From phones to cars, EMIs are eating your salary. CA shares two rules to avoid a financial trap

What’s the point of earning a fat paycheck if you’re left broke by the end of every month? Many young professionals proudly flaunt luxury cars, the latest phones, and branded watches, but behind the gloss lies a hidden trap: EMIs. Chartered Accountant Sachin Mishra recently shared a story on LinkedIn that shows just how dangerous “easy monthly installments” can be—and why they silently eat into your income before you even realize it.

Mishra recalled a conversation with a friend who earns six figures every month yet constantly complains about being broke. Curious, he asked him why. The answer was short and sharp: EMIs. The friend had bought everything—from phone upgrades to a luxury car to a designer watch—on installments. On paper, he looked rich. In reality, he was drowning.

That’s when Mishra put it bluntly: “EMIs are the modern-day chains.” According to him, the system first manufactures artificial needs through aggressive marketing and then convinces people that those desires are easily attainable through EMIs. You end up paying for years while thinking you’ve “made it.”




He compared it to a lion in the zoo, who gets free food but loses freedom. The lion in the jungle, who hunts for himself, may have it tougher but is far happier. In other words, debt-fueled luxuries may give you short-term thrills, but true freedom lies in financial independence.

To avoid the trap, Mishra follows two simple rules:

• Buy your needs without hesitation.
  
  
• Buy luxuries only when you can afford two in cash—and then take one.

He warns that EMIs often start small and manageable, but over time, they multiply and outgrow your income. The real focus, he argues, should be on increasing investments rather than increasing EMIs. “The world runs on compounding,” Mishra wrote. “Those who understand compounding, earn it. Those who don’t pay it.”