TB - 8%.
Heart attack -16%.
WHY SIP and why not an EMI....
Lets see the points...
By investing in SIP...you are actually CREATING a corpus wherein you can buy ASSETS with your own instead of BORROWED future earnings which can be hugely stressful.
Know what....SIP will also help you benefit from COMPOUNDING and actually create WEALTH
An EMI will do the reverse......your money is GONE....the asset you bought is depreciating and the all the future earnings are not being enjoyed by you but going to service the EMI.
One of the worst decisions that many make is
TAKING A VEHICLE ON EMI
By the time your EMI ends (normally 3-5 years), the price of the vehicle would have become more or less ZERO due to depreciation and you need to go for an EMI again!!
3. A Sip can always be STOPPED in between in case of any financial difficulties you may have but an EMI cannot be stopped. If you skip paying any EMI...the charges and penalty are levied and you are burdened even more!!
Think TWICE before going for an EMI
EMI or SIP?
Save, only where there is a forced liability-EMI
Save, with a purpose and goal in mind-SIP
Save, to meet Your Life Goals-SIP
Asset appreciating, in value-SIP
EMI or SIP :-)
SIP helps you
1. in Developing Financial Discipline by inculcating the habit of SAVING.
2. Your Financial dreams can be achieved with your OWN money and not borrowed money
3. NO STRESS!!!!!!!!!!!!
EMI results in DEBT
4. NO need to worry about Market Levels as SIP buy MORE at lower levels and buys less at Higher levels.
5. Helps you to enjoy POWER OF COMPOUNDING
6. VERY IMPORTANT - WITH AN EMI, YOUR COST IS ALWAYS HIGHER. WITH A SIP, YOUR COST OF A PRODUCT THAT YOU PURCHASE IS ALWAYS AT ACTUALS and sometimes even at a Discount as a Seller always prefers Immediate Money and Later Money (like an EMI).
7. In an EMI....you PAY interest....
IN a SIP........you EARN Interest
8. You have NO control once you take the EMI....
For every little change in your life like changing a job, changing your residence, buying another asset....you will have to think so many times due to your unavoidable, must pay EMI
9. Control over Asset Allocation.
Once you have taken EMI...you cannot change the Asset and the debt outgo will be there
With a SIP, you can always cpntrol where to invest (Equity, Debt funds, Gold funds, International Funds, etc)
EMI is PRISON
SIP is FREEDOM.
Do also read how YOUR HOME LOAN EMI can be made FREE with a SIP....
if there is any advantage with an EMI is...
1. You get to enjoy the Asset immediately
2. You Know the ACTUAL Outgo every month
Here again....for the 2nd point...if you are displined enough (which you ought to be, for your own benefit)....the actual outgo can be known and even maintained
For the 1st part....DISPLINE is required from the outset and Delayed Gratification will ensure that you dont need EMI
If you are indeed going for an EMI....it only shows that your Financial Planning is not proper.
If planned prudently with the help of a Good Advisor, then EMI should never be a part of your life. Never.
INVEST IN SIPS......MONEY WORKS FOR YOU
GO FOR EMI.......YOU WORK FOR MONEY