Pay Rs 40,000 home EMI or invest Rs 40,000 and stay on rent? CA decodes the dilemma many professionals face in early career

For many young professionals stepping into their first jobs, one major question often looms large: should they invest in a house right away and begin paying hefty EMIs, or should they channel that money into investments while continuing to stay on rent? With rising aspirations and social pressures, homeownership is increasingly viewed as a milestone of success in one’s 20s. However, financial experts caution that this early decision may come at the cost of long-term flexibility and wealth creation.

Chartered Accountant Nitin Kaushik recently addressed this dilemma in a detailed post on X (formerly Twitter), drawing attention to the long-term consequences of committing to a home loan early in one’s career.

The Dream vs. the Drain

According to Kaushik, owning a house may feel like a personal milestone, but it can severely restrict financial freedom. A Rs 40,000 EMI over a 20-year period translates to reduced liquidity, limited investment opportunities, and increased vulnerability during job changes or layoffs. Young professionals often find themselves locked into inflexible financial commitments just as their careers begin to evolve.

Kaushik highlighted that while the house may be a physical asset, the ongoing loan significantly ties up one’s cash flow. “You own the house, but it owns your cash flow,” he pointed out, warning that the sense of ownership often overshadows the reality of financial strain.

What Happens When You Invest Instead?

Offering a different perspective, Kaushik explored what could happen if the same Rs 40,000 per month were instead invested in mutual funds, SIPs, or PPF. With average returns of 10–12%, such investments could potentially grow significantly over 10–15 years, creating a sizeable portfolio—one that might even allow for an outright home purchase later, without a loan.

The added benefit of staying financially liquid also means greater freedom to switch jobs, move cities, or explore new opportunities without the stress of fixed liabilities.

Building Wealth Over Assets

Kaushik highlights the importance of focusing on wealth creation in the early stages of one’s career rather than rushing into real estate. He states that while early ownership may bring short-term emotional satisfaction, building assets that grow over time is what leads to lasting financial strength.

His message is straightforward: let your investments pave the way toward homeownership, not your salary slip. Prioritising asset growth over fixed liabilities can offer more stability, mobility, and peace of mind in the long run.