NRIs are Famous for their High Income but also Notorious for Wasting Money through:
- Buying High Priced Houses back in India just to Lock them for 10 years 🙂
- Investing in Over-priced assets 🙂
- Buying stocks on high & Selling them on low 🙂
They are often the Guinea Money Pig for Bankers, Brokers, Relatives & help to Run the Local Economy.
Later they return back to India without any Passive Income & Continue to be the money slave. The current corona situation revealed the same. Isn’t it?
Literally they are Loosing Millions per Year through these under-estimated Investments. They don’t have Training! Bankers knows this & Here is another example of how they exploit NRIs.
The Problem
Recently one of our NRI Subscriber messaged me an Offer provided by Federal Bank to NRIs.
It also tries to Teach some Maths to the NRIs!
The Questions
The question of our Subscriber is following:
- Is this scheme a profitable deal?
- What is the Returns %?
The Evaluation
Now let us evaluate the above offer. It says if we pay Rs. 6182 every month for 10 years (Rs. 74184 in 1 year for Simplicity) then you will get Rs. 10 Lakh on maturity!
Totally you are spending Rs. 7.4 Lakhs in 10 Years & the Interest Returns is Rs. 2.6 Lakhs.
For drill-down evaluation – you have to find out the Interest on Year 1, Year 2 etc. which is calculated as below based on 6% Interest.
Inference
As you can see from above the Interest Rate applied is less than 6% only!
Clearly this is a NO GO option as the Interest Rate is very low for a very long investment period. Instead, you can go for a Corporate Bond of 10-12% Interest and gain higher returns.
Who is Profiting?
Clearly the Bank is Profiting from this Deal! They are locking down the NRI customer for a long period at low interest rate. Poor NRI!
Our Advice
If you are an NRI or High Income Person you are Dealing with High Amount of Money & You should be Master of Calculations! You should be positioning Investment Returns for 20-30% level so that you can be Super Rich & Financially Free. Download ROI Excel Sheet.
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