We all know about Inflation, the hidden dragon. However, our fancy lifestyle is more dangerous than inflation. We even don't mind going into debt just to fulfill our instant gratification. We just get tempted to 'use now & pay later' and credit cards, ease of finance, EMI holiday gives a false sense of owning things.
This philosophy is extremely dangerous in the long term as you move toward overspending first rather than saving. As you don't understand the benefit of compounding interest in the long term through investments, you never understand the ill effect of borrowing and paying compounding interest in the long term also.
Investments are important but keeping oneself under debt will eat out more than what you actually earned through investing. Try to get out of Debt as early as possible as most people can not differentiate between good debt & bad debt.
There will be always two options available:
- Borrow first - spend - pay interest & principal
- Invest first - earn interest - spend
The majority of people who struggle financially throughout their lives fall under the first option. If you have a lifestyle that depends on borrowed money, from other people, or from credit cards, no advice can help!
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