Why invest in Gold......

I hit upon this website.

It interested me, as it was inline with my earlier post, which appeared in trak.in.

The only difference is in India, real estate price had continued to increase and looks to be heading beyond the reach of a common man with decent earnings. So, as far as India is concerned, high prices in real estate, also make gold more attractive, as you can decide the quantum of investment as per one's wish.

Read more! Read more...

Small is beautiful -- E-commerce way!

"Small is beautiful" the famous book written by E.F. Schumacher in 1970's, not very sure whether this can be applicable after 3 decade are not, but interestingly, within India, we do have some E-commerce based start up, which was made name in matter of 3 to 4 years times.

These start-up are born from innovative ideas from young techies, who found the need for it. Most of these start up came into existence post 2005, when Internet broadband penetration into India started growing high. Most of them, started as home based office. In India real estate prices in the last 10 years have moved 4 times, so it had been a wise decision for these start up to opt for virtual office and as well as use web as their market place.

These start up had been started by techies, after quiting their well paid job in IT industry . This shows that one need not look beyond India in software services sector, its well on its way to become a self sustaining industry for a small entreprenuer, who has the right attitude and in sight.

I thought of exploring series of E-commerce site which are quite innovative developed entirely for Indian market, the first one being,

Bus ticket booking : If you a looking for bus ticket booking then look out for redbus. Started by Phanindra Sama around 2005, due to the need he had felt on his holiday as he could not get home. If I am right around this time, one would have started using Indian railway ticketing system with a fear in back of my mind whether my transaction would successfully go through, interesting Phanindra Sama, felt the need to a bus ticketing system in 2005.

It really impressive the turn over would reach Rs 150 Crores this year and have about 250 people working at 10 office. I read with interest the interview about his venture in rediff.

The other E-commerce venture which impressed me is apartment management software, which can be classified as SAas (Oh!... yes, you can call this as Software - as - service for free) .

Apartment Management Software: The concept of apartment is not new in India, since 80's the concept was known in metro cities of India. However apartment complex of 100 plus flats had become very common post 2005. There has always been challenges is running an apartment efficiently. Communication, issue management, vendor management, networking had always been challenge for bigger apartments. The apartment management software effectively tackles the problem through their software solution.

In India, you will find rosy advertisement of proving a paradise from real estate builders to promote huge apartment complex, but I don't feel importance is given towards maintenance of these huge complex during their later years. Builders, run the show for one or two years collecting maintenance amount in advance, beyond this, mostly the apartment complex are handed over to the association and this is where these software solution provide transparency and management of apartment in effective way!.

Common floor, justmyneighbour and apartment adda are some of the website which provide effective apartment management solution. The amazing story of commonfloor and the way it was started appeared in outlook business.

Few other such venture impressed me, will be writing about the same next time...Till then, welcome readers opinion.

Read more! Read more...

Currency Exchange wars ! ! ! !?

As per a recent article in the leading news paper, "Global imbalance" is the cause for economic crisis. The US is running huge trade deficits whereas country such as China due to its vast exports across the globe had generated trade surplus.

The surplus money had found its way into US and since the interest rate was low, it inflated the real estate prices, shares and asset and finally the bubble burst. This rather, I would say as one dimension of economic problem. How was China able to achieve this surplus? Is it because China being technologically superior compared to other nation like US?

I believe one of the root causes of the problem is the currency exchange rate. There are accusations that China is undervaluing its currency to increase its export and remain competitive, on other hand US Dollars, Euro and Japanese Yen are strong compared to Chinese and Indian currencies, but unfortunately the job losses seems to be maximum at in the countries where currencies are stronger. Also, the economy is still in bad shape in developed countries.



Ideally, if a country’s economy is in bad shape, then, I believe the currency exchange rate should depreciate. This, I believe is logical, any kind of asset like real estate, share market takes a beating when a country faces economic crisis. If the currency is strong, this is bound the multiply the problem, as import will look cheap compared to domestic production. At same time, can US think about depreciating its USD against other world currencies? May be not, since USD is considered as Global reserve currency in the world, the moment there are indication that US would devalue its currency, it might result in a catastrophe, particularly with most of the countries across the world still holding USD as their foreign exchange reserve, they might end up selling USD for other safer investments. Euro and Yen is also considered as foreign reserve currency though at a distant second. This is one of the reasons, as why developed countries might not be in position to depreciate its currencies.



Why does import look attractive when currency is strong? With 1$, one could get much higher value commodity/service in countries like India , China compared to what the money can buy in US, UK or Japan, naturally any business man would like a source his goods or service from that part of the world.

Even in one’s house, if one look around you would only see international brand electronic products, hence with world becoming flat and small , due to faster information exchange , easier air travel , GATT/WTO agreements any commodity particularly consumer electronics, which has price tag above $100 and less than 10 kgs in weight (call it 100/10 rule? - had earlier written in my blog on similar lines) has to mass produced and entire world is the market and if the manufacturer concentrate a particular region, then the manufacturer could become extinct or acquired due to competition. Hence, product manufacturer has to optimize all categories of cost; this would naturally lead to locating manufacturing plants and jobs in low cost countries.

In my opinion, when there are job losses and the economy is showing shunted growth, and if the country currency is strong it might end up in creating multiple problems.

Read more! Read more...

Needs Vs Wants - Avoid getting materialistic

World is turning out too materialistic, with many plastic card (credit cards) or finance option available it’s very easy to spend money. What’s not so easy to spend money wisely?

Knowing the difference between “wants” and “needs” is an important part of learning to manage money.

Wants are nice to have but not essential, eating out, buying a new fancy gadget.

Needs are the essential or the basic needs for survival, like shelter, food and cloth.

But, we have evolved over a period of time, in 70 or early 80’s if you had visited an Indian house, refrigerator was want. But, post 80’s it has become a need. Take a case, of mobile phone, it was a want even to an executive in late 90’s, however it matter of 4 to 5 years it have become a need to an executive at the same level as compared to late 90’s.

The list is endless…. One can add so many and further fancy advertisements in news papers, TV channels and peer pressure makes the wants turned into a need, which makes one to seek finance option and look out for use of “future money” option. By future money, I meant easy equated monthly installment option.

Its better one asks the basic question to himself “ Do I want it? or do I need it?” You might be surprised, many items would turn out to be your wants. Future money usage or credit might be a good option to finance your needs and not your wants. Again, if you are taking up an equated monthly installment option, at any point of time let is not be more than 30% of your total monthly income.

Though, there is no hard and fast rule, you may even go flat out that 100% of monthly income can go for equated monthly installment (EMI), it depend on what stage of you are in your life or higher percentage of equated monthly installment, may be OK for a month or two. But in long run for years together, its wise to ensure that equated monthly installment(EMI) content does not go beyond 30% of your monthly take home pay. This will also make you feel that you are in control of your debt content.

Read more! Read more...