not all suggesting that investing is denying life’s little pleasures, definitely yes. I’m all for the weekend movie or dinner, the key word here is ‘little pleasure’, spending one months income on a gadget is definitely not little, though the EMIs make it look as if it is little, they add up to a lot!.

I’m not against borrowing for purposes of long term benefit, such as a house or education of children. They are basically investments for a good future, the 50 inch TV does not fall under investments even though it may be smart TV, but you would not be smart to buy it on installments. It is downright dumb to have a smart TV but not much saved up for a rainy day.

Pay for it if you can afford, else, look for alternatives. Your life will not improve much by owning too many gadgets, which seem to go out of style every weekend but your bank balance and investments will certainly improve and that to me and i hope also to you is the ‘deal of a lifetime’

 

 

{ 4 } Comments

  1. Muthu | June 17, 2015 at 2:56 pm | Permalink

    Good insight. Very well articulated. Keep writing more.

  2. Bhaskar jain | June 17, 2015 at 3:16 pm | Permalink

    Thanks. Recently came across this simple quote and it has stuck to me – “Money speaks only one language – if you save me today, I will save you tomorrow”

  3. shankar | June 25, 2015 at 11:37 am | Permalink

    Thank you for the encouragement, Muthu

  4. shankar | June 25, 2015 at 11:40 am | Permalink

    Agree Bhaskar Jain, thank you for the comments and please do share your comments in future too. You can also subscribe to our mailing list, and help us spread the word by asking your friends to check the blog.

    This has been written from actual experience, have seen many suffer because when their incomes increased they increased their expenses much faster by borrowing, today they are really struggling to make ends meet.

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