By taking proper measures, a devotee can effectively deal with
the crisis of recession and steadily continue on the path of devotion.
Many devotees whom I know have suffered the terrible impacts of recession. Some have lost their jobs, some have lost their businesses, and many are struggling to make their ends meet. But in spite of all these difficulties and adversities, whether or not a devotee is able to maintain his focus in Krishna consciousness that is the most important question. As a financial consultant with the Bombay Stock Exchange and a practicing devotee, I have offered here some suggestions to devotees who want to remain steady in Krishna consciousness, regardless of the external material situation.
LIVE SIMPLY, THINK HIGHLY
One only needs some food to eat, a house to live, and some clothing to wear. If we can meet these bodily needs with minimum effort, then we can spend the rest of our time in the cultivation of Krishna consciousness, the prime objective of the human form of life. The more we acquire modern amenities for increased sense gratification, the more we become attached to them, and thus our lives become increasingly complicated. As our dependence increases on material resources, we feel more disturbed on losing them. A devotee therefore should never get carried away by the thoughts of material allurements and possessions, which are simply tricks of maya, and must always remember that his goal is Krishna and devotional service unto Him. One who can survive comfortably on minimum material needs will be least affected by such situations like recession.
NEVER TAKE A FINANCIAL LOAN
Taking a financial loan is the biggest blunder a devotee can commit. A huge financial loan can create havoc in a devotee’s spiritual life, because the extra sense gratification that the loan promises to provide is all illusory. Eventually the loan becomes such a huge burden that he is unable to bear the anxiety of repaying it. His mind becomes disturbed, and relationships suffer. To earn more wealth, he has to sacrifice his health by working extra hours, but in the end he spends all his wealth in regaining his lost health.
Physical stress is better than mental stress. Financial loan, a mental stress, should always be avoided as far as possible. The meter of interest works 24 hours but a person does so for 8-10 hours. A person has to run faster to catch up with it.A devotee should prefer to live simply and save money so that he can fulfill his needs without taking a loan. That will free him from all unnecessary troubles. (See box “Financial Loan: The Greatest Trap”)
PLAN YOUR RETIREMENT LIFE EARLY
I remember a statement made by a senior ISKCON leader: “A sincere devotee will plan his vanaprastha life before he enters grhastha life.” This means a devotee should make sure he has enough savings at the end of his grhastha life, so he can remain independent and peacefully execute his Krishna conscious activities without bothering anyone. He can reside in a holy dhama, go on pilgrimages, or preach. A serious devotee should take all necessary measures so that at the final moment of death, he can think of Krishna and go back to His abode the only place that is free from all effects of recession!
(As told to Mukunda Mala Dasa)
Ananda Vrindavana Dasa, B.Com., M.M.S., G.C.D., D. Com., D.B.M., D.E.M., D.T.M., D.S.M., (world gold medalist from London Chamber of Commerce, U.K.) worked as partner for 18 years with J. G. Shah and Co., a leading stock broking firm in Bombay Stock Exchange. For past five years he is running his own portfolio consultancy. He came to Krishna consciousness in 1989.
Financial Loan: The Greatest Trap
A Mathematical Analysis:
Vinay, 25, is working for a multinational company and is earning Rs. 50,000 per month. Since he doesn’t have his own house, he decides to purchase a new flat in a posh city locality. He takes a housing loan of Rs. 20,00,000 (twenty lakhs) that has to be repaid in 20 years. He has to pay an EMI (equated monthly installment) of Rs. 1250 per month/ per lakh. This means he has to pay:
Rs. 1250 x 20 = Rs. 25,000 (monthly)
Rs. 25,000 x 12 = Rs 3,00,000 (annually)
Unfortunately, after consistently paying this sum for three years, recession sets in. Vinay fears getting laid off from his company. To avoid this, he agrees to work extra hours daily, including weekends.
Very soon Vinay finds this situation too difficult. His balance salary is too small to meet all his regular needs monthly home expenses, children’s education, telephone bills, car loan repayments, recreation, etc. He finally decides to sell his flat and move to a suburb, a cheaper middle-class location.
But recession has had its effect on property rates, too. The resale value of his flat has gone down to Rs. 15 lakhs. What can he do? Vinay sees no other solution and therefore agrees to it.
Vinay then approaches the bank to clear off the loan. But to his surprise, he learns that the amount he has paid till now has gone in repaying the interest and only a small part of the original Rs. 20-lakh–loan! The principal amount has not reduced significantly. Moreover, the bank is now demanding a penalty from him for canceling the loan prematurely, before the due expiry date. The penalty, Vinay learns, comes to around 3% of the principal amount, that is, Rs. 60,000.
Vinay is devastated. He feels cheated after suffering this huge financial loss.
If the economy didn’t crash and everything went normal, let’s see what would have happened. Vinay got married at 25. At 30, he was allured by the prospects of a housing loan. He kept on repaying the loan until he was 50. As we saw above:
Rs. 1250 x 20 = Rs. 25,000 (monthly)
Rs. 25,000 x 12 = Rs 3,00,000 (annually)
Rs. 3,00,000 x 20 = Rs. 60,00,000 (60 lakhs at the end of 20 years)
To repay a loan of Rs. 20 lakhs in 20 years, he actually ended up paying a massive sum of Rs. 60 lakhs!
Now at the age of 50, he realizes that he has no savings left with him. His health no longer permits him to work as usual, but his responsibilities are far from over: his son is still studying, and his daughter has to be married off. He continues to slog despite his failing health.
Alternative methods Vinay could have adopted instead of taking a housing loan:
Keeping aside Rs. 25,000 for his monthly expenditure, Vinay could have stayed in a rented flat paying Rs. 7,000 per month. The balance Rs. 18,000 should have been invested in mutual funds, fixed deposit, or some other secure place for the next 7 years. Thus his savings would have been:
18,000 x 12 x 7 = Rs. 15 lakhs (approx.)
Interest deposited during this period = Rs. 5 lakhs
Total savings = Rs. 15 + 5 = Rs. 20 lakhs.
Purchase a flat for Rs. 20 lakhs and settle down. If one argues that the property rates will rise in these seven years, Vinay should then reduce his expenditure to save a little more to make up for the balance amount.
Vinay, who is 25 years old, should stay in his original home and adopt these steps:
Follow steps of Alternative 1 and save Rs. 20 lakhs in 7 years. Purchase a new house worth Rs. 20 lakhs and settle down. At 32, he will have his own house.
Repeat the steps of Alternative 1 for the next seven years to save an amount of Rs. 20 lakhs. At 39, he will have a house and also Rs. 20 lakhs of savings. Invest this amount in Fixed Deposit for the next seven years. This amount will grow to Rs. 30 lakhs (interest value added). During this period, continue following the steps of Alternative 1 for seven more years to have an additional saving of Rs. 20 lakhs.
Total savings at the end of 21 years = Rs. 30 + 20 = 50 lakhs.
Thus at 46 years of age, without any loan,Vinay will have his own house and also savings worth Rs. 50 lakhs. If he puts this money in a bank, he will have a steady monthly income enough to support himself and his family for the rest of his life, thus enabling him to retire early.
If you take a loan, after 20 years you will have only your house but no savings. If you don’t take loan, after 21 years, you will have not only your own house but also savings of 50 lakhs.