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| UG and family |
Countless were the times when UG stood by my side and steadied
my life boat rocked by life’s swirling waters.
Anyone who dares to follow the dictates of one’s heart and refuses
to toe the line and trod the narrow, beaten pathways of society or culture, would
inevitably end up like the boat at the mercy of 'high winds on high seas'.
As I plunged headlong into my relentless spiritual pursuits
and other social misadventures, it was UG, who played the key role of an anchor!
His sagely and timely advice in moments of crisis greatly replenished my inner strength
and courage. He made sure that one would never get sucked into the whirlpool of self-doubt
and despair.
I had lived out such a checkered life! I was naïve and credulous,
vulnerable and sentimental. Idealistic and dreamy to a fault, I would surrender
my time, energies and finances to anything that appealed to me as noble and
honourable. Perhaps these personal traits or infirmities were the
‘warty outgrowth’ of my value system!
My list of misadventures included unconditional, dedicated services
to gurus or spiritual guides, who I naively believed, selflessly worked for the
good of the world. At some point, I had also slogged as a freelance activist
crusading against the ‘white collar crimes’ perpetrated by wily bankers, hell-bent
on exploiting financially illiterate masses through dubious finance schemes and
options.
I was blissfully unaware of the traps of social life and largely
remained ignorant about the dangers involved while essaying the role of the good
Samaritan!
Once on seeing me carry an old, invalid lady into an ambulance
(Major’s mother-in-law in the Bangalore farmhouse), UG had gently chided me
placing his palm on my chest, mockingly reading my heart, “Sir! I can
feel the beats of your heart – you have a do-gooder’s high” but quickly added,
“No sir! Am just joking! Thank you so much for helping her!”
That was me, impulsive, overly-sensitive, not really given to much
thinking, planning or premeditation.
During the heady days of my active social life, salary was my only
source of income. It was decent by any standard but fell woefully short of the
demands placed on me by my own relentless social engagement. To support my
beliefs and social commitments, I needed tons and tons of cash. Money had to be
raised somehow. From where the finance was sourced hardly mattered , as
long as it was legitimate! It could be a high-interest personal loan from a
predatory bank or a high-risk credit card from a blood-thirsty multi-national
bank. As long as they met my huge demand for ready cash to support an
egalitarian mission, I thought all risks were worth taking!
My naiveté and foolhardiness knew no bounds.
Slowly but surely my finances were spinning out of control and I was getting
hurled towards the brink of financial disaster. The writing was on the wall but
I was a blind man, blinded by the glare of my ideals and values!
My fragile finances started to bleed. My monthly outgo
toward loans was so huge that it siphoned off my entire salary on day one! Really
speaking, I was no more than a well clothed beggar with a concrete roof over my
head! To make matters worse, I was in charge of three hungry mouths. My wife
and two little children had to be taken care of too!
To sustain myself, I started borrowing heavily and began to
shop around for high-risk, high-liquidity credit cards. Many of my 'do-gooder'
activities required instant cash! I somehow managed to get hold of not just one
but three credit cards! I was plain broke and so would draw cash from one credit
card to pay off the monthly outgo of another card and also continue to finance my
social projects at the same time. This indeed is the most expensive form of
credit. At one point, I had maxed the credit limit on all of my three cards! That
essentially meant that my repayments primarily went towards servicing of the
huge interest component rather than repayment of the principal amount!
The compounded interest on the ‘roll-over’ credit of a typical credit
card could be anywhere up to a whopping 58% p.a., based on a beguiling 3% monthly
interest that sounds harmless!
This is a gut-wrenching piece of math and truth!
The financial wisdom, “Credit card is for convenience and not
for credit” eluded me at the time! Though an engineer by profession, I was ‘financially-illiterate’ a bloke unaware of the traps of high-finance and the fraud-ridden ‘fine print’!
It was Terman who nailed it, when he said, “Reading the fine print
is education; not reading the fine print is experience!”
My car, purchased on credit, gathered dust and rust in my parking
lot with a dry fuel tank. I was not able to afford gasoline! I began to walk
the streets of Bombay while on daily errands unable to afford the auto rickshaw
and resorted to public transport while commuting to office!
Unsuspectingly, I had walked into a ‘Debt Trap’ - the most
feared form of financial illness of modern times - the bane of salaried middle
classes across the globe who endlessly borrow to satisfy their ever growing
greed for comfort and style !
Deep down, I had at least the satisfaction that all my borrowed money had gone primarily towards sponsoring social causes, serving many an egalitarian purpose. I was financially down
but not out! Somewhere deep inside of me, I heard a sanely voice that egged me
on, ‘Keep on going! This Too Would Pass’!
I had borrowed money from every available source with interest
rates ranging from single to double digits! In spite of the crisis, I had never
defaulted on a single loan! I continued to
remain 'respectable'!
I told myself 'enough is enough' and decided to take charge of
my tottering finances. All through the crisis, I stubbornly refused to seek help from my dad or
brother, who I knew, would not hesitate to stretch their fragile finances in
order to dole me out of my dire straits. I didn't want to bother or burden
anyone!
I took the responsibility for my mess and earnestly and
sincerely started working towards a solution. It kept eluding me for quite a while!
Finally I did what anyone would do under such gruelling circumstances.
I decided to consolidate all my loans into a single fat loan financed from a
public sector bank with a simple and transparent interest rate. Thus I would
end up paying a single monthly installment and would not be saddled anymore with
multiple, needless and burdensome transactions. If I were lucky, I might even
end up with some extra money that I could use for my purposes after settling all the existing loans!
I would certainly gain some traction!
Why choose a public sector bank? Because these banks in India still have
a face! If you discover a scam, you could slap a manager! Yes, he or she is still
human and hence answerable and accountable for your hard earned money. But you
can never nail a private or an MNC bank! Private bank is just a piece
of faceless electronics –it is essentially the answering machine! You can hardly penetrate
the thick-layer of pseudo customer-care ('customer-scare', really!) when you
are faced with a real problem. You will get bounced around with various push button
options or worse will be subjected to the never-ending recorded voice messages
or boring tunes.
Many scams get perpetrated on the guileless public, thanks to
the façade of the phone banking system and its ubiquitous answering machine!
Finally, I zeroed down on a bank for seeking the 'mother
of all loans'! I promptly submitted my documents and complied with all their
instructions. I was pinning my big hope on this big loan that would end my big
trouble. As the bank pursued its due-diligence, I crossed my fingers and
waited with bated breath!
As days passed, my
anxiety grew and finally my
sanction letter arrived through the courier. I was in for a rude shock! My loan
eligibility was Rs. 40, 000 said the letter, less
than half of my take-home salary!
Gosh! My salary income from my airline job combined with my mortgaged home together with my
hypothecated car, all of these added to my net worth of Rs. 40, 000! The harsh reality was that my credit worthiness was not very different from the net-worth
of a stone cutter or a plumber who slogged hard for his daily bread!
I was brutally hurt! I stayed back home that evening
contemplating of my next course of action. Sleep deserted me as I mulled over my
worth in the eyes of the financial world and recounted my looming liabilities and commitments. As
my wife and children slept in the next room, unable to sleep , I began pacing up and down in the main
hall, through the night, unable to digest the piece of truth.
Yes, it was a shocking proof that I was indeed a financial wreck and could no longer survive under the circumstances without
some angelic intervention.
It was nearly 3 0' clock in the wee hours of the morning when
my physical and mental exhaustion finally took hold of me and I dropped down on my sofa
and fell fast asleep.
I suddenly woke up to a call from Kamal, my friend! The time
was 4:30 a.m. Kamal gleefully announced, "UG has just arrived in Bombay. Am
calling from airport. He is on a short visit! He wants to see you. Start
immediately. (UG was shouting 'Pronto!' in the background). See you soon at
Parekhji's place, am about to drive him there!"
By the time I made my way to Santacruz, many UG friends had already
arrived at Parekhji's place. As I settled down on the floor in front of UG, he turned
to me, looked me in the eye with great intensity and poignantly remarked, "Sir, I have
come for your sake!"
It was instant relief!
Coming straight from UG, given my plight, his words meant a
world to me! It was the most reassuring statement I had heard in years!
Only the one who is connected to you at such a deep level could offer such assurance
and confidence.
Only UG, it appeared in the entire world knew what I was going through!
Needless to say, my difficulties soon came to an end! Shortly
after UG's trip, I found a friendly bank manager who forwarded my loan
application with high recommendation citing my 'impeccable' record of previous loan
repayments and got me a sizable loan to help me knock off all my existing liabilities.
I was given a lease of life! First time in years I started
breathing easy!
My deadly encounter with the debt-trap had left me with invaluable lessons
on personal finance. Through this nerve-wracking experience, I garnered tremendous
insights about housing and personal finance - the bedrock of social finance!
I began to share my learning with all and counselled many of my colleagues and friends on personal finance. I played the role of a lead
negotiator for my airline and crusaded against unethical and unfair trade
practices of financial institutions in the ill-regulated Indian banking sector.
This effort earned me the much coveted invitation from the Indian Express group
to do columns for their Sunday Express supplement.
UG in a strange way had come to my rescue and had averted a paralysing disaster! When he learnt of the
invitation from the media group, he openly and unequivocally supported my role
as a columnist on financial literacy.
