Everything about debt for Indian babies and children. #debt #business #investing

Category – business

Reading time – 6 minutes

Babies don’t need to study economics. They don’t need to know about debt. They don’t need to calculate interest rates and returns on investment.

But their fathers need to know all this. They need to earn money and then grow it slowly to fight inflation and uncertainty.

Babies and children in turn need this knowledge for their daddy or mamma; who are in-charge of money, which babies will own one day.

Don’t you think they want a wiser dad or mom, so that they can get lot more more money, than a passive parent may provide.

So this blog is to understand basics about debt or loan.

Debt is a loan which is to be repaid in fixed time and is given on particular rate of interest ( extra money other than principal amount ).

It is a way to raise money for businesses.

It can be classified into various types like business loan, personal loan, housing loan, car loan etc.

It can be secured or unsecured. secured loans have attached asset like property, machinary or FD; equivalent to the amount of loan, which can be forfeited in case of inability to return the loan.

What are bonds?

Bonds are one type of debt instruments. They are used by businesses to raise money.

Bond is a standard piece of aggrement, that fixes term of the loan like interest rate and tenure.

Company has to pay interest irrespective of the revenues. Hence, for investors bonds are relatively safer option to invest their money. As fixed returns are guaranteed beforehand. But, as risk is reduced in these compared to shares, returns on investment in bonds is also lower.

Government also takes loan from people for building infrastructure and other works.

Bonds are issued by government. This type of loan is called sovereign debt. Govt gives assured retuns on these investments.

Various debt instruments.

1. Bonds which we have discussed above.



2. Debentures – It is a debt instrument that is not secured by collaterals and generally has tenure longer than 10 years. Hence it is given to creditworthy organizations.


3. Corporate deposits –

It is company version of fixed deposit. It is for fixed duration and has fixed interest rate. It is provided by banks and non banking financial institutions.

4. Fixed deposit ( FD) – It is favourite thing of Indian masses. It preserves money with very low returns.

5. Public provident fund ( PPF) –

It provides for reasonable returns and tax and saving benefits. It has limit of 1.5 lakhs. Lately it’s returns have also been curtailed.

6. National savings certificate ( NSC) –

These are issued by government of India as small savings instruments. It is provided by India post.

7. Debt mutual funds

These are mutual funds that invest primarily in bonds. Hence they have lower returns as compared to shares but are safer.

Main aim of all these is capital protection.

Capital gains is secondary.

As you age, it is better to invest more in bonds and debt instruments.

As you near your retirement or big expanse, you can take out money from equity and park it into a debt instrument for capital protection.

Inspiration – many personal finance books.

Few things about home loan.

It is given by bank or non banking financial company.

Down payment is initial payment for the home. It is generally 20% of the home value.

Before construction you have to give pre EMI. In first year 99% loan is disbursed.

After registration of the property remaining 10% is disbursed and registration documents lie with bank as collateral.

After, registration EMI starts.

Tenure is time period in which loan is to be repaid.

EMi is decided based on rate of interest and tenure.

There are other charges like processing fee, notarization, conversion charges etc.

Overdraft facility –

It is a way to reduce tenure and EMI of your loan.

Bank creates a savings account linked to your home loan account. It is called overdraft account.

Any additional amount of money in this account; over and above your EMI is taken as pre payment towards the loan. This reduces loan principal and hence reduces EMI.

Added advantage is that you can withdraw money from this account anytime.

For example; if you took 25 lakh loan with overdraft account. And you added 5 lakhs to this account. Interest rate of your loan will be calculated on 25-5 = 20 lakhs in place of 25 lakhs. Hence you get reduced EMI.

Why is it so.

Because interest rate of such loan is higher by 0.25-5% as compared to routine loan.

But inspite of this it is a useful way to save money.

You will be happy that you know it.

Inspiration – Mistakes in personal finance, that I have made.

18 lessons for your personal finance! #money #business #psycology

Category – Business. Reading time – 5 minutes

Personal finance is such a sticky thing. After you grow out if childhood, you come to know about this money thing. Now your dad stops fulfilling your unreasonable demands and starts to expect, that you are going to earn some money now.

Eighteen years of pizza, burgers and your TV recharges needs to be billed to you from that moment.

You were sent to school to learn how to earn. And you scratch your head that school completely forgot to teach you, how to earn money.

You wonder how will arithmetic and algebra and mediveal history, will get food on your plate.

You see towards your friends and they too are under axe of their parents, to earn their living.

In this post let’s discuss few basic concepts, that help in managing personal finance in current scenario.

And that’s the time when one needs to learn about personal finance. Earlier you start, better it is for your lazy body.

Let’s get this stuff.

1. Don’t compare with others. Everyone is running different race with different rules and different rewards. Choose your race correctly, that suits your mindset, skills and personality.

2. Nothing is free. Yes, that free voucher, with that costly phone is indirectly to be paid by you. And, you must also understand that your time and attention are also a form of capital that Marketing people are in pursuit.

3. People, beliefs and culture change with time. So don’t keep your ideas rigid. It was risky to board in car of a stranger, but now it’s fashionable due to UBER.

4. Always leave some room for errors, unexpected events and unknown forces. Don’t be a overconfident. Don’t board Titanic without lifeboats.

5. Past cannot predict future. Experts cannot predict future. No one predicted 2008 or 9/11 or covid.

6. Negatively gets more focus and attention. Try to go beyond all those negative vibes floating in sea of social media.

7. Personal finance is a relatively untouched part of the conventional knowledge. So, start learning about it.

8. Set ceiling of your satisfaction. Don’t keep running. Rest, relax and enjoy. Afterall, that’s why you work.

9. Use power of the compounding. And be aware that it takes time. There are millions of articles and videos that explain compounding to you.

10. Getting rich is easier than staying rich. All those sports stars who retired young can easily slip into poverty.

11. You can do average things and fail multiple times, but you can still become rich.

12. Financial freedom is the biggest success possible.

13. Be rich. Don’t focus on looking rich. Be humble and save money.

14. Dollors saved are equal to dollors earned in value.

15. Go for cash flow instead of capital gains. If you can generate positive cashflow other things will take care of themselves.

16. Try to build assets which put money in your pocket, even when you are not working. That elusive thing is called passive income.

17. Whenever you calculate your gains always keep inflation in mind. It reduces purchasing value of your money. This 100 rupee note will be less useful five years from now.

18. Don’t try to be cheap. Try to be useful to others. Don’t die fighting for pennies. Keep your heart big and vision broad. Don’t be 11 th fruit seller in a row on roadside. Enter business with substantial returns for your efforts.

Why employees come before customer? #infinitegame #business#startup

Category – Business

Reading time – 2 minutes

A business owner has one thing in his mind- profits. That is where is eyes are. After Friedman’s theories took deep roots in society, it was ok to work for investors only.

It was easy to forget employees. Afterall unemployment will never end and you could always get new person to take place of the last one.

This finite mindset makes companies to lay off people, on slightest jolts in their business.

But they miss the reality. They don’t see the hidden costs.

1. A employee who loves company is an asset.

2. Customers are also humans like employees. You should be able to keep all humans happy.

3. Trained and old staff keeps customers coming back.

4. Training and retaining new staff is also a money consuming process.

5. If nobody stays for long how will teams form and coalesce.

So love your staff.

So that they love your business.

And due to that customers also love it.

Inspiration – The infinite game by Simon Sinek.

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Illusion that all businesses create! #infinitegame #workstress#newbusiness #simonsinek

Category – Business. Reading time – 5 minutes.

A lot of things are infinite. They continue. Waiting for their end, leads to early obituaries. Eyes dry out, before comprehending corners of these things.

There is no end to a few things. There is no permanent winner or looser. Only finite moments of disturbances followed by a continuous flow of the time. Flow; that is continuous.

Life is such a thing. A little part of infinite flow of time. It ends and no body notices after sometime. Then new biomass loaded with consciousness, wriggles on earth and this flow continues unabated.

Life is part of an infinite stream that continues; come what may. Life ends but game of the life continues. Till last living cell is destroyed, it will continue and even after that; there is always a chance of resurrection of biology.

So why do we want finite durations?

Why we want business quarters?

Why we want annual reports?

We know business continues till owners live , so why is focus on the short term? Long term things should have long term strategy.

So, for a brand to last for decades; we need infinite mindset.

Infinite mindset means – That business is an infinite game; that is to be played with long-term targets in vision.

For example, USA thought Vietnam war was a finite game but after loss of life and big fortune; they realised that it was an infinite game, if they continued to play it.

Microsoft wanted to defeat Apple, which was a finite game mindset. Apple focused on satisfying the customer and recently on the privacy of customers. Hence Apple was clearly playing infinite game right from the start.

Lego wants game to continue. Hence it has been around for so long.

Even if Apple knew that iPhone will kill the ipod, they went ahead with it.

Similarly gym to gain fitness is an infinite game. If you stop following diet and excercise schedule after few months, you endup regaining all the weight you shed with so much effort.

So take life as an infinite game.

Qurters, annual revenues, flowcharts- all are artificial constructs to keep shirt term goals in perspective, but too much focus on them may jeopardize long term prospects of the business.

Infinite game is positive and inclusive.

It needs reselience and it has a just cause.

It avoids too much focus on the short term results, as long as long term progress is positive.

Hence next time you see an CEO too much submerged in three monthly results, assume that he has got a finite mindset.

Inspiration – The infinite game by Simon Sinek
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How to finish almost everything that you start! #personalgrowth #habits#psychology

Category – Business
Reading time – 5 minutes

Starting is easy. Every year millions of people start things. They take resolutions. They start journaling. They even start evening walks and blogs.

Many more testosterone filled souls start revolutions. But it is both frightening and disheartening that 92% of the revolutions fail. Especially violent revolutions.

Non violence has better chance of succeding, as it stays for longer duration and gets more moral support. So we humans are excellent starters but very poor finishers.

Projects, books, loveletters, charities, homeworks, commitments, most of businesses in long term don’t finish well.

So, finishing a thing is an extremely rare skill, that is must for every restless entrepreneur.

What can you do. Here are few things

1. Don’t aim for perfection.

Nobody was perfect and nobody will be. Do best whatever you can do. And just don’t mess up voluntarily. Accept that you are normal ape, that is not perfect.

2. Divide and rule –

Divide big work into small tasks. It frightens less. It remains manageable. It keeps your brain away from panic and chaos. If you want to write a book try to write a page first.

3. Make things fun –

Attach some reward or pleasurable activity with your work. Listen to music. Go out while drinking your coffee if you should. Watch a cricket match on reaching home.

4. Remove noble hurdles –

They represent part of perfectionism. Things like, ” If I do this, then I will… need to be avoided.

5. Measure progress –

You will get idea about how much have you accomplished.

6. Find your space –

Identify time and place, where you are generally most productive. I know you count bathroom in, and it’s ok, if you are creative there.

These things will help you finish a lot more thing. A half done work is not useful to anybody.

Inspiration – Finish by Jon Scuff
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How to save a talent from wilting away? #personalgrowth #motivation #sucess

Category – Business

Reading time – 5 minutes

Talent is a peculiar thing. It is so abundant sometimes; that you see it everywhere. It is more accurate description of social media personas, we encounter daily.

With acceptability of self boasting as a new normal trend, we see people floating their talents on social media.

Talent has multiplied many folds. With no judge or critic, people produce things ( posts), using their talents and push it down the throats of other similarly talented people, in exchange of ever elusive likes and shares.

It’s like apes scratching each other. If Socrates or epictetus somehow visited instagram pages prevelent in present times, they would be bewildered to see infinite sea of talented people on the planet earth.

They might like to take a wordpress SEO tutorial, for their teachings to beat average blogger followership.

That was the idiotic babble at the start of the article.

Now let’s see few basic concepts, that help in keeping talented person afloat.

1. Practice till your subconscious accepts the skill and you could make an omlette, while doing that work.

2. Find a mentor. Yes that one person who dies lesser number of mistakes as compared to his younger self. And who wants you to be a success.

3. Get inspiration. If not enough steal ideas. But give credit to the original creator.

4. Learn both hard skills like plumbing and softskills like boardskating, writing etc.

5. Don’t try to label yourself as child prodigy, as most of them fail as they grow into the adulthood.

6. Learn from mistake. Don’t burn the toast each time. Also don’t burn the toaster.

7. Increase difficulty level during practice time. On field things will appear easier, if you have done more difficult things.

8. To learn a new move, exaggerate it like the helicopter shot of mahander Singh Dhoni.

9. Take notes and also remember to read them before throwing them into the trash.

10. Practice immediately after the performance. That is the time when muscles are hot and motivation engine is running.

11. Visualise your performance or better watch your performance video.

12. Keep you big hairy audacious goals secret from the world.


Motivationa – The talent code by Daniel Coyle

https://www.amazon.in/dp/0099519852/ref=cm_sw_r_cp_apa_fabc_Z8YNFB3MBA08AYZY0ZC9

Correct way of doing work! #deepwork #calnewport

Category – Personal growth

Reading time – 5 minutes

You need such solitude to connect deeply with your work.

We all need to work. Not only to earn money but also to keep us purposefully engaged and have satisfaction of contributing to the society.

But great work needs focus. It is not produced by anxious multitaskers with fleeting attention. Great work needs solitude and extreme focus with prolonged slots of distraction free time.

This is called deep work.

Greats like Carl Jung, Woodey Allen, JK Rowling all went into solitude to work on their main projects. Bill Gates takes thinking break once a year to envision future projects. Adam Grant who is bestselling author of the book, Originals goes into self isolation shutting himself away from social media.

As world becomes overburdened with data and job profiles change; old skills are rapidly outdated. You have to be a lifelong learner to stay in the race of everchanging industries. Due to advent of online work culture you have almost whole world competing for same online works. Hence level of expertise needs to be worldclass.

On the contrary to to availibilty of attention destroying social media apps and emails; it is increasingly difficult to have a deep focus on any task. But busyness is not equal to productivity.

Shallow work is easy but is useless. Deep work is dificult.

JK Rowling went to hotels to write in solitude.

What you can do!

Isolation from distractions. Focus on goals.

Try to do meaningful moderately difficult work that puts you in state of flow.

Work hard for a fair amount of time and then reward yourself with a treat like walk in woods or music.

Choose location that inspires and provides you your peaceful workplace. Go to hotel like Rowling or to island like Alan Lightly. Avoid open office.

Go to areas where exchance of ideas can happen like clubs. In MIT there is famous building 20, where scientists go to have coffee and multiple specialities interact with each other.

Focus on important things.

Act and measure progress.

Set accountability on failing to act.

Take break from your main work and indulge in different and attractive work for sometime.

Think about your task while walking.

Give time for self projects. Get enough leisure time to restore energy.

Stay away from social media during most of the worktime. Do not waste too much time on emails.

Inspiration – Deep Work by Cal Newporthttps://www.amazon.in/dp/0349413681

how future leaders should be working? #simonsinek #leaderseatlast

Category – Business

Reading time – 5 minutes

I am not a big fan of leadership books. They are all little bit skewed in their content. They are either very superficial or they paint too idealistic picture of a leader.

As mankind has progressed, rules have changed. We need new type of leadership for future businesses and organisations. Good old paternistic bosses, who wagged their tongue as a whiplash are useless in a generation of individualism.

Leaders of present times need to carry a smile and graditude on their faces and every employee commands a certain degree of respect and freedom. Time and again different studies have confirmed that happy employees lead to happy customers and hence a happy balancesheet for the company.

Few perks and freedom to feel control over their job; leads to more productive workers. This feeling of control erodes away any feeling of insecurity that is prevelent in present job system, where health benefits and pensions are literally absent.

Employees in small teams who trust each other and are free of interteam competition; is a dream of every manager. After 1980, individualism became an accepted theory and fences started appearing between people. This created a dehumanised society; which focuses on profit before environment or poor people.

Rich pay less taxes. They find all possible loopholes to evade taxes. This leads to ever increasing inequality and rich finally end up in such a strong position that they lobby strongly against any change in tax laws.

Self employed and salaried people pay significant part of their income in taxes; as they do not posses knowledge and resources to use tax system loopholes.

So at the end of the day, employee feels good if he had a decent treatment in office. A respecting boss and cordial working environment that permits few human mistakes will make them forget all the odds stacked against them.

So we need leaders who have respectful way of getting things done by their workers and who are ready to handover some control to their workers; so that they feel that they are driving a part of this company.

We need more of oxytocin surge; which leads to feeling of friendship and generosity and lesser levels of cortisol.

Inspiration – Leaders eat last by Simon Sinek.https://www.amazon.in/Leaders-Eat-Last-New-Chapter/dp/0670923176

What #calnewport has to say on career choice and #passion – my observations

Category – Business
Reading time – 5 minutes






Cal Newport wrote a book with title “So good that they cannot ignore you.”

As it is always with any self help book; there was very less new to describe. Afterall all the self-help works on well known and old few principles; which have been around for centuries.

Hence, you cannot create a new concept. So he did what was possible and he refuted a well established advice blurted by every self help guru that “You should follow your passion.”

That’s why he got attention of people who have always assumed that it is always right to follow your passion, even if final destination is not clear.

Newport argues that it can be a bad advice or even dangerous one. Let’s examine his reasons so that we may find something useful in this antitheory.

There are two types of people-
( Actually there are many types but we need to focus on these fellows here) –

1. Passion mindset– People who think that we should chase passion to be happy. World has to give us something. It owes something for our greatness.

2. Craftsman mindset – Be good at something and give something valuable to world and you will feel happiness.

How actually you can follow this path of,” loving what you do”.

It is like an Indian arranged marriage in which your parents choose your partner and you fall in increasing love as your marriage life proceeds.


Few things one can do according to Newport are as under

1. Develop a skill that is rare and valuable – It is your career capital.

2. And then negotiate with world to take control of how much you do and how you do. But keep in mind that skills you posses must be easily cashable and people should be ready to pay for it.

3. Do deliberate practice to improve yourself. Know that it will take time. But be So good they can’t ignore you.
Look for next minor improvements ( adjacent possible) that you can add to your skill set.

4. You need to differentiate between –

Job – pays bills.

Career – Progressive improvement in your skills and earnings

Calling – Things that have impact on World.

5. Don’t go out full throttle at once. Start small. Play small bets to learn what works.

6. You need to market your skills. Make it a purple cow as coined by Seth Godin.

A purple cow is an attention catching peculiar thing amongst heap of similar looking stuff. People identify it easily and remark on it. It is not one of those routine things.

A parantha ( Indian stuffed bread) shop is a Gray cow but a shop that offers biggest parantha in city is a purple cow.

7. Do right work. It is more important than finding the right work.

My observations

Nothing is new.
Everything has already been said in some other self help book.
It is true about all new self help books.

10 k rule is from Malcolm Gladwell.

Adjacent possible from Steven Johnson book, Where good ideas come from.

You must have good skills and must be patient and improve slowly as life passes, are well known axioms.

What author has done is refuted the notion of following your passion with few new stories about people we don’t know and analysing stories of people we know like Steve Jobs with a new perspective.

But there is no rule that is good for everyone.

If we follow Cal Newport world would be a little less pleasant and perfectionist; where every step will require tight scrutiny about risk benefit.

Humans are not built like that.
They need to express their stupidity, eccentricities, peculiarities, leaps of faith and senseless dreams.

We need both.passion of traditional self help tweakers.

And caution and hardwork of Cal Newport.




#business
#career
#followyourpassion
#calnewport
#selfhelp
#nonfiction

12 things that businesses produce – Basics of business – #business #money #productivity

Reading time – 3 minutes
Category – Business



If you have started a business. That’s a good thing. Congratulations for your efforts.

All businesses of World produce value, which they provide to the masses. This is the value for which people pay their hard earned money.

Here are various forms in which businesses provide value –

1. Product –

They produce a physical or digital product which solves problems of customers.

2. Service –
They serve to solve particular problem of customers like doctors, financial advisor, lawyers, coaches, teachers etc.

3. Shard resource –
Produces a durable entity that can be shared by multiple users.
Like marriage palace, gym, theatre, mall etc.

4. Subscription –
They have recurring fee for a service or product.
Like Netflix, editing softwares etc.

5. Resale –
Here we buy a product at margin and sell it on a profit.
Like retail stores, online stores etc.

6. Loan –
Money is given with predefined interest on loan.

7. Ticketing or licensing
For a particular fee a specific facility is provided for limited duration.
Like movie tickets, licence of guns, coupons, discount cards etc.

8. Insurance –
Transferring risk from buyer to seller after charging some amount.
You know there are so many of them around. They are continuously spamming your phone and emails.

9. Capital –
Purchase of ownership in a business.
Venture capitalists and investors.
You need to have good knowledge before you do that.

10. Aggregation
Potential buyers are aggregated in a common place to publicise and create some revenues.
Like trade fairs, conferences.

11. Agents –
They don’t produce themselves. They help produces to reach their customers. Like ad agency, PR agency, literary agents.

12. Lease
In it particular assett is given on a fee to use. After customer goes next customer uses it.
Like boat, castle, car, motorcycle etc.


So, whatever business you do try to know what you are creating.

Also it is very important to notice that we might be missing few more things. Will like to hear from your side.

Inspiration – Personal MBA by Josh Kaufman.
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