Sunday, 16 September 2012

Mumbai Real Estate

The average rate of property in Mumbai suburbs is 10 Million rupees. So how the financial numbers work to get one such property.
1. Required Annual income = 2 million rupees ( 20,00,000/-) i.e monthly Rs 1,65,000/-
2. Loan provided by Bank 75% of property value = 7.5 million rupees (75,00,000/-)
3. You need to shell out from savings (if you possess) = 2.5 million rupees (25,00,000/-)
3. Monthly EMI = Rs 83,000/- for 20 yrs.
4. Amount paid over 20 yrs to bank = 19.92 million rupees (1,99,20,000/-)

So to buy property worth 10 million one pays 19.92 million rupees. Does this make financial sense plus consider all uneven things that can happen in due course of 20 yrs??

Instead of buying property if one stays in rented house, the benefits...??

1. Rs 2.5 million of initial investment if invested in secured government bonds for 20 years gives Rs 11 million in return.
2. Rental expense with 10% hike every year is Rs 17.18 million for same property, still Rs 2.74 million less than loan amount to be repaid for 20 yrs.If this 2.74 million rupees amount is invested in secured government bonds over 20 yrs it gives you Rs 11.15 million.
3. Maintenance cost of property over 20 years Rs 1.5 million
4. Property tax over 20 yrs Rs 0.6 million (with 2012 rate)
5. Total saving generated from renting property is Rs 24.27 million over 20 yrs
6. The most important thing renting gives flexibility to change cities/localities as per requirement of job/schools for children and many more.

Buying property at least in Mumbai has no rational. And how many people have annual income of 20,00,000/- in Mumbai...????

Saturday, 15 September 2012

Investing in India

Investing in India...what you should know......

1. Huge Population & natural demand
2. Large untapped market
3. Highest percentage of young population
4. Saving rate of 30% to 40%
5. People buy premium stuff to impress others
6. Population in rural areas possess money but lack avenues to spend
7. Rampant corruption acorss all levels
8. All cities/towns/villages are full of filth & dirt
9. Infrastructure is in pathetic condition
10. Politicians, local goons & unions demand security money from every business
11. Decision making in painstakingly slow
12. Patience is the biggest character all companies need to posses while operating
13. Cheating is very common
14. Opening new business/factory/outlet/warehouse is full of hurdles
15. Even after so many good & bad things country is still growing rapidly

Sunday, 22 July 2012

INS Sahyadri Commisioned

INS Sahyadri last in series of three stealth warships was commisioned today at Mumbai. Indian Navy will get seven more indigenous stealth frigate warships to give the Indian Navy a stealthy power punch and will be built in Indian Yards.The next generation warships to made under approximately Rs 50,000 crore Project-17A will have more improved stealth features to further reduce radar signatures and under water radiated noise. They will also have slick appearance and multifunction radar to further bring down detection chances.The weapon system will be flush-deck mounted that will allow vertical launch of missiles from under the deck, said a navy official involved in designing the ships.


Few basic laws of investment:

1. No investment is free of risk.

2. Insurance in not investment, its just a tool to cover risk.

3. If you want to play safe invest in government bonds.

4. The asset which rises rapidly falls rapidly.

5. Don't invest with herd mentality.

6. Real value is in gold/silver or any physical asset. Money is just printed paper.

7. Invest in only those tools which you understand thoroughly

8. Sell off when every person without basic knowledge of that field starts speaking on investing in it.

Sunday, 15 July 2012

5 Lakh crore gamble

Banks have disbursed over Rs 5 lakh crore credit to the farmers during last fiscal as against the target of Rs 4.75 lakh crore. Still the GDP numbers for agri sector growth remains meagre at 2.7%. Same amount of investment/credit in any other sector would propel growth of around 8%-10%.
                Reason for such low growth..??? The money is getting diverted by end users to non farm sectors. Many farmers have bought private vehicles, consumer electronics goods & things of leisure using this credit. Many know they do have to return the loans they have received from banks considering previous loan waivers from government. with small lands sizes , poor irrigation , low market rates many farmers have opted for same.
               Already Dr. Subba Rao has pressed the panic button as NPA have risen by 50% for loans given to agriculture sector. The GOI seems ready to take another huge write off in 2014 (election year).

The List Goes Long

Pages wont be enough if we start putting pictures of underachievers or rightly said in-capable leaders who have been given top positions to run the countries governance. The ruling party over 60 years have appointed such people who lack leadership, management, governance skills that has taken significant toll on growth of the country. The appointment of such people continues religiously against will of general public.

World Drought Scene

Major part of the world is under going through worst droughts not seen in decades. 53% of united states is facing severe drought conditions. The problem is getting aggravated as this drought is in major farming states. The drought has affected crops like wheat, soybean, corn plus live stocks.
           Same condition is in major part of Africa, India, Spain and many more countries. Drought is creating perfect condition for massive price rise across all food commodities. The price rise is going to affect global food prices and already prices of wheat,soybean, corn, sugar are on rise. More critical is going to secure regular supplies of potable water for huge population.
            Global warming has started to show its effects.!!