Thread by @myfinology

Answering every iPhone-lover-new earner's query once & for all👇

Should I buy an #iPhone on EMI?

Please ‘re-tweet’ & help us educate more investors

(1/10)

#personalfinance #investing #loans

Let's understand this with a real example :

I earn ₹35K p.m, live in a rented flat in Mumbai & pay EMIs of ₹10K p.m for education loan.

I'm planning to buy an #iPhone12 on 9-months EMI.

Can I afford to buy now? 🤔

(2/10)

Before moving to 'buy / not to buy' decision, you should understand ur current spending status first. (Recipe.finology.in > Prosperity Ingredients > Spending Habit)

Say, rent 8K, food 5K, fuel 2K, clothes & outings 5K & existing EMIs - 10K.

Which means you are -

(3/10)

When u r 'Overspending', it's suggested to bear a new expense & jeopardize d situation!

Try tweaking ur spending habit first to see if d new purchase fits in or not.

Click 'Replan' button & enhance ur spending profile by reducing non-essential exp. (Wants)

For eg

(4/10)

An Iphone 12 costs around ₹61K in Amazon (probably lowest among all e-coms). The 9-month EMIs for most credit cards is around ~ ₹7.5K

But can you fit it into your new spending plan? 🤔

(5/10)

Under the enhanced spending plan, u are saving ₹8K p.m. So yeah, u can afford to pay EMIs for the new Iphone12.

But wait!

You will save & invest less than 2% of ur salary (₹0.5K), which should ideally be 20%! So, clearly NO❌

Not just that, check ur debt profile👇

(6/10)

Say, u have ₹10L education loan with EMI of ₹10K. If u chose to buy the Iphone, u'll add another loan of ₹61K with EMI of ₹7.5K

Total Loan = ₹10.61L; Total EMI = ₹17.5k
(no existing savings)

Enter these in Recipe's Debt Diagnosis calculator & see the result👇

(7/10)

As you can clearly see in the results, your ‘Risk of Debt Trap’ is High!

So, taking loan to buy Iphone won’t be a good option for you now.

But wait! We have an alternate plan for you👇

(8/10)

What if we say you could buy it at ease without having to worry about EMI payments every month?

Go to Recipe.finology.in > Dashboard > Goal Planner > Add ‘Custom Goals’

By investing just ₹5K p.m, you can buy an Iphone12 next yr (even if its price goes up to 65K)

(9/10)

Sounds cool, right? 😍

The only caveat is u need to realise dat purchasing it today is only gonna overburden u, but 1 yr hence, u'll be in a much stable situation to buy it without any stress.

So, start investing & u’ll never have to compromise wid any of ur goals!

(10/10)