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Buy house or take on rent, what is advisable, let's see

To buy or rent a home Are you torn between renting and buying a house? This video delves into the age-old debate, exploring the financial implications of both options. Whether you...

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Introduction

In the ever-evolving landscape of real estate, the decision to buy a house or rent one has become a subject of intense debate. While owning a house offers a sense of security and ownership, renting provides flexibility and financial advantages. In this blog, we'll explore the dynamics of this age-old dilemma, drawing insights from personal experiences and financial wisdom.

The Necessity vs. Investment Debate

The first home is often seen as a necessity, providing a sense of stability and security. However, the mistake highlighted here is buying a flat on EMI, tying up finances that could have been invested elsewhere. While deciding between home loan or a rented accommodation, the inflation in real estate and rentals needs a close consideration. Taking a loan from parents is proposed as an alternative, ensuring the money stays within the family. Starting a Systematic Investment Plan (SIP) with an amount equivalent to 10% of your home loan Equated Monthly Instalment (EMI) can help you regain the home loan amount loan amount within 20 years, assuming an annual return rate of 12%.

Ownership and Security

The emotional aspect of homeownership cannot be ignored. Owning a house provides a sense of belonging and security. Those who own may not fully appreciate it, while those who don't aspire to have their own space. Striking a balance between financial goals and emotional well-being becomes crucial in this decision-making process.

Living for the Moment

The argument for living in a rented space and investing time in relationships rather than real estate is presented. Changing residences every few years is deemed financially viable. Comparing with service like Rent-a-cab instead of owning a car adds a pragmatic touch to the discussion.

Individuals must conduct a self-assessment to determine if such a lifestyle is sustainable in the long run. Factors to consider during this evaluation encompass proximity to the workplace, convenience regarding nearby amenities such as daily essentials, grocery stores, routine healthcare facilities, schools, recreational opportunities, commuting duration, and the adaptability of each family member to such a lifestyle. It requires a thorough examination of various elements to gauge the feasibility of embracing this living arrangement for an extended period.

Vastu and Premiums

Lessons learned from personal experiences emphasize the importance of choosing the right location. Whether for personal living or investment, considerations such as Vastu and premium for a better view are suggested. The blog encourages readers to be mindful of these factors to maximize returns.

Legal Aspects and Due Diligence

When purchasing a property, the potential risk of errors in property titles and associated documents arises. To mitigate this risk, individuals can engage the services of a lawyer specializing in title search services. Moreover, when securing a home loan from a reputable institution, such as a nationalized bank, the bank conducts a thorough evaluation of the property chain.

The Case for Renting

Contrary to conventional beliefs, the blog presents the option of staying in fully furnished rented accommodations. The residential accommodation at India typically comes with a rental amount of 2-6% of the property value. Looking at this range, opting for rented accommodation will be suited best financially. Further, potential financial benefits like lower upfront cost and the today’s world convenience of hassle-free relocations, lower maintenance cost, challenges the ingrained Indian sentiment of needing ownership for security.

Second Property as an investment

The blog tries questions the common practice of taking loans with the expectation that rent will cover EMIs, urging readers to consider the potential risks involved in this intricate game. There are lot many other factors such as occupancy level, maintenance issues, property and income taxes, depreciation in property due to age, area concentration risk, illiquidity generally over shadow the potential perceived benefits. The notion prevails that if one seeks substantial returns in real estate, the rewards may not materialize promptly; instead, the advantages will be savored by succeeding generations.

So, one may look at estate planning while carefully examining the second property as an investment. This insight prompts readers to think critically about their investment choices and the legacy they intend to leave behind.

Conclusion

In the quest to answer the eternal question of whether to buy or rent, this blog navigates through personal experiences, financial insights, and unconventional perspectives. By weighing the emotional and financial aspects, readers are encouraged to make informed decisions that align with their unique priorities and goals. Ultimately, the housing dilemma is not a one-size-fits-all scenario, and the path chosen should resonate with individual values and aspirations.

To Buy or to Rent: Decoding the Housing Dilemma Introduction In the ever-evolving landscape of real estate, the decision to buy a house or rent one has become a subject of intense debate. ...

In the game of cricket, when a team is faced with a daunting target, the approach cannot be slow and steady right from the start. Similarly, individuals with less than a decade before retirement, and a modest retirement corpus, often find themselves in a challenging financial match. Just like a cricket team chasing a high score, they might need to adopt an aggressive strategy to make up for lost time and build a robust retirement fund.
The Aggressive Playbook -Maximizing Contributions
Just as a cricket team needs to maximize their run-scoring opportunities, individuals nearing retirement should consider boosting their savings. Maximize contributions to retirement accounts, taking advantage of employer-sponsored plans and additional voluntary contributions.

Diversification – Playing on Different Pitches
A successful cricket team adapts to different pitches; similarly, diversification is crucial in investment. Spread investments across a mix of assets like stocks, bonds, and real estate to mitigate risks while seeking higher returns.

Cutting Unnecessary Expenses – Fielding Well
Fielding well is vital in cricket, and financial defense is equally crucial. Identify and cut unnecessary expenses to redirect funds toward retirement savings. Every penny saved contributes to the overall score.

Seeking Professional Coaching – Financial Advisors
Just as a cricket team benefits from the guidance of coaches, individuals approaching retirement can seek the expertise of financial advisors. A professional can help tailor a strategy, assess risk tolerance, and make informed decisions.

The Power of Compounding – Building Innings
In cricket, a series of well-played innings can lead to victory. Similarly, the power of compounding can significantly impact retirement savings. The earlier aggressive strategies are implemented, the more time investments have to grow exponentially.

Risk Management – Playing Smart Shots
While aggression is essential, playing reckless shots can lead to wickets falling. Likewise, managing risk is crucial in retirement planning. Strike a balance between aggressive investments and safer options to safeguard the retirement corpus.

The Final Over – Preparing for Retirement
Just as the last over of a cricket match requires strategic planning, the final years before retirement demand careful consideration. Review the retirement strategy periodically, adjusting it based on changing circumstances and market conditions.

In conclusion, for those with a limited time horizon and a modest retirement fund, adopting an aggressive yet strategic approach can be the key to financial victory. By maximizing contributions, diversifying investments, cutting unnecessary expenses, and seeking professional guidance, individuals can aim for a successful retirement innings. Remember, just like in cricket, a well-thought-out game plan increases the chances of achieving a winning score in the game of retirement planning.

Retirement Planning: A Lesson from Cricket – Aggressive Pursuit for Financial Victory In the game of cricket, when a team is faced with a daunting target, the approach cannot be slow and steady right from the start. Similarl...

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Mutual funds, a wondrous thing,
Invest your money, watch it bring
Long-term wealth, growth, and gain,
A wise investment, a financial chain.

With mutual funds, you can invest,
In stocks, bonds, and assets that attest,
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The power of compounding, a great force,
In mutual funds, it takes its course,
With time, your investment will grow,
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Choose wisely, invest with care,
In mutual funds, you'll find a rare,
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Investing in mutual funds, a way,
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So take the leap, invest in trust,
With mutual funds, your wealth will thrust,
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A prosperous life, year after year.

How to invest in Mutual Funds

Here are some common life goals and recommended mutual fund categories to achieve them:

Short-term financial goals (1-3 years) - Liquid Funds or Short-term debt funds.

Building an emergency fund - Liquid Funds or Short-term debt funds.

Children's education - Equity-oriented Hybrid Funds or Large-cap Funds.

Retirement planning - Equity-oriented Hybrid Funds, Large-cap Funds, Multi-cap Funds, or Index Funds.

Wealth creation - Multi-cap Funds, Small-cap Funds, or Mid-cap Funds.

It's important to note that these recommendations are general in nature and one should consult a financial advisor before making an investment decision to ensure that the investment aligns with their specific financial goals, risk tolerance, and overall financial situation.