For most people in India – at least in the suburbs of urban India if not in the whole world, real estate is a big portion of the total assets.
Let us think of a person who bought a house in Campa Cola’s land in Worli. He / she may have bought at a high price. Now let us say hypothetically the cost was Rs. 1 crore – and now worth Rs. 5 crores.
Let us also assume that all his other assets put together is worth Rs. 30 lakhs. Let us also assume he has a Home Loan of Rs. 28L which he is repaying over a long period of time.
SUDDENLY tragedy strikes. Your building is declared illegal. Now your networth is Rs. NIL.
Your house has to be demolished. Supreme Court Orders (and you cannot go on appeal)….spine chilling is it not?
Exactly the reason why asset allocation is a MUST.
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