As I was driving back home yesterday after work, I saw a massive billboard at a crossroad. It was a billboard advertisement for a housing project featuring a famous Bollywood actress with a tagline “Kyunki apna ghar toh apna hota hai” which caught my eye.
Indeed a very heart touching tagline. Don’t you agree? Anyone without their own home would have an instant connect with the message.
There are lakhs of people out there who dream of having their own house one day. But given the exorbitant properties rates across cities in India today, many dreams remain an unfulfilled dream.
Today it is practically impossible for the middle class to afford even a one bhk house in metro cities. Prices of properties have touched the sky even in non-metro towns and tier 2 cities of India.
There is no doubt that everyone’s idea of a dream home may be different, but the biggest obstacle is lack of enough funds. Although property prices have stagnated over the last few years, the cost is still very high and not showing any signs of decline.
Buying your dream home can be a costly affair
Banks do not lend more than 80-85% of the value of the property, and hence one needs to make a lump sum down payment initially. This means a significant portion of your life savings will be used up to make this payment and secure the home loan.
Check out the below table which shows how much excess one has to pay on their home loan.
Due to interest, the real cost of the house would amount to 1.54 crores with interest alone amounting to 74.73 lac rupees. So is there a way around without bearing the massive burden of interest?
Investing just 50% of the amount in quality businesses in the stock market in India
By investing even half of what you would have otherwise paid on your monthly EMI, in quality stocks in the stock market in India over ten years, you can easily build a corpus of 1.12 crores assuming a CAGR of 20%.
Our model portfolio has delivered 400.53% returns during the period Apr 14 to Mar 19. Click here.
Investing in the stock market in India can be one of the best ways to achieve your dream house because traditional investments are merely ineffective in generating such a vast corpus.
Even if the price of the property appreciates to 1 crore from the current 80 lacs in 10 years, you will still be left with a surplus amount after purchasing the house. Not to mention the 74.73 lacs which you would save on interest payable if you had taken a home loan.
Imagine what all can be done with this huge corpus generated by investing in the stock market in India. It could be used for funding one’s retirement or for children’s education or marriage or buying your dream car.
Yes, definitely there is a catch. You need to be committed to investing every month systematically and ensure that you do not withdraw from the corpus under any circumstances.
But then as said by famous author Katherine Paterson “A dream without a plan is just a wish”.
Life isn’t just about dreaming; it is all about working hard and smart to make your dreams come true. Remember no one ever accomplished anything by just dreaming. Start investing today. If you need expert help click here.
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Read more: How Long-term investing helps create life-changing wealth – TOI.