I am thinking of some financial advice, please free feel to advice me or alternatives if there is any.
Let us suppose I want to build a house, a small house around 60 lakh. I have around 1 crore in cash. Now as far as I think I have 2 option if I don't want to take risks. My preference is stability here.
1) Build with full cash 2) Fix deposit 1 crore (let interest 8%) and take loan from FD with +2% (10%) for 5 years.
With first option. I can have loan free, no headache and straight forward deal. I built a house and then stay chill on that house.
Second option is interesting. I am earning interest from FD, but then there is deficit if I were to pay both principal of loan and interest rate, somewhere around 50-60K per month. But then there is some pressure but after 5 years if repaid on time, I can have my principal intact, though it looses its value by inflation.
Further interestingly If I earn 50K per month for 5 years = 50,000 * 12 * 5 = 30 lakh Whereas, with 2nd option, if I earn and pay loan 50K per month for 5 years = repay 60 lakh
I know must of us are here for quick money, less are for long term. My philosophy is not on generating quick profits only but on sustainably building wealth for future. Swing trading, investment is one part of building wealth. But still want advice of yours, just to make sure I am not "kuwa ko bhyaguta". High chance I might be thinking one one dimension. Critical points are highly appreciated.
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