Debt and Decisions

Some 5 years back, my investment advisor addressed my dilemma to build personal assets, savings etc. but asked me to create a liability first. This was quite logical and I am being a finance professional had been raising debt for companies that was at least twice their own equity in the business.

In 2012, I heeded to the advise and raised a home and a personal loan. I used the money to buy a house. With this decision the incremental outflow was going to be 45% of my monthly income. I sensed pressure on cash flows for first few months.

I stopped checking my bank account frequently. Passed on the responsibility of managing the household expenses to my spouse. I diverted my attention to other details in life as if saving money was a foregone thought. I did have moments of fear and helplessness. I exploited my credit card limits to meet my urgent needs of cash and in repayment made the issuing bank double its profits.

Today, after 5-year repayment, I decided to sell the property and foreclose the debt. This will give me the needed cash inflow to create liquid asset that has no corresponding liability to meet. However, no wealth created in process.

The main reason for not creating wealth is lack of discipline. I have come to believe its only self to be responsible for decisions.

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