I know everybodys situation is different but after meeting several homehunters I have found several commanilities. Here is the dominat profile of the house hunter that I have met.
Male, late 20's to early 30's, earns 10 lakhs per year (had a great career so far and moved from 2 lakhs to 10 lakhs in 5 to 8 years), married and has a small kid. Wife doesn't work.
These guys get around 70K in hand and has a 50 lakhs budget ffor the home and has around 25 lakhs saved...roams around on a bike and is looking to buy a car. On loan.
I fail to understand how he will manage his expenses if he has to pay EMI on 30 lakhs homeloan and 5000 EMI for his car.
Can somebody explain this to me???
To me, its a financial harakiri to buy that 50 lakhs house if his household income is 'just' 10 lakhs per year....even if he pays 20 lakhs as his own contribution and has 5 lakhs to buy curtains.
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I know this must have been discussed 100's of times and multitude of different threads but I still cannot fathom. If you are one of those guys (10 lakhs income at 30 and sole earner), please educate me.
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  • Job loss for people in th 10 lakh payscale is unknown in india. So the risk appetite is higher.

    It is likely to remain so in the near future
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  • "Job loss for people in th 10 lakh payscale is unknown in india." Again a funny statement from WillyWick.
    Dude, Currently You may not know the jobloss for people in 10L category as there are few ppl who work in that category. Our companies are keen to higher mid exp. ppl to do there job. But still there are lots of ppl who lost jobs & they were part of that 10+ club
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  • I think the answer is evident from replies of a few:

    People are hedging against potential future earnings. They think that they will continue to move up the ladder and hence their financial position will improve drastically over time.

    The above might have been true for past few years, but from the IT professional's perspective, might not remain that way for long period of time. Consider this, most leading IT companies have hiked salaries barely above inflation (and if you are unlucky enough to have a lower performance grade, even below inflation) in past couple of years. So for some people, the actual earning is negative considering consistent +/- 10% (unofficial) inflation.

    What many people fail to consider is that while your income may (or may not) rise exponentially, your expenses certainly will. If one buys a house at young age of 25, he/she have very little idea on how the future expenses will pan out. Ask couple of parents about their kids' education fees back in 2008 and now in 2012. This is just one example.

    There is of course, another future bet of getting timely promotions, but people who work in big IT companies know how narrow Pyramid keeps getting as your travel up the ladder. What was assured with 3 years of good performance before, has now easily become 5 and may become 8 after a while.

    Just my 2 cents (or more realistically, Paisas).
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  • Originally Posted by SpiritualMind
    "Job loss for people in th 10 lakh payscale is unknown in india." Again a funny statement from WillyWick.
    Dude, Currently You may not know the jobloss for people in 10L category as there are few ppl who work in that category. Our companies are keen to higher mid exp. ppl to do there job. But still there are lots of ppl who lost jobs & they were part of that 10+ club


    Havent read any layoffs in the 10L club unless you talking about about few rare exceptions , maybe kingfisher
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  • Just google the web & see the current economic situation..Dude rosy days are over..Soon there will be financial "ZERO hour" & pune RE will realize its true value
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  • Originally Posted by NG2012
    I know everybodys situation is different but after meeting several homehunters I have found several commanilities. Here is the dominat profile of the house hunter that I have met.
    Male, late 20's to early 30's, earns 10 lakhs per year (had a great career so far and moved from 2 lakhs to 10 lakhs in 5 to 8 years), married and has a small kid. Wife doesn't work.
    These guys get around 70K in hand and has a 50 lakhs budget ffor the home and has around 25 lakhs saved...roams around on a bike and is looking to buy a car. On loan.
    I fail to understand how he will manage his expenses if he has to pay EMI on 30 lakhs homeloan and 5000 EMI for his car.
    Can somebody explain this to me???
    To me, its a financial harakiri to buy that 50 lakhs house if his household income is 'just' 10 lakhs per year....even if he pays 20 lakhs as his own contribution and has 5 lakhs to buy curtains.
    ----------------
    I know this must have been discussed 100's of times and multitude of different threads but I still cannot fathom. If you are one of those guys (10 lakhs income at 30 and sole earner), please educate me
    .



    25 lacs in savings in 8-10 years of career . I am amazed nobody commented on this! bhaiya .... peanuts kha kar hi itne paise bachaye ja sakte hai expect those who get long stint of onsite work / big dowry.
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  • Originally Posted by SpiritualMind
    Just google the web & see the current economic situation..Dude rosy days are over..Soon there will be financial "ZERO hour" & pune RE will realize its true value



    The crisis western world are facing is due to a lot of factors, most prominent of them all are over leveraging, over spending on credit and little in saving...We have just started on this path and are miles away from their fate...

    Regarding the RE prices, I dont see a steep decline...when prices crashed in 2009 many investors jumped in to avail the opportunity...an asset like RE, in most of the cases, have a holding period of 5+ years...we are still 2 years away from the minima of it...around 2014-2015 one should see ample supply of investors flat in market...

    Also tougher global economic conditions will hurt people who have not done their proper due dilligence or banked upon the future growth ( which many may have assumed strong and steady few years back)...these will also want to be exit from market...

    So if one is proactive in his search then he can clinch a good deal in couple of years to come...

    I hope to be one such man...
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  • Originally Posted by hb_78
    25 lacs in savings in 8-10 years of career . I am amazed nobody commented on this! bhaiya .... peanuts kha kar hi itne paise bachaye ja sakte hai expect those who get long stint of onsite work / big dowry.


    Very true. Its very difficult to save 25 lakhs in 8-10 years if you are working in India.

    After seeing general trend & my friends, I can say that 50 Lakh+ house can be afforded only by set of people belonging to following category:
    1) IT guy (single/married) who has been onsite for at least 1-1.5 year
    2) DINK - Dual Income No Kids families
    3) Person who has some help from family/parents
    4) People with 6th pay comission earning 1 Lakh+ per month (Professors)
    5) Black money guys
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  • Originally Posted by WillyWick
    Job loss for people in th 10 lakh payscale is unknown in india. So the risk appetite is higher.

    It is likely to remain so in the near future


    Jobs that pay 10 lakhs+ per year are very tightly linked to the economy. Indian as well as global.
    I do not know whether RE will crash in face of economy tanking but I know for sure that well paying jobs will become scarce if and when that happens.

    Originally Posted by hb_78
    25 lacs in savings in 8-10 years of career . I am amazed nobody commented on this! bhaiya .... peanuts kha kar hi itne paise bachaye ja sakte hai expect those who get long stint of onsite work / big dowry.


    Many people get a donation from parents, have proceeds from RE sale in their hometown, ancestral gold etc etc.

    It was my mistake...I should have said that the guy has 25 lakhs (and NOT "has saved 25 lakhs"). I am sure there are quite a few people who have their own 25 lakhs within 10 years of service but we should consider everybody who has access to 25 lakhs. Thanks for pointing it out.
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  • Originally Posted by Gsagarcoep
    I am 23 years old and I am looking to buy a flat now. I think that when in future my salary will increase, I can save some money and reduce my principle amount, which in turn, will reduce my loan tenure. I plan to make it null by 10 years maybe.

    It's all about planning your money wisely. There are a lot options for that. Start early !! :)


    23 years age.........Money comes by luck (at least 50% is luck) and it comes when it is destined to come. But this time will not return. In your age, live your life. I am sure you are making a good balance between life and investment at this age. Money comes and goes. But what always remains with us are the memories of time we have 'lived'. If one invests 90% earnings in RE and market crashes then he will loose all money. I may be wrong but my theory is....when you are 23...spend 60% on tours/trips or what ever pleases you. as you keep on aging, keep decreasing the spending amount. No recession will be able to take the moments you have lived away from you.
    .......just concerned....... :bab (16):
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  • Originally Posted by boy.hash

    After seeing general trend & my friends, I can say that 50 Lakh+ house can be afforded only by set of people belonging to following category:
    1) IT guy (single/married) who has been onsite for at least 1-1.5 year
    2) DINK - Dual Income No Kids families
    3) Person who has some help from family/parents
    4) People with 6th pay comission earning 1 Lakh+ per month (Professors)
    5) Black money guys


    You covered only salaried persons.

    I think almost 30-40 % investors belong to business class and we tend not to consider them. I know businessman... even a pan wala owns 1-2 flats.

    these people never pay taxes showing loss in business ( though they are making good profits ) and park this money in safe heaven of RE .
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  • Originally Posted by NG2012


    WIth overactive libido I couldn't think beyond women when I was 23. Not that I was successful at that either.

    .


    ;);):D

    A very Honest post I must say .

    Well I agree that with that early in the career most of the people think about career growth... like MBA etc.

    Though nothing wrong if one doesn't have such aspirations and loves his/her job. and looking for stability.
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  • Originally Posted by jackdaniel


    But this time will not return. In your age, live your life. I am sure you are making a good balance between life and investment at this age. Money comes and goes. But what always remains with us are the memories of time we have 'lived'. If one invests 90% earnings in RE and market crashes then he will loose all money. I may be wrong but my theory is....when you are 23...spend 60% on tours/trips or what ever pleases you. as you keep on aging, keep decreasing the spending amount. No recession will be able to take the moments you have lived away from you.
    .......just concerned....... :bab (16):


    Thats exactly what I feel.

    But not everyone has the same thinking and everybody is free to live the way which makes them happy. I enjoy a lot....spend and save at the same time. just try to strike a balance between living a good life and securing the future as well.:bab (4):

    PEOPLE DESTROY THEIR HEALTH FOR MONEY AND LATER ON LOSE THEIR WEALTH TO GAIN HEALTH.:bab (39):

    Better to live the life to the fullest and time one gone will never come back... but if you have good health and pace of mind you can always earn :):)
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  • I think the guy is in a good position to buy this flat. He has 25 Lakhs in hard cash, thats very important. 10L is still good salary. I think he should go for it.


    Originally Posted by NG2012
    I know everybodys situation is different but after meeting several homehunters I have found several commanilities. Here is the dominat profile of the house hunter that I have met.
    Male, late 20's to early 30's, earns 10 lakhs per year (had a great career so far and moved from 2 lakhs to 10 lakhs in 5 to 8 years), married and has a small kid. Wife doesn't work.
    These guys get around 70K in hand and has a 50 lakhs budget ffor the home and has around 25 lakhs saved...roams around on a bike and is looking to buy a car. On loan.
    I fail to understand how he will manage his expenses if he has to pay EMI on 30 lakhs homeloan and 5000 EMI for his car.
    Can somebody explain this to me???
    To me, its a financial harakiri to buy that 50 lakhs house if his household income is 'just' 10 lakhs per year....even if he pays 20 lakhs as his own contribution and has 5 lakhs to buy curtains.
    ----------------
    I know this must have been discussed 100's of times and multitude of different threads but I still cannot fathom. If you are one of those guys (10 lakhs income at 30 and sole earner), please educate me.
    CommentQuote
  • Originally Posted by sheeshu
    In times when it's difficult just preserving capital from inflation, good luck funding luxuries with investments.


    One should not buy luxuries on loan if investments dont produce enough returns. Does anyone sane buy clothes on loan then why go and buy a car on loan (unless you buy the car on a companies name and deduct depreciation and interest from taxable income)

    One also needs to take a hard look as to where his/her savings are invested. If majority are invested in FD, PPF and EPF then the returns will not outpace inflation. If a person has bought some ULIP or money back insurance scheme then chances are again the returns will be very poor.
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