Why you should Buy a Second Hand Car?

Few Months back i have published the Article - Buy a Second hand Car.
I have received so many comments on this article. Most of that comments were from highly un satisfied readers. I can understand the feelings of my readers.
Few days back, i have received a comment from a reader. Here is the Comment.

" I guess there is a thin line between frugality and savings. Would you die as a billionaire without experiencing the small joys of life OR you would die with sufficient savings and all the enjoyable memories of life with you? I think the decision to buy a car of more than 1% of your asset should NOT only be thought from financial point of view, but rather an emotional point of view also. It is a balance that needs to be achieved. If you are satisfying your emotional needs then I think buying a car more than 1% of assets might not be a bad idea. Imagine a person wants to buy a car of his choice, but is stuck with your logic of 1%."

Well, the purpose of this article was just to educate the people regarding they should not spend more than they earn. See. Basically these car companies are marketing their products so aggressively that, it affects your mind. So Not having a Luxurious Car will feel you poor.

Because this aggressive marketing by Car Companies, people starts thinking that if they want to look cool and rich than they must buy a car. So they don't buy 2nd hand car only because they want to look cool and rich.

They started thinking emotionally that they are not happy because they don't have a new luxurious car. Well, to those people i would like to advise that,Car is one of the Ultra-fast depreciating item. Means once you buy the new car, it will loose more than 60% of its value within first 4 years.
So instead why not buy just a 2-3 year old car having a good condition?

Because somebody else has already taken that loss on their head. Yes, I know that it will feel you poor and the reason for that is because Car companies have so aggressively marketed their products that not having a car will make you unhappy or feel poor.
second thing i have mentioned in the article that, True rich people never buy a car more than 1% of their Total Net Worth. Well, see.. No matter how you feel emotionally or psychologically but the true fact is that,"If you want to live Financially free and without having any financial burden, than you have to spend less than you earn"


No matter how you attracted by some car or something else but the basic fact of happy living is that, you must have to spend less than what you earn. If you love a car worth of Rs. 10 lacs and you don't have a net worth of Rs. 20 lacs only than buying a car with borrowed money is a Fool's plan. Because by borrowing money you give the rights over your future Income to anybody else (Bank or Financial Institution) and this is not at all a good financial plan, No matter without having a car what you feel..........


Please try to understand that, not having a luxurious car feels you poor and un comfortable only because those car companies have spend literally spend hundreds of crores of rupees behind marketing their various car products. It is only the state of your mind that makes you feel poor..........
So i again advise readers that, please buy a 2nd hand car only. Never buy a car of more than 1% of your Total Net Worth............

I know, first you won't look cool and rich but when you see your Wealth growing, you won't care how you look.....!!!!!!!!!!

Investment Tips : 1 Rupee Saved & Invested is 10 Rupees Earned

There is a saying that, "1 Rupee Saved & Invested is 10 Rupees earned"Well, what it means by the above saying?.well...it means that,... when you earn 1 Rupee.... you pay 30 paise (30%) to the government as a Tax (assumed that you fall in a 30% Tax bracket).So now remains 60 paise only after paying a tax to the tax man.Now you got to market for a shopping.

you have already paid the Tax of 30 paise. so you do a shopping from remaining 60 paise.But wait, the problem here is that the thing you buy from the market has already tax inclusive price. so you pay Double Taxation on your hard earned money.One Tax you pay to government from your salary before you do any other expense from your pay check and second Tax you again pay to the same government when you buy a thing from the market which prize is inclusive of all Taxes.so what it means?....

You pay roughly 50 to 70 paise (50-70%) Tax to buy the item of 30 to 50 paise.So it means that to buy 30 to 50 paise item you earn 1 Rupee.Now Suppose you earn 2 rupees and pay 60 paise Tax (30%) to the Taxman.from rest of the 1.40 rupees you expend 40 paise and save 1 rupee.So what it means?well.... you have saved 1 Rupee so actually it means that you have saved 1.60 Rupees. because 1 rupee saved means 1 rupee saved plus 30 paise Tax saved.plus you haven't shop from this 1 rupee so you have bypass the double taxation.So it means that in reality you have saved 1.60 rupee (1 rupee saved + 30 paise Tax to Tax man + 30 paise double Taxation).Now you have invested this 1 rupee (virtually 1.60 rupees) to any asset. say from example stocks and put this amount there for 10 years.So what happens?....

your 1 rupee now has earned another rupees.And the Investment Income is totally Tax Free.So it means that, 1 rupee saved and invested now work as your employee in the market. everytime it generates more employees (rupees) of its kind and these more employees generate even more employees next time and so on....

But here, the advantage is that, the rupees that your originally saved 1 rupee has earned is a Tax Free Income even though it is a earned Income (by your rupee).And everytime these rupees generate more money all of them are Tax Free....So Remember,...- 1 Rupee saved & Invested is 10 rupee earned- Save & Invest as much amount of money as possible- The money that you earn is 100% Taxable but the money that your money earns are totally Tax Free.- So understand the fact and save more money....