Hello folks, Good afternoon

Today I'm going to write about a concept that financial educators talk about pay-in-sight x payment on time.

What I write here is about the interest that is paid in my country (Brazil). I don't know what it's like in your country, but if the interest is high, I imagine that posting will be of great help!!!

source: https://www.lifehack.org/articles/money/how-pay-off-debt-fast-using-the-stack-method.html

As you know, adult life requires us to have daily expenses, both to pay bills and other issues. The main focus in a worker's life is always to pay the bills. With what's left, he tends to have his spending more connected to comfort. That is, if you're not an investor who separates a little from your income every month to invest in something that gives you long-term equity.

Well, imagine that the person wants to buy a smart TV of more or less 40 inches. Let's put a price on it for 2,500 reais. I don't know what it's worth, but I guess it's that way.

Look at the two situations.

A-the person portion in several times and in addition to paying this value of 2,500, pays more 400 to 800 real interest accrued within the parcel, depending on the size of their division. Total television = more or less 3,200 reais

B-The person has the money to pay on sight and in addition receive a common discount that the stores offer, which, usually varies from 5% to 10%, she is a good negotiator. You know very well that interest is embedded within the price of those who will buy in view. She can, for example, call the manager, tell her that she has the money to pay there on time and get a much bigger discount. If she gets a good bargaining discount, her television can come out for 1,900 to 2,100 reais for example.

Did you see the difference??? In addition to not having multiple interest embedded in the parcels, you can greatly reduce the price at the time of sale, if the person has the money in hand to pay on time. This makes the same television, have a difference of more or less 40% in its final value to the consumer. Paying interest, the person is buying almost half of another TV....

That's a "small" value. Now imagine buying a car.

Two situations.

A-person wants to buy a popular car worth 45,000. It makes a financing and parcel this car in several parcels. At the end of the last installment, after years of payment, she added her payments and saw that she paid the total amount of 72,000. This person did not give any entry and paid something around 1.8% a month to have his car.

B-the person wants to buy a car and has the money in view to pay it. Being a good negotiator, you can lower the price of the car a little, and add some items that would not be placed if the payment was on time. The concessionaires do not give much discount, even paying in the view, however, in a car of this value of 45,000, I think that if the person presses, will get a discount of up to 4,000 reais.

That is, at the end of the day, if she funds it without admitting it, it will pay about 70% of the value of that car compared to the one who buys it in view. It's a lot of money "thrown out," in my opinion.

I think that in the vast majority of cases, in which buying something would be just to give comfort, it is infinitely better to join the money to buy at the view than parcel just to have that item more quickly. The lack of patience in this case causes a terrible effect on the person's financial life. Imagine in the case of the car, if the person loses his job and can not afford the parcels.... You'll be shaken financially and emotionally, besides getting your name dirty!!!!!

Frizo whenever they only make spending that they are not ultra necessary, if they have money to buy in the view. Spend months or years gathering, but do not spend on the installment, because a lot of money goes away. It is only worth the installment, if there is no interest, because, the money of the person can render a little while she pays this installment "No Interest". However, I always think that the person can get a very high discount, which would not be worth the installment, even if there is no interest.

Note: The accounts are not accurate and I put more or less an average value that I see in financing the two items quoted, not exactly these. It's just an average!!!

Thank you all and good afternoon!!!