A smart move is not that smart when everyone has the formula

Smart move is not that smart when everyone has the formula
Cost of Living going up - Consequences

What do you mean by cost of living...
By defninition it is as simple as price you pay to do around your normal routines, like rent, EMIs, food, beverages, clothes, transportation etc.

India now have a sizeable service industry relying on outsourced work. Outsourcing as business is viable in India due to various reasons, one of the most important factor is cost effectiveness. Though there are so many factors which India enjoys to fetch such business home, cost effectiveness works as main force on string pulling the work/business.

As per our definition of cost of living it depends directly on inflation which is index of similar factors affecting COL.

People have tendency to look out and spend to attain level of lifestyle, necessary or lavish. Lifestyle living in a big bunglow and driving Mercedese have been dreams of so many employees service based industry. Not much before say 10-15 years back it was not in sight, but today many young employees thriving towards such lifestyle and they are in hurry to achieve it by taking neck deep loans and are ready to pay EMIs.

Not much before, just one or two generation back it used to be opposite. People save money and keep their investment to build their dream home after retirement, till that time they used to stay on rent or in their family house. They were literally afraid of loans.

There is a point lying between both patterns which concern me for future. Society turning from money saver to money spender and burdening themselves to keep their earnings up and keep paying EMI's.

When a individual does follow some tricks and get benefitted, he called smart. When whole society follows same trick then either trick doesn't exist or it fires back.

We intend to buy home and save rent and in last we have home with savings (rent-interest). Good Trick!

Sounds like a good calculation and logical as well, everyone understood and tries to implement.

So y i am talking about something which is like tried tested hence proved?

Answer this, did your salary gone up(for same level) in the same proportion which builder have increased rates of PSFT in last 5 years?

Why they can sell a thing with so much margin ?
Why everyone is turning as builder or real estate agent?
Why without finishing one loan everyone wants to acquire more EMI to buy another house?
Why model flats are built with so much cost?
Where is our cost effectiveness here?
Agreed that we need shelter as one of the must resource. But are we following demand supply ratio? Is the balance maintained?
Construction cost hasn't gone up more than 100%, but why a builder is quoting 4 times sqft rate in comparison to psqft rate 5 yrs back?
Still buyer is seeing value in it.... they would like to sell at least higher than cost after repaying loan.
So when it would stop appreciating? .... oh ... are we creating some bubble?... oops! May be!

Bubble get burst sometime or later.. with so much pain directly to invloved and indirectly to society.
USA is appropriate example for such case.

For us a cost effective country, this model doesn't suits. Why are we following same bubble here in India?


Sooner is better if we could understand that "A smart move is not that smart when everyone has the formula".