India has been on the path of development for a long time now, we have definitely achieved some significant milestones. Thanks to the ‘Age of Globalization’. Specifically, today’s youth, who are constantly going after the extravagant lifestyle, simply because they feel they can afford it. But in reality, a detailed research shows that today’s youth is paying more EMI for their aesthetic pleasures than they save in a month for their future.
Effects of EMI & SIP
To be very frank, EMI’s are worse and do more harm than good, if a loan is bought without proper deliberation. EMI eats away your wealth and investments slowly and painfully. One tries to manage their finance by trying to compromising the other expenses but that never achieves the objective because a huge chunk of salary goes to EMI, which makes it worst situation financially speaking.
On the other hand, Systemic Investment Plan (SIP) is the exact opposite of EMI as it slowly and gradually increases your wealth which secures the future against unforeseen contingences. Contrary to an EMI, SIP even though deducted from salary is not a burden and in fact reduces your burden as it increases your Net worth.
How to use EMI and SIP to our advantage!
If an EMI is paid to create an appreciating asset than that is called a good EMI, because in that case you are leveraging your finance to optimize the returns on the investment that would otherwise be blocked in buying the asset. And in case of SIP, if invested in the right place can unlock the power of compounding which will increase your Net worth and help you achieve your financial goals and freedom.
So don’t fall under the Trap of Leisure and invest in EMI’s. Act smart and start an SIP today to attain financial freedom in the long run.