The 40% EMI Mantra
20 Oct 2022
While saving and building wealth, one must not ignore the liabilities they may incur in the path towards wealth creation. This is where the 40% EMI rule can save the day.
Individuals usually take loans to buy a house or a car or they may run up huge credit card bills.
The 40% EMI mantra states that the total debt / EMI that you pay towards a loan or credit card bill must not exceed 40% of your net income.
Put simply, if you plan to buy a house (or anything else), with a take home salary of Rs 1 lakh, make sure the EMI is less than Rs 40,000.
This simple mantra will ensure your liabilities are in control and don’t disrupt your finances or your ability to repay the loan.
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