Tuesday, February 15, 2011

Six Money Management Skills that Every Young Man or Woman Should Develop

In the ancient times money was just a concept that was a human invention to make human life better. Today whether we like it or not it dominates human life to a large extent.I was born in a village and money was never a priority for us and our icons were never the rich but people who lived a simple life of sacrifices.Making money was not considered as a great virtue and even though we may lack money some times, the neighbors or well wishers helped us and we returned the favor when there is a need for them. Decent education and health care were available from the government institutions at affordable prices and our needs were limited. But things changed up to a large extent even in villages in the last decade.

After completing my education when I started my work life in a big city, I realized how big the role of money in the life of an urban Indian. The system is corrupt to the core and from good education to health care, huge money is essential for a better life in any urban city and the government doesn't play much role in providing basic amenities to the urban population. Even though I don't want to compromise my principles for money or any materialistic thing,I realized I
should know the rules about money and learn to handle it well for a better life in the current urban India. After observing things for a few years, I found out that there are a few skills that we need to learn.

The way money works is not fair, same for life in general. We all may have seen it, nice guys most of the time finish last. Most of the time success with money or love is not achieved by people who deserve it, but by whom who know the rules and take actions accordingly.

I have identified the following skills that one need to develop if you want to handle money well:

1. Learn to negotiate - In the world of money you need to learn to negotiate.If you are from a family with strong values you were taught in the childhood that bargaining is bad and never put a price tag on you. It works only in the ideal world. In the real world, it is the other way. If you don't negotiate for your interests, you will end up as a loser be it in your career or your investments. Learn to negotiate with out compromising our principles and beliefs.

2. Conduct thorough research before you make an investment decision - Some of us do sufficient research before even making small purchase decisions, but we never do the same for investment decisions that affect us significantly and may require long term commitments. Never go by the words of financial advisers who sell financial products for their own benefits. I made the mistake 3-4 years back and paid heavily for it and to reduce my loss I still have to keep investing.
As a starting point read the book "What Your Financial Agent Will Tell You And Why You Shouldn't Listen" from Deepa Ragahavan

Learn and understand very well about each investment option and take your decisions wisely. Don't hesitate to ask questions about things you don't know and read the product brochures carefully before signing them. In the era of internet if you don't do research it is your laziness. Very few financial advisers really cares about your money other than worrying about his commission. Read sites like Jago investor, Yahoo columnist Deepak Shenoys blog , Moneycontrol or other informative sites regularly.

3.Learn as much as you can about finance and market - Keep an eye for detail and learn as much as possible about the terms we associate with money. For example learn about compound interest, systematic investment plan, various types of mutual funds, dividends, equities, ULIPs and so on. The simple rule that I have seen that work most of time is "buy assets when every one else is selling and sell when every one else is buying".

4. Learn about tax laws - I used to strongly believe that I need to pay all the taxes as a law abiding citizen of the country with out seeking much exceptions. But later I realized in the real world, it is the not the case. The best paid people in India pay taxes much less than many of us think. The reasons is Indian tax system has many loop holes and exceptions that either they or their well paid tax consultants know to use and we don't. When I first came to know about that I used to get angry, but if it is not against the law and not a breach of ethics there is nothing wrong in using it till the government take action and close those loop holes.

5.Learn to shop well - Quality is most of the time(at least in India) not related to price. Paying a lot for something doesn't mean you get the best. Always try to find out the best offers available in the market, speak to different vendors and compare the prices from 2-3 places before purchasing something.

6. Learn to keep your debts to none or minimum - Use your credit card wisely and understand the terms and conditions carefully. Don't take loans unnecessarily to purchase assets that depreciates in value in the long run, even though some loans like home loans are good in India to reduce tax burden.

These rules may be simple that many from urban families know well, but there may be a lot of people like me who doesn't know even this when I started working. I made all the 6 mistakes in the real life. Even though I said all these, I believe one should never equate money with happiness. Never compromise on your principles, your family and loved ones for the sake of money. In the long term, money cant buy you love or happiness in life.

Note: I don't claim to be an expert in financial matters and these are just observations based on my own experiences. It is up to you to take it or not.
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Thursday, February 3, 2011

Trip Notes from Southern Tip of India

Yesterday I was attending toastmasters session in my company. One of the topic during the table topic session was how did you spend your annual holidays during the December shut down period. Suddenly I was thinking about how I spent my holidays. I was thinking about writing a travelogue about my trip for long time, but I was lazy and postponed it, all of a sudden I began with ease.

This time I was eagerly waiting for the annual holidays because I planned for a trip to Goa with a friend. I never plan for any trip in advance, all of a sudden I may decide and go. But this time everything was planned and we booked ticket in advance and a friend in Goa promised to arrange accommodation. But at the last minute everything turned down. My friends father had an accident and we had to cancel our trip.So, I decided to go to my village near Cochin and spent time with family. 3-4 days passed quickly as I was playing with my nephew and visiting friends and family
members.The sixth day all of a sudden I was feeling very bored. Day time most of the friends wont be there as they don't have holidays. I thought about a couple of options and then finally decided to go to Kanyakumari a place I had never visited. On the way I wanted to cover Trivandrum too.


After a five hour journey from my home, I reached Trivandrum. Trivandrum is the capital of Kerala and it had many tourist places around. My classmate was eagerly waiting for me as we have nt seen each other for a couple of years. After a warm get together he took me to the Kerala legislative complex where he works. The assemby session was going on and I took a visitors pass and watched the proceedings of the assembly for an hour from the visitors gallery. I stayed with him for that day and we had a nice time recalling several events from our college life.

The next morning I started from Trivandrum to Kanyakumari. Kanyakumari, the southern tip of India is about 80km far from Trivandrum. Before independece the Kanyaumari district was part of Kerala, but after the states were restructured on the lingustic basis Kanyakumari became part of Tamilnadu. My plan was to visit Padmanabhapuram_Palace on the way.

Padamanabhapuram Palace

After getting down from the bus I had my lunch. I asked the way to the palace to a passerby. He turned out to be a native and he suddenly realized that I am from Kerala from my Tamil accent.Instead of telling me the route, he send me with a man on a motorcycle whom he was acquainted with and going that way. From my experiences during my trips around various places in south India I know that villagers rarely cheat. So, I decided to take chances and go with him. He dropped me in front of the palace. The Padmanabhapuram palace is a palace built in traditional
Kerala style and unique one of its kind in South India. It is one of the biggest wooden palaces in India. Some of the interesting structures in the palace include include the poomukham, the mysterious corridors, mantrasala, natakasala and southern palace. I met a north Indian family visiting Kerala and we visited the palace together. Walking through the mysterious corridors was a walk through the history.It took around one hour to see the palace around.

Back in the bus stand I struggled a bit because the bus boards were in Tamil. With some effort I learned to read boards in Kannada, but never bothered to learn to read Tamil. The buses were all crowded and coming and going. Due to the rush nobody was bothered to answer my queries on bus to Kanyakumari. Finally, I found a bus, but it was heavily crowded.

I reached Kanyakumari by evening after a long journey that got worse by heavy traffic.After a walk around the beach, I searched for a lodge there to settle down. It seemed easy, but then there was the second problem. Whereever I went they said there is no room available after finding that I am alone. Finally after talking to a guy who knows malayalam, he told me that first he wants to speak to my parents and check if I came because there are any issues at home and if everything is fine he will give a room. He explained that Keralites rarely travel alone and they are suspicious seeing me alone. I gave my home number and he called and my mom picked up the call. He directly asked if I came alone because of any love failure or some thing. I can imagine the shock my mom had. After getting a satisfactory response he agreed to give a room to me. I explored Kanyakumari beach and stayed till late on the beach enjoying the sea sight and the calmness at night. In the morning I went again to see the Sun rise at 6.00 AM. It was cloudy in the beginning, but finally Sun came out with full glow and that was one of the best sights I ever had.

The next thing was a boating to the Vivekanandha rock and one had to wait for a long queue for almost an hour. It was the place where Swami Vivekanandha meditated before his departure to the world religion conference at Chicago in 1891. I met a Bengali family in the queue and we enjoyed the company of each other exchanging information on various tourist places in India.The boat journey took only a few minutes as the sea was calm. There was a small memorial built for Vivekanandha and the sea was worth watching from the rocks. On the return journey we also had a stop at the Thiruvalluvar statue.

Return journey to Trivandrum

Around 2PM I started my return journey. I got a seat and it almost seemed comfortable when I started, but there were a lot of events waiting for us. In the middle of the journey our bus had a break down at a remote place. The conductor couldn't arrange a replacement bus and he told us that he will make arrangements in the other buses to Trivandrum. Many buses passed, but all of them were crowded and none of the buses stopped. The bus had many tourists from north India and foreign countries and they had a tough time understanding what the bus conductor was saying in Tamil and they were scolding him in their own languages that he didn't understand any way. I helped them as an interpreter in English and Hindi. Almost an hour went and no buses were coming our way except local buses. A french man was scolding the conductor left and right , but the bus conductor couldn't make out any thing.

The French man needs to go to Trivandrum and he asked for my help seeing that I can speak English. we asked a few local people and they said the next town is only a few kilometers away if we go by a local bus. we took a local bus to the next small town and from there we got a bus to Trivandrum. The Frenchman turned out to be a great companion. He is one of the leading architects in France and he is a member of the several architectural organization in the world. His trip to India was to visit some of the architects who were members of his organization in various parts of India. He was coming back from Calcutta and visited many places in India on the way. He shared his experiences in India and out of all the places he visited his favorite place turned out to be Calcutta. After a tiring journey with a lot of events, we reached Trivandrum by late evening and we parted saying will be in touch. Later he wrote to me after reaching France and kept his word to my surprise. My friend was waiting for me and after a few hours I took a bus to Cochin to go back to my home. The next day I had to come back to Bangalore and thus thus ended my Christmas holidays for the year 2010.

How to reach Kanyakumari- Frequent buses are available from Trivandram to Kanyakumari. Buses may take 2-3 hours to reach. From Bangalore to Kanyakumari you can go directly by Island express also.

What to see Around: Sun rise and sun set at Kanyakumari, Vivekanada rock, Sucheendram temple and worth visiting Padmanabhapuram Palace if you have time.
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