Financial freedom

Robert Kiyosaki the author of Rich dad Poor dad describes the concept of the "Rat Race” as a self-defeatist cycle:  an employee works hard for an employer to receive a raise or a promotion and as their income increases, their expenses increase as well. As the employee’s debt increases, he becomes further tied to their job and more reliant upon their paycheck. Furthermore, they are forced to work harder for their next promotion to offset their debts.

Now all off already trapped in this rat race. We have increase our debts in the form of Credit Card, Personal Loan, Car Loan and Home Loan. How we get out of this rat race and achieve the financial freedom. This is when your passive income i.e. income generated by your own saving/investment, exceeds what your expenses are. Robert Kiyosaki calls it "out of the rat race".

Once financial freedom is achieved, you don’t need to work for money, you have all the time you need to do whatever you want. That could be continuing to set new lifestyle goals and objectives to achieve them, or service work, whatever.

We can achieve financial freedom with following action points:

• Start Saving and Investing Early and Regularly
• Spend At least 30% Less Money Than You Earn
• Never default on Bills or EMI
• Create Emergency Fund
• Get Life Insurance, Term plan only
• Pay Off Your House Loan Early
• Invest on yourself
• Start second source of income

0% interest free EMI scheme: trap or opportunity

First I want to say that there is No free lunch. So why there is Zero down payment and 0% interest free EMI scheme in the market. Let explain how this works. In this model there are 3 segments of people involved,

1. CUSTOMER: Customer gets to buy a new item for absolutely zero down-payment and a chance to pay the amount in easy installments without any interest being paid.

2. SELLER: Seller gets to sell more goods due to these kind of schemes as the customer base is also increased. These schemes enable a man to buy anything without any money because he has to pay in installments.

3. FINANCE COMPANY: Financing these kind of customers. But it is called 0% interest free scheme means no return on the loan given to the customer. Then why they are doing so… for charity? Answer is NO.

Because no zero percent scheme is actually zero percent.  The amount of interest that you would have paid is taken from the seller in this case. Although it's not as that much but some portion of it (This is a hidden information that most sellers don't tell).

Sellers never agree to any kind of bargain while selling goods on EMI right? Because they have to pay to the financer to give you enough capital to buy something from them. So sellers pay that out of their profits of course.

If you buy anything cash and not over EMI (interest free), then it will an opportunity for you to bargain and some discount on the product. You will easily get 500 to 1000 rupees off because seller need not to pay anything to the FINANCE COMPANY sitting there to offer 0% interest free loan.