Trashing the term insurance plans

While I have earlier reasoned why I am sticking to my Ulip plan, here I am trying to bust the myth that a combination of term insurance and mutual fund is good for an individual.

Lots and lots has been written about Unit Linked Insurance Plans (Ulips) being a bad product as compared to a combination of term insurance + mutual funds. What I tried to examine is if the term insurance products are really that good for an individual. I am not going to repeat the calculations here, since they are freely available in thousands of financial advice sites over the Internet.

You have to necessarily pay to continue with the life cover
Most pure term insurance products are based on the assumption that you will continue to pay for the whole duration of the term. Which means that if you don't pay your life cover will be terminated, albeit after a grace period in which you can revive the policy. While the same revival benefits are available, what is attractive about ULIP plans that after a certain number of years, depending on your accumulated fund you can withdraw enough to actually pay the Annual Target Premium (ATP).

Loss of capital
Pure term insurance does not give you any maturity benefits. Which means once the term is over and the life insured is still alive, they will thank their gods and won't even say a good-bye to you. They have pocketed your money, but no thanks. In case of ULIPs, after deducting the mortality charges the rest is invested, so you get back something.

Nobody buys pure term insurance
Yeah, that's true! And not because we are not educated, but because we are not financially educated and we are hell lot emotional. So when a person is faced with loss of capital, they tend to go in for money-back plans, endowment plans, etc. Such plans have a fixed term and the insurance house may declare bonuses in between or promise a lump sum amount at the end. People like such products because they want to be able to insure that their children get the education they want, or their retirement funds are guaranteed. If that is the case then why waste good money on such traditional products which promise at the max a return of 8% as opposed to the equity linked product which can potentially give a higher growth.

Taking advantage of your short-sightedness
No doubt that the way some of these insurance products are positioned are in a very bad taste. What the general public must realize that Ulips are long-term products as opposed to mutual funds. Even if you are going in for the equity linked saving schemes (ELSS), it's very easy to spend the money either because you want to buy something, or some emergency has arisen for which you need funds. But in case of Ulips, its a yearly or some such periodical payment option. Now most generally people have the insurance payment budgeted over and above the emergency funds. But how many people budget investment?? And thus it becomes very easy to spend that money that you get from the mutual fund. It is the same reason why I dislike the money back plans amongst the traditional insurance plans. And the this thing as a whole is detrimental to long term wealth building, which many of us are not able to see for us.

Read the fine-print
The pitch that any financial planner will make to you is, ULIP's are high initial cost products, almost in the range of 30%-65%. Now if you add the power of compounding to it, it represents a huge loss of income in one's lifetime. Well, those figures are wrong. Any good insurance house would have charges in the range of 40% and less and that too for the first year only. And it's not as if they sneak out that expense. It is clearly mentioned in all brochures and illustrations that they come out with.

The conspiracy
Yes, I believe that there is a conspiracy by the financial planners and mutual fund houses. In recent years the growth of the market linked insurance products have managed to attract more capital than the regular mutual fund industry. In fact this debate started when the Indian government decided to increase the limit on tax saving insurance premium payment. Earlier as per the Indian Income Tax laws, a yearly payment of Rs. 10,000 only was tax deductible under premium payment for insurance plans while it was higher at Rs. 30,000 for equity linked saving schemes. Then the Indian government went ahead and clubbed both under the same bracket and raised the combined limit to Rs. 1,00,000. Now the mutual fund industry saw red all over. Then somebody comes along and suggests, "Let's build a cartel of financial advisers who will keep trashing the ulip products and simultaneously build the reputation of the mutual fund industry." Voila! and that day onwards it has been that way.


My 2-paisa conclusion: Long term wealth building is all about controlling your emotions and getting educated in finance. It has nothing to do with which product you choose. Even the greatest of all investors and father of value investing, Benjamin Graham, suggested that you have a certain percentage of your portfolio in high grade bonds. Start early, make a plan and stick to it! That's all that is there to it.

The Worst Mistake In The History Of The Human Race

That's the title of a paper by Jared Diamond where he exposes what has been held sacrosanct for centuries - agriculture - as the worst step that mankind took. You can read the pdf here. The article in itself was published in 1987, but is seminal in its approach, for me at the least.

From healthy food to malnutrition - In today's age, the remaining nomadic have a more protein and fibre rich diet as opposed to a carbohydrate diet that our staple rice and wheat provide. Also, since we are totally dependent on a few varieties of food, during a famine there is lack of food as opposed to the nomadic who rely on more sources of food that we could possibly imagine.

From tribes to kingdoms - When it was cult of the hunter/gatherer, there could be no one who could command over the other as a parasite, since there was no concept of stored food. Each tribe fended for itself on a daily basis.

And then there are arguments that farming is less time taking. But statistics reveal that an average hunter/gatherer works less than 20 hours for its food needs, as opposed to the farmer. Also art. The progressivist view keeps that art flourished because we went farming. But evidence is in place about art existing even before farming. Given that these days preservation methods have become better, but that is due to technological improvements and not due to agriculture.

The article is an eye-opener. Read it. Opens the mind in a different direction.


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The article was sent to me by a friend of mine, who is leaving to pursue a phd in economics. Ah! the life of an academic. I also have such plans but it is going to take some time to materialize and I have calculated the financial implications of such academic pursuits.

Home - Buy or Rent??

For every educated aspiring middle class Indian home ownership is all about the attached pride that comes with it. I can just imagine having a nice little spot that I can call my own and preen when others go all gaga over small little embellishments that you have made to your living room and your own personal garden (sigh!). But then soon as we remember the phrase "middle class", realization dawns upon us and we set out to slog the hours of youth away in saving up for that all important initial down payment for the loan.

With hope in my heart I searched on the net about such discussions. I came across a very good illustration on the topic on rediff money. Here's the gist of the calculations:

• Property value (now): Rs. 25,00,000
• Rental value (now): Rs. 13,500
• Rate of inflation: 5%
• Increase in rent on a yearly basis: 5%
• Investment return: 8% (that seemed a little low!)

Additionally the author has considered property tax, and lots of small things. In the end the net outlay on rent is Rs. 46,19,303 while if a person were to buy the house it would cost him Rs. 74,29,300 over the 20 year period.

I just added a small little stuff to the above calculation. Effect of investment of the difference amount in a investment opportunity that will earn me an effective rate of return of 12% (the author assumes 8%). Also consider that the rent goes up as mentioned above, but the EMI on the house loan (calculated to Rs. 22,022) remains same. So in the first year, the monthly saving would be Rs. 8,522 (Rs. 22,022 - Rs. 13,500). In the

• 2nd year - Rs. 7827
• 3rd year - Rs. 7138 and so on...
• ... and becomes negative in the later years as the EMI stays constant but the rent keeps on increasing.
  

So compound all the positive and negative cash flows over 20, 19, 18 ... years and so on. I ran the numbers in an excel sheet and I came up with an extra Rs. 32,00,000 (approx.) at the end of the 20 years. And I think that's cool change. So the total thing adds up to the same in terms of valuation. But consider that in the rental scenario, you also have Rs. 32,00,000 as liquid cash whereas in the home buy scenario you have a home to call your own.

And that is what it all boils down to in the end. Human emotions. When you buy a home you are not effected by external factors such as increase or decrease in real-estate prices or corresponding rental. Also it serves as an important strategy in your asset allocation. Plus you tend to take care about your home and feel more comfortable with investing in whatever embellishments you want. But be aware that you need to pay for the electrical and plumbing jobs all by yourself as also property tax and lots of small things will need to be done on a regular basis, like painting it, etc.

On the other hand if it doesn't matter to you where you live, you are probably better off renting a place to stay. In case you find that the locality is not suitable to your mental makeup you can go ahead and change whenever you want. If you suddenly don't like the paint work on the walls of the apartment that you are living in, you can change. And no maintenance headache. Add to it that if you shift your job in the next 4-5 years and the property market does not rise, you are doomed to a loss considering all the taxes that need to be paid. But given the current real-estate market in India, where property and rental values have gone up 5-10 times in the last 3 years, you can make a killing of an investment.

In the end, buy a home because you are reasonably sure that you want to live in it for your lifetime. But don't buy a home because it can appreciate in value (as your broker might tell you) because you are going to live in it, and any appreciation is immaterial for you (unless you sell it and make a move). And all said and done, I will buy a house given the opportunity and when the time for such a decision arises.

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Besides the above article from rediff money, I also found an article in MSN Money. There are lots of discussions in blogs about the same.

Which Mutual Fund to buy??

Usually this question would elicit a smirk from most that I interact with, especially those that have started in their journey in the stock market and have had the beginner's luck. Not forgetting those that have made actually made quite a pile in the current bull run of the markets! But most of the these are such who are a product of the era of the market rising beyond the sky phenomena. For the more seasoned investor it is a serious consideration, especially if you belong to the category of people who don't have a job in the financial industry and also don't have much time to invest in learning the actual financial ratios and techniques for asset valuation.

While I also do belong to the fast driver category with high risk taking capacity, I needed to ponder on the question when I was asked for advice on investment avenues recently. One such was a friend of mine and another a colleague from work. And I was in a fix. While I am aware of some potential high growth stocks, when it comes to belting out the advice I am not ready to take the risk on another's behalf. So I did some research on their part and came up with a equity oriented mutual fund portfolio. This discussion does not include asset allocation strategies and risk mitigation. So I will not be taking up the case of debt oriented MFs or Exchange Traded Funds (ETFs). Also the recommendations are based on today's date and may be revised only after a year or so (essentially keep track but don't fret).

What is a equity oriented fund?
An equity oriented Mutual Fund has the objective of investing 65% of its fund portfolio in equities at the least, and rest may be invested in money market instruments or kept as cash, depending upon the objectives of the fund and the fund management capabilities of the fund manager.

First off the recommendations and then selection criteria will follow. Also given alongside is the value of Rs. 10000 invested 5 years earlier in the funds, as also the current entry loads.

1. Reliance Equity Growth Fund 113820 2.25%
2. SBI Magnum Contra 107550 2.25%
3. Sundaram Select Midcap 103170 2.25%

Criteria for selection

• Equtiy Diversified - Within equity oriented funds, there are diversified equity funds, midcap/large cap funds, sectoral funds, specialty funds and other flavors. With all the flavors except the diversified you are taking a call on a particular sector of the economy or the type of stocks that the fund would invest in. This is a very good option for those that understand macroeconomics, and those who can identify the peak and bottoms of a sector. But if you are a long term investor, it is necessary to realize that no single sector keeps growing. Almost all sectors are cyclical in the sense that they keep going up and coming down. The best example are the automobiles, cement, steel and such other sectors. So when the objective is diversified, over the long term the fund manager has the freedom to make the call on the up and coming sector.
• Age of the Fund - All three funds are more than 5 years in operations and have therefore proved their mettle. In fact they might have even undergone change in their fund managers and yet have been able to maintain their performance. Goes to show the strength of the underlying analyst team
• Assets under management - All of the above funds have more than Rs. 1000 crore under their management. This is also important, so that the fund manager has enough cash to take advantage of any opportunity arising out of market movements. For example if their is a market crash, most people would like to redeem their funds and get it in cash. But the fund manager might be able to identify good valuations of a company that he wants to buy. Large assets under management (AUM) allow the fund manager sufficient room.
• Time - I have assumed that the person investing in these funds has a long term horizon, say more than 5 years (although 3 years is also good enough) such that any sudden downturn due to sectoral calls, fund manager change or such external factors are nullified.

Mode of Investment

• Systematic Investment Plan (SIP) - If you don't have money right now but will have it regularly in the future, this is the best option. Through SIP, the law of cost averaging will help to reduce the purchase price of the units in the fund.
• Systematic Transfer Plan (STP) - If you have a lump sum amount to be invested, it is best to follow this option. In this, the initial money is kept in a liquid fund from which money is withdrawn into the primary fund at pre-defined intervals (monthly recommended). This helps in generating more than the interest rate offered by liquid savings in the bank.

After having said all this, I am sure there are people who are ready to take some sectoral calls. For such people I recommend the financial services sector, the power & energy sector and the darling of all - the real estate and infrastructure sector. For such, I can recommend (with a 3 year view)

• Reliance Diversified Power Sector fund
• JM Financial Services Fund
• UTI Infrastructure Fund

Actually there are no real real-estate funds, except those that are there with high entry barriers (minimum investments in lakhs of rupees).

Also what ever fund you select, it's necessary that you go in for the growth option. To find out the advantages of growth option over the dividend option, read this.

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Disclaimer: The risk in the recommended portfolio is borne by the investor, although if the investor is ready to share a part of the profit with me, I have no qualms in bearing the risk also.

Dual Monitors

Recently my organization came up with the idea to provide dual monitors at work. It seemed to bring some cheer to the developer community in my company (it was announced at a gathering). I joined in polite applause while my mind clamored to list the actual productivity gains if any. Talking to other people did not elicit much information besides the most obvious ones.

Then I did some research on the world wide web and found some interesting articles on the subject. First and foremost, dual monitors are old hack. People have already experimented with 3 or more and the debate has died down mostly. Yet since this is the first time that I may have such an experience (yes, my company is still to make it actually come true), I thought it would be interesting to find out how others use them simultaneously.

Since the topic is on usability, who better to know and design than Microsoft. While there are the hardcore developers who would differ, this article from Microsoft is good enough for us other mortal developers. After that I went ahead and find out how the developers actually position their monitors and what kind of data they keep open. Some examples:

Most of the time when I am writing code, I am referring to a certain design document or probably another piece of code with the global variable or some such stuff. With one monitor, I need to always do an ALT-Tab to go to the data, memorize the stuff, come back to the primary app and code and then again go back. Imagine with dual monitors, I will just need to keep the reference data open and probably just shift my glance or at worst move my head and I will be able to get the information needed. A better example is when you are trying to learn something new and you need to constantly refer to the tutorial and also run the application simultaneously.

Also the development environment that I use (and most others) have a lot of small panels within the main app, such as directory structure for the code, page hierarchy for the file, attribute options for UI development, compiler messages, etc., etc. With all these options, sometimes the actual code view becomes cramped and I need to shove them under. And then soon as I change to another page, I will need to pull them out. What a waste of time. With two monitors there is essentially more space on the desktop, with the full application window spread over two displays.

Another simple use is to keep your music, email, calender and such other app open in the secondary monitor. For me specially, I like to listen to music all the time when I do serious work. And sometimes I keep the playlist running just because I would need to shift the window focus to another, search for a particular song depending on the mood and then come back to the app. Having two windows just simplifies the task by letting me glance over the playlist which I have given full real estate to in the secondary monitor and select the song that I like with a simple mouse click, each time, every time.

The people who find this most useful are gamers, and more specifically those that play flight simulators and such. They can keep the different instrument panels on one, the viewfinder on another.

Well from all that I could read and gather, it is supposed to increase my productivity, ergo my company's bottomline. Studies have proven that the actual increase in productivity is an average of 30%, while ranging from anywhere between 9%-50%. And therefore it leads to me to conclude that it would also effect the dotted line on my payslip where it says net cash in hand. Cheers!!!

If you want to read more of the actual developer discussions (they are pretty old by the way), you can find them at slashdot, lifehacker , codinghorror, and many more on the web. Also there are already available wallpapers for such dual monitor setups. Wonder how they will look with the patch of the display in between.

Also reading those articles also pointed to some problems. Highest in the list was neck strain, but I think that would come from a less ergonomic arrangement than advised. Also people had problems with the setup, working as they were with different graphics cards.

Waiting in anticipation for the actual implementation of the promise.

What Does A Billion Dollars Every Year Mean??

Recently I had a small discussion with my teammates where I was struck with the idea, what would I do if someone were to give me a billion dollars every year for the rest of my living life. Or more generally if I had all the money in this world given to me legally, how would I live my life?? What is the activity which would keep me engaged.

Here it would be safe to assume that the money would definitely fulfill all the materialistic needs and provide financial security. So it eliminates all money gathering activities such as a job, running a company, playing the stock market or value investing if you prefer. It also provides a home, or several if you prefer. You can have a fleet of servants of all kind (your personal butler, cook, secretary, nurse, driver, pilot). Finding companions won't present any difficulties. Or if you prefer a harem in the style of kings. In fact, it will easily fulfill all the tenets on the bottom three rungs of Maslow's hierarchy of needs. (I read about it here) You can go so far with the money as to provide comfortably for all those you near and dear ones that you would be working for also.

So what we have here is not what you would like to buy or splurge upon. You can buy that jet you lusted for, or eat and drink in the most expensive restaurant on a every meal basis. But will it keep your attention engaged. Most of the times we want to do certain things because we see the richer doing it and by virtue of it being out of our reach, something like a trip to the outer space by Tito. But once done these things loose their charm. But then again you can gamble all your money away every year, although chances are that probability will work against you in that case and you might end up earning more. And let's keep things like charity at bay.

While the rest had differing views on what they would do, it set me thinking. I have always been fascinated by books and of my life's aims remain reading, studying, teaching and doing related activities. The question that arises is: will it be enough to engage my attention?? I embark on the quest to list such activities.

• Gyaanpipasa (thirst for knowledge)- as is obvious, it tops my list. But with that amount of money I can embark on doing it in the style of Akbar the great, one of the greatest rulers in the history of India. He had in his court a bevy of great minds, each a champion in his field. What greater opportunity can be there than to learn from discussion with such people. Obviously, it would require me to raise my standards.
• Travel - and that too possibly on a bike, preferably one from the touring family of motorcycles by Harley-Davidson, that has each undergone proper homologation for each individual country of travel.

There are innumerable blogs and sites which come up with lists of 101 things to do. Yet reading each one of those shows that they all can be done on each consecutive day and all the activities would be finished within a year's time frame at the max. What do you do then?? After much racking of my brains, I am able to come up with just the above. Are there any others that you can come up with?? Would love to hear such ideas.

My Life Plans and Their Financial Implications

I have come to realise that it is not humanly possible to do everything you want within one lifetime. And according to the hindu philosophy of rebirth, your incarnation in the present human form is a result of crores of births and even more good actions. So it becomes essential that you if you want to enjoy your time on this earth, you plan accordingly. Obviously there are those that would say that you don't know what would happen to you the next moment. But my point is - what if you were to survive the next moment? Would it be not better lived if you had planned on how to spend it and accordingly enjoy it. And as everybody knows, one joy leads to others, and the big cascading effect.

Leaving aside the spiritual, I am planning for the materialistic joys that I may be able to enjoy in the future. And for every materialistic joy in this world I would need money, the medium to buy everything possible on this earth and hopefully a medium which will not change in my lifetime. So in all my calculations below I will assume that the rate of inflation remains at 6%, which for the long term is a good enough assumption. I would also like to assume a min 6% increase in my income on a yearly basis, such that it keeps pace with inflation at the minimum

First the very distant future

I would like to move away from the active corporate life in the early 40's and shift into an academic pursuit of knowledge and sharing of the same. Making it more definite, at the maximum age of 45 I should be in a university and pursuing my degree in philosophy, economics or english literature. Hopefully at that age I would be happily married and have a child. So I would need to provide for them and also have enough money to be able to give up the high earning corporate life and make the transition to the life of an academic.

So going by the current market scenario, I will take a leap of faith and assume that Rs. 30,000 a month will cover all inflationary expenses for an average Indian family and allow them to live in comfort (and not luxury!). Compound it at 6% for 20 years and this becomes Rs. 96,000 per month. Round it off to Rs. 1,00,000 monthly or Rs. 12,00,000 annually. Now considering all the current monthly income schemes, it is safe to assume that a 8% p.a. income can be generated without much sweat from a decent fund. So I would need a corpus of 1.5 crore rupees to generate the desired income. Now, another another assumption is that of what would be the rate of return on my investments over the next 20 years. It has been seen that a 12% rate of return is an achievable target, even if you are a passive investor. So putting these numbers into a calculator, the magic figure that comes up is an investment of Rs. 20,000 per month in an instrument which would give me a post-tax return of 12%, which is a very achieveable figure.

In my above calcuations I have assumed only inflationary expenses, i.e. things like food, petrol, clothes, some budget for fees, medical expenses, etc. I have excluded all such items such as EMI's for car, house, and any other such things which I would hopefully procure from the extra income that I would get annually. Also I have not taken into consideration that even when teaching I would have at the least a very nominal income.

Now for some magic play with the figures above.


You can find such financial calculators all over the internet. The one from moneycontrol can be found here.

So what do I do with 6% increase in my income that I would hopefully incur. Well that goes into buying that house, the car and obviously the Harley Davidson. Again there is continued inflation even during the post corporate life. Again hopefully the income from academic activities such as teaching would augment the income to beat inflation.

Mistakes to be avoided in an interview

Recently I have begun to interview people for recruitment in my team. Since I myself don't have much work experience, I am clubbed with another colleague of mine for the process. We both as a team conduct the first round and we are typically given resumes of people with similar levels of experience. After having interacted with some candidates, I have been able to reach a particular level of competence where I could recognize the candidate's capacity within half-an-hour.

When I start the process, I am typically looking to select the candidate. So my efforts are directed towards leading the candidate into a successful process. But in the same way I would like that the interviewee also helps by picking up the clues and making an attempt. So what would be a put off in an interview for me:

• Poor handshake. A firm handshake shows signs of confidence. If the interview is over phone, add the name when you are greeting the person.
• The interview starts off with the question if you are interested in any particular subject or domain. At the least, have one particular choice. Don't say, "I like all of them" or "I know a bit of all of them." That's like saying, "I am super brilliant" or "I am the jack of all trades." If you are super brilliant, go do research: don't waste your time here. If you are the jack of all trades, go somewhere else. A simple response can be, "I kind of like all of them within the domain, but am particularly interested in so and so..."
• Long resumes. I am not going to prepare a dissertation on the history of your work. Its good enough if you can tell me in a few words what is your area of expertise, your job responsibilities, and probably your interests if you are a fresher. Some of the best resumes that I have seen have completed themselves within two pages. And please use proper English. Spelling mistakes are a strict no-no.
• Don't rush your answer if they are half-baked. If you are not sure, ask for a hint. And listen carefully to what the interviewer is saying. Find out if the interviewer is trying to hint that your answer is wrong or is on a track that the interviewer does not like.
• Being late or not receiving the call. Puts me off no end. If you are going to be late or are not in a position to take the interview at the appointed time, call me and let me know of the situation. Almost always I am ready to accommodate, unless you are doing the same for the 4th time in a row.
  

These above are very basic things which I think should be taken care of, and does not require much effort. These are very rookie mistakes, and reeks of immaturity. Once you have mastered these simple things, you can go in for more advanced approaches such as influencing the interviewer with behavioral techniques, getting your resume written professionally.

Welcome to the real world. We've done it.

Those are the words from Morpheus to Neo and Trinity when they are able to bring out Neo from The Matrix into their ship Nebuchadnezzar in the real world. When I entered into corporate world along with my other fellow college mates, I could almost equate my feelings with this awakening, this enlightenment.

Back in college I was the absolute king of my domain. Nobody disturbed me in my stupor and nobody cared, for everybody around me was in the same state or maybe greater. Oh, I enjoyed the discourses that I gave to my disciples (seniors, juniors and fellow classmates). Put me in control, brought a newer understanding of the basics and more confidence in self. The fame, the adulation, I lapped it up all.

I began differently from others in my batch in that I knew more about certain aspects of academic life that others didn't and took some time to realize. For example, attending classes that too sitting in the front row was not going to fetch anyone any marks. For example, completing all your assignments before time was a mark of nervousness on your part. For example, last moment cramming was of no use. You just got to know the brief description of the lessons, which you can get anyway if you apply your common sense to it. For example, you don't need to be a genius to complete an experiment in the physics lab. All that it takes is a bit of patience and perseverance. For example, every senior knows that you need to earn the respect of the junior to really be called a senior behind your back.

Anyways, armed with what little experience I had, I started a little ahead. So my full concentration went in catching up with my reading which had been languishing a bit. Obviously reading "The Economic Times" had an attached snob value in the first year. Am a bit boisterous in the fact that I don't easily make acquaintances. But with my skills and obvious disdain towards a structured environment, I attracted people filled both with acceptance and curiosity with what I was. With this I participated in fests, organized them and in general went around doing pretty much what I liked. Alongside I started with a bit of experiments on robotics, programming and design.

All above just goes to show that I grew quick and enormous within the span of four year in college. Armed with more knowledge about technical and people stuff, I became confident in being able to deal with the big bad world outside. Why bad?? Because every senior I talked to would be cringing that it not a bed of roses. You needed to trudge and plod to make your way, and there was no fun in it. But in my mind I was this super being who would just blow away walls of rock with a small breath.

That was until I actually stepped into the corporate world. One thing that I must say before I proceed is, from day one I was treated like a true professional. No longer was I a student who would be spoon fed lessons and excused for mistakes and shortcomings. There was no sympathy, only praise and encouragement.

It all started with what is called as "boot camp". A overall training in all technologies that I would be dealing with during work. It began well with me trying and succeeding in capturing the lessons, asking the right questions and completing the practice problems. Then as it gradually built on the previous lessons, it took more effort on my part. By the time it was the last few days of the training period and the last series of lectures, I was ready to give up. Even the instructor then informed us, "Even the most experienced programmers take away lessons from only the first 2-3 days of this lecture series." Notice the change in the outlook from college. Where in college I was onto ideas at a higher level of abstraction here I was trying to unveil the abstraction of Java and Oracle Application Framework classes.

But all was not that bad. Along with hard work came parties, mostly on a fortnightly basis. People unwound over dinner and drinks. Talk varied from the current movie to the hottest gossip in the team. Realization dawned that these people working with me were just another bunch of normal human beings. Only the level of commitment was higher and focus was stronger. I was among a group of go-getters. There was one nagging doubt. I had made my path laterally, in that I had never participated in the direct race path but still managed to come up tops, getting what I wanted and beating others to it. Here there was no such scope. There was just that one thing that you did and no other way. Then while talking to someone and reading more, I knew work was not life. Work is what provides the fuel to run the vehicle of life.

The team that I joined had recently faced a lot of attrition, so a major workload befell us new employees. Workload from my perspective and that of people fresh from college. It took some time, patience and struggle to do all that was given. It helped that I had an amazing work environment. First names for all (a trend that I started in college, although some preferred otherwise). People coming over to your machine to show you the works. Personalized training for the new employees on the working of the product. Most of all free internet (althought I kept it at a minimum by choice).

Now after almost 9 months (significant, yes??) I have settled down. Work is fun and life after work is all relaxed. I have been traveling around a lot. Based in Hyderabad, all major cities in the south - Bangalore, Chennai, Pune, Goa, etc. - are within overnight travel. My company pays me enough so that I buy books whenever I please (my roommates are worried at my thrift in this).

Conclusion: There is no conclusion. The journey has taken a new turn and is starting to be fun. For all people in college: come, see and absorb. Initially it will just as if you are in the first year of your college. But with the maturity that comes with age things will settle down quicker and then all the fun begins. Yet there are time when I wish I was back at college and the lounging around all day, reading, thinking, talking, dreaming. Someday maybe again, but not yet, not yet.

A small anecdote to end:

Looking for the Best!!!!

A group of alumni, highly established in their careers, got together to visit their old university lecturer. Conversation soon turned into complaints about stress in work and life. Offering his guests coffee, the lecturer went to the kitchen and returned with a large pot of coffee and an assortment of cups : porcelain, plastic, glass, some plain-looking and some expensive and exquisite, telling them to help themselves to hot coffee.

When all the students had a cup of coffee in hand, the lecturer said
"If you noticed, all the nice-looking, expensive cups were taken up, leaving behind the plain and cheap ones. While it is but normal for you to want only the best for yourselves, that is the source of your problems and stress. What all of you really wanted was coffee, not the cup, but you consciously went for the better cups and are eyeing each other's cups."
"Now, if Life is coffee, then the jobs, money and position in society are the cups. They are just tools to hold and contain Life, but the quality of Life doesn't change." "Sometimes, by concentrating only on the cup, we fail to enjoy the coffee in it."

So don't let the cups drive you...enjoy the coffee instead.

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This post was written for the digital edition of a publication from my college, around Mar 2007 with the current student and alumni as target. Cross-posting it here.

Bongs - A Thesis (an essay in understanding the myth)

There are two kinds of Bengalis that I know. Probashi or Expatriate Bangalees, a fairly large and diverse group about which I can't write as I am one of them. And Bengalees who are from Kolkata. This group is incorrectly known as Bongs, as they are merely a subset. However, this is the only group which matters. Gokhale told of them, long years back, 'What Bengal thinks today, India thinks tomorrow.' To which Rene Descartes responded, 'I think (today), therefore I am (Bengali).' Like all other Nobel Prize Winners, Oscar Awardees and most successful Indian cricket captains, Rene Descartes was also a Bong (this fact is not known outside of Kolkata).

Physical Description: The Bong has a large head, glasses, glistening hair and dark skin. Older Bongs develop an ample stomach to balance their large heads. This happens by the age of 25. They smell of Keo Karpin. The average life expectancy is 65 years. What is even more impressive is what they do in those years. Outside Kolkata, regardless of weather, sex or age, Bongs can be seen in Monkey Caps. This is a must-have accessory as well as a sign to recognize other Bongs. (please see second update for more). The Bongling can often be recognised in either over-sized or under-sized school uniforms. The Bong mother's second biggest fear (See diet for the biggest one) is that the 'porer bochor o lomba hoye gele abar notun skirt kinte hobe!!' or 'Next year, if you grow taller, we'll again have to buy a new skirt!!' Thus, the school uniform is selected to last at least three years. Thus the uniform sits as conspicuously on the Bongling as the plumage of a macaw.

Early Years : While most Bongs are born with innate talents in singing, dancing, painting, film-making, cooking or embroidery, their creative talents are honed even before they can start speaking. Frequent meets are organised between infants and their successful ancestors and other relatives. MA degrees (preferably from Cambridge , at least from Presidency or Jadobpoor) are displayed over the cots. The infant is exposed to the best of Bengali thought - Marx, Bentham, Kalidas, Tolstoy, Chekov*. This increases the sizes of their heads and the height of their ambitions. Similar examples, though rare, can be found in European tradition as well, like in the case of Mozart. In India , however, Bongs have the sole preserve on such activity during infancy. Soon, when they grow up a little, their characters are honed in the best of schools. Here, I am not referring to the South Points, La Marts, Don Boscos and all. They are important in the nurture a Bong child goes through. What is even more important are the schools the Bong child passes through before school and after school. Many a Bong child wakes up at five o'clock in the morning to attend swimming classes. After one hour of swimming, he attends tennis coaching before rushing off to one of the South Points, LaMarts etc. mentioned above. School finishes by two or so, from where he scoots along to Singing/ Instrumental Music/ Dance Classes, then tuition (for at least three of all five subjects). He rounds off the day with coaching on either Debating or Quiz. Many a Bong mother will carry the child along through this day, feeling equally energised. This behaviour is again not restricted to Bongs. It also seen within kangaroos in Australia who rush along from one clump to another bush.

Growing up: Soon the Bong attains adolescence, doesn't find friends of his age (since everyone is competing for the Nobel Prize or the Indian captaincy) and finds intimacy in conversation in his/her parents and poems of T.S.Eliot and Pablo Neruda. When school ends, they move on to the good colleges- Presidency, Xavier's or IIT Kharagpur. The best of them, though, move straight to Joo (Jadobpoor). However, in recent years, Dilli (Stephen's obviously) is becoming the preferred destination for some escapists. In colleges, they decorate their rooms with books or portraits of Robi Guru (Tagore). On the opposite wall, men would have posters of Che/Maradona and women would have Enrique Iglesias, thus expressing solidarity with Latin American culture. All of them share equal interest in the Bong-Rock (Bhumi, Chondrobindu, Cactus, Pink Floyd, Led Zeppelin and Deep Purple).

Later Years : Bongs mature early. Critics have said that they grow old early, but that is nothing but old hat. Years of toil and Eliot would obviously bestow wisdom. The reason they look older is because the sole purpose of a Bong's life is to win the Nobel Prize or the Oscars (and in recent years, captain the Indian team). With great responsibility comes great age. Add to it the chlorine in the swimming pools and you know why Bongs grey prematurely. As far as their mission in life is concerned, they have been very successful at it. Every Indian Nobel Prize winner has been Bong (the others who weren't don't matter). So have the Oscar Awardees. And most successful Cricket Captains. And Bipasha Basu. Once Bongs have kids though, their mission on life changes. The only raision de'etre for them is making sure that their progeny achieves the heights that they could (or couldn't). Hence, they are mostly found outside of schools, colleges and tuition classes.

Diet: Diet is as important as Robindro Shongeet. There's nothing that a Bong can't eat. However, they prefer protein over other food groups. The largest source of protein for them is fish, then meat, and then mishti (sweets) made from milk. More than fish itself, it is the knowledge of fish which is coveted and enjoyed. Carbohydrates are tolerated if they are fried in oil or if it is accompaniment to fish. Luchis (somewhat like aPuri), Telebhajas (pakoras) and Phuchkas (Paani Puri) are the favoured source of carbohydrates. The young Bengali though invariably always has Farex, Lactogen and Waterbury 's Compound. As far as the most important meal of the day is concerned, please do note that what dieticians have been saying in the last few years, Bongs have known for centuries. Breakphast/tiphphin is an occasion where the entire family comes together, to watch the office-going Bong male and school-bound Bonglings eat. The Bong woman's biggest fear is that 'Shokale bhaat dal mach bhaaja na kheye beriye gailo' or 'In the morning, He went out without eating rice, dal and fish fry.' To round off the calories, Dal is often accompanied by aaloo bhaate, aaloo bhaja, potol bhaaja and various other heartily fried stuff. Not for the faint-hearted.

Mating and procreation: A few Bongs end up being in relationships, which lead to love marriage. This is sometimes shown in movies and song. However, most do not have any such social malignancy and end up marrying the woman of their mother's dreams or men of their father's choosing. This results in mixing the right genes for the next cycle of Bongs.Love marriage, by its very nature, is random. It sometimes results is tragedy, like marrying into another country (most often, India). Hence, it is avoided, wherever possible.

Social Life: Adda, robindro shongeet and cha....Repeat. Do note that the young Bong doesn't have a social life (at least not till he wins the Nobel or gets a Government job). And phootball. The Bongs have had an illustrious history of achievement in football. Every para (neighbourhood) has stories of when they won the World Cup at the expense of the next one. The last time it happened in my parent's para was in 1986, when Argentina won in Mexico . Diego Maradona, who looks Bhodrolok enough, give or take a few lines of coke, scored famously using his hand, a skill which he learnt in Kolkata.Over the last few years, Brazil has been gladdening the hearts of many Zicos who were born in Kolkata around 1982-86. The only team which is not Bong is Germany as they play with more efficiency and no creativity, which thus is not amenable to adda. Do not ask of a Bong doing anything on the phootball field as then the Bong will keep you occupied about Jakarta ,1962. 'Chuni Goswami je Ball tule dilo PK ke. Match-er aagei bolechilo, 'Ekta Ball debo. Daam kore maarish. Gol hobe'.' Chuni Goswami put a football up for PK (Banerjee). He told him before the match itself, 'I will give you one ball. Hit it with a bang.Goal will happen.' Obviously, it is also the crowning moment of Indian phootball.

Habitat: While you may find a Bong in other places (like occasionally in offices), the best time to observe a Bong is in his natural habitat - the best of colleges, the best of schools, the best of coffee houses. It is here that he will tell you about Balzac while she will recite poetry with gay abandon. To mix in with the Bong, apply Keo Karpin to your hair and carry a jhola. Hopefully, they won't notice your small head. Do not worry about not knowing the language as the Bong likes being heard.

Famous Bongs :Many famous Bongs have been referred to in this extract. Hence, this section is used to debunk that big myth about Bongs. People believe that Bong men can't be hunky. If so, then what about Abhishek Bachchan (via mother), Saif Ali Khan (via mother), John Abraham (via girlfriend), Hritik Roshan (via grandmother) .

Bongs in Literature, Film, Art: Everywhere you care to look.

Closing Word : Being Bong at the end of the day is a state of mind. Or, a case of being discovered by them. Best of luck.

I am ready to learn again

Since sometime the comments section on my blog was disabled. While the exact reason cannot be ascertained, it bears mention that I was going through a phase wherein I did not want to learn from you! I was going through a phase where I was trying to learn by reading more than from discussion.

Well it has been somewhat fruitful, as might have been visible somewhat from my intermittent posts. I have been following the most fanciful of all material things: the Sensex from the Bombay Stock Exchange. While I don't profess to know even 10%, I am good enough to find that wealth creation is about changing your lifestyle and mindset, the latter more so than anything else.

Besides that there was the internal battle within self about migrating to foreign lands. And it was not all about the lure of the green lucre. I gradually have discovered that in the enterprise application space I am more interested in the business part than the actual technology implementation. While I can and will write code when required, I somehow cannot see myself doing just that. I have come to realize that it cannot be done staying away from the center of action. So am currently biding my time and building intrinsic value.

This blog of mine will now tend towards my materialistic trials and tribulations. Hopefully the philosophy will remain same.

Financial Dilemma

Recently I have been reading up a lot on the capital markets, personal finance and related stuff. And with this half knowledge and no experience in dealing with live cases, there is a huge dilemma that I have come into.

When I first started to work last year, I was acutely aware that insurance is a must for all middle income groups and the earlier you opt for it, the lesser premium you need to pay for it on a yearly basis. So I went looking for advice and talked to lots of insurance agents, all of whom were interested in selling me only ULIPs (Unit Linked Insurance Plans). Well at that time I took what I found to be the best plan, although all were almost the same. So I took a ULIP from Max NewYork Life.

Features of my ULIP:

• Life Invest
• Premium : Rs. 60000 p.a.
• Sum Assured : Rs. 15,30,000
• Fund Type : Growth (max 70% equity, rest in money market instruments and cash)

So far so good. But then I started reading about personal financial planning, asset allocation and related stuff and some of it has started to make sense. Wherein I landed up in comparisons between ULIP and SIP (Systematic Investment Plan) from Mutual Fund houses. And therein lies my dilemma.

Most of the subject matter dealing with comparisons between these topics advice to take a pure term plan for insurance and put the rest of the money in a Mutual Fund SIP. Essentially separate the insurance component of your financial planning from the investment component. Yet the more I think on this topic, the more I am convinced that for a person like me it is the best investment vehicle. What follows is a completely biased view on why I should continue with my current insurance-cum-investment policy.

• I tend to splurge on occasions. Which means I might at some point of time reach a level of debt wherein I find that stopping the investment option for sometime would help me recover from the debt. And that is the worst mistake that one can do when targeting long term wealth creation.
• Even the growth fund in the ULIP is relatively secure because they are completely governed by strict IRDA guidelines. Now most financial advisers would advice that out of your portfolio of stocks, some should be such that they are blue chip, or stalwarts or similar companies. So while these regulations do take care of my balanced part of my portfolio, it leaves me free to invest in high risk stocks without having to think about mitigating risk using my own judgment.
• In the future sometime I might want to go in for higher studies. Then it will be very easy to cull the investment process and use the money for expenses incurred during the non-income period. Again such a move is not recommended from the perspective of long term wealth creation.
• Different studies for the performance of the stock market over the last century have found that the annualized gain is around 15% on an average. If that is the case, then my insurance house would do good enough.
• There are other aims in my life like traveling, reading. Given a free reign with the money I can very easily divert it to such activities and not accumulate funds at all for any kind of wealth creation.
  

As I sat down to think of these above points, I also realized that there were lots of cons too with this approach. Most notably:

• For an amount of approximately Rs. 10,000 I can get a pure term insurance (an insurance plan that just gives cover and does not give any money back at any stage). So the rest of the Rs. 50,000 can be invested in a good fund which would give far superior returns. But would I put all my money in just a equities fund over the long term and would I be able to select the best performing fund year-on-year??
• The first three years after I go for the tax saving Mutual Funds, I can churn the money into the fourth year. Which leaves me a clear amount for later better investment opportunities.
  

As I was writing this post I also simultaneously watched a TV show on the annual Himalayan Odyssey organized by Royal Enfield India. Realization dawned that wealth creation is eventually about being able to align your psyche to such a goal. While I realize the need to do so, I might not be disciplined enough to keep the approach on my own. I think I will stick to my ULIP, which would enforce the investment discipline in me.

If you are reading this, and the above makes any sense to you, please do enlighten me with your inputs.

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The comments section of my blog is open again !!!