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.

Investment on a house.

It is a standard view in India that real estate is a safe investment. This view can be either justified or countered taking various aspects of the transaction. Thus one has to understand various aspects of the process and decide for oneself.

Recently I was party to a property transaction. I did not have clear understanding of the whole transaction before the transaction. But I could understand some aspects of the process. There are a few aspects to be understood for making an investment in house property.

First the reasons why it is considered a safe investment.

1.      The investment is in a tangible asset, which appears to appreciate in value over time.

2.      Government provides some tax incentives on interest and principal repayment of a home loan

3.      The family can enjoy the asset

4.      Real estate prices are rising beyond expectation in India.

These are true and there are many more arguments which make a real estate purchase a logical buy.

But one should not think that it is a panacea. Also it is not a one size fits all solution. The reasons are as follows.

The asset is tangible, but illiquid. It requires lot of time to liquidate the property, if required. Let me quote an example. My friend was trying to dispose his house for 2 years. He was not successful. He could complete his transaction after 2.5 years after he reduced the price. This brings us to the other related point. It is a problem as to how to value the property. There is no reliable value. Government price is below the market rate and the price suggested by broker is on the optimistic side. One needs to do lot of research to arrive at the right price. Else, the sale/Buy may not take place.

Another unsupported view is that real estate prices keep increasing. They were for a decade or so in the past. Currently he rise is not spectacular and there is no guarantee that the rise will continue.

Tax sops are real and one can use them to one’s advantage. Also, if one is staying in the same house for which he is paying EMI, the payment in EMI can be partly compensate by rent he pays for the accommodation.

Thus one has to consider many aspects before investing in real estate.

However, if one understands the implications, one can utilize real estate to one’s maximum advantage.