A trap called “Debt”

I had moved places and had relocated to Delhi in 2007. Into a new job, a new location, and amongst new mindsets. 

With not so handsome package, I got into a job role of a Relationship Manager for High Net Worth clients of a renowned Indian private bank. With an eye-catching flashy designation on my visiting card, that of a Premium Relationship Manager – HNW, I was expected to represent the bank as a smart, flashy and charming banker to my HNW clients.

By being flashy I mean is, wearing expensive suits, shoes and watches. Taking out clients on expensive dinners. It was something, my not so fat salary could afford.

I started spending on credit cards, and trust you me, it was addictive. And then all of a sudden within six months, I had exhausted 90% of my credit limits of not one but two credit cards.

Trying to match and keep up to the standards of the role and the designation, brand reputation and the culture of the flashy city of Delhi, I didn’t realize I had got myself into a trap. I had to finally take a personal loan to pay off my debts on credit cards.

I managed somehow, and paid off that extremely expensive lifestyle, in the next four years. But learned a lesson. That was my first and the last financial blunder.

But my friends, it is not this story, my story, that I wanted to draw your attention to.

The actual story begins now.

I met someone in my new organization, someone who had been on that role for quite sometime but much experienced than me. He was a chain-smoker and a daily drinker but someone who was thoroughly professional in front of his customers. No body had ever complained about him. He was much senior to me and an absolutely nice man.

While interacting with him one day, I got to know, that he was stressed, so much that unknowingly he had expressed that he might suicide any day. 

I was like, shocked to my core. Shaken. Completely. 

Feeling that he needed some help, I helped him vent out his stress. By listening to him and his woes.

That was when he told me that he was living off credit cards and personal loans. Has two car loans and a home loan emi on his head. And every month the debt is just multiplying. Unable to pay the full amount of credit used on credit cards, he was paying minimum balance, had to take a personal loan to pay off his previous two cards, had two car loans that he had managed on high interest rates from some small finance companies. On top of that with a heavy home loan emi, he was so burdened, that he had started borrowing money from his friends and relatives. It had gone so bad that he had not spared even the cigarette shop owners, he was a regular customer to. He was borrowing money even from them.

I was speechless for a very long time. I tried but couldn’t speak a word. This was the condition of a banker with 12 years of experience, someone who was a great financial advisor to his clients but a pathetic financial planner for himself. Someone whose package was three times that of a newbie like me. 

The trap, the deadly trap called “Debt” had left him nowhere.

You must be thinking why this post today and that too of an incident that happened years back. Actually today I happened to cross that branch, when I was passing by the road in front of that bank branch.

No, this post is neither on any tips on how to be better in financial planning. Although I was once a financial planner for my clients but am now a financial planner only for my finances. I don’t recommend or advise people anymore. There are great professionals in this field these days. Better equipped and updated than I am.

I can only advise one thing. If you want to live a happy, peaceful and prosperous life, keep yourself off from debts. As much as you can.

One thing which you should always keep in mind is to keep your monthly debts below 30% of your monthly income.

Stay off this Trap called “Debt”.

I don’t know if knowing what happened to my colleague would help you or not, but I am sure you want to know.

That colleague is no more. He committed suicide six months later, that same year.

At times in life, we have to learn from other’s experiences too. It is not mandatory to make that mistake yourself and then learn.

This was one of my experiences. I am sure you too have had similar experiences of bad financial management or planning.

If any one of you is unknowingly or maybe consciously getting into this trap, thinking, you have planned how to get out of it, trust me, it is a risky proposition.