Should you buy things on EMI or pay upfront! Debt Traps which you should avoid
Recently, I ordered an iPhone XR worth Rs 39,999 on Flipkart and surprisingly some of my relatives thought that I purchased it on EMI. This actually surprised me a bit. Some Indian’s probably think that if you are buying expensive stuff, it has to be on EMI. Well, that’s not the case with me honestly, I paid for it full upfront and don’t think that I am rich enough. It all takes some planning and investment strategies to buy products at a cheaper price rather than paying extra for the same over the next 12 months or so.
How I got my Phone for almost Free !
Let me explain how did I do it. Well, I had been saving for the last 3 months to buy a new phone because I knew that within a time span of 8-10 months, my old iPhone which is an iPhone 6s is going to be out of support and it won’t get any software update ahead. Each month I saved not much around Rs 6000 separately for a new phone which I needed to buy in the future.
What I did was, I kept it aside every-time my salary got credited in my bank account. I feel I was lucky to put that sum not in the savings account but I kept investing that money in Bitcoin. Sounds Crazy na ??
Most people fear Bitcoin as an investment as it’s too volatile but if you had researched about it, you must probably know that every 4 years or so, an event is known as Bitcoin-Halving occurs. It cut’s the supply of new Bitcoins in half and soon a price rising trend happens. The last time it happened in 2017 or so and hence, I knew it would happen in 2021.
That research literally saved me 50% of the cost of my smartphone as the Bullrun occurred as I expected and my invested sum literally got doubled in the last 3 months. So that’s the power of buying an asset rather than piling things on EMI. Also, I thought that it would cost me around Rs 47,900 to buy the iPhone XR, but it has dropped in price over the last 3 months and I got it for Rs 40,000.
What should you learn from this? Well, the only thing that I would say to you is that if you want to control your tendency of impulsive buying, avoid Credit Card EMI traps, keep as much money possible out of your spending account. Only maintain the minimum balance and some extra thousand bucks to spend your month. Invest the rest of your salary in buying assets, which can be Gold, Stocks, Bitcoin, Ethereum, Silver, etc. Don’t show off by wearing fancy clothes until you are really rich. Always follow the thumb rule that it’s better to be rich actually than pretending to be rich.
Lastly, don’t take things on EMI, please. You are buying depreciating assets like Phones, Clothes, Fancy Glasses which will lose value with time. Start saving if you want to buy them and you will notice that after 3-4 months the price of the exact same product will fall when you will buy it later. Don’t upgrade your gadgets unless it’s really important for you and your work. And lastly, stay grounded.