You are richer than what you think...
By vanny
@vandana7 (102698)
India
February 9, 2013 8:10am CST
Well...may be not rich...but more comfortably off...
I am hoping to bring down stress levels of some of you.
So...you have stocks...take credit limits on that. You have a house, take credit limits on that. You have a car...even that can fetch some credit limits. Gold and other precious metals allow you to borrow as do tax saving instruments. In India we have NSCs..national savings certificates. You can save taxes on them, and simultaneously avail credit limit on them from any bank.
Now..I am not asking you to splurge all that...in fact, I am asking you to avoid splurging all that. There is a strict no for spending away that money. You may also not lend it to anybody. However, credit limit when it is sanctioned to you...it gives you confidence to face any problems and take some risks.
And it keeps you happy...if I or my loved ones get sick and we run short of insurance monies, I can always withdraw from this account and cover up in future ...kind. Likewise, if I or any family member lose the job, this will help us to survive. I could never sell a house..being from old school of thinking. Instead, I would borrow on it. At the worst, I would sell the house, and buy a smaller one in my budget, and then avail credit limits on it.
And the best part of it all....all those precious documents and stuff, when they remain with the bank, it is the banker who spends on their security..lol
So do you all have this kind of deficit financing in your country?
5 people like this
11 responses
@blackrusty (3519)
• Mexico
9 Feb 13
well i must admit i just moved to mexico back in June still working on becoming Mexican so as of now i don't know much but as i am american yes we have the same and more to the point we just want all your spare money and then some so go borrow so you can live on nothing
1 person likes this
@vandana7 (102698)
• India
10 Feb 13
Oh dear...I am not asking that you borrow, I am asking you to keep yourself prepared for some emergencies with such kind of products so that you feel less stressed ...how will I manage if there is an emergency. Quite often, we are unable to do it in the last moment. And keep stressing ourselves over not having enough savings for such things and forego small desires to build up adequate savings.
@vandana7 (102698)
• India
10 Feb 13
Yeah...that is a good concept. But savings get used up if we liquidate them..but if we take credit facility on the savings...and repay this sort of borrowings at our convenience, would it not be retaining savings and surviving the crisis?
Let me explain...
Suppose you have savings of 10000 and your banker is willing to offer you credit limits of 7500. Dont use it...until you feel there is an emergency. Now, suppose you withdraw 5000 out of it...the interest meter starts ticking. But you also have some monthly receipts which can be routed into that account. So your monthly receipts have the effect of brining down 5000 to 3000 or so.. you start averaging around 3500 or so..Ok? So the banker is charging you interest no doubt..but you are paying interest only on 3500. Its like repaying a loan. We are not always eligible for loans, right? But this is an indirect loan availed. We can increase it back to 5000 or even 7500. :) That sort of flexibility you do not have in your home loan. Hope I got across to you this time. :)
@blackrusty (3519)
• Mexico
10 Feb 13
i would say the same try to put a 1/3 of your income if you can into savings make sure that you do have stuff on hand for anything that may happen in your area extra drinking water what ever the needs are and plan for the items that will last a week
@else22 (4317)
• India
10 Feb 13
I never get much money in my hands,but I am happy even now when the prices are skyrocketing.I have a habit of saving dince I was a school student.Our family consists of seven members and none of them splurges money.We live a very simple life.A major part of my private expenses is buying books.I have a home library of my own and the number of books has been going on increasing constantly.Now I lack space and so I am now in the process of restructuring my house.
1 person likes this
@vandana7 (102698)
• India
10 Feb 13
I am sorry to learn of your hardships. But this is where we go wrong I think...we first need to move from simple life towards the luxuries. Instead, we start enjoying before we provide adequately for adversity. If I had kids, I would ensure that they got into buses before they got a chance to have a ride in the car. And I would ensure that they traveled in buses regularly till they had a home of theirs and adequate savings. At the best, a two wheeler. Some people buy kids vehicles when they are not yet earning members and then cry when kids die in foolhardy races. That is stupid parenting I feel.
@else22 (4317)
• India
10 Feb 13
Living a simple life is initially rough,especially if you are habituated to leading a luxurious life.But ultimately it pays rich dividends.I had experienced abundance in my childhood.After my father expired I underwent abject poverty.I had to sustain my family consisting of as many as seven members.We lived a very simple life then.So simple life has never been tough for me.In fact,we enjoy it.
1 person likes this
@urbandekay (18278)
•
11 Feb 13
I count myself rich beyond the dreams of avarice because I have.
1. shelter
2. a fire
3. food in my belly and food in the cupboard
4. free medical care
5. health
all the best, urban
@vandana7 (102698)
• India
11 Feb 13
Great..
Quite often, we are so lost in comparing our financial status with others and getting stressed about it, that we forget what we have, and forget how to use our assets optimally.
We do need to check what we have...and feel good about what we have...it is a very warm feeling to be contented, and know that if calamity does strike, I am prepared for it. :)
Quite often, we are so lost in comparing our financial status with others and getting stressed about it, that we forget what we have, and forget how to use our assets optimally.
We do need to check what we have...and feel good about what we have...it is a very warm feeling to be contented, and know that if calamity does strike, I am prepared for it. :)
@dpk262006 (58679)
• Delhi, India
10 Feb 13
Hi Vanadana!
You have highlighted some good ideas to get credit on our assests in case the situation demands. It would be better to get credit on our own house or car instead of asking someone (read relative) for help.
However, I do not believe in taking loans against assests as it will have to be paid later with interest, until am pushed to the wall. Paying loans puts extra pressure on me.
@vandana7 (102698)
• India
10 Feb 13
Deepu...I am not asking you to use that facility...I am just asking you to avail that...and NOT USE IT unless absolutely essential.
You are an Indian and so you will naturally understand what I am about to explain to you...
So suppose the bank charges interest at the rate of 10 percent compounded per month on your borrowing...ok? And it is going to review your balances on per day basis and compound it on monthly basis. So suppose you do have this account, and may be need that money...and use it..you can immediately route all your other receipts through this account. Effectively, your outstanding balance will be lowered, and the question of compounding does not arise because the banker picks the interest at the end of the month, right?
Now...if you were availing credit facilities on your credit card..it would be a disasterous story because you cannot reduce your outstanding amounts. And the interest rate is exorbitant, right? That is why...this is a better option.
When there are emergencies...there is little time to rush around for borrowing. That is when we turn to friends or relatives and become obligated. That can be avoided by using such practices.
You are a wise person I know...:) But there are many who are not. :)
@bellis716 (4799)
• United States
10 Feb 13
We Have National savings bonds, which mature in 25 ¥ears. That used to be the considered safe but a very low rate of interest. However, bank savings accounts and CDs are now paying even lower rates. Due to our age, we prefer to keep our money where it is more easily accessible. Money market pays more than a regular savings account and can be drawn out at any time without penalty. We could get a reverse mortgage on our house, but that would be our last resort.
@bellis716 (4799)
• United States
12 Feb 13
Your suggestion about investing in the name of your parents mare me smile. It would not work for us, as both sets of parents are deceased. Seriously, I thank you for the advice regarding investments.
@bellis716 (4799)
• United States
10 Feb 13
It appears that rates on savings are higher in India than in the U S. Rates here are not keeping up with inflation, but at our age, I don't feel that we can take chances with your money.
@vandana7 (102698)
• India
11 Feb 13
Rates in India are also not keeping up with inflation. But some companies do borrow and offer interest that is closer to the bank's lending rates, but may be slightly cheaper. There are credit rating agencies that rate such companies. So it is up to people to go cherry picking. Senior citizens get a better deal and more tax concessions, so investing in the name of parents is a good idea.
@WakeUpKitty (8691)
• Netherlands
9 Feb 13
Most of us are richer as we think, might be it's just in our mind or if it comes to our health. But being or making yourself aware of that does cost a lot of energy and it also makes you think more... and more.. and realize that you need way more as what you fool yourself with.
1 person likes this
@ajithlal (14716)
• India
9 Feb 13
I am also from India and after reading all the above things, I do think that there are lots of ways we can do to get over a problem. I think eve if we are not rich, we can find financial stability if we work hard and also do things in a better way and also try to save money by budgeting. 
@vandana7 (102698)
• India
10 Feb 13
I was kind of surprised ...there are many people who do not know about such things!!!
I have a person out here...I guided him about his finances about 15 odd years. I told him he needs to establish a reputation ...get a credit score...and then get a home etc. Over the years, he bought two flats out here, and bought a house in his home town. The house in home town he purchased in the name of his parents. He always asks us monies to bridge the financial gap he faces, since he is a contractor. I feel he should be taking limits on his homes now instead of asking us. So this year, he again approached us, and since papa has been kind of godfather to him, I helped him out though I am feeling the heat. While doing so, I asked him to get that property in his home town gifted back to him, and avail credit limits on that. He was surprised that it was possible to do so and shocked at the potential - so much so that he is planning to buy another flat with those funds. Though he has not yet completed the relevant formalities, I am glad I could make one person less tense about managing his funds.
I have a person out here...I guided him about his finances about 15 odd years. I told him he needs to establish a reputation ...get a credit score...and then get a home etc. Over the years, he bought two flats out here, and bought a house in his home town. The house in home town he purchased in the name of his parents. He always asks us monies to bridge the financial gap he faces, since he is a contractor. I feel he should be taking limits on his homes now instead of asking us. So this year, he again approached us, and since papa has been kind of godfather to him, I helped him out though I am feeling the heat. While doing so, I asked him to get that property in his home town gifted back to him, and avail credit limits on that. He was surprised that it was possible to do so and shocked at the potential - so much so that he is planning to buy another flat with those funds. Though he has not yet completed the relevant formalities, I am glad I could make one person less tense about managing his funds.
@dandan07 (1906)
• China
9 Feb 13
Because of my early experience, I now form the habit of saving about 20% of my income when I get it. I consider it as the money for my old life. So even I am in a very bad situation, I will not use the money. As the account goes up with time, the money in it increase day by day, I know I am richer than I think.
@joliefille (3690)
• Philippines
10 Feb 13
You know this discussion has made me realize that my parents were really poor and remained poor because they didn't learn about investing. They weren't fond of any jewelry, at least it would be something they can pawn or whatever. Also, they did not invest in a house because they didn't really have the mentality to do that kind of thing, they had that old school kind of thinking. When I started working and later on my sisters, that's when I thought a little about investing. I'm trying to get them out of the poor mentality even though we're not really that rich at this point as we're just starting out.
@marguicha (230350)
• Chile
10 Feb 13
I would say I am neitherrich nor poor. I had all I wanted until I got cancer. Even with my savings and the health insurance I have had to use up a lot of my savings. I guess there`s no way to manage such an illness, but besides that, I agree with you about money management.
@vandana7 (102698)
• India
10 Feb 13
Oh dear...
I hope you are feeling better..and I am truly sorry...I know how expensive that disease can get. Just the other day, my insurance agent was telling me the costs of treating such ailments...mind boggling...kidney dialysis for one year...15,00,000 and cancer chemotherapy ...almost as much. So he wanted me to take a top up. I took for pa, and I promised him, next year I will take for me. I intend to. I know these are present costs, and 20 years down the lane, such cover will again seem inadequate. But hopefully, they will find some medication that would be affordable and easy to pop in just like headache pill.
By the way, before coming into discussion segment, I read a blog here on myLot...from medIndia...saying there is a pill discovered by researchers in L.A. May be you can look into that. It may not be in the market as of now. But if it is indeed coming, then cancer would not be as dangerous as it is now.
Hope you get well soon sweetie. Take care.
I hope you are feeling better..and I am truly sorry...I know how expensive that disease can get. Just the other day, my insurance agent was telling me the costs of treating such ailments...mind boggling...kidney dialysis for one year...15,00,000 and cancer chemotherapy ...almost as much. So he wanted me to take a top up. I took for pa, and I promised him, next year I will take for me. I intend to. I know these are present costs, and 20 years down the lane, such cover will again seem inadequate. But hopefully, they will find some medication that would be affordable and easy to pop in just like headache pill.
By the way, before coming into discussion segment, I read a blog here on myLot...from medIndia...saying there is a pill discovered by researchers in L.A. May be you can look into that. It may not be in the market as of now. But if it is indeed coming, then cancer would not be as dangerous as it is now.
Hope you get well soon sweetie. Take care. 
@natliegleb (5173)
• India
10 Feb 13
its all in the mindset and we have to perceive things differently and take life calmly and just keep moving ahead and not just cash which matter a lot
