A friend called me with a surprising question.
Let us call him M.D.
He bought a house in Navi Mumbai for about Rs. 180 Lakhs, – of this about Rs. 95 lakhs was funded by a loan from the State Bank of India. Over the last 4 years he had paid a lot of interest, but the principal outstanding was still Rs. 85 lakhs.
He was also doing some SIPs which had seen an amount of Rs. 33 lakhs, but now in this market was worth Rs. 37 lakhs – not too bad, but the IRR was not too great. He does not have any debt investments except his LIC endowment policies – and all the policies are together worth Rs. 30 lakhs.
So far fine. He just lost his job with effect from December, 2016……he is on notice period now………
He will have to find a new job, NOW and immediately.
What is at stake?
Household expenses (including children’s school fees) …….Rs. 100,000
EMI Rs. 102,000
His needs are as follows:
Rs. 2L x 12 = Rs. 24L – assuming he gets a job in 6 months, he will need Rs. 24 L.
He is about 53 years of age – he needs to have his retirement corpus in place. He knows that jobs paying Rs. 45 lakhs and above are almost non existent especially in Sales and Marketing unless you are willing to take aggressive targets. In the bfsi space perhaps it is only a bank that will take him. How does a 53 year old join an aggressive and young bank? Not so easy….
He can always sell his house (he thinks it has appreciated, my take is the appreciation is LESS than the interest paid on the loan)..but yes that is a choice. Options are few and far between in the jobs. Most people expect a 53 year old to be holding a technical qualification or an address book of potential clients…he has neither…
What does one do? Looking for answers…
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