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Saturday, October 3, 2009

Save Money Make Money: Episode 8

Concept 8: Stop or Minimize Living on Loans

To lead a life under the perennially hanging sword of debts is never a healthy life style. Nor it makes sense economically or financially. You lift the loans from the various lenders at exorbitant interest rates and throughout your life, you pay through your nose, the hefty interest part of your loan alone for a very long period of loan repayment before you come down to repay the principal part of it. You are meekly handing over your hard earned money (on which you have paid pretty good amount of income tax) to money lenders who are amassing your money without doing much. Do any calculation and you will find that you are a loser. This whole thing is a big drain on your earnings. If you can save it by buying only that much which you can afford within your earnings, you can stop this drain and lead a life with less tensions, pressures, stresses and strains.

If you must buy something like education, house or car and you can not afford them within your income, do take sensible amount of loan(s) and settle for an appropriately priced education, house or car.

If at all necessary, take loans only for value adding essential items or activities like education, house or car (car, only if the public transport is absent or inefficient). Do not take loans for anything else.

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