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.

Inspiring others

Generally we feels that others are not performing as we would have performed if placed in such a situation. This feeling may be partly due to one’s biased observation. But there may be some truth in the feeling.

I am very passionate about something as I conceived it want it to happen. One has to understand that others may not know the details and for them, it is another routine job.

The question here is can I inspire others to be as passionate as I am in a cause. There are few points one can contemplate in this situation.

1.      Does one care for others

2.      Does one encourage others do something rather than ordering them around?

3.      Does one passionate about the job oneself in order to inspire others?

4.      Is the need clearly communicated to others.

Most of the issues that one encounters in these questions or discussions pertains to relations rather than knowledge or skill. This is to be understood, before one tries to inspire others. I recently read a good example of this behavior, narrated by APJ Abdul Kalam. He was the team leader for Satellite launch vehicle project. When his first mission(launch satellite launch vehicle)  was a failure, his boss handled the press conference taking the blame. The next time when the launch was successful, his boss made Kalam go and chair the press conference.

Thus one can inspire peers, subordinates and children with one’s attitude.

Different way to coach

An often used format while coaching anyone, specially children, is to give the answer so that the child can get a quick gyan. Is this always appropriate?

When someone gets stuck with a problem and comes to a person for advise, generally the advise is dispensed generously, giving all possible solutions. The person who gets stuck chooses a solution and gets one’s task done.

For example, if my son comes to me for help to write a composition on say a cow, I can easily recite some 10 lines about a cow and he can write them down and the job is done.

Is there any issue with this method? When he has to write the next composition, he will come to me and I will have to help again, making him gradually dependent on me.

Is there a better way?

As a popular saying goes, donot tell when you can ask a question.

I can think with him to get some points for his composition, at the same time I can develop the thought process in him  by choosing appropriate questions. Thus, he will complete the composition but also learns the process by which one can complete the task at hand.

The above may be a very trivial example. But the process can be used in many situations. Thus one can inspire a peer, child or subordinate to think on his own for a solution.

This, I found was most effective with children and after sometime, the children will become really self directed in many routine tasks.