Experience with Children

Are children asset or liability.

Once can argue both ways on this topic. My personal belief is that we can make the children what we want them to be, to most extent.

In dealing with children, the theory about situational leadership helps. In that theory the point is that on needs to act as per the level of one’s subordinate to lead him/her. That means one style of leadership will not work in all cases.

Similarly, one has to behave with children differently at different times. But the behavior should be consistent. Let me explain. One can point out issues in a child’ behavior. But few precautions will help deliver the message firmly but in a friendly tone. criticize the act and not the actor. Also don't use corporal punishment. This type of behavior help developing bond between parents and children.

Now a days children are getting exposed to life experiences from an early age. A parent can help them further if he/she creates more and more opportunities in that direction.  For example, letting them take (minor) decisions. Let them go out and purchase things on their own. This will teach them the way world works. A parent needs to be ready for some loss in the bargain.

Children can be used as good learning tool. If one discusses various topics with children above  15, one gets good inputs, which a parent can use.

Thus it all depends on how one reacts and how one uses children to mutual advantage, that determines relationship with children.

Lastly one has to respect a child’s privacy. This is important because, every one has his own secrets and others need to respect that space. This will not be a major problem as long as healthier bond exists between child and a parent.

Many of these methods, I used in my life and the response or result is very satisfactory.

Frugality - In day to day life.

One route to wealth is frugality. Frugality, as I understand is reducing personal requirements to the extent possible. Don’t get me wrong. I am not hinting at renouncing all worldly pleasures etc.

All requirements, I feel, can be splits into wants and needs. Needs are essentials which can not be foregone. For example, food, clothing etc. Then wants are things which are good to have, but not essential. For example, one can have a decent clothing which is a need. But designer wear is want.

I think, many of us confuse one to the other. A car can be requirement(this itself can be a point of contention). But car may be required, to meet certain social status norms. For that one can spend a reasonable to unreasonable amount. For a newbie, an entry model car may be sufficient. But if one opts for a sedan which can be 2-3 times the base mode, one has to finance it from one’s resources. Thus, one needs to differentiate between wants and needs. Another aspect which skews our judgment in this connection is societal pressure. When a colleague at a similar level purchases a bigger car, one things(falsely) that he too show off his wealth.

When one takes a purchase decision, one can think if one can get the same service with a lower price else where. This search takes time. Thus, one needs to control one’s urge to buy something on today basis. Generally, one gets a better deal, if one studies the purchase and takes an informed decision. However this is not required for all purchases. If I want a pen for Rs 10, spending an hour  researching  may not be worth it. Thus one has to optimise and use this technique only where substantial gains are possible. Routines help in this situation. Zero down on some brand of pen, paste, rice etc and purchase same brands for purchase till one gets some issue with those products. This will help save lot of time in regular purchases. One can counter this, by saying one misses variety in this process. But I believe, that will be a minor price to be paid for the time saved.

Then comes high value purchases. These are the situations where one can save substantially by proper research. It is quite possible that we go to a supermarket and like a fridge or AC. One way to go ahead with purchase is to book it immediately. I follow a different way. Once I want to by some object, I research about various brands comparing them on factors like cost, maintenance and service levels. There are many websites which provide this type of services. One can make full use of them. Once service level and maintenance issues were understood, one can check the lowest price of the piece on net. There are many sites which provide same object for different prices and one can chose the lowest one. When a standard object is purchase(LG 1.5 Ton AC), the item will be same across distributors and some could give discounts based on their logistical efficiency. Currently, the online stores are providing lower prices compared to brick and mortar stores.

This process cannot guarantee purchase of a good which lasts for a very long time with zero maintenance. Same is true for immediate purchase mentioned at the beginning. However, this process can  reduce occurrence of such incident. However, this process needs some effort from individual.

Also, continuous check of one’s purchases should be done, at least till some control is achieved. For example, I reduced non essential purchases reasonably and now my month end surplus(salary – expenses) is generally constant. I will route this amount to investing for the future. This worked for me quite well.

Please comment if you have some different views on the topic or the process.

Air Conditioner

Would like to share my experience in purchasing an AC.

Two years back, I thought of purchasing an AC. As always, I started researching for good brand and service factors etc. Then I stumbled upon the BEE rating.

This is the energy efficiency rating of the machine. The agency(BEE, in India) compares similar objects in a category and rates them based on their energy efficiency. The categories include AC, Refrigerator etc. The rating is in the form of stars from 1 to 5. The higher star rating the better, meaning it will be able to do the same work with less energy. Of course, the higher the star rating, costlier will be the object.

I started comparing various brands on the BEE scale and price. There were many suitable ACs which came up in the analysis. I was tempted to go for the one with highest rating, though the price is more. This is with a view that I will be able to save energy and money on a monthly bill.

Then I looked at the BEE efficiency calculation and their saving numbers. They take 8 hour of operation per day and 365 days a year. This may not be the case for many. With the current auto switch off models, one can program the machine to switch off in 3-4 hours in the night and can comfortably sleep the whole night. Also many may not use it for 365 days a year.

After this analysis and understanding, I settled for a 3 star AC of a brand. Now after two years, I am happy that my understanding is correct. We use the machine for about 6-7 months in a year and about 4 hours in the night.

This input on usage was not available anywhere, while I was researching for factors to be considered.  Hence I wanted to write so that this is known to all.

Health

Health is becoming an important concern for each individual now a days. Untimely deaths in close circles and articles on net/papers are increasing this anxiety.

But there is no use worrying about one’s health. What is needed is positive action. How can one start?

First one needs to take stock of his/her situation. On good starting point for this will be a periodical medical exam. If one did not get this done till now, this may be a good time to start. PME and subsequent consultation with a doctor, which is currently being offered by many medical centers, can help put one’s health in perspective.

There are few key parameters viz  blood analysis(sugar, Lipid profile), heart functioning etc.

Normally, in medical consultation, doctors tend to give a brief overview of the problem and more about the precautions/steps to be taken to alleviate the condition. One needs to question the doctor to understand one’s condition better and what various test results signify. This will slowly make the person able to understand the test results.

Next, one can make a plan, to prevent one’s health from deteriorating or maintain good health. “Prevention is better than cure”. One can anticipate the age related issues and take precautions in advance. Life style changes form an important part of this action plan.

Starting from early thirties, (if one had not already started), one can make exercise a daily routine. Initially, regularity will be a problem, but over a period it improves. One can add various exercises for various body parts and rotate the exercises so that one does not feel bored.

Then comes healthy food. One needs to temper food, as one ages. It will be better to reduce carbo hydrates and compensate with likes of sprouts etc. One should take care to take sufficient quantities in regular intake lest one tends to snack on un healthy items between meals.

Good exercise regimen supported by healthy food will see one through in middle age. But making these a habit takes time. One needs to be patient and has to keep working on these aspects to gradually improve the plan.

Once a reasonable level is achieved in this, one can work on his spiritual side. Controlling extreme emotions to the extent possible, cultivating love for all etc improves one’s outlook and makes world a better place.

Thus one can gradually work on  oneself, keeping in view long term goal of a healthy life.

Art of wealth creation

In a wealth creation journey, different people will be at different places. A young person who joined a job newly is at the beginning. Middle aged person should be anywhere from beginning to the end. Only the person knows at what position one is in. One has to understand this first.

Then comes the requirements/goals. What are the objectives for which one is saving or creating wealth. The answer that easily comes to the mind is retirement. There can be/ will be some more goals one feels one is responsible. These are to be identified. Of these, retirement corpus is sacrosanct. One should plan to get reasonable corpus to see him through his retirement.

What is the corpus required for this? A reasonable estimate will be about 15 times annual current income. However, one has to estimate for himself and plan for the corpus. It will be better to err on the higher side. This is because the costs are continuously increasing and having a higher corpus will not hurt.  

Next step is to find the resources. First will be the salary surplus. Salary surplus is the amount left over after all expenses. However, it will be better if one controls expenses to the extent possible and maximizes the surplus so that the same can be channelized to wealth. As retirement corpus/goal amounts are generally big, one needs to channelize the maximum possible to meet the goal at the earliest.

For reduction in expenses, one needs to re-look at the expense sheet for a month and see if some of the expenses can be reduced or eliminated. It is a worthwhile exercise as one comes to know what all the expenses one is incurring in the first place. First step is identification and second step is follow through, to increase the monthly investible surplus.

Once this surplus is obtained, one has to plan for security first. Some contingency fund is required to see one through difficult times. This can be equal to 3-6 months of expenses and stored safely.

Then comes insurance. If the earning person is single, there is no need for insurance. But if one supports a family, insurance will help securing the income source of the family. Also, insurance amount is to be sufficiently large to see the family through a reasonable time.

After meeting these 2 requirements, one can start channeling balance surplus to investments.
There are various ways of investing, depending on the risk appetite.

Will post my thoughts on this, in another post.