Our Greatest Pain

Our Greatest Pain in life is not to die, but to be ignored.

To lose the person you love so much to another who doesn’t care at all. To have someone you care about throw a party & not tell you about it.  Or when your favorite person on earth neglects you. To have people think that you don’t care.

The greatest pain is not to die, but to be forgotten. To left in the dust and never get a call from a friend, just saying ‘hi’. When you show someone your innermost thoughts and they laugh in your face. For friends to always be too busy to console you, when you need someone to lift your spirits.

Life is full of pain. But when does it ever get better?

Will people ever care about each other and make time for those in need?

Each of us has a part to play. Each of us has a duty to tell our friends that we love them. For if you do not care, you will not be punished. You will simply be ignored or worse, forgotten.

Found on a note from a well-wisher sometime around December 1999.

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Demystifying EMIs & Expenses

Within hours of posting ‘Want to Kill Your Dreams? Get an EMI’, received numerous requests to share insights on how loans work and what can one do to save on interest costs. Attempting to demystify two questions in this post. 

Q. Am taking a home loan / just taken a home loan [something that was necessary for me] and hence, want to understand the nuances of my EMI. Have no other EMI except this one but my outflow is high.

A. Worked out an amortization schedule on home loans and realized a few important things. For you to get an idea, here’s a break-up of what an [INR] 1 Crore loan looks like at an interest rate of 9.5% per annum for a period of 20 years.

Home Loan Amount Taken                              100,00,000
Interest Paid in 20 Years on the Loan                              123,00,000
Total Paid Back To Lenders [Per Crore]                              223,00,000
EMI Per Crore                                      93,212
Interest Paid in first 8 years [96 months]                                69,40,165
Interest % Recovered in 8 years [96 months]                                              56
Interest Paid in 150 Months [12 yrs]                                99,65,727
Interest % Recovered in 150 months                                              81
Notes
You pay 56% of all interest due over 20 years in first 8 years.
You pay 81% of all interest due over 20 years in first 12 years.
Interest Payment becomes 50% at the end of 150 months i.e. 12 years. At this point, your EMI constitutes an equal % of principal and interest. Until then, you are paying more interest than principal on your loan.

This table throws a few insights:

#1. Since you end up paying more interest than principal in the first 150 months, with 56% of interest recovered in first 8 years [96 months], it might just be smarter to keep repaying your loan amounts in the first five years of taking a loan. Each time you repay, your interest amount comes down because your principal on which interest is calculated reduces. This means cutting down on all unnecessary expenses to ensure that you pay off a chunk faster. Am not asking you to forgo your annual vacation but if you spent two weeks abroad, this time, spend a week and then use the balance to prepay.

#2. If you buy a property worth 1 Crore, it better be worth more than 3 times your investment in 20 years and hence, run due diligence checks on the builder [setting up a simple google alert might work] and find out historical prices of the area before you buy. Why? Because you pay more than 100% per crore for your property via interest. While the registration pegs your property at 1 crore, the actual cost to you is 2.23 crores if you don’t repay faster and continue your EMI for 20 years. [Refer table above] Now multiply this calculation per crore.

Tip: Evaluate your expenses before you take a loan / quickly once you take a loan and tighten your purse for the next five years. Everything you save by realigning your lifestyle will only ensure you pay less for your property.

Q. EMIs are a necessary evil. How will I ever save enough? 

A. You will. This requires one thing. Financial discipline. Being prudent with your expenses and spending on what you need v/s what you want or desire is the trick. For e.g. your friends and colleagues have been flaunting their new phone [one that costs anywhere between 40,000 to 50,000 rupees]. The features are awesome and the camera works in the dark.

Great! How many moments are you going to capture in the dark, eh? Now look for all the features that this expensive phone has and chances are, you will find almost everything you need in a phone brand that costs 50% of that amount. If you are super brand conscious and have to have that phone, wait for a sale. There are more of those running around. There! That is an EMI saved.

Dreams

 

If you have more questions, do leave a comment. Will try and update this blog post. 

Want To Kill Your Dreams? Get an EMI!

Memo Alert: This goes against everything we’ve been hearing about how EMIs are good for us & challenges principles of finance that marketing has us to believe. This is for everyone stuck in a job they don’t love, forced to listen to their boss while dreaming of a vacation and looking at the clock for the day to end, living Friday to Friday. If you are one of those, this is definitely for you.

We all have dreams. Big ones. Small ones. Ones that revolve around what defines an acceptable standard of success as per society. We judge ourselves and how our lives are going in relation to how our peers are doing. Mostly, of course – speaking of the masses. For some, it’s about owning a bigger car or investing in a second home and getting a promotion with a higher cost to a company than your batchmates or even having money in the account for that coveted ‘one-week-a-year’ vacation. For others, it’s about being able to do better than our parents or providing expensive toys for our kids because we never had any ourselves. And how do we get to achieving those dreams? We take an EMI. Take your pick, cause financial institutions have us pegged to the floor & at their mercy.

For a lot of us, success is about owning things. Or rather, being able to afford things. Often, disguised as a thought of achievement as ads have us believe. An EMI, of course, quantifies as a better lifestyle than our parents had. Making us run after things that we want rather than the ones we need. So if you are wondering what happened to your salary and why there is no money in your account for the last 15 days of the month, look closely at your expenses and see how many of these were credit card payments or/and EMIs. Take a hard look at what you spend on and where your money goes.

Q. Would your career choices have been the same if you did not have an EMI? Would you possibly have chosen a ‘riskier’ career if it was not for the financial burden you carry?

But, I also invest! Some of my EMIs are SIPs in highly ‘recommended’ mutual funds. And if my relationship manager has his money in that fund, chances are, it is good for me. Wrong again! Contrary to popular belief, a majority of relationship managers are great ‘sales’ guys who know how to sell you a dream that your money will grow with time. The average tenure of a Relationship manager in a fund can max 3 to 4 years and this means that by the time [if] your money grows, your relationship manager might not even be around to guide you. It’s their job to sell. Period. Dig deeper and you will see that the money you earn and invest is now in the hands of someone who [in this case the fund manager – backed by a research and data champion] will take decisions on your behalf. Because they know best. Right?

Think about this. If every fund manager was equally competent, how is it that only a few funds grow year on year? And even fewer give out dividends? Because the system ain’t working for everyone. And what happens when a fund starts paying out? More people put money there. So as a herd of sheep, we flock to the least possible risk avenue and hope we don’t get slaughtered by the market. And while people have gone to the extent of calling a SIP a good EMI, it is only one if you make money and not the other way around. So the next time someone recommends a fund to you, ask them a few questions and see how much they really know. Then, maybe you’ll know too,

Taking a step back, as people, we’re only figuring out the things we love every day. Some of us realize our true calling when we are in our 20’s [a more care-free, risk-taking life stage] while for most of us its when we have some money in our pockets and want to do the things we love.

This is also the time that two realities hit us. One: That the career I’d love to take up [for e.g. being an artist or a scuba diver] won’t make me enough money & Two: Money makes the world go around. Simple.

By the time we are 30, we have a couple of EMIs running [Personal loans for a marriage, car loan or/and a home loan or the latest sensation – a gadget loan]. Credit card payments are an added bonus and not to mention the life we have chosen that comes with a maintenance bill. We’d all like to live the good life and yes, an EMI makes that happen. Before you know it you are a slave to the monthly payment, caught in a tenure of 10, 20 or 25 years [depending on the loan availed].

From this point on, every single thing we do -from running the grind to being submissive in front of authority – is a mindset that stems from a deep subconscious fear. And the older we get, the more responsibilities we shoulder, the greater this fear becomes. We’ve all heard stories of executives and how their life changed one day when they got the pink slip. This fear runs across levels. Imagine waking up one day and not knowing where your salary will come from? Or that you have a notice in your account for late payments and that your home might no longer be yours. This fear also means we become ‘yes people’. Ones who rarely challenge status quo.

Your credit score might determine if you get a credit card, but if you’ve never taken a loan, chances are how will they know? It’s paradoxical as much as it is toxic. How is it that your worth and potential is based on whether you pay your bills on time or if you have a stable income? Does this not mean at some level, companies prefer ‘safe’ conformists. Ones who will never question the rules and sign off their lives on a dotted line, pay their EMIs on time and put their heads down so that you can slap them with a late fee or interest for even a day off the mark. And even if this upsets you, what can you do? It’s not like we’re in the ‘fight club‘. Speaking of fear, wonder what would happen if we, as a nation of people living on an EMI, collectively, as one, decide to default and not pay up? What if non-performing assets [NPAs] of lenders and banks cross a limit of say 50%? Would companies be able to manage this wave? Would they survive? Ha!

And, guess what? The money we borrow is actually our own. Theoretically, for the layman, this is how banks make money: We put our money in a Fixed Deposit for say 5 years at 6.5% per annum and end up taking an EMI in the form of a personal loan at say 16.5% per annum for the same tenure on a car, the 10% difference is what the banks make. It’s our money being sent back to us at a higher cost. So, we end up paying more, making less and draining our savings. All of this, to live the great lifestyle lie.

Living on an EMI also has deeper social ramifications. Imagine having to live in shame if you are not able to have a ‘li[f]e-style’ that and what will society think? We go deeper into the rabbit hole. Look for avenues of income to satisfy our wants and paying in parts to live a life we don’t really own. Moreso, since our decision making is based on being able to ensure an acceptable standard of living, our definitions of right and wrong tend to mirror those that do not break that myth or cause disturbance to your monthly payouts. We take sides that work for us, hold back on following our dreams of doing the things we love and even take shit from our bosses because we have EMIs to pay. What’s more? We’ll do nothing about racist comments in a foreign country – compromising our dignity, to say the least, so that our dream of a better lifestyle is not impacted and have great pics on facebook. Just so that society does not tag us a ‘reject’ because we did not go on a vacation for the last two years. We might just fall prey to ‘get rich quick’ schemes and invest in loss-making avenues only to regret those decisions at a later date. The more I think about this, the more complex this gets.

We’ve often heard parents say ‘live within your means’. Never really understood what that means until the day I saw us buy a house. With one cheque, all white. My father had been saving for it his entire life. The price we paid for the wait was nothing compared to the pride we had of owning our home from day one. Having the financial freedom to do what we want with it. That’s when it hit me. The answer to this mess. That taking an EMI would only limit our dreams and not help me fulfill them. That if I was willing to pace my life, I would not need an EMI. Ever. Imagine the possibilities. This would mean a slower pace of life – but a happier one. Where age/life stage did not determine the nature of my expenses but instead, invest in the things we needed to have at a particular time.

All this said, can you truly avoid taking an EMI today? 

Scenario 1: You are in your early 20’s and are thinking of a big purchase like a phone that costs double your current monthly salary. This is a no-brainer. The answer is that there is hope for you. Hold on. Put aside some money for the phone and in six months, you’ll own it at zero interest. The only price you will pay is that you will be six months behind your peers who bought it on day 1 standing sleepless in a queue. That’s it. It will still be the same phone and it will be yours from the day you bought it and not from the day you paid it off. Hold back because this will also bring in a lot of much-needed financial discipline.

Scenario 2: You are already neck deep in EMIs. This is a tough cookie because you need financial discipline of another kind. The only answer is to restructure your life. Transfer loans to a lower interest rate as soon as you can and if you can’t, dedicate your life to paying off every loan you have. Down to the last one. Then, start afresh.

How will this change your life? Coming from someone who does have an EMI, this decision will make you smarter, financially independent, live stress-free and help you reach your true potential. This will also help you make balanced decisions that help you grow emotionally. Rome was not built in a day. Neither is our life going to be. We’ll all rest in peace someday and then, there is nothing we can do except ensure that our kids don’t fall into the same trap we did. That they are able to live free.

Do write back & share this if this blog makes sense. From where am standing, we could all do with a bit of re-alignment.

Interim Update 

Within hours of posting this, have received numerous requests to share insights on how loans work and what can one do to save on interest. Attempting to demystify a few questions in a separate post here.

When Destiny Met Determination!

This is one episode I’d like to tell my kids and have them tell their kids. It’s the story of destiny meeting determination.

The first time I laid my eyes on this beauty was exactly 30 minutes before a scheduled ride back from Malaysia. But one glance and you know you have to take this home. Dug from an excavation site with authentic battle damage lay a 16th-century Samurai Sword / Katana at a genuine antique dealer in the heart of KL.

When I first pulled it out of the slightly rustic quiver, a strange (if I may add) shiver went down my spine. That’s when I knew we connected. Often believed to be a part of a warriors soul, the katana lay in an extreme corner of the shop. Disguised to the eye in a way. The first thing was to call a friend in India and ask him if one could get arrested for bringing in an antique into the country, that too a sword. The only assurance I got was “Come back. I’ll bail you out if you got arrested.”

katana

But my journey was far from over. The first step was to get a clearance from Malaysian customs. The funny part was placing this under the X-ray machine. You should have seen the faces of airport customs team. Step two (and I knew this would be difficult) was declaring this in Indian customs. Their first reaction was ‘Why do you need it?’ I mean hello! Won’t you want to have one? Their first reaction was that this comes under the Arms and Ammunition Act and hence was out of the sole jurisdiction of the Customs. Fine I said, so what would I need to do? Get a NOC from the police on a particular date and time as convenient to the customs officials. So had the sword sealed and kept at the airport for two days.

After which, I spent an entire day accompanying an official to the police station, getting a NOC from the police and getting the NOC back to customs for clearance. Yes! This can happen too! That was not alL, the Superintendent refused to release it even then. Why? Am sure you will love this answer ‘Not releasing this on my shift. Am not signing the release papers even if the police have cleared this. Wait for the shift to end.’ That was 4 ½ hours away. So I just stood there, outside his office. A bit of ‘Gandhigiri’ ho gaya. Must add that the other team members in customs were quite helpful and they were trying to tell me ‘Sorry about this. But, vo aise hi hain.’ Those 4 ½ hours were quite a revelation. But if honesty and fair play in terms of following our laws had got me so close to owning this piece then it would take me through this as well. And that is exactly what happened. The shift changed and the next guy was welcoming of the story.

 

You Are The Legacy.

Last year, our family had to deal with the loss of two loved ones. It’s like your world crumbles. Nothing seems to be able to fill the void that such a tragedy brings along. As part of the rituals, a lot of people come and spend time with you. Old friends to your loved ones who reminisce about yesteryear. Then there are the ones who want to know how they passed away. As you painstakingly explain what happened; It is here I believe that life gives you a window.

Image Credit | MyMordernMet

Think of this: We spend our lives defining who we are and making a place for ourselves. A lifetime spent on making our mark in society. Making our parents proud and living a distinguished life. Creating our own legacy and leaving something for the next generation, hoping for the best.

While the pain takes time to go away and we find our coping mechanisms, we decide to work hard, leave a mark and create a better version of the future.

What we, however, tend to forget is that we are already living a purpose.

You see, our loved ones never really leave us. They live through us and our actions as we pass our values to the next generation. You are the legacy your loved ones meant to create. You define them just as the next generation defines you. Understanding this helps to give meaning to our lives. No one lives forever. The pain then is replaced by peace.

To quote from the Last Samurai ” Tell me. How did he die?  I’ll tell you how he lived “.

So ask me again.

7 Reasons Why You Must Watch Krrish3 !

Normally, am not someone wanting to dedicate a full post to a film. But I guess when you spend oodles to watch India’s first highly recommended ‘Superhero’ film, it deserves this pedestal in cyberspace. XMenOh no! This is not a mistake, don’t let the XMen poster fool you. Krrish3 is a super duper out of the box inspired movie from characters, scenes and plots of this movie and many other popular comic characters /films like the Matrix, Iron man, Hulk, Superman, Spider man & Avengers. It has all this and much more [If you can handle it]. Here are seven reasons why you must watch this movie. 

1. You get to meet ‘Kaal’. If Prof. Charles Xavier had a dream that he had an evil twin who could combine his powers with those of Magneto, this one makes it happen.

2. For the first time ever, in the history of Cinema anywhere will you see a ‘Mutant’ {a mystique alike} who lacks ‘feelings’ in a love song sequence with costume changes. Also, it will show you some breathtaking locations.

3. You will get immediate flashbacks of sequences from other cult Superhero movies and will wonder what their next trailer looks like.

4. You will learn that Bournvita can make you a scientist, Fortis Hospitals saves lives and keeps a logo on every pillow, AirIndia still sucks at retaining people, SIS has a hire and fire policy like no other and that Flair pens has stopped making ball pens and is now into extensive tie-ups with Scientists to develop and create a design that can capture and channel the energy of the sun.

5. India will learn that ‘Krrish ek soch hai. Krrish hum sub mein hain. Krissh … forget it.’

6. You will learn that wrapping your tongue around people can cause you to hibernate or worse…get you killed.

7. You will see that no matter what you do, movies will get you to buy more ‘Krrish merchandise’ especially for kids and no matter what happens, you have to believe that the human body nothing more than a solar charger.

Hrithik-Makeup-Krrish3-Rohit

If there are a few things that do deserve a medal (seriously) those include the make-up done for Hrithik as ‘Rohit’, the editing and the Special effects /VFX. Some scenes sure can give some serious ‘takkar’ to Hollywood. Especially the transitions shots for Kangana who plays ‘Maya’ a.k.a. Mystique from XMen. Kudos to the effort in pulling this off. And last but not the least, Hrithik for his acting as Rohit. [Rekha’s son] Or was it the other way round? Wait, there’s baby Rohit who can fly too. Get ready for Krrish4 [based on the adventures of Superboy]. Do we see another franchise?

A Love Story (Of a Few Words).

Unless so specified, a love story is known to transcend boundaries. Cross borders and move mountains. Lovers are known to yell from rooftops, cross the highest mountains, fight with the world and go against the tides. Or at least, that’s how the story goes in most movies. You have a protagonist, an obstacle, and a happy ending. [More or less]. Lovers are of different types. The ones who are all out to proclaim their love and tell the whole world that cupid has struck. They want to share that warm fuzzy feeling you get that makes you go weak in the knees. Sigh! Love.

People go to great extents to show the world that they have found their soul mate. It can start by ‘adding’ a life event on Facebook or changing your relationship status. There is more: having the same ‘lovey-dovey’ profile picture and commenting on each others wall with emoticons and heart symbols on every update, posting pictures of gifts received, candlelight dinners. Getting a tattoo. The list goes on.

Bench

And then there is the love story (of a few words). Where telling your partner ‘I love you’ 5 times a day is simply not part of the DNA. It’s the more (for lack of a better word) ‘quiet/understated sort’ of love. Where holding hands while shopping or having identical profiles is simply not it. Are they not in love you ask? Yes! They very much are. Their love is that of a few words. It’s when having long conversations are not really needed. When a few words will suffice. It’s when you ‘simply know’ that this is the person you want to grow old with. The person who may not hug you every day but will love you unconditionally. Will poke you when you grow a beer belly but will love you even more cause now there is simply more of you. Will quietly come and put her head on your shoulders as you watch TV or read the newspaper. Not say a word. Smile and carry on.

You see, being in love is not about having the same identity. Instead, it’s about loving each other for the way the other person is. You may not like all of each other’s habits but you’ll surely love each other. You may even fight or show your displeasure on something but the love is still there. Where somewhere, losing your identity to be compatible is not the objective. There. In that one moment you know, their love is a different kind. A love of a few words. A few words it is.