Financial freedom is the ability to lead a lifestyle of your choice without being dependent on an active income S. Lakshmi Narayanan-9945643550

In this series of articles, I explore my experiences in my financial freedom coach journey?????????????

Is the financial freedom coach or financial planner only for those who have money to invest

I had just finished my weekly business networking meet and was about to leave for my office. One of the members by name Giri (name changed to protect the privacy of the client) came to me very hesitantly. He said,” Sir, I have a financial problem. Can you help me?”. I said “Yes, go ahead”

He continued “Sir I am almost bankrupt. I start from my house early in the morning and go back only around midnight. I do this because my creditors always come and abuse me, as I could not repay their debts. I was in a good job and then I left the job to found my own company along with a partner. Things were going good and life was beautiful. I also immediately bought a house on a loan of Rs.40,00,00. I could easily pay the installments for the housing loan in the first 2 years. But the third year, the industrial recession hit, and orders began to decrease. I was finding it difficult to even give food and education to my children. I could not repay the housing loan installments. I began to take loans to repay the housing installments and then even to take loans for household expenses. I began to borrow from friends, my partner, and even some of my relatives, with the hope that things will improve. But the situation has deteriorated. What started as Rs.30,000 loans, in the beginning, became Rs.25 Lakhs in no time!?I do not know what to do? I am now too numb to think.

I listed all his assets which only consisted of his house (under loan) and his technical skills. I first arranged all his loans under decreasing order of interest rates. Then I asked him to immediately take a home loan top up so that he can repay the loans with higher interest. A home top-up loan is relatively less costly. Then I asked him to sell his only house. It was very difficult for him to do that, but he did that after much persuasion. After the sale of the house, We repaid all the loans, including the home loans. I told him to identify a job suited to his technical skills. He was very lucky. He got a job in the gulf and then traveled to the gulf to take up the job.

Before he left for the job I asked him “ If you had disposed of the house when your income has decreased and you were unable to pay the installments, you would not have had Rs.25 Lakhs, since most of these loans, were taken to repay the housing loan installments. He told me “Sir, it is the sentiment as well as the social stigma if I were to dispose of my first bought house”. This is what made me hesitant to dispose of the house. But your persuasion and assurance that you can get a better house later convinced me to dispose of my house.”

Within 5 years of his going to the gulf, taking up a job, he purchased a house without a loan by saving and investing in the house. He is well on his way to financial freedom and in a few years, I am sure he will return back from the gulf, having generated a passive income.

Moral of the story- Even bankrupt people can benefit from a financial planner and freedom coach. All it requires is a leap of faith and a great financial mentor.