Mindset of Rich People: How Money Works for Them — Decoded Secrets
Why do the rich keep getting richer while the middle class struggles with EMI traps? In this episode, we host Harsimar Preet Singh, known as the "Skating Finance Guy." From exposing the dark reality of Crypto scams to explaining the "Buy, Borrow, Die" strategy used by billionaires, Harsimar breaks down complex financial concepts into simple Punjabi.
⚠️ The Trap of Easy Money: Crypto & MLM Scams
The desire to get rich quickly often leads to disaster. Harsimar highlights how many Crypto apps and MLM schemes lure people in with initial profits, only to vanish with the principal amount later.
The Lamborghini Tragedy
Harsimar shares a chilling story of a trader who lost ₹250 Crores in a crypto crash and committed suicide in his Lamborghini. Volatility in unregulated markets like Crypto can wipe out fortunes overnight. If you don't understand the underlying asset, don't invest.
🛠️ Why Modern Products Are Designed to Break
Ever wondered why your old TV lasted 20 years but your new LED TV breaks in 3? Harsimar discusses the case of Tupperware. They made products so durable that customers never needed to buy replacements. This lack of recurring sales led to the company's downfall.
The Lesson: Modern companies practice "Planned Obsolescence"—manufacturing goods with a limited lifespan to ensure you keep coming back as a customer.
💰 The "Buy, Borrow, Die" Strategy
This is the secret sauce of the ultra-wealthy. Middle-class people sell assets when they need money (paying taxes on the sale). Rich people borrow against their assets.
How it Works:
- Asset: You have ₹1 Crore in Stocks or Mutual Funds.
- Need: You want a luxury car worth ₹90 Lakhs.
- Poor Way: Sell the stocks (Pay Capital Gains Tax) -> Buy Car. Compound interest stops.
- Rich Way: Pledge the stocks -> Take a loan at 8-9% interest -> Buy Car. Your stocks continue to grow at 12-15%, covering the loan cost, and you avoid tax.
💳 The Credit Card Trap & Gold Secrets
The Minimum Due Trap: Never just pay the "Minimum Due" on a credit card. If you do, the bank charges interest (36-40% annually) from the *date of transaction*, not just on the remaining balance.
Gold Lockers vs. Gold Loans: Harsimar advises against keeping gold in bank lockers.
- Locker: You pay rent, and if the bank is robbed, they have limited liability.
- Gold Loan (OD): Pledge the gold to get an Overdraft limit. You only pay interest if you use the money. It turns "dead weight" into a liquid asset for emergencies.
🏢 Sole Proprietorship vs. Private Limited
For small businesses, a Proprietorship is fine. But as you grow, Harsimar recommends moving to a Private Limited Company.
Why? Limited Liability. If a Proprietorship goes bankrupt or faces a lawsuit, your personal house and car can be sold to pay debts. In a Private Limited company, your personal assets are legally separate from the company's liabilities.
📉 Need Financial Planning Advice?
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Contact Us❓ Frequently Asked Questions
It is a strategy used by the wealthy where they buy appreciating assets, borrow against them (instead of selling) to fund their lifestyle and avoid taxes, and hold the assets until death to pass them on tax-efficiently.
Yes, it is often better than breaking the FD. Your FD continues to earn interest (compounding), and you pay only slightly higher interest (usually +1%) on the loan amount, keeping your long-term savings intact.
A high CIBIL score (750+) allows you to negotiate lower interest rates on loans. A poor score can lead to loan rejection or very high-interest rates (12-15% vs 8%).