₹2.5 lakh a month, and 80% goes to EMIs

He earns ₹2.5+ lakh a month.
Has been with the same company for 10+ years.
Lives a modest lifestyle.

And yet, 80%+ of his income goes towards #EMIs!

Recently, an ex-colleague reached out to me for advice.

These weren't #ConsumerLoans.
He had taken loans to buy a house and two plots.

He had simply followed advice many of us grew up hearing:
“#RealEstate is a real asset.”

Today, his biggest worry is
“What happens if my #salary stops tomorrow?”

The obvious solution?
Sell one of the plots.
Except both plots have been on the market for six months.

Why?
He isn't getting buyers at the price he considers “right”.
And that price is largely based on what the builder is currently quoting.
But here's the problem with real estate:
The builder's selling price isn't necessarily your selling price.
There is no MRP.
An asset is worth what someone is willing to pay for it today.
That's the uncomfortable difference between valuation and liquidity.

So we started looking at other ways to improve his #Cashflow.

One option was to temporarily reduce his #EPF contribution to the statutory level, subject to his employer's rules.
Not because EPF is a bad investment.
But because when 80% of your income is already committed, liquidity can become more important than optimisation for a long-term goal.

The immediate goal:
Build a liquid #EmergencyFund covering at least 6 months of expenses + EMIs.

We also looked at his loans, interest rates, outstanding balances, tenure, and prepayment options to determine where any future property-sale proceeds would have the biggest impact.

But there was something else that concerned me even more.

His wife also earns. They have been married for over 5 years.
Yet they had never really discussed their finances!

She wasn't even aware of the financial #stress he was carrying.

We often tell men:
“You are responsible for running the family.”
But financial responsibility shouldn't mean financial secrecy, especially in the current times!

Your spouse isn't your roommate.
They are your life partner.

You don't just share your home.
You share the consequences of your financial decisions.

#MoneyMinusNoise
Real estate can be a great asset, but not necessarily liquid!
You can have a large net worth on paper while having very little financial runway!

And talks between partners on financial topics are as necessary as talking about the grocery list!
A healthy relationship can't be built over financial blind spots!

If your financial plan looks great on paper but leaves you anxious about the next EMI, perhaps it's time to look beyond net worth!