In another age Shakespeare would have been called a financial pundit for writing: “Neither a borrower, nor a lender be; for loan oft loses both itself and friend, and borrowing dulls the edge of husbandry.” The conventional wisdom was that the poor borrow; the rich don’t need to. And wise men live within their means. Unless you have been living in solitary confinement for the past few years you will know these nuggets of wisdom, whether you got them from Shakespeare or your grandfather, have been turned on their head. Today, the richer you are the more you can, and you probably do, borrow. And you are most financially challenged if you don’t live beyond your current means. That’s the power of credit for you.
Right from its first issue, MONEY TODAY has assumed that EMI is becoming a better indicator of affordability than the MRP. The proof of this belief is the Affordability Meter that regularly appears in the Insight section. The basis behind the assumption is simple: from house to hospitality, from vehicles to vacation; Indians are living on credit. The question to ask isn’t whether to borrow, but how much, when and on what terms. In short, how to be a smart credit taker? This is precisely the question our cover story attempts to answer.
Broken into seven sections of credit ranging from credit card to travel loans, the story is for those who have embraced life on credit, but haven’t yet mastered the rules of this new lifestyle. Borrowing can be a vice or wise, depending on how it is used. Our cover package is one attempt at helping you distinguish between the two kinds. Smart borrowing increases your affordability way beyond your current income so that you don’t have to beg or steal to meet your aspirations.
What’s our innovation this fortnight? Turn to Trend Spotting on page 11. The idea came to us rather accidentally while Googling. One of the ways to begin financial planning is to understand the financial priorities of Indians. Though it has its limitations, Google Trends (www.google.com/trends) does give unique and interesting insights into our financial priorities. And to quote Shakespeare out of context again, we will try and find for you method in the cyberspace madness.