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As a Owner of 3 houses (with Housing Loans) , I want to share my experiences, which are a little contrary to majority of the views in this thread. I want to submit these facts with all due respects to the other views specified here.Adventure 1, 30 November 2004 :I purchased an Independent house in outskirts of DR.A.S. Rao nagar of 122 sq.yds in area Ground Floor at the price of 8.25 Lakh.My Salary at that point of time is 25000 INR per month, I am 23 yrs of age, paid INR. 6131 as an EMI.I have paid a total sum of 14,23,531 up to my last installment of my loan.Today, it earns about Rs 90,000 an year after due maintenance.In Open Market, its Valuation is about 42.7 Lakh (Land Valuation + 7 Lakh for the building with all depreciation) = 49.9 lakh.Total Tax saved under Section 24E : 1,50,000Tax saved under 8C : 26000 INRAverage CAGR Earned (without tax saving) = 13.57 %Average Return = 6% P.A In addition to CAGR.————————————————————————————————————Adventure 2, 3 May 2009 :I purchased a Flat of 1500 SFT, 3BHK in prime locality in VIZAG at 1950 Rs per SFt. (take 30 lakh as total expenses)My Salary at that point of time is 1,00,000 INRper month, I am 28 yrs of age, paid INR. 21799 as an EMI.I am still paying loan, I project to pay about 36 lakh up to my last installment of my loan.Today, it earns about Rs 1,38,000 an year after maintenance and I pay 1,51,000 Rs as interest, out of which I save.In Open Market, its Valuation is about 56.00 lakh.Total Tax saved under Section 24E : 2.9 LakhTax saved under 80C : 0.75 lakhAverage CAGR Earned (without tax saving) = 8.44 %Average CAGR Earned (with tax saving) = 9.28 %Average Return = 6% P.A In addition to CAGR.Adventure 3, 28 January 2016 :I purchased a Flat of 1500 SFT, 3BHK in Gated Community near IT HUB prime locality in Hyderabad at 3250 Rs per SFt. (take 60 lakh as total expenses)I used my Stock Market Gains (in Vedanta, TVS Motor, Hindalco and DCB bank ) as a upfront payment .Tax saved is about 66k per year, and I pay about 22K per month as interest (30 Lakh Loan and 30 lakh interest).If I have to take this for Rent, I will have to shell out 22K as a Rent in this Area, plus a risk of increasingAt this moment of time, I can comfortably sell this house at 70 lakh (my neighbor sold it for 67 lakh in last month with less amenities)I have not included Return Ratios here because house investments will look bad for first 5 years.———————————- —————————————Summarizing, I was able to create a Wealth of 1.7 crore Liquidity with 54 lakh debt as on date, with a single asset class, in a span of 14 years. this means I was able to start with a mere 6131 rupees per month to create a 1.2 crore wealth. If I would only trusted MF investments, I would have lost 50% of my capital in 2008 -2010 period and again in 2014–2016 period, and should have started with 25K per month contribution, which is not practical.House investments are not bad investments when you compare with equity if your expectations are about 13–15 % CAGR. In addition to Finances, If we value the emotional value for the same, you can count on as price less.Your first home/house is always risky, in case you lose your job.But the moment you have at least one house that’s free from encumbrances, your consequent houses will always pay for themselves over time, some times out of the clutches of income tax department and market volatility.Side notes: I always take Homeloan OD’s accounts (IDBI homeloan saver and SBI MAX Gain ) to ensure I get Loan at a cheaper Interest Rate and use it for Speculative investing such as prevailing conditions as on today 13 July 2018.( I am going to invest in REC, PFC, IOC, Action Construction Engineering, Orient Electric , Ashok leyland, GNFC and SBI and use the profits to Offset the interest loss on third house).Any Intelligent investor maintains balance between all asset classes and asset types. excluding any asset type would only mean you are vulnerable to certain types of risk.———- Update 1 ——————————There are few good points raised by quorans, which I felt makes sense to add in the original answer.Concerns on Liquidity : House property is not a easily liquidate-able asset. but definitely a great asset to ride out of cash crunch by following methods.You have income source, but need capital for other purposes : take Loan against property.You are retired, want money to meet your monthly bills. You have Reverse Mortgage Loans Reverse Mortgage LoanYou need money, but only short term, small capital need you can take Loan against Rental Income. https://www.hdfcbank.com/personal/products/loans/loans-against-assets/loans-against-rental-receivablesYou can always, sell your house.Taxation on Rental Income: Always account your rental income to income tax department. as long as your interest is more than the rental income, you don’t need to pay additional tax. the additional loss can be claimed as an exemption.EMI vs SIP : If you are calculating EMI vs SIP, always calculate the results using EMI Vs (EMI-RENT) as this is what you actually allocate to the SIP based investments.IF NONE OF US BUY/INVEST ON HOUSES, YOU WILL NOT GET RETURNS ON EQUITY AS WELL.Indian markets have about 38 % weightage for financial sector,Housing finance contributes upto 60% of banks interest income.To detail this, Housing Development Finance Corporation which focuses on only home loans and housing corporations has a weightage of 7.28%.if no one takes home loans, this will not contribute to growth of index itself, that means, your equity CAGR will be subdued.CEMENT Sector and Construction equipment amounts to 6% of Nifty, and housing markets contributes about 90% of the cement industry consumption.housing industry in India amounts to 35% of the steel consumption. that means if we are not consuming/ investing houses, even metal index is also going to be in loss.Major consumers of transportation industry are fmcg only followed by housing industry.OVERALL, HOUSING INDUSTRY CONTRIBUTES ABOUT 25% of index earnings in this country. if this is impacted, you cannot get the 13–15% of CAGR.we have the audacity to tell rent a home because at this point of time, availability of homes is greater than supply. rental values will multifold the moment this goes out of balance.—- update 2 ———————Thanks quorans for bringing up very valid points.Real Estate Assets (RE) are subject to Maintenance Costs :Like we have maintenance costs in Real Estate, we also have the maintenance costs on Mutual funds.The only difference is that they are hidden and we don’t feel the direct pinch from pockets.Please see these Link(s):Costs involved in mutual fund investingMutual Fund - Fees and Expenses | Mutual Fund Expense RatioThe total expense we pay on the mutual funds range from 2.05 - 3.00 percent every year on investment in total.it is just that you don’t pay upfront from your pocket and these costs are actually "Hidden" from you.Painting and Maintenance expenses in RE investments would be about 0.25-0.5% percent per year.If you are comparing apples to apples, Mutual Funds attract 4X times more maintenance Expenses to that of a Flat/House.

Writing anonymously as many of my friends, relatives on Quora.So I am an IT Manager 32 year old, married with a kid.So how I waste or spent,Salary around 1,20,000 per month after tax and VA yearly around 1.5- 2.0 lHouse Rent = 22000 I am living in Bangalore.Car loan emi = 11000 - I own a sedan.Fuel Expenses - 8000 pmKids School fee - 5000 pm paid annuallyMaid, dth, electricity, mobile - 6000 pmGrocery,milk, vegetables, fruits - 15000 - dmart helps in control it.Annual Travel and wandering last year was 1,20,000 - means around 10k we usually visit at least 1 new place every month globe trotters.Shopping around 1l per year. 10k pm approxGive 10k to parents pm.What left used to go in investment, I hardly have any investment though as I have to withdraw it to pay some unplanned expenses.Health and Term life company provides.I don't have any home loan, personal loan etc.I have 7 credit cards which I settle in full every month.I have house in my hometown in my 9 years in the industry I changed 6 companies to reach this figure.I don't know about ppl who post that they earn huge but I can say I always get as per market standards.Well considering education I am B.tech+ mba.I really scare taking risk or home loan as I seen ppl paying it only throughout their life and in end it's only liability except from a bit of personal satisfaction.Life in IT is waste only I am living 1500 KMS away from my parents, I was a scholar in school and college and the neighborhood guys who just didn't studied well are earning fairly well than me and bought their own property in my hometown.And I am still paying what I am earning.Planning to come out of this trap in next 8 years plan.I have my childhood friend earning more than 3l pm by only selling sarees, dress material, home furnishings on different online platforms in my hometown.People stay in IT thinking once they will go onsite and everything change without knowing if you are bachelor then only onsite is beneficial or if you both are working and only living to earn money.I seen people living in Germany, Sweden, Europe living with their family there for 5–6 years and doing everything by themselves still not even save anything and coming back to India still paying loan for entire life for home loan.Income Tax in European countries are up to 50% and there is specific slab in which u will get paid if u not something outstanding well in.And that outstanding is 2–3% only.I seen people not traveling to their parents for 1–2years as it can cost their entire year savings living abroad.So long story short if you are working in IT you are bound to waste money. And you are not alone so don't get frustrated.Edit 1:Thanks Everyone for so many upvotes, I might be somewhere generalized but definitely I am writing about my situation or what I observed.Few days back I came accross a book on Amazon Kindle store by some writer and found very close to what we are experiencing or experienced,Giving link below of book I recommend reading it,Some Untold Chapters: Story of You and Me Story of You and Me eBook: Abhinandan Asthana: Amazon.in: Kindle StoreComing to the Questions:Nazir Keshwani : My Kid is in Junior KG in a known Pre- school not in any international school and fees is 61290 annually including annual day, sports etc.But definitely it will increase going ahead in 1–2 years in higher class.Dinesh Kanwar : Sir you might be right in your scenario and I don’t own either Benz or any high end car.But I drive a lot I took this car Maruti Dzire ZXI+ Sub 4 Meter Compact Sedan top end petrol model in July 18 and the current ODO is 7528 in 6 months means 1200km/month.I recently went to Mumbai by my car from Bangalore, and I have travelled almost full Maharshtra, Gujrat, Rajasthan by my older car which was Hatchback I drove it for 5 years total 68932 kms that’s the odo reading when I exchanged it.Coming to Loan my emi is exactly 10952 loan 5 years 9% interest rate and amount around 6L.I paid rest amount through my older car exchange and bonus + corporate discount+ rest from my savings.User-13547231434857645703 I already mentioned Onsite is Beneficial only if you are Bachelor or Both are earning, and you are right tickets are in range of 30k-40k only /per Person but if you multiply it with 2,3,4 ppl it will be something you can’t have saved.And definitely you will think same amount of time before purchasing it.And I will tell you India is the Best Place to Work and Live as its your own country, you have the best weather conditions, if you want please visit Sweden, Netherlands, people living there starve to see Sunlight as we see in India full year.The condition were good earlier not now, I have worked in Both German and US based MNC’s in my career.And recently dropped a long term German WP Offer due to my past experience.Other hand I am not saying you can’t make money in US or Europe you make a lot with family but you have to be in top 2% - 3% ppl with really good technical skills and Educational Background.I know my friends who went to US doing MS 4–5 years back thinking they will join Apple, MS etc. Most of them are working in India now. As F1/F2 Student Visa is for 5 years and now making into H1 is getting impossible.They took 35L loan for MS and worked for 3 yrs in US on it after studies and now back in India. Hardly they can save to pay loan as interest rate is 15% on Education Loan.And to tell you they are not paid like huge in India as in Product based companies ample amount of people are there like them, 2 report to me too in my current company with almost same experience with MS from US.Edit 2:Bob B Nakahara Please check the link Sir,Taxation in Sweden - WikipediaIt's going up to 57% in Sweden.And the free education you are saying is either in German in Germany or Swedish in Sweden.For Education in English you have to pay.Taxation in Germany - WikipediaIt's 45% in Germany.The other big thing it's horizontal salary culture in Sweden and Germany where the ppl earns normally between 30k sek - 45k sek in Sweden 3k Euro to 6k Euro in Germany per month before tax.Either you are bus driver or software engineer your salary be same.Because till that figure only tax rate is 30–35% and above it's in range of 40–50%Regarding retirement benefits it becomes applicable after 61 years.No one from India wants to retire there.Social security it's more of benefits for EU citizens, not for Indians.Health insurance it's free provided by almost all Indian IT company for u, spouse and two children in India too.Even the best one is by TCS.Definitely not such thing for everyone in India but we are not part of it.In recent times NPS, Atal Pension Yojana and PMJJY is same type of scheme by Narendra Modi related to retirement and health benefits for all.People who don't get better job in India go to Europe these days and if you compare India has better work benefits than anywhere else.

Disclaimer: Please be patient for the lengthy answer.Every IT Employee, irrespective of the city, has this question in mind. I have been in the same situation.Assmuptions:1) You are not having any loan.2) You are not having any financial commitments at home.3) Your office is in Magarpatta Area.Now, the way to spend money:1) Always divide your salary into 4 parts.First part - Basis ExpensesSecond part - Comforts & LuxuryThird part - Short Term SavingsFourth part - Long Term SavingsThis kind of divisions, will help you a lot in the long run..So, 22000/4 = 5500 per partLet us go through the details nowFirst part - Basic Expenses : Basic Expenses essentially cover the basic needs: roof, food and clothes ( in a rudimentary sense ;) ). You always need to find a house/flat which will minimize your expenses, at the same time provide you a decent home. Instead of eating out in cafeteria, cook yourselves/ hire a maid.Second part - Comforts & Luxury : Weekend parties, going to nearby places, watching movies, dinners, or any kind of luxury item. Even if you are buying a Casio Watch, it should be from this part of your money.Third part - Short Term Savings : A monthly Recurring Deposit / a fixed deposit ranging from 30 days - 1 year.Fourth part - Long Term Savings : PPF Contributions, LIC , Mutual Funds, 5 Years Fixed Deposit all come under this.Because our salary is pretty less, I am combing the first & second part, as this our disposable income. So, finally we have a budget of 11,000 for our expenses.Monthly expenses hacks:Never go for very good societies such as Amanora, Magarpatta etc. Just with a couple of kms radius, you will find very good accommodations which far cheaper rates. Check for Sasane Nagar/ Flats near Nobel Hospital , near Amanora and you can find the difference. Always minimize your accommodation expenses. So, you can find a decent enough Fully Furnished 2BHK at 12-16k. For calculation purpose, lets assume that our rent is 16k. So, 4k is paid as rent. Maid charges 1k per person for cooking, cleaning.(sometimes, washing clothes too!!).Electricity and Wi-Fi expenses come around 2400. So, 800 rupees per person. Groceries will come around 4800 per month. So, 1200 rupees per person.Total basic expenses:4000+1000+800+1200 = 7000 per month.Now, we are left with 5000 from our monthly budget.Travel cheap and use Public Transport for maximum chores. It hardly costs you 15-20 rupees to travel 15kms in Pune via Bus. You need to get accustomed to it. But, once it is done, you will do fine. Autos charge you 12kms per km. and most of the autos in Pune are rigged. So, you will be paying a premium price. Ola & Uber, will devise new pricing which will not be feasible for Aam Aadmi. Let us peg the travel expenses to 1500 per month.So, now left with 3500. Here comes the tricky part. We need to have fun and also spend less.Initial 2-3 months phase:Always, go for the movie in the morning shows. It hardly costs 100 rupees. 2 movies per month costs around 250 rupees. Do not go for a weekend outing more than once in a month. It will cost you around 1000 rupees. Restaurants and bars, go for the economic ones, twice a month. Spend the rest 2250 over there.A little hack(A risky one though): Go for a premium Credit Card whose yearly spend should be generally around 1.5 lakhs. If you are not able to make it 1.5 lakhs yearly spend, you need to pay 500-1000 as credit card annual fee. Take the example of HDFC Times Card. You get 25% off on all movie tickets at Cinepolis. So, effectively you are saving 50 per month, which will be 600 per year. Many restaurants sign up with these premium credit cards and offer 15-25% discount on your bills. Voila!! You can saving a thousand or two. But, never ever use your credit card for your luxuries.Remember one thing: Money makes money. So, saving money is crucial in the initial phases.After 2-3 moths phase:I will come to this once we cover Short term savings.Third Part -Short Term Savings:This is your cash cow, which can save you for your cravings towards luxuries, a trip to Goa, or a costly present to your loved ones.First option:We will have a 6 month Recurring Deposit(RD), of all the 5500 rupees. So, by the end of 6 months, you are sitting on cash of around 33,000. You will also rewarded an interest towards principle, which can be around 1000 rupees(Bonus!! Remember, Money makes money). Now, this 33,000 is all yours and do whatever you want!!P.S.: Better thing is to spend half of it, and the other half keep it for long term savings.Second Option:(Not a suggestible one, but I take our childishness into picture)I am unable to wait for 6 months. I want to do some shopping or stuff.Let's have a 3500 FD for 30 days in the first month salary. The second month end will add more 3500 for this part. So, total we have 7000 by the second month end. Go for a luxury and treat yourselves.The rest 2000 will go for a 6 month RD.12,000 at the end of 6 months + interest.After 2-3 moths phase:I think you have the answer.Fourth Part- Long Term Savings:This needs some knowledge and research from our side. Read a lot about PPF, Tax Saving FD's, LIC Policies, Mutual Funds, Bonds, Stocks, and real estate(a farfetched idea). If reading is not your cup of tea, hire a Financial Planner/CA for this. They might charge you a couple of thousands, but it is worth it. But, again, having the financial acumen is the best thing.Use these links for a start:5 Best Long Term Investment Options in India10 Best Long Term Investment Options in IndiaBut, I suggest you to go for more study. For stocks, read "The Intelligent Investor" & "Security Analysis". These are the Bibles for Investing.To explain you the power of long terms savings, let me take an example:You invest 2000 in PPF, today. At the current interest, it becomes 4000 by 2023. Then, it turns out to be 8000 by 2031. In short, compound interest is a magic which anyone hardly grasps.Invest for long term plans early.A rough Portfolio:Go for a LIC Policy of around 2000 per month. Then, a PPF for 1500 per month. Initially, invest in Mutual Funds 1000 per month. Then, play with the other 1000 in Stock Market. Start gaming the Stock Market, and then you can shift your Mutual Funds money into Stock Market.Want to buy a house?? Stock Market money, PPF will come handy.Hack:1) Meet a goof Financial Planner, and ask him/her to pitch you the idea of portfolio and different types of saving schemes. They generally do it for free!!2) Shift some of your short term savings here, into Long Term Savings , basing on the requirement.This way, you can manage your finances and also lead a very good life , in the coming days..