Home IS where the Holy Grail is

This is a late post. Late by many years, considering how old my thoughts on this one are and how the property prices have ballooned. But if you have read any of my earlier posts, by now you know I am a lazy writer, so blame my moods not me.

A few weeks back, I read this post by Jason Zweig. If you read it, I do not need to write on the emotional aspect of owning a house any more. But, there has been too much chatter on why investing into a house is not a great idea. Too many people who claim how pure equity investing is Oh! So much more lucrative and better for you as an investor.  Too many people glorifying the fact that renting it out is so efficient for your portfolio and may take you to heaven when you die. Now, don’t you get me wrong! I haven’t been paid by the builders to write this post nor am I trying to seduce you into Real Estate. I am better off evangelising mutual funds over Real Estate any day; at least the former is healthy for wealth creation and fetches me a cute pay check at the end of the month too.

Before you read ahead you may want to know that:

•  I am not a fan of real estate but strongly believe in owning one debt free house in which you  aspire to live immediately or eventually.
•  This investment should be done as early in your career as possible.
•  I am strictly against buying many properties for rental income. It is like buying a dairy farm    when you need 1 litre of milk. In short, you have better options for ‘side income”.

Now that I have fairly immunised myself from hearing your criticism for recommending real estate, I shall try to tell you why investing into a ‘home’ is much more than just that ‘investing’. It is a way of life.

Most of us have read about the renowned investor Rakesh Jhunjhunwala, about how he sold his CRISIL shares in 2005 for 27 crores and bought a flat at Malabar Hill. If he had remained invested, that money would have been worth some 600 crores by 2015. The flat at that time was worth some 65 crores. This story has hindsight wisdom written all over it. Imagine if instead of CRISIL he had shares of Hindalco. 27 crores worth of Hindalco shares would have been approximately worth 18 crores at the end of 2015. This story reeks too much of survivorship bias. Also, what he did made his mother and wife much happier. He probably saved his marriage and ensured that his mom continues to make the best Dal Baati Churma for him. Jokes apart, no stock market returns can parallel the happiness of your near and dear ones. Sometimes you do things to comfort the people in your life who matter. When you enter your grave, nobody will remember how much CAGR you earned on your portfolio but people will remember how much love and respect you earned from those around you.

I had come across these beautiful lines by Prof Robert Shiller in one of the articles “A rental doesn’t have the same permanence as an owned property. There is an instinctive sense of territoriality shared by people and animals that a rental probably can’t fully satisfy”. Did you know many animals mark their territory by peeing in that area? We are then humans for god sake. The most evolved thinking animal. Homo sapiens have that natural tendency to mark their area too. Not by peeing of course but by buying it. We are quite decent that way. The emotions, the sense of belonging, memories, attached to a house that you own can never be matched by a rented property. I remember the TV ad of a Housing Finance Company, where the child is colouring the walls with crayons and the mom lets him do by saying ‘Apna hi ghar hai’. You don’t have to be careful where you hammer the nail for that painting, that the wall colours are not as per your taste, that the windows need attention but the landlord has no time and you are not willing to change them as you only pay rent. Owned house, however small it may be feels home but a rented apartment however magnificent it may be; will never make u feel the same. Partially may be but totally, nope.

Another ludicrous suggestion I read off late was to invest into equities in formative years and then buy a property in late forties, assuming you have built wealth investing by then. I found it quite cute the assumption that you will continue with your job and high salaries to be able to pay EMIs in your late forties or early fifties, when I see voluntary and sometimes forced retirements all around me. By late forties, you may have gotten used to a certain lifestyle which could be difficult to cut down with the huge expenditure of a house and sudden erosion one will see on their liquid portfolio (for a drawdown to pay for the house). If the same house is bought early, you learn to live within your means. One tends to work out their lifestyle accordingly. Stable EMIs with rising salaries only further helps to improve one’s standard of living. Also, rent is nothing but a sunk cost. The lower the better, even if you are claiming tax benefit, it remains money spent which did not build you an asset. I wonder how many of us are truly judicious with our disposable income, most of us end up spending on too many things to impress others and depress our investments anyway.

Leverage if used efficiently and prudently is one of the most beautiful financial concepts to my mind. Reckon, that leverage when used to buy a property fetches us tax exemption but the same leverage used to buy stocks popularly known as derivatives is considered a taboo by many a prudent investors. Warren Buffett has rightly called them the ‘weapons of mass destruction’. What is important to my mind is the leverage multiple when you buy that mortgage. To put it simply, it is the Total Loan to CTC ratio. The essence is to keep this multiple in check. Stretch it too much and suffer sleepless nights, too low and you probably look foolish few years later for having bought a property much below your aspirations. The look, feel and comfort of a tangible asset can be very satisfying and will continue to remain so at least till the time you are able to stay in those demat accounts where you run huge leveraged positions. Can u ever comprehend leveraging yourself heavily year after year to buy the most convincing stock ideas? It is an extremely specialised field and requires phenomenal skill to make money out of leverage trades in markets, but owning a house does not need any special skill. There is a surety that after paying a certain number of EMIs, I shall have a roof which I can call my own.

Staying on rent forever with a great equity portfolio sounds quite exciting when you are young.  Do you want to take a minute and imagine getting old??? Trust me, when you get old this same idea may sound criminal to your mind. One does not have the energy, patience, willingness or strength to endure the burden of a rental home. Because all said and done, you still remain at the mercy of your landlord or land lady who may decide to pack you up if some eventualities arise. Also if you are pinning hopes on you children to stay with them at that age, you may also want to pin hopes on night outs with their friends. The moot point being, have no expectations from anyone but you.

Another argument I usually get is: But, I do not intend to stay in this city. I am working here and I need to access the best facilities while I stay in the best of locations. Ok. Fine, I see no problem in this one. A very valid argument, but ever heard of the word ‘future-planning’?? So plan, decide and buy a livable property  in some corner of the world, be it Timbaktoo, as early in your career as possible. The place which will shelter you when you are out of this rat race rubbing tea tree oil on your weak knees.

I can at this juncture entertain disagreement in this entire argument depending on who is buying the property: Salaried person or a Business person. I am kind that way. When the stream of income is pre-defined like in case of salaried employees, buying a house makes more sense. But if you are living by the adventures of self -employment or upcoming business, etc. renting it out and not hurrying into buying a house can be a more logical thing to do. As your return on capital employed in your business will be far higher than blocking money into a house (Or so I hope and wish is the case with entrepreneurs)   

Reverse mortgage is another fantastic financial innovation. Where a couple gets a stipulated amount every month depending on the value of their property and when they both die, the bank will offset the accrued interest and principle of the annuities given and whatever remaining is passed on to the rightful owners. I am not saying this is the most efficient or cost effective tool but all I am saying is this benefit also exists. Why would I want to leave my house to my kids after I die? Why can’t I instead, live a better life even when I get old with zero expectations that my children should bear my monthly expenditure, medical bills or cost of travels? I personally aspire to give them the best education and then leave them to fend for self. Sounds great, till they don’t read this!

Your wealth can dwindle, plans can go haywire, money can be philandered or lost, businesses can wipe out, medical ailments or court cases can leave you broke but a house remains. When I was a child, I remember my dad suffering a huge business loss. Eventually, it stripped us of all our savings but the house which he had bought in earlier days stayed. He was desperate to sell it and get rid of the bad loans. I remember having prospective buyers at my home but my mom would send them away, saying the house was not for sale. The house remained. It also gave us a reason to be in the city and fight it out. My parents together struggled, suffered but the house remained. We sought comfort in the fact that we eventually have some final asset left to bail us out of the mess. That gave strength. The house was our strength.

I gravely deride all the suggestions of 100% equity investing and firmly believe in owning a tiny abode somewhere. It will leave you with reminiscences and peace of the unmatchable variety. Go Get it.

Investing Lessons I Have Learnt from The Mahabharata - Guest Post for StableInvestor.com

A guest post I did on Stable Investor

Mahabharata, one of the greatest epics written by Rishi Vyaas is a known name amongst Indian households. Did you know that one of the greatest superstitious beliefs attached with Mahabharata is that it should not be kept or read at home as it can cause faction in the family?

Nevertheless, it cannot stop us from taking away a few key lessons to help us become better investors.

Mahabharata is essentially the narrative of a war between the Kauravas and the Pandavas; the good and the bad; the virtuous and the vile. When it comes to investing, this good and bad is within us.

It lies in our behaviour, actions, emotions and restricted knowledge. Let us look at a few situations from its manuscript and what they teach us. Each point is a topic in itself, but I prefer you attentive over sleepy when you read this, hence keeping it short.

For the remaining blog, please visit Stable Investor

Figure the Finances for a Fragile Life

Death seldom comes as good news unless it is a pest in your house and by pests I purely mean lizards, cockroaches or rats. Death can be an even more painful event if it is that of a near or a dear one. And it can get gruesomely painful to know that the one deceased had yet years to live by, responsibilities to fulfil, a life to envisage and decades yet to give. Today, I have witnessed one such heart breaking events of my life.

Sonu was 37 years old, healthy, smart, handsome, intelligent, successful, happily married, a blessed father and a dutiful son. I say this without exaggeration. He drowned yesterday to an untimely death. He was devoured by the swimming pool where he was playing with his son.  The family is desolate of course. He leaves behind two boys and the wife completely clueless about how to handle this thing called Life from hereon. Sonu did everything. He made the money, he saved the money, he invested it and he spent it. He planned the vacations; he planned the parties and much more. I do not mean to disregard the wife’s contribution but he was in charge of the ‘monies’ saved or spent. What happens now that Sonu is not around? After all he may have budgeted for many a things but death was not what he budgeted for. Well, Not Yet!!

So, after all the gloom settles down and when Sonu becomes only a memory, memory of all the past times, What next??? As they say, the Show Must Go On. Picture Abhi Baaki Hai Mere Dost. Sadly, memories do not buy you ration, fondness or love does not pay the school fees, tears may wash away some of your pain but they will never wash away the hardships of life. Those, have to be faced up close. I hate to break this to anyone who has any doubts but Money still remains the most sought after commodity on this planet only after oxygen that is. Thankfully, Oxygen is free but Money does not yet grow on trees.

So, if you haven’t done it yet, make a checklist today and ensure a few pointers:

• Does your spouse (be it the husband or the wife) know where are all the papers related to your bank accounts, investments, tax returns, etc are? I personally maintain one hardcopy of each investment made and store it in a folder. This folder contains all our investments be it mutual funds, insurance or the land deal I made with Robert Vadra (Yes! Don’t under estimate the power of Yamini Sood)
  
  
• Do you have life insurance? And by that I mean term insurance. U better have it unless you have been told by a Nadi astrologer that you will live till 80. And if you have believed that enough to ignore insurance, you may also want to believe that you can still wear diapers under your pants and look cool.
  
  
• We live in an e-world with most things online. Collate all such money related information, passwords as per your convenience and share the location with your better half.
  
  
• Demat Accounts, Mutual Funds have the wonderful option of Nomination. Ensure that your spouse has been nominated under all your investments. Putting your spouse’s name as the second holder in the bank account is not just wise but also very convenient for all the extra ordinary times when you may not be physically around (travel, etc) while some bank work needs to be attended to.   
  
• Let your spouse know about your monthly liabilities, EMIS, utility bills. Chances are he/ she may already be aware but its better if you are not trying to be a super man/super woman keeping all the thorns to yourself and showing your spouse that life is a bed of roses.
  
  
• If you have a huge housing loan, it is advisable to have a home insurance too. You may be paying your EMI diligently and may have plans to pre pay the loan soon but there is something known as contingency planning. Devil lies sometimes in detail and sometimes in unserviceable EMIs
  
  
• Be prepared for the unexpected. I am not saying be prepared to die. But, if ur Karma is not a bitch, your organisation may choose to be so. Be prepared to lose your job, face a large unanticipated medical calamity or worst of all you may decide to produce ‘Prem Ratan Dhan Paayo’ and go bust (I have advance sympathies for Rajshree Productions)
  
  
•  Above all, try to spend less and save more. Save first and then spend the remaining. Learn about investing. You can start with many You Tube videos if reading blogs or opinion pages sounds scarier than watching a Kamal R Khan movie.
  
  
  Disclaimer: This post is targeted at the young and working in their late thirties or early forties. Not that this piece of advice will not apply to those who have just started or are towards the fag end of their careers. But, their financial checklist would include or exclude a few more items which I haven’t included in this post to keep it short, simple and bitterly sweet. {Psssst.. Also, I am too lazy to write}

  

Forgotten Feminism

I have been contemplating writing my thoughts on this topic for some time now. If you count an approximation of 3 years as ‘some time’ then yes, sometime it is. And then Vogue happened along with Deepika Padukone , Homi Adjania & 98 other women who seem to be advertising for a black Dove soap in a grey cover.  The last, much needed push came from yesterday’s conversation with a friend who was dumbfounded on hearing my thoughts and took many of his hats off during our conversation.  By the end of it I had collected a bagful of virtual hats from him. Now to the piece, lest I loose my thoughts to laziness one more time.

I looked up the actual meaning of ‘Feminism’ in Wikipedia. Feminism is a collection of movements and ideologies that share a common goal: to define, establish, and achieve equal political, economic, cultural, personal, and social rights for women. Right to vote, equal pay, equal work opportunities, education, enter contracts, respect for her body, to own property et cetera. These seem absolutely fine to me.

The problem lies in the warped meaning it has achieved over years.  Since when did equal rights become the right to offend men, right to look down upon housework, right to procrastinate pregnancy for your own ambitious needs even when your partner desires a child, right to derogatorily talk about other women as “O, she is just a housewife!” Well…sex outside marriage is also a right which if she needs, so be it. But be prepared to lose the right to complain when he has it tomorrow.  Aren’t we talking equal rights here?

We have to accept that nature has made man the provider. He was always the hunter. The one who went out to fetch, the one who fended for his people, the one who increased the tribe and trained it; to protect from predators galore. The promiscuity of men has roots in this fact too (where he was always in search of healthy and fertile partner who could give birth to more children and raise them for him) but will need another write-up though. Not that the women have ever been immune from promiscuous behaviour in the past. But in a sample size men have far outdone their fairer counterparts and thus happily take the blame. Nature also made woman the nurturer, the care-giver. The one, who gave life, nurtured the life, imparted values. The basic roles haven’t changed much even today but we the women seem to have a problem. Oh! The confused feministic streak.

I happened to attend a sports event and an annual event in my kids’ school last year. There is something eternally graceful about a woman’s curvaceous body when it moves to the beat of rhythm and music to produce some enthralling dance moves. In athletics, there was a 100 metre race of girls and then boys apart from many other races. But the sheer energy exuded by the boys when they ran, the crisp and well sculpted legs and hand coordination, the intensity on the face of those 15 year old boys far outdid the pleasure to see the girls running. At the risk of sounding misogynistic or backward, I have to admit that these are some genetical pleasures of a woman dancing or a man running carried on era after era which can get modified but not eliminated.

Coming back to My Choice! On a good day it is eating potato chips along with a captivating book and to be left alone in a room. But then my choice will be made into a book not a small article which only I will buy. India has a vast population of under privileged women out there in urban cities, small towns and villages who do not have a choice but to work for a paltry amount of cash, come back and cook, run the other errands around their house, take care of the child and do much more as many of them probably have a man who lurks around a desi-daru shop & beats her black and blue when she refuses to entertain his whims for some moolah or sex. She is the real super woman who goes unnoticed, uncredited, unsung and completely unaware of the choices Vogue thinks are important like putting a surname after her name along with the hallowed red bindi.
   

Being a woman is such a privilege. Isn’t it a matter of pride to be able to nurture life firstly inside your womb and then outside it for the rest of the child’s life? Isn’t it love which you serve along with the food on the plate? The emotions and energy spent while cooking by a woman of the house, impacts the mental consciousness of the one who eats it. Hence there is a word like ‘ghar ka khaana’ and outside food. With cooks in many a modern households doing the needful what else can we expect but a generation full of apathetic youngsters.

Aspirations, independence, being able are all very good, to support your family or plain yourself financially even better but the audacity to look down, to defy the ability that nature has given her is when I have a problem. It is good to say “you don’t own me” to your man but then so don’t you. This, in your face bluntness or aggression is the kind of feminism which scares me. Womanhood is about sharing, caring, adjusting and nurturing. We need to be proud of this fact, not ashamed of it. There is merit to the statement when Indra Nooyi or Anne Marie Slaughter said that “Women can’t have it all”. The trouble is when she seeks it all. She should remember that if she can’t, so also the men can’t have it all. He can’t wear pink pants or go on a devilish mode citing ‘those days of the month’ as a reason. On a serious note, he can facilitate but not bear life. Only a woman is capable of binding a house which can never be a man thing. She should revel in the glory of what she has, the prime quality of being a nurturer and a care-giver.  Being a provider is secondary for her and will always remain so. She may like it or hate it. Just like being a provider/ protector will always remain primary for a man. Isn’t it a fact that when it comes to choosing a partner, be it for a live-in relationship or a marriage, however successful a woman might be she almost always seeks a man more successful than her? Why? Think.

Walking with the man and his family not ahead of him or behind him is true feminism.

YOU

My imagination takes us to a far-away land,

My fantasy gets me near you,

My loneliness conjures you,

My realities abhor you.

Broken in my head you are,

Yet my heart restores YOU



I have seen joy, when I saw your face,
I have spelled sunshine when I said your name,
I have held comfort, when I held your hands,
I have tasted ecstasy when I kissed your lips, 
I enveloped life in my embrace when you wrapped me in your arms,
I felt heaven with my head on your chest,
I have known the unknown when i thought I knew you.