Jagoinvestor
March 2, 2017
I don’t own a flat like Techie guys – So What ?
This is a guest post which is already published on Ravi Karandeekar’s blog, which is an excellent blog when it comes to real estate (more related to Pune). Ravi discusses various projects and his experience meeting with Builders and various stories of real estate frauds etc.
A few days back, I read a real-life story of a female IT engineer in Pune and she shared various aspects of her life in detail, which I thought should be read by more and more people and I took permission from Mr. Ravi, if I can republish his article on this blog, which he agreed to and I am thankful to him.
Here is a great write up below.
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Hi Ravi,
I regularly follow your blog and I like your sarcastic style of writing. I have read several of your articles where you have highlighted the importance of living a quality life versus living a life under pressure to own a house as soon as possible at any cost in huge debt.
I think in life we have to make certain choices where we cannot achieve what others can because our circumstances are different. Mine is another such case.
I am an IT engineer and a daughter and a wife.
I am the only child of my parents so their entire responsibility is on me.
My parents are simple middle-class people who worked hard, saved every penny so that they can give me a comfortable life and a good education.
They sacrificed nearly every personal need of theirs so that I can go to a convent school, become an engineer and have a happy childhood with all worldly comforts. Beautiful clothes, birthday gifts, toys, ice creams, picnics. Everything was for me and only me.
We lived in the heart of the city
Until I graduated we lived in the heart of Pune city in our very old ancestral rented home. They did not even buy a new flat within the city limits although they could have afforded it.
If they had bought that flat they would have had to cut out almost all the comforts from my life and quality education.
So they bought a cheap apartment on the outskirts in a pathetic locality (just as a backup) while we continued to live in our ancestral home.
That 1.5 lakh difference mattered to them. And they made a choice – Me
When I graduated eight years back we had to move out of our ancestral home.
Our backup apartment is on the 3rd floor with no lift and my mother has health issues because of which she cannot climb those 3 sets of stairs.
So eight years back, at the age of 22, I had to think about our future accommodation.
My starting salary at that time was 24K and the rent was 7.5k. My father retired around the same time with a government pension. There was not enough money to buy a new flat in the city.
I had 2 Options
So there were two options.
Option 1: Save that 7.5k of rent for my future life and let my parents stay on the 3rd floor in a sad locality.
If I save the rent money I may even be able to buy a home inside the city in 7-8 years.
Or in that money, I can have a lavish wedding.
Whatever!
My mother’s diabetes had impaired her health and climbing stairs would have been extremely difficult. She compromised saying “I won’t get out of the house much so I don’t have to climb the stairs”. From age 55 she would have been trapped in a house for months like a caged animal.
My father too was old. The neighbors were not nice. Water supply problems were there. Medical facilities, our relatives and all the other things that we were used to would have been unreachable for us.
Parents were ready (as always) to live that life as of course they don’t want their daughter to spend 7.5k every month. Our scrupulous traditional middle-class parents will never touch their daughter’s money!
Option 2: Spend the rent money, I will have fewer savings and let my parents live a decent life.
All their life they sacrificed and adjusted. Don’t they deserve a good life at least during their last years?
Importance of TIME in life! YOLO!! (You only live once)
My parents are not going to have these last (healthy) years again!! Soon they will cross mid-sixties after which they will be too old to even get out of the house.
This is the time window (55 to 65 years) when I can give them the lifestyle they deserve as the proud parents of a highly qualified daughter. So I take the decision and rent out an apartment (against my parent’s wishes).
Our backup apartment stays locked.
Eight years have passed and option 2 has worked out really really well!
How?
We live in a beautiful spot in Kothrud surrounded by greenery and beautiful bungalows.
My mother goes for walks every day since we live on the ground floor. She enjoys going to the market and being able to live a normal life.
My father is thrilled as there is a katta nearby where all the retired members like him meet in the evening.
All our relatives live nearby. We live in a 30-year-old 1 BHK and the floor tiles belong to the 70s era. But the people here are so friendly we live like one big family.
I can get a flat on rent in a high rise in a cosmopolitan atmosphere in Baner or Wakad (where I would be very happy btw ).
But here we are surrounded by Marathi families like ours. There is an excellent hospital nearby. The convenience, homeliness and the safety of the neighborhood are important to me. The society does not have amenities like swimming pool, club house but my home is filled with happiness.
My Priorities
Years passed, I got promotions and salary increased. I was easily getting a home loan. 1 BHK was a piece of cake and 2 BHK was also possible.
But turns out not buying a flat was very wise. There were many things that had to be handled first. We planned our monthly budget well, saved most of my salary, spent smartly and also had a little bit of fun.
Four years back my mother had a heart attack. Several hospitalizations and a bypass surgery set me back by around 8 lakhs.
But that was easily managed. I was never tense about money and my parents were relieved that we don’t have to borrow from anyone.
I had managed my finances so well that I gifted my mother a pair of gold earrings 2 months after the surgery for a speedy recovery!
I am happy too!. I was able to save for my own wedding. Since our wedding expenses were well within our reach we were able to enjoy it completely.
I have also been able to fulfill some of my dreams. I am passionate about travelling and I have been to my dream destinations Himachal Pradesh, Kerala, Dubai and New York.
In these eight years, I have lived a fulfilling life. Dining out in fine restaurants, going shopping in malls are some of the things we never thought we would do.
Parents/Family suffering because of loan
My folks are happy that I am able to have fun and don’t have to scrimp and save like a person in debt. I do not frown like a debt-ridden son when some unexpected expense turns up. I have seen the scenes from movies\tv serials where the son reproaches his parents when any expense comes up as he has a big loan and says “Baba atta Kasa Shakya ahe! Tumhala Kalat nahi ka loan ahe” (English meaning is – “Dad, How is it possible right now, dont you know there is a loan”). Way to go, son!
This is what you give your parents in return for their entire life spent on you!!. Unbelievably, I have seen this scene in real life also in many homes!!!. These guys have a 2 BHK and a Sedan worth 10 lakhs but they will frown upon if their parents\wife have to have something basic.
There was a time when my parents made a choice between me and their dream home. When I grew up I made a similar choice. It’s okay if I don’t have my own flat at the age of 26 like IT engineers do.
I will have it when I am 35 or 40 years old. But these 10 years of my life were important to me.
Spending on top-notch medical treatment, living comfortably, travelling around the world, saving for my wedding, supporting my husband was my top priorities.
All the while I am saving money aside for my dream house too. I am halfway there, slowly and steadily I will get there. You must work out a plan that suits your circumstances and lives happily because you only live once.
Regards,
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2 Tough Question for all readers
- Do girls take the decision of buying a house in a more sensible way compared to guys?
- Do males face more life issues when it comes to “home ownership”?
Disclaimer: This is a personal story and views by 1 person depending on her life, her experience, and her circumstances. Let’s not judge male/females by this one article alone.
Please share your perspective about this article and what do you feel about the issue? How is a male life different then a female when it comes to buying a flat considering how our society has shaped up to date.
I would like to hear your views and stories in the comments section.
Hello everyone !
I just don’t understand why every one is so much against the buying homes early in their life… means it’s okey to live on rent. But owned house always gives you a feel of comfort and sense of fulfillness in your life lest the apprecited prices of your homes This appreciation in real estate prices over time would also be one more reason for buying them early.
Living in rented homes always keeps you unsecure especially in the environment where real estate prices increasing like mad… You in back up of your mind would always think that one of your life goal is still to be fulfilled and prices are already going high!
It’s always okey to sacrifice your 5-10 years (considering the pre-payment) for repaying home loans and ensuring safety rest of your and your loved once life.
One of my colleague had purchased the row house in Nasik in 2006 for about 8 Lakhs. Considering our salaries that time (we are Govt employees) , the 8 Lakhs amount was too high, and everybody including me was wondering how can he repay the loan and for how many years he has to be slave working for banks repaying that home loan. But in 2006 itself VI pay commission has granted to Govt employees, salaries of us gone high and he could manage to repay that debt in 7 years only (with not much compromise on his household expenditures as well) and imagine what that row house has valued as on today… after 15 odd years that row house is having valued more than a crore.
Had that friend not taken decision to take a risk, take home loan and purchase that row house, today he would never even think of owing that house.
From this instance I learned my lessons and I also purchased home on loan. In just 05 years I managed to pre pay all the loan and cherry on the cake that home has also appreciated double in value.
Many can debate the appreciation in homes can not be considered as return as homes are dead assets and we literally can never think of them selling and encashing the gains… Correct, but my point here is that with the appreciated value you may not be in position to purchase a one!. Right Na! So, unfortunately you have to compromise on the locality or purchase smaller home.
I think I made my point clear. These are my personal views anyways 😉
Thanks for sharing your personal view Vijay
I dont think the author of article (the lady) is saying that she is against buying house early. All she is narrating her personal liking and life story I guess. Just like her story is REAL for her, yours is also REAL for you..
To each its own! .. So Go ahead with whatever deems fit for you! .. Thanks for sharing the long comment btw !
Manish
I also want to share my story, it may help decide to live on rent or buy a flat.
One generation up, our parents, they never had this craving of owning a house in their late 20s or early 30s. They saved enough and when they thought they could afford, they purchased the one.
I work in IT and come from a small town. I started working in Metros. 2008-2013 was a time when a need for having your own flat was generated buy the realty estate builders/agents. As if,
if you don’t buy now, you won’t be able to buy ever.
I also fell in the trap and booked an under construction flat and almost all my peers did the same.
Some of us have got the possession but few are able to reside. The reason being, affordable homes were in the outskirts and workplace is very far. Some of them changed the job and relocated to other
city. So the point of owning a home and living in that could not be realised for many. And got the burden of debt over the head in an early age that too in a time when IT industry is going
through tremendous pressure. Most of us have become wage slave, just want hike so that the burden of debt could be offloaded. People have 50, 60 Lac of home loan, 50K plus EMI and staying far
from the workplace.
In the end, I learned that, if you cannot afford buying 1Cr home then don’t buy. Stay on rent, you can change your job without much strings attached.
Thats a wonderful sharing ! .. I agree with you . It does not make a point to buy a house with so much debt only to realise that you will not be able to use it and have to move to other cities
Manish
I studied in a coed school and college. I noticed that girls mature faster in a way. That said, in intellect and applying logic they are no way less and it is more individual. All things being equal, a woman looks at things a little differently than a man. Probably, it is the sports culture and boyish games where winning and being the victor takes precedence.
Well, buying a flat is a personal choice. But if one is getting shackled by that into wage slavery – may be that too is a choice (even if unknown and unthought – thoughtless seems a cruel word).
Most get into EMI and flat and at the end of the term, the principal and interest makes the property double the purchase price. So what is the return?
I would rather live in outskirts in a rented place and invest a smaller amount than in an expensive flat and wait for returns on my investment. Or live in central place and cut on travel and save on time and spend more on that.
At the end, it is an individual thing – why someone want to live only in Mumbai, some want to live only in Delhi and some want to leave them and go to some place with no electricity and roads and get into farming after living in all kinds of cities.
Madness or the lack of it has nothing to do with the sex of the person – similarly rationale. One person’s rational decision seems madness to the other. We called a local barber to shave our infant son’s head after birth and paid him a good amount and gave a lunch. Our maid flew home with us for the occasion. My colleague took his son and the wider family to a temple town for the shave. My taking the maid by flight looked expensive to him and his bash looked even more expensive to me – for a haircut !!!
There it is.
Thanks for sharing how you feel about this issue 🙂
“But the people here are so friendly we live like one big family.” – I think this is the main thing 🙂
whether you rent or buy an apartment, you can verify the materialistic things but having friendly and cooperative neighbors depends on your luck.
Thanks for your comment Shyam Singh
manish congrats u shared a really good n emotional post.
one could be calm & steady, happy with his/her life but usually succumbed to peer pressure & unforeseen fears.
i am quite fortunate to live with parents(in a metro), married & a lovely kid, though not at par (economically) with my batch mates ( peer pressure).
one residing on rent can see shifting his rent to loan emi’s in two ways:-
1) pay an emi for a home – feel safe & optimise its emi being adjusted to rent(to some extent)
2) try for same but comfortable EMI(rent+overhead EMI) as an investment strategy
both being a liability of say 15 years. but both have own pros & cons, moreover 2nd option probably finally gives u a money equal to a flat/house to be purchased at later years. in 1st option ppl might be able to create a additional backup unit.
your comments pls.
YEs I agree with you. There are both pros and cons of each option . May be the 1st option is more practical because we dont live our lives on an excel sheet 🙂 . We have spouse, kids, parents and they have their own reasons and emotions attached to a HOUSE we own. Just because option 2 makes sense financially , people cant just opt for it …
That does not mean that option 2 is bad or is not a good option! . Its just that option 2 will not work out for many people taking various things in consideration !
Hi all, I think if this was in boys case they would have definately purchased the flat. Today’s girls are more demanding as they want boys to have their own property and want to live separately from their in-laws. So basically boys have to think from many perspectives and not just about his parents or himself.
Yes, thats correct !
hi Mr. Manish. Thank you for all the articles. I have 2000 rupees to save every month. Could you please suggest the best way to invest 2000 rupees every month for a period of 15 or 16 months so that I’ll get maximum return after that period?
You need to start SIP in mutual funds. Thats a good option for you ..
In case you are new to this, my team can help you with setting up everything from start to end. Just fill up http://jagoinvestor.dev.diginnovators.site/mutual-funds#sign-up
Dear Manish
This story appears to be a justification for not buying a house.Her father had a house not in good locality. Why was that not sold to get seed capital on which lesser loan would have got them a place of their own. On top of that father was a govt servant who would have got decent retirement benefits. in addition they were not covered with health insurance which is a big blunder. Also govt covers you for medical expenditure whether central or state.
Thus it appears to be a story more of justification for not buying a flat rather than prudence.
I own a 2 bedroom flat in mulund mumbai. Since I wanted to give a separate bedroom to mild both children each I rented a 3 bedroom flat within the same locality and gave out my flat on rent. The difference of Rs 10,000/- is worth for next 5 yrs by which time my daughter will be 26 and son 24 or my flat which is going on re development will be ready. So by spending 6 lakhs I get comfort of 3 BHK house. BUT despite having done agreement for 3 yrs after 1 yr the land lord asked me to vacate the flat as he lost his job in Dubai. Then I had to hunt for another 3 bedroom flat in nearby locality( which I found and settled now. ) Saving grace– bad comes worst I can always go back to my own 2 BHK house.
Remember the sword of damocles will always hang on your head in a rented accommodation and you cant decorate the house to your “taste”. So on one aspect it may be a financially better decision to rent a house BUT Staying in rented house lifelong with decoration ot to your taste Is it a wise decision is your personal call.
IMHO a rented house should always be a stop gap arrangement.
Thanks for sharing your thoughts . We all can come up with our views on this story and thanks that you gave yours. My only intention to share this story was to share how one person handled her case and if few people can get any learnings out of it .
I agree with you that there might be few blunders from parents side, like no health insurance, no proper financial planning for themselves etc.
I can see this like this,
Its not that those who bought flats with loan will end up in a situation like she mentioned its the poor financial planning they made. Who asked them to go for 2BHK in a costly area and a sedan with 10L when they can’t manage the financial turbulence even for a month or few months..
There are lot of things which everyone needs to fulfill before going for home ownership or buying luxury cars (in my thought process) like…
1. Creating backup funds (at least 3 months and 6 months is advisable)
2. Having enough insurance health and life ( in this case she lost 8 lacs for surgery may be a 20-25K insurance premium would have taken that responsibility)
3. Invest in your needs first before investing in luxury…
Buying a flat or staying in a rented accommodation is always a debatable topic and it will decided by ur priorities and the growth rate of your flat. Your financial planning and priorities are the best judges to decide…
THanks for those points .. makes sense !
Good to read another girl’s life story, esp one who has been a sound financial planner, able to balance both her familial responsibilities and financial ones. Hey story and philosophy is an inspiration to many of us, who succumb to peer pressure to tick the box at the “appropriate” time as defined by societal norms. It’s not a one size fits all.
I’ve been in a similar situation myself. My parents splurged on sending us to a school they couldn’t afford, bought us expensive clothes and everything we asked for, buying a small house in a developed neighbourhood instead of buying a site in the outskirts. I bought a house at 26, as my parents would have to climb two storeys in the flat they own. I settled for a neighbourhood closer to where we were brought up, inside of the fast growing and new localities in Bangalore. There was definition a compromise on the appreciation. But totally worth it as my parents would have been uprooted and become dependent on a car and driver of we moved to the new localities.
We are on a well developed and old part of town being close to neighbours.
Buying the house was a stretch as I’d to dip into all my savings. I but it’s been the best decision, as I will be able to retire the loan within 7 years of buying the house. What looked like a huge amount is manageable right now, because our income also grows.
In these years I’ve gotten married, with mostly my money and mom’s help, bought jewellery, traveled abroad, sponsored my husband’s study abroad, splurged on gifts, spent money on education for myself and saved to pay back the loan to a large extent.
The lesson for me is to put family first. We’ve a life ahead to create money. There is no dearth of money in this world and given our education we can create what we choose. Immense gratitude to our parents as we are where we are thanks to their sacrifices, choices and generosity!
Thanks for sharing your story !
Good decision blend of logic and emotions
Thanks for your comment THENNARASU
Your point is valid Manishji emotions are priceless and everyone should respect them. Though many people are involved while purchasing your first home you should clearly understand the benefits of both rented home and owing a home. In my personal opinion the rented home benefits are more if you study and understand in deep.
Three main benefits:-
1) Flexibility of changing your location as per your convenience as per family needs.
2) No EMI burden
3) The more money you save can be invested , remember the early you invest the more you get.
Also I have seen many guys who are owing there first home but not living in it as it is inconvenient for them in daily life.
Thanks for sharing your thoughts Nikhil
I am sure the benefits are more visible depending on which side of marriage are you standing on ? I am not sure if you are a bachelor or Married with kids.
Manish
Generally it is said that women are better investors and seen a real example now in this article. Her choice makes sense for everybody who pass through this phase.
Thanks for your comment Your Money Matters
I personally feel, that this is all hypocrisy, though the girl has taken a good decision, pls let me know if even one percent of parents would like to marry there daughter with someone with same mindset, leave parents how many girls would marry before asking about financial well being of spouse, pls remember this so called nuclear family culture started with our father and fore father’s leaving in search of job and financial well being. Easier to preach and difficult to practice.so no doubt in my mind that financial approach for ladies and males is totally different in our society.
Hi Amit
thanks for sharing your thoughts.
Marrying someone with this mindset I think is totally a different thing altogether. I would be interested to extend this conversation to discuss why its seems wrong to choose a guy who has a flat over someone who does not have it? Its after all the world where the “survival of the fittest” applies. I am sure men also choose women who are more beautiful than someone who is not (others things being equal).
In the same way if a girl is choosing among prospective partners, its very natural to choose someone with more wealth and health . After all its a cruel and unfare world.
Please share your thoughts.
Hahaha…..comparing these two things;boys choosing beautiful woman and woman choosing boys with wealth, luxary etc simply does not make sense. Are you saying that only beautiful woman have the right to demand that a prospective groom should own a house?? Even those women who are not so beautiful do expect boys to have their home nd luxary.
Boys whether handsome, hot or just ordinary looking have to own a house. Thats it. And women whether beautiful or not will always demand that boy should have his own house atleast. Yes its an unfair world…..
Comparing these two things;boys wanting to marry only beautiful girls and girls wanting to marry boys with own house and luxary etc etc does not make sense at all. Are u trying to say that only beautiful girls have the demand of own house. Even girls who are not looking beautiful do demand that the prospective grooms should have his own house.
Now as far as boys are concerned whether they are hot, handsome or not so handsome they have to have their own house. Its as simple as that. You will find so many cases where intelligent, educated girls have chosen grooms who are not so smart and good looking but have his own house, is the only child of his parents so no brother in law, sister in law. Yes it is an UNFAIR WORLD.
Thanks for sharing your thoughts Nimesh
Manish, so you are basically supporting the double standard. On one hand the girl is being praised and called smart for not investing in a flat but on the other hand guys are getting the shaft for taking the same decision. What kind of hypocrisy is this? By your very logic, it shouldn’t be wrong for guys to ask for dowry either. It’s a cruel and unfair world and the rich guys deserve to call all the shots and set the terms of marriage.
I think we are talking the same thing . I am saying that both men and women are right in choosing the partner based on looks and wealth. I never said one is right and other is wrong.
“It’s a cruel and unfair world and the rich guys deserve to call all the shots and set the terms of marriage.” – I am saying exactly that in the comment. Also I am not supporting the girl nor men. The article is up for sharing with all a story and we are discussing perspective from everyone.
Manish
Hi Manish!
Thanks for sharing such a wonderful post! I am totally in agreement with what the girl did in her early years of career.
I also agree with the fact that women/girl are more sensible in buying homes. And, I am telling this from my own experience. My wife did an excellent financial calculations for buying our dream home. She planned a 3 year life style with a mix of austerity as well as bit of leisure . Though, I was reluctant to buy house that time and was pushing my wife to enjoy life, travel abroad, etc but she was firm! Finally, we bought a row house (lavish one but little bit outside city limits). our parents live with us and they are happy too,to have a garden, backyard to manage and spend time. We spent at least two years with compromise. Later, salaries increased, loan transfers and few more tips helped us overcome the burden. We started enjoying the life again, started traveling abroad for vacations and had a family now.
I guess, if I would have been the one to take the decision, this dream home would not have been possible to own!
Thanks
Sumit
Thanks for sharing your personal story here .
I am sure you got a good financial planner with you 🙂
Manish
@Sumit, I woud like to know what tips helped you to help you reduce burden, if it can be applicable to general public
Since the author asked for another perspective..here is mine.
My father was in a govt job, lived in govt. provided apartment. In a span of 40 years, we had to change our flat only once..from a 1bhk to 2 bhk. When he retired, I was already working. Yes, in IT. We didn’t own any house, land or had claim in family property. I and my sister studied in a separate city, away from home. So he had to finance most of the eduction through his savings and PF. As he retired, I wanted us to stay together. Bought a flat in a location where many from his organization has bought. It was at a manageable rate. However,the flat construction was delayed by 4 years. We moved to Pune as I found a better job and for other family reasons. My parents joined me and we rented an apartment. This is the first time they were living on rent. We had rent agreement for 3 years. We finally decided to settle down in Pune, again for personal reasons. Sold out the earlier booked flat. Father has a nice group of new friends.As 3yrs was about to be over, we started getting call from landlord. He was too about to retire and wanted to shift to his pune home from mumbai. And then I saw the panic in my in my parents. They were scared, insecure, Sleepless. For them it is a big change. So now my priority is to give them a permanent address,needless to say..closer to hospital. So, I have decided to buy a house,on loan.
Thanks for sharing your story.
Its great to read things like these which shows the real life issues and they way humans take decision related to money matters !
Excellent story Mr. Manish, i really learned a lot.
Glad to know that shahid ..
Good insightful article which shows the choices one has and how pragmatic decisions can be taken without being blinded by sentimentality of having own house. It will be also good to know the savings approach( MFs ,direct equity or regular FDs) which was taken by the author which enabled her to provide for her parents emergencies.
Thanks for your comment Pramod
Nice article an eye opener for those who buy new flats taking heavy loans. In my view you should buy new home when you are in totally good financial condition and that too for living in it, not as investment. What works well off course this is my personal view that you should save the proposed emi and invest in mutal funds shares after years of investment when you are in position to buy, purchase new home. This reliefs from the emi stress and you have option to change locality as per your wish, working location.
Just go through this nice whatsapp message and take a wise decision…
Time Will Come !
New York is 3 hrs ahead of California but it does not mean that California is slow, or that New York is fast. Both are working based on their own “Time Zone.”
Some one is still single. Someone got married and ‘waited’ 10 yrs before having a child, there is another who had a baby within a year of marriage.
Someone graduated at the age of 22, yet waited 5 years before securing a good job; and there is another who graduated at 27 and secured employment immediately !
Someone became CEO at 25 and died at 50 while another became a CEO at 50 and lived to 90 years.
Everyone works based on their ‘Time Zone’,
People can have things worked out only according to their pace.
Work in your “time zone”.
Your Colleagues, friends, younger ones might “seem” to go ahead of you.
May be some might “seem” behind you.
Don’t envy them or mock them, it’s their ‘Time Zone.’ You are in yours!
Manishji nice article..
Thanks for sharing that Nikhil
I would like to just add one point . People do not buy house always with mathematics in mind, They are not always calculating the best time and right EMI. There are times when they have to take into consideration various other real life emotional issues like parents health, how their parents feel about owning home, pressure from spouse and looking at the inconvenience of their kids.. All these contribute to the point of buying a house.
Manish
Truly appreciate the girl efforts in taking care of her parents,
but I do not see any extra ordinary decision taken by the girl, she thought like every other girl who is the only child for their parents.
Thanks for sharing your thoughts on this