Sunday, November 30, 2014

Never compare

Mr and Mrs Sharma were living an envious life. Mr Sharma was a CEO of an international company. He retired 4 years ago at the right age of 55. Mrs Sharma was with PSU bank and took retirement last year. Now, she would get good benefits and Mr Sharma got good fat bulk money during his retirement.

Sharmas have two children. Mr wanted a girl child and Mrs wanted a boy. God obliged to both of them. Once they were blessed with a princess while second time they were blessed with baby boy.
Both of them were academically good students. They completed their engineering and did their masters. The boy settled in US while the princess decided to stay back in India.
Sharmas lived in the plush locality of the city. They had a good shining bungalow in the heart of the city, off course, mortgage free. People wondered what else could a person want if they had Sharma's life. What many did not know was a basic principle of life: Each and every human being has his own share of gifts and problems. The people who were jealous of Sharmas did not know of their share of problems.

Mr Sharma was the fifth and youngest child of Senior Sharma. Both the Senior Sharmas died when Mr Sharma was five years old. He was brought up by their eldest brother. However, he too had his limitations. He could afford only matriculation of all the siblings and rest he left them to fend for themselves. Mr Sharma had the attitude of taking the problems head on. He worked part time and studied in the evening while attending night college. Many times in a month, Mr Sharma would skip dinner. Sometimes, it was due to sheer lack of energy to cook and many times it was to save funds for his own education. He survived this grind and completed his bachelors. He got full time job in a good company. However, after one year in job, he realised that he could not grow in that company with the same set of education. So he went ahead and applied for part time masters in management. He completed that in next three years and got opportunities opened in his own company (Note: this story has no dates. It would date back to 2002 or 1992. So do not think that MBA has a ticket to opportunities, at least in current scenario).
After his PG, he decided to stay with the same company for few more years. The company periodically rewarded his loyalty and Mr Sharma periodically renewed his aim to stay with the company, extending it by some years, only to retire in the same company. However, the designation on which he left was a dream come true for most of the people.
In the meantime, he got married with a beautiful girl. Mrs Sharma belonged to a rich family. However, her parents saw the integrity and determination of the boy and agreed to their marriage. Mr Sharma, too, did not disappoint them. First he gave his wife complete freedom of thought and living. Mrs Sharma too reacted positively. Rarely, the fought, too. However, those  moments of fighting just increased their bonding. Sub-sequently, they got kids too.
 
Suddenly, one day, his eldest brother died. The brother did not have any insurance and his son's responsibility was left to his non working wife. Mr.Sharma rose to the occasion and took the responsibility of the child, monetarily. During this tough period, Mrs Sharma stood rock solid behind her husband. This would have been a huge drain on their finances. However, they decided to bite the bullet. Mrs Sharma was thinking of two things: 1. Taking help from her parents in this tough situation. 2. How would she react, if the same thing happens with her. Even though, she had a good job, it would not be sufficient to support three children. Collectively, they decided against point number one. For second point, both of them bought life insurance for themselves. Their health insurance was available from their respective employers. God smiled on Sharmas and they could successfully complete the education of all the three children and as per their likings. They never needed those life insurance policies and they thanked God for that.
 
During the last market crash, almost 80% of the Sharmas investment were wiped off. They were living paycheck to paycheck. Mr Sharma being in private company was hit badly. His salary did not increase for three years. Mrs Sharma being in PSU, her salary went up marginally each year. However, all was still paycheck to paycheck. As they say, when the going gets tougher, the tougher gets going. Mr Sharma did not panic and sat on his portfolio throughout the market crash. His male ego was not hurt when his wife was driving their livelihood. Mr Sharma had the brains to understand that market behaves in cyclic manner. Although, he could not add anything to his portfolio, he never sold his any of the investments. He was rewarded for his patience after three years when market began to rose. His portfolio grew 22% YOY.
 
Jr Sharma wanted to study after masters. Mr Sharma supported him and sent him to US. After his one year of study course, he decided to work over there. Initially, Mr Sharma thought that after a brief stint in US, Jr. would be back home. However, that did not happen. Jr. expressed his interest of settling in US. Although heartbroken, Sharmas did not oppose him. Jr. tried very hard in convincing Sharmas to migrate to US. However, they did not want to leave India. Jr. was disappointed with their decision. As the father - as the son, Jr. too respected their decision. They mutually agreed to meet each other every six months. This was revised to once a year and soon it became once in every five or six years.
 
Princess Sharma had decided long back to stay in India. She completed her masters and got a good job. She got attracted to a very handsome guy and got married against Sharmas wishes. Mr Sharma realised that the guy was good for nothing and was just a showcase item. Princess too realised this. However, it took five years of torture, beatings and mental agony to realise that Mr Sharma was right. It was too late then.
 
Mr Sharma tried to bring his daughter back home. However, princess wanted to pursue her marriage and make it a success. She could not. She got divorced, heart broken, bruised and now is in mental asylum for recuperating from the pain. Jr. stayed in India with Sharmas during this tough time. However, his company felt that two years were enough for difficult time and called him back from his work from home schedule. He had to rush back to his house.
 
Over the years, time healed the wounds but the scars remained. Jr. too got married. Mrs Sharma chose a girl for him and he was more than wiling for an arrange marriage. Sharmas were not sure was this willingness due to his guilt of staying away from them or due his sister's condition with her love marriage.
 
Sharmas longs for their kids at home. They are jealous of the people who are privileged to stay with their kids. Mrs Sharma is eager to play with her grand children, whenever that happens. Both are now retired from the daily jobs. Few days back, Mr Sharma booked an Europe tour for him and his wife. Mrs Sharma wanted to go on a Europe tour, some ten years back. Mr Sharma felt bad that he could not buy her the tour. Nevertheless, he has now booked an Europe tour. They would be touring the Europe with little sugar, some blood pressure and lots of restrictions on the diet.
 
Mr Sharma tries to make up for the lost time and caring for his wife. On the face of it, Sharmas life looks honky-donky. However, only he and his family knows of the grind through which they all have been.
 
Moral of the story: Never compare yourself with others. We have no idea what others have been through or what they are been subjected to. We can only be motivated to reach where the other person stands.


Saturday, November 29, 2014

Things to be remembered while buying house - Part 2

Sometime back, I wrote a simple post on "things to be remembered while buying a house".
 
Few months back, my friend had to buy a new house and I had to give him company while house searching. It was basically, 4 eyes finding fault instead of 2 eyes. We did that exercise for around 2 months and then finally found something interesting. However, in the process, we also found few more points which should be remembered while buying a house. So here are few more items to list down.
 
  • Always, always remember to visit the house in day time. Chances are maximum to miss something important in night or evening light.
  • Try to reach the place by public transport. This would give a good idea of the connectivity.
  • Always have your friend or spouse along with you while viewing house. Agents can easily influence the mind of single person than two.
  • Once you reach there, some agent always seems to be in hurry (btw, our agent was really nice man. He took us there and then left us alone for at least half an hour to look at the place in peace. This he did for all the houses that we visited. To our surprise, he advised against buying few houses for some reasons that we could not spot. I am surely going to recommend him to other people. This is called as long term vision. Umm ... may be topic for another post).
  • Check if the walls have paint, wall paper or tiles.
  • If the walls are tiled, it must be due to leakage. I have not seen anybody tiling their hall or bedroom just for fun.
  • Look at the paint, are the walls newly painted?
  • Look for cracks in the wall. Fine cracks are to be ignored. They can be due to inferior quality of POP or cement used. However, large cracks are to be taken seriously.
  • Open all the windows and have a look at the neighbouring environment. One of the house had cemetery and of course, the window was jammed which was overlooking the cemetery. Nothing wrong with cemetery. The problem was deliberate jamming of the window.
  • Visit the place in weekday. You will come to know about the noise, if you have any school around. Again, for some this may be desired point.
  • Politely, ask the owners to switch off the TV. Sometimes, TV noise blocks the railway lines noise. The owners may be used to the noise and they would have even unknowingly watching TV.
  • If possible, take a walk around the building. One of the place that we visited had smoke coming out from a rubber factory nearby. This could have been missed.
  • If you are planning for a baby or already blessed with one, make sure you enquire about day care facilities around the area. Check from which age they admit the babies. Also, as discussed in last post, check for schools too.
  • Check if the building has security guards. One of the building's guard, did not let us in. He specifically needed a telephone call from the owner or secretary, although the owner was not staying in that building. That was impressive.
  • If you believe in Vaastu, check that too.
  • Ask society members about the water availability.
  • Check if any of the branches of the trees from the compound land in your balcony. If a branch can, a person too would be able to follow.
  • If possible (I know, not always it is), visit the area during any festival. The amount of noise would be a big factor, post house purchase.
  • Check if any other building or so is coming up near the compound. That would certainly block the sunlight and wind. However, in Mumbai, it would be foolish to decide on this factor. A building may stand tall between the time gap of you applying for loan and your loan getting sanctioned.
  • Looks stupid, but do consider how long your nearest relative or friend stays from the house that you are looking.
  • If in Mumbai, if possible, do consider buying a house within toll naka limits. This would avoid unnecessary toll payments and hassles. One of my friend spends more on toll than on CNG gas for his office drive.
  • Time your second visit probably in the evening or at night. This would let you know how lonely or safe that place is in off-peak hours.
  • Never to forget the NA certificate, Completion certificate, Occupancy certificate. If society is formed, check on whose name the society shares are. If society is not formed, ask for an estimate. The earlier the better.
  • If the house is newly constructed, do not paint the house immediately. Wait for at least 6-8 months. All the water below the tiles will show up on the lower levels of the walls. Let it dry. Then go for paint.
  • Buy house which has a parking space, if possible. Parking on road is never easy and safe. Reserved parking is always better than searching for parking in the night.
  • Of course, you need to check medical shops, allopathic doctor, dentist, sabji market and general stores shops. They should be in the vicinity.


Friday, October 24, 2014

Information available on internet

Gone are the days, when one would have to visit the nearest library to get information on some important concept. Pre 1995, finding information was painstakingly difficult. Even to find the long form of MF, one would have to read the financial papers or find the investment books in library. Library was not a outdated word, then.

I remember, my uncle checking some English newspaper with utmost interest. The print on the paper (for that particular page) was so fine that many would have got soda bottle specs. Still he and his friends were interested in reading those prints. Years later, I understood that he use to check the price of the stocks. He had a small circle of friends and they kept on discussing and monitoring their portfolio. Have no idea who made profit and who faked profit. However, it kept them busy in their retirement life (ghosshhh, direct equity in retirement!!!) and my aunt never seemed to complain (may be, her ornaments were sponsored by some of the stocks and she felt that another necklace would do no bad :P ).

Internet has replaced everything. Now, we just have to type the word in google and it gives loads of information on that word (btw, never tried ‘understanding a women’ on google). As always, every coin has 2 sides attached to it.

Let us look at the positives of this bombardment of information. Before today, investor did not have the blogs like Subramoney, AIFW, jago and calculator king. Their investment advice was limited to the financial papers and the human beings around. As always, most people preferred the easiest way and hence there were always talks of investment and never actual investment was done by ‘average’ people. Of course, there were exceptional people who discussed stocks in trains and implemented them. Even today, if you catch a Borivali local, you can hear “Tata nu bhav su che”, “Reliance ne bhav vadharigayo”, “Maro broker saro che” and so on.

I still remember, project activity in my school was like a heck of an activity. We had to do loads of paper reading, paper cutting and then we would get some good information to show to our teachers. Today’s kids just go to google baba (instead of their real baba) and download the stuff. Honestly, I do not know which way is better. Now, the children can cut down the time spent on searching through various magazines and papers and just can download the right picture and right article. The rest of the time is available to them to play cricket, football or volley-ball (all to be played in park and not on video games).

Now, you don’t have to worry about your paper cuttings getting wet or getting lost. Just download them and keep it on your laptop (oops, today’s kids use ipads).

My grandmother referred some recipe book and my wife refers online recipes. I have to admit that the recipe books did not have the variety of the dishes that online PDFs has. Eggless cakes, dal dhokli, rassam all are available. I was planning to refer such recipes for noodles but then realized that on the back side of maggi, we have all the detailed instructions. So abandoned google baba.  

The other side to all these examples (and obviously to information available on the internet) is the question “how to sort the information available”, “which one is suitable to my condition”, “how to distinguish the real matter from the dummy one”, “how to distinguish between financial advice and financial porn (word borrowed from Subra)”.

Searching on google is not as easy as it seems. Just type ‘mutual funds’ in google. What you get is not the information on mutual funds but the advertisements of the mutual fund companies.

Mutual funds on Google


Of course, cannot blame the google. It searches everything with mutual funds and displays the links according to SEO techniques. So here rational brain of human (LOLs) is to be used. Read any online article of famous new papers and you would find plenty of funny articles. Like few days back, somebody was recommending equity mutual funds for a goal which was 2 years from today. This was the goal based strategic plan developed by financial experts in one of the reputed financial news papers. So understanding which information to use has now become more difficult.

Few days back, read another article. It listed how every photo that we take from our smart phone has a geo id tag to it. When we upload it on social networking sites, the geo tag can be interpreted by software and exact location of the object (or human being, of course) can easily be found out. Now imagine, how a stranger can actually know where you live and what are your geographic co-ordinates just from your social networking photo.** What is this paragraph doing here.. ummm

One of the financial blog will say invest in debt mutual funds for a goal which is 1-2 years away. Mathematical experts like Pattu can point out that how debt mutual funds too suffer from volatility and if the goal is important one, keep all the money in bank FD, taxes be dammed. However, if we read both the blogs from neutral angle, how one is to understand who is right and who is wrong. So for that, he himself must understand volatility and standard deviation.

Subra says I have 2k units of Palmolive shares. Now, you cannot go and buy Palmolive share because Subra has it. Subra may have bought it 50 years ago.

You read somewhere that Ashal says invest in FIBC fund. You do that exactly. It may happen that, you did not read the article completely. Ashal’s goal is 15 years from now, yours is 2 years from now. I remember, when I had asked Ashal to point out the strategies for handling retirement corpus (handling corpus and not creating corpus). He told me that one size does not fit all. True. Situation matters.

P.S.1: Do not ask me moral of the article (It would be difficult to tell you that I am yet to figure that out). You just read about indiscriminate information available on the internet. This may be one of them.


Thursday, October 2, 2014

End of S .... S for Sujit

It was 2.30 in the night. ACP Gokhale's personal phone was ringing. This was a clear sign of emergency. Very few in the police HQ had ACP's private number. ACP picked up the phone with anticipation of some of his dreaded fear. After listning to the phone call, ACP's heart sank. 

Sujit was indeed his dreaded fear. He has been on the run from last 8 years and ACP managed to get close to him only on two occassions and that too was wasted.

3 murders took place in a gap of 60 minutes, all in one locality and in same manner.

ACP rushed to the location at 3:15am. The primary investigation revealed that the murder was done using a sharp object like a butcher's knife. All the murders had Sujit's signature: S written on the wall with victim's blood. All the victims were not related to anyone in any manner. Hardly anybody in their families had anything to gain from the murders. In fact, in two of the cases, the victim was the sole earner. After 5 days of investigation, no clues were obtained and ACP had to announce that Sujit was back.

The media, as usual, were highlighting how the police force were inefficient in handling a serial killer. CP called a closed door meeting and wanted to see the results. Everybody just had one question - HOW?

Police inspector David Bregenza suggested an approach. It looked good on the face but the execution was difficult. David's plan was to get personal with Sujit and make him commit mistake. The assumption was if Sujit gets personal he would think with some rage or revenge in mind and it would create some chink in his plan. That was the only hope. Just when the meeting was about to finish, ACP got another call saying there were 3 more murders in gap of 3 hours with 'S' on wall. Sujit was way ahead in his thinking and getting personal with him was difficult as nobody knew his background.

CP suggested David and ACP work together to formulate a plan and get it executed.

They both visited the latest crime site. First victim was Mrs. Ashalata. She was in her mid-fifties. No personal animosity with anybody. Peace loving and involved in social work as well. Has term insurance of 50 lakhs. The amount would be given to her daughter. Her husband expired 5 years ago. Daughter is studying in Shimla. Ashalata had no love interest with anyone. The daughter too was clean. Class topper and friends with everyone.

Next victim was Miss Neelam. She was in mid-twenties and was working in a private firm under reputed person. She was about to get married to that reputed person. Everything was honky-donky, till she was murdered. The man was clean. He had been to visit his native place in south during the incidence. His phone records, natives and other references were verified.

Next was Mr Chander. He was in his mid-thirties and a very corrupt man working in a bank. He would often ask for bribe for approving loan. He was suspended few times for the same charge. Since the bank was PSU, he was still holding his job. However, few thousand of rupees would never be a good reason to kill someone brutally.

David was surprised. He said to ACP, "Sir, there is no pattern". "Exactly and that's the pattern of Sujit. And hence I am worried", came the reply from ACP. They needed to find pattern and that too quickly. The murders were happening in multiples of 3 each week.

David and ACP promised each other of thinking more on the lines to find a pattern and put an definite end to the murders and to Sujit.

ACP reached home at around 8.30pm. Still in thoughts of Sujit. He could neither relate to any pattern nor could find a way to identify who Sujit was. He sat at couch and was surfing few channels. Just then his daughter shouted, "Papa, please go back to the channel. It was my favourite add coming". So he went back to that channel but the add was gone. The daughter started crying. To console her, he took her in his lap and told to hold for few more minutes and that add would be relayed again. To his daughter's cherish, that add was relayed again. That add made both of them happy. The daughter got to see her favourite add and ACP got some hope. The add was of feviquick. The man in the add would stick some glue on the iron rod, dip in the water, wait for few seconds and bingo he had fish stick to that glue. That was exactly what ACP thought could be used to catch Sujit.

He quickly went and called David. They met at local resto in next 20 mins. ACP explained what happened and David liked the idea too. They formulated a plan and left the resto after 3 hours.

The next day, ACP asked a news channel to announce that the media house had received a specific information from a reporter that Sujit

would next kill people from Galaxy compound. Immediately, the police sealed the whole compound. ACP came and happily announced to the media that now Sujit cannot come and kill anyone here. This was the bait. To encourage, rather challenge him to commit his crime in a particular locality and try and capture him. ACP had installed secret cameras all over the place.

Sujit, being a true serial killer, showed up at the site. He came dressed as a postman. Nobody suspected him as he had a perfect bearing as that of a postman. ACP was informed about a postman entering the premises. ACP was immediately alert and went to the same building in the which postman had entered.

ACP and David formed 2 teams. The plan was, 1 team would go by lift and other would go by stairs. ACP and his team went by stairs. No sooner they crossed the third floor, the men with ACP were killed with gunshots. ACP hid himself behind the fire duct. There was complete silence. Something went wrong. David had reached the top 18th floor, when he heard the firing. They quickly got out of the lift and tried contacting ACP overphone. ACP's phone rang and his hideout was revealed. ACP quickly pulled his phone out from his pocket to cut the phone. However, before he could cut the phone, a bullet went past his head. Second was through his head, killing ACP immediately.

Due to the firing noise, all the teams in the compound were on alert. As soon as the postman came out of  the building, he was gunned down by the team waiting with guns and snippers. Sujit was dead and so was ACP. When the police searched Sujit's body and his bag, they found a letter. Sujit had written the letter himself.

He had written: As soon as the news broke about me killing people in the compound, I was sure that this was police's bait. I am aware of your stupid plan. However, I just wanted to show that if Sujit wants to kill someone, he can. ACP Gokhale was a great man. However, he was less clever than me. I want the world to remember that I was always ahead of him in thinking. Now that he said that I wanted to kill someone in this locality, I knew that he would be here. I came here to kill him and I know I can do it. By the time, you would be reading this letter, I would not be alive.

The city finally got rid of their most dreaded serial killer. However, in the process, they also lost a very daring, brave and intelligent police officer.


Monday, September 8, 2014

Paying homeloan from credit card

Somebody, in some forum (@Ashal: ssshhh), asked a question: "Can we pay home loan from a credit card?".

Actually, it was not a question. It was kind of a suggestion and the person just wanted to get the feel of the audience. I dare not comment on such threads. It just gets nasty. I have burned my fingers once, when I argued, why should an agent cheat client. If he needs to be paid the commission, he must say that. Simple, right? Nopes, someone argued that he needs income as well. This is the exact mentality, why agents get a bad reputation. Offcourse, nobody is against their income. Just that, it should be differentiated from the premium. Okay, lets not get into that.

Coming back to the topic. The moment I heard the question, I remembered this "thread". First thing first, I have never heard any bank deducting a premium from his credit card. Why? Simple: It is actually like an old proverb - 'Robbing Peter to pay Rob'. The idea sucks, not financially but psychologically (I never get this spelling right). It is like a trap. You get use to the credit card and then comes the admin charges, yearly charges, usage limits and plenty of other stuff. 

Why complicate our lives. Just pay off the EMI from SB account. The counter argument is, we get free money, if we pay by credit card. This is what Subra call - innumeracy. What people do not understand is (even if banks allow) paying by credit card just changes their EMI date and nothing else. 

Suppose, my EMI date is 5th of every month.
I have started using credit card and hence get say, 20 days to pay off. So now, effectively, my EMI date becomes 25th of every month. The benefit of free cash usage is only in the first month. Then onwards, its just the change of the date and nothing else. 

P.S.1: If somebody disagrees with my view, I would be happy to hear their counter logic.
P.S.2: It would be interesting to see Ashal's views on this.


Sunday, September 7, 2014

Stop complaining

Like every other human being, I too have the habit of complaining. Generally, we complain about things like:

  • Getting cold and cough
  • Paying 10 or 20% tax on the income
  • Getting 8% ROI on FD and a friend getting 9% ROI
  • In malls, not getting an autorickshaw
  • Not able to eat pizza/vada pav or burgers, daily
However, recently, I met this girl. After hearing her disease, I was like "Freak... how do you survive...".
The said girl has a disease due to which she is allergic to nuts (peanuts, almonds, cashews, etc..) and to majority of the fruits. It is like a unique disease and she has to live with it. No medicines to cure that. She just has few medicines which reduces the impact of allergy when she comes in contact with the above mentioned food items.

The restrictions are too much. Even if she inhales the air which has the particles of the nuts or some fruits, she gets the allergy attack. Her allergy attack is similar to asthma attack.
Once, when she was traveling from London to her home town, she was served doughnuts. As soon as she had one of them, she got the allergy attack mid air. Fortunately, there was a doctor on the plane. He understood her condition and gave her the emergency injection. She carries this injection all time. Later, when they checked, the doughnut box had a warning: "May contain traces of nuts". 


My camera


The greater problem is, only when she consumes a particular fruit, she understands whether she is allergic to that. The kiwi seeds, the custard apple, orange and few other fruits are banned for her.

Almost, in all the developed nations, the food product manufacturing company has a mandate to write the warning, if the items are produced in vicinity of the nuts. If the patient does not get quick medication, his immune system may get permanently damaged or he may die. Such is the severity of the disease. 

Recently, a small girl, almost died in a plane. The passenger sitting three rows ahead, opened a packet of cashew nuts and started eating. The small particles from the nuts, caused her breathing problems. Her mother immediately informed the crew members and they took her to the end of the plane area and gave her a seat over there. However, the air in the plane is always circulated due to the air conditioner and she started getting vomiting and other symptoms. She did not carry the anti-biotics and could be treated only after reaching the nearest airport. Luckily, she survived.

After hearing such cases, I have stopped complaining for minor issues in my life.


Thursday, August 7, 2014

Luxury (Part2/2)

From Part 1

Raja made arrangements for computers, hacking software, guns and extra sim cards. Each of them had 5 set of sim cards. Kunal studied the security arrangements of the bank and decided how to break those security stuff and play along the plan of Arjun and Nisha. Arjun and Asmi took care of keeping a watch on the bank and their staff. Nisha was doing all the ground work of how to take care of the looted money and how to distribute them and how to use them without getting detected.

Asmi seduced the bank's employee and opened a new account in the same bank in which the project was to be executed. This was part of Arjun and Asmi's plan. Arjun convinced Asmi that they would deposit all their money in that account and route that to some other account in other country so that the tracking of serial number would not be a challenge for them.

Every married man knows, that the wife always knows what her husband is up to. Nisha easily got credentials of the new bank account from Arjun's document folder and could imagine what the plan could be. Nisha opened an international account in other country where she would transfer Arjun and Asmi's money. That night, after Arjun had slept, Nisha booked 2 tickets for Belgium where she had the bank account as well. The plan was to get out of country within few hours of the luxurious execution.

The D-Day (night actually).

Kunal had already bribed the 3 security guards of the bank. The bank was situated on the ground floor of a residential building. Our story's 5 characters had rented the apartment on first floor, just above the bank. At 1430, they entered the bank without even branding their guns. They entered the vault room where all the money had kept. They took a x-ray  and a magnetic print of the levers of the lock. The x-ray and magnetic print showed how the levers of the lock were arranged. Once that was known, Raja started making a key to suit the combination. Nisha praised Arjun for how he had thought of using this medical equipments here. The key was prepared in 30 minutes flat.

In a pull off that lasted more than 3 hours, they had removed almost 100 crores from the vault. It was unanimously decided to keep the money with Asmi for timebeing. They left the venue immediately. Next plan was to back stab each other.

Asmi and Arjun arrived at the venue again within 10 minutes with all the money. They kept all the money back in the vault in 2 minutes. However, next 20 minutes were spent in transferring all the money electronically to their account in the same bank. For this, they used the bank employee's computer. It was an easy taks for Asmi to get the credentials from the bank employee. They wired all the money to the bank account of Asmi from the bank's database.
Here, Raja was dividing 100 by 3 and planning what do of this huge sum of money. Kunal too was busy in planning for the money utilization, however he had divided that money by 2.

Nisha had reached their home. Arjun reached and told her that he was late due to some traffic. Nisha knew the real reason. He went to have quick bath and get freshen up. In the mean time, Nisha transferred all the money from Asmi's account to her Belgium account and left the home. She had to reach airport for the flight.

Nisha boarded the flight. She had booked window ticket for herself. No longer she sat there, a bearded man came and sat next to her. She smiled and said "Love you honey, what a plan". Arjun removed his artificial beard, smiled back and said "Love you too honey".


Sunday, August 3, 2014

Luxury (Part1/2)

Note: All the characters in this story are fictitious and bear no resemblance to any person or event in past, present or future.


Arjun and Nisha were a fun loving couple. They met each other in the office canteen for the first time, sparks flew and before they could understand they got married. It was like living a dream for them.

After 6 months, the reality dawned upon them. They made a classic mistake of marrying  without know each other well, at least "financially". Next 6 months were like who kills first competition between them. Thankfully, both survived. They realized what was going on in their life and why it was so. Both of them thought of taking corrective action. They only had two options - either get divorced and marry someone else who has more money or make more money. Since, they loved each other, they thought of giving a try to making more money first and if that does not work, former option was always available.

Next one month was spent in tyring to figure out what do to earn more money. They thought of anything and everything. Side business was ruled out since both of them were working from 8 am to 8 pm. Weekend was spent in house hold chores. Nisha managed to change job and get hike in her job. While the hike was only 20%, it kept both of them engaged for another month or so. They soon realized that still it would take next few decades to make enough money so that they can just sit back and enjoy the luxurious life. Coming from the fast food generation, wait was not acceptable.

Arjun tried to pester his boss to give foreign country assignment. However, this depends upon the project you are in and hence was left to chance.

Next day's newspaper changed their life entirely. Somebody had robbed the city's biggest bank and vanished with all the money. They too thought of taking the wrong path to get the amount of riches they wanted.

Even a jerk would tell that to pull off the bank robbery, they needed a team and a fool-proof plan. Arjun and Nisha spent next 8 months in preparing a master plan to execute the bank robbery. Code word was: Luxury. The next step was to involve 3 more 'motivated' people who would be the part of the team. Their office friends were ready to venture in this new 'business'. They quickly found the suitable 3 people and their team of 5 people to execute the 'Luxury' was ready.

Asmi was the receptionist in Arjun's office. She was more interested in pursuing a career in fashion rather than being a telephone picker in an office. Kunal was security in charge in Arjun's office. Arjun had involved Kunal for his expertise in security area. Arjun and Nisha needed another guy who could handle the logistics of any kind, be it ammunition or accessories. Kunal helped them in finding such a man. His name was Raja.

They arranged for their first official team meeting at Kunal's house. Arjun and Nisha told everybody about the plan in detail. Everybody gave their suggestion which was accepted or ignored after all considerations. After a week or so, their blueprint was ready.

During one such meeting, the seeds of the so called double crossing, revenge and blood were sown. No longer when it became evident that Kunal was the main part of the Luxury execution, Nisha was seen giving him more importance. Raja and Arjun could clearly see that Nisha was attracted towards Kunal. In retaliation, Arjun became close with Asmi. In next few weeks, there were many fights between Kunal and Arjun over the execution of plan. However, the real reason was very obvious. Raja was left to playing a match referee. Arjun and Kunal, both of them have to play a crucial role in the Luxury. Arjun was the creator of the project while Kunal would be the one who would be pulling it off. Raja declared the ceasefire by conducting the meetings separately and then preparing the plan separately. Though this was time consuming, it was the only way in which the team could continue to work and be productive.

However, this separate meetings meant more time for each party to think on how to check-mate other. Arjun confided to Asmi that he was planning to back stab Nisha and Kunal. He told her that they would pull off the project and then ditch Nisha and Kunal and distribute the reward among Asmi, Raja and himself. They also took Raja in their plan. Raja and Asmi had nothing to loose. This double crossing meant increased share for both of them.

Not sure if Nisha read Arjun's mind but she told Kunal to prepare some plan by which they could back stab other 3 and keep the entire fortune for themselves, get married and leave the country.

Hence, at the same instant of time, 3 plans were made and each party was eager to ditch other.


Sunday, July 27, 2014

Whats next

Recently, on Ashal's FB group (Soon, Ashal will start charging me for using his name :P ), somebody asked a query. The person has taken care of all his goals (from investment per se) and now was thinking to close the home loan so that his wife can opt out of job to take care of their child. 

This made me think. First thing first, we must congratulate the guy (and his wife too) for making it. It is very difficult to achieve such a feat. Just imagine a person who has calculated all his needs and has been making regular investments to fulfill those goals. Awesome.

My guess is, he must be in late thirties or early forties. I started wondering, what should a person with such an ability should do with his excess money. Below are my thoughts on the same matter:

1. If he chooses to close his home loan with his excess money, he loses the tax benefit. Big deal? Nah.. The financial reason why he must choose to run the HL as is: the decreasing power of the money which is used as EMI. The 20k EMI (just a example) that he pays today does not have same purchasing power 5 years later. Hence, if he chose to pay 20k extra today, he is losing much more than just tax benefit. 
Some people would argue that closing HL will give him peace of sleep, they can read my previous post "Personal Finance". However, his case is little different. He does not want peace of sleep or he does not intents to purchase second house. His point is, if he closes HL, his wife can opt out of job. So in this case, IMHO, he must close his HL and stop worrying about tax benefits.

2. If he chooses not to close the HL then, he has few more options. The person must focus on building a good corpus for medical costs. Read Pattu's this post.

3. JD Roth suggested some time back to build an opportunity fund. Now what this means? Let us see this with an example. Suppose a friend of yours is going to settle in some other country and is looking to sell his house. Now, since he is in a hurry to sell it and have cash, he is selling it at 50% market rate. He circulates this news among his friends and gives them 3 days to respond. Can you take advantage of this opportunity? Depends on how much liquid money you have. If you have 20% of the selling price in money market MFs or liquid funds, zoommmmmm, you got it. Make no mistake. Do not (repeat do not) dip in your Emergency Fund for this opportunity. That would be bad financial decision. Hence, JD suggests to build another fund and call it as opportunity fund.

4. Sundaramjee (from same FB group) donates good amount of his money to needy people. Sometime back, he donated hefty amount to a girl, whose marriage was in jeopardy due to some money problem. You can also get tax benefit for donation in 80G. Read more about it here.

5. You can increase contribution to your child's education fund. This can be very helpful for your child. Today you are planning to send you child in one of the top ten colleges in India and you are investing from that point of view. Suppose, tomorrow your child decides to study from some abroad university and for that he may have to avail a education loan. Hence, by increasing your contribution to the education fund, you can save him from starting his career with some burden of debt. Offcourse, this can be contested as pampering your child.

Big note: All these points are assuming that you have enough emergency fund and you are contributing enough to your retirement corpus.


Sunday, July 20, 2014

Personal Finance

Ashal hits the target with 100% accuracy when he says that personal finance is personal.

To some people, this may sound like some marketing line "Personal finance is personal" or some may say that "even we understand english words, whats next?" 

This line has more in-depth meaning, than it looks on the face.

What it actually means is that: copy-paste rarely works in personal finance. What may be a brilliant advice to a person X would not necessarily be brilliant (even, good advice) to a person Y. Irritated? Let me explain with few examples.

1. Few days back, my friend told me to compare various online term plans. I gave him "this post" and compared on the basis of parameters that I thought were important. He told me that, I did not compare on other factors like customer satisfaction, number of outlets in city, etc. Although, his factors are good enough to consider, they are not the one which I thought would influence the decision. Here, you can understand that the personal choice matters. 
For me LIC premium of 13k would be a turn-off however, some person may be eager to ink with LIC for their 97% CSR. So again, it is personal.

2. By nature, I am a frugal person. Like, I don't mind walking 15 minutes instead of taking an auto or bus (given that, I have time in my hand). Co-incidentally, I rubbed this frugality on my friend (I never intended to do anything). He started doing less shopping on ebay, myntra and other online websites. All this unknowingly to both of us. He went for a holiday to his sister's place for 1 week. After returning, he started giving me advice on living life. As any other human, I was not really very interested in listening to other's uncalled advice. 
When I heard the whole story, I got amused and little angry too (angry, because I was being blamed for his money saving habits. WTF). And amused because his sister gave him an awesome advice to living a happy life. To cut the story short, he went to his sister's place and his sister noticed his frugality. The lady scolded him for being cheap and advised him to live life king size. She told that instead of living within our means, we should focus on increasing our means. 
Brilliant advice but to a wrong person and at wrong time. This advice would have been wonderful for a person who is already living within his means and now you are encouraging him to increase his means. No, I am not yet mad, there is a fine line here. This advice to a person who saves say 50% of his income would mean he increases his income by say x% and sub-subsequently, increases his saving by around x%. The lady in the story did exactly the opposite. Now, my friend is  hell bent on spending everything and advises me to leave my cheap habits and live my life.
Do I care? Off-course not.

3. "Suggest me one best mutual fund", is the line that we can see on all the financial portals. This question is incomplete. The real question could be: "Suggest me a mutual fund to invest considering, my equity to debt ratio is X and my current investments are into this fund with their percentages (or even actual values) are Y". Unless and until someone discloses his current investment funds, it is almost next to impossible to give any advice. This is personal finance and it varies person to person. I may have enough large cap exposure and may think that mid-cap is what I need. However, telling others to invest in some mid-cap without knowing his current investments will not be a good thing to do.

4. One of my friend is crazy on bikes. He has one bullet for daily commute and other spare bike when his bullet is in service center. To some this may sound foolish. This is not. He spends money on things which gives him happiness and cuts spending mercilessly on the things which are not important. Please do not get this point in contradiction with #2. The guy in #2 was spending everything. This chap earns good, saves lot, is frugal and spends only on things which makes him happy and that too in a limit.

The whole point of this post is when I answer your question on best MF as "I do not know", I really mean that I do not know which is the best MF for you. I can only point you to the websites or posts which can help you decide the fund which is suitable for you. If you insist, I may give names of few good funds in random. Does that suit you? Yes and No, both. Happy investing.


Sunday, June 29, 2014

Term Insurance

One of my friend, who is very financial savvy (self proclaimed) was telling me the importance of term insurance. He was giving very useful insights into term insurance.
However, on little probation, I learnt that he himself has no insurance. When I insisted on a reason, he told me that he was finding it too much effort to go through all the websites and search for best product. As usual, I told him that there is no best product available in the market. All you have to do is go with the company you are comfortable with (Ashal's line). Still he insisted on comparing on various quotes and that he found boring.
He requested me to come up with a post which would give various quotes on term insurance. So, if you are looking to buy term insurance, read further.

Warning: Term insurance will not give anything on maturity. Still interested? Ok, read on.
Wait, term insurance will not give anything in return if you surrender. You did not close the window? Ok, now you can read...

To make my life easy in creating this post, I will consider only below companies: HDFC, SBI, Aviva, LIC, and Bharti AXA.

I hope, this ready made information on term plans, forces many of my friends to rise and select one.

All the data has been taken from their respective sites. However, the data may change from time to time 

Let us see on what parameters we would be comparing the companies:
  • Premium
  • The so called Claim Settlement Ratio 
  • Solvency ratio

All the data is valid for 32 years of age (01-Jan-1982), male, non-smoker, for 25 years and 1 Cr SA (Indian’s fascination with 1 Cr :P)

HDFC Click2Protect:
  1. Premium: 11000 per year (excluding taxes)
  2. CSR: 96.56%
  3. Solvency ratio: 227%
  4. Miscellaneous:
  • No medicals upto 75 lakhs for non-smoker male till 40 years of age (this is what they write on their websites and off-course may be subject to case)
  • Premiums paid are tax exempted under section 80C (another attraction :P)
  • Maturity amount received (to nominee) is tax exempted under section 10(10D)
  • In general:


SBI eShield:
  1. Premium: With ADB: 14821 and without ADB: 12686 (ADB: Accidental Death Benefit)
  2. CSR: 94.41%
  3. Solvency Ratio: 225%
  4. Miscellaneous:
  • Facility for Accidental Death Benefit
  • Premiums paid are tax exempted under section 80C
  • Maturity amount received (to nominee) is tax exempted under section 10(10D)
  • In general:


Aviva i-Life:
  1. Premium: 9046 per annum (inclusive of service tax)
  2. CSR: 87.7%
  3. Solvency Ratio: 415%
  4. Miscellaneous:
  • Feature to receive annual payout to family (instead of one time payment) for 15 years in parts (not recommended)
  • Premiums paid are tax exempted under section 80C
  • Maturity amount received (to nominee) is tax exempted under section 10(10D)
  • In general:


LIC online term plan:
  1. Premium: 15843 (inclusive of taxes)
  2. CSR: 97.7 (ahh the iconic value)
  3. Solvency Ratio: 154%
  4. Miscellaneous:
  • Sirf naam hi kafi hain :)
  • Premiums paid are tax exempted under section 80C
  • Maturity amount received (to nominee) is tax exempted under section 10(10D)
  • In general:

Bharti AXA e-protect:
  1. Premium: 7900 per annum (exclusive of service tax)
  2. CSR: 89.5%
  3. Solvency Ratio: 227%
  4. Miscellaneous:
  • Additional hospital benefit rider
  • Premiums paid are tax exempted under section 80C
  • Maturity amount received (to nominee) is tax exempted under section 10(10D)
  • In general:

Note: Manish has written many fantastic articles on term plan. Please read them too.

Note: All the data has been pulled from their respective sites.