Light Up Your Lives This Diwali

Posted on October 26, 2011 by Ranjan

Happy Diwali to you and your family. May this diwali light up your lives with better health, more wealth and even more happiness.

Diwali means a lot of things to different set of people. While Diwali is popularly known as the “festival of lights” and “triumph of good over evil”, a more appropriate significance for this column’s purpose is “the new year of luck and wealth”. The Diwali festival celebrates the victory of good over evil, light over darkness, and knowledge over ignorance, although the actual legends that go with the festival are different in different parts of India.

Diwali also marks the beginning of a financial year. Stock exchanges in India celebrate Diwali as a “muhurat” day: a beginning for the new year!

How about experiencing Diwali this year?

As we clean our homes, let’s clean our minds and intellects too.
As we wear new clothes, let’s also get rid of our loans and debts. Let’s also get rid of unwanted, disturbing habits of anger, jealousy, worry.

If we really experience Diwali we will succeed in invoking (calling upon) Goddess Lakshmi. Her name comes from the word, ‘Laksh’ meaning ‘the GOAL’, experiencing Diwali (as explained above) will help us reach our goals of life – which Goddess Lakshmi stands for.

Two days after Diwali, we Kayasthas, will settle our old account books and begin new ones, simultaneously let us plan to create new income streams. On the spiritual front, let us settle our old karmic accounts, any unpleasant relationships and begin our relationships in a new, positive way.

We are all aware of the pollution caused by firecrackers, but it is Diwali, we need to burn crackers, so why not burn all the crackers of evil characteristics within ourselves – this burning will in fact purify our minds and the environment.

As we exchange sweets let us also exchange meaningful sweet words, good wishes and blessings.

Once again, I wish that the festival of lights stands for a reaffirmation of hope, and creating a new year of health, wealth and happiness for you.

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A Story about Planning

Posted on October 25, 2011 by Ranjan

Here’s a story. Read and share with me the thing you learnt out of the story.

…There was a country long time ago where the people would change a king every year. The person who would become the king had to agree to a contract that he would be sent to an island after his one year of being a king.

One king finished his term and it was time for him to go to the island and live there. The people dressed him up in expensive clothes and put him on an elephant and took him around the cities to say goodbye to all the people. This was the moment of sadness for all the kings who ruled for one year. After saying farewell, the people took the king on a boat to the remote island and left him there. On their way back, they discovered a ship that had sunk just recently.

They saw a young man who survived by holding on to a floating piece of wood. As they needed a new king, they picked up the young man and took him to their country. They requested him to be the king for a year. First he refused but later he agreed to be a king. People told him about all the rules and regulations and that how he will be sent to an island after one year.

After three days of being a king, he asked the ministers if they could show him the island where all the other kings were sent. They agreed and took him to the island. The island was covered with thick jungles and sounds of vicious animals were heard coming out of them. The king went little bit inside to check. Soon he discovered the dead bodies of all the past kings. He understood that as soon as they were left in the island, the animals had killed them.

The king went back to the country and collected 100 strong workers. He took them to the island and instructed them to clean the jungle, remove all the deadly animals and cut down all the excess trees. He would visit the island every month to see how the work was progressing. In the first month, all the animals were removed and many trees were cut down.

In the second month, the whole island was cleaned out. The king then told the workers to plant gardens in various parts of the island. He also took with him some useful domestic animals like chickens, ducks, birds, goats, cows etc. In the third month, he ordered the workers to build big houses and docking stations for ships. Over the months, the island turned into a beautiful place.
The young king would wear simple clothes and spend very little from his earnings as a king. He sent all the earnings to the island for storage. When nine months passed like this, the king called the ministers and told them: “I know that I have to go to the island after one year, but I would like to go there right now.”

But the ministers didn’t agree to this and said that he has to wait for another 3 months to complete the year. 3 months passed and now it was a full year. The people dressed up the young king and put him on an elephant to take him around the country to say goodbye to others. However, this king is unusually happy to leave the kingdom.

People asked him, “All the other kings used to cry at this moment but you seem to be happy?”

He replied, “Don’t you know what the wise people say? They say that when you came to this world as a baby, you were crying and everyone was laughing. Live such a life that when you die, you will be smiling and everyone around you will be crying. I have lived that life. While all the other kings were lost into the luxuries of the kingdom, I always thought about the future and planned for it. I turned the deadly island into a beautiful abode for me where I can stay peacefully.

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How to become an Expert

Posted on October 24, 2011 by Ranjan

There is a particularly clever scam,” Link:

Get a list of email addresses of people interested in sports betting. Say you have 32,000. Email 16,000 of them to say that the home team will win this week’s big team, and 16,000 to say the home team will lose. Now, half of the people will have gotten the correct prediction, and the next week, you do the same thing with them. After 5 weeks, you’ll have 1,000 email addresses of people who have seen you pick the winner five times in a row!. Now you pitch your 1-900 number or paid email list subscription to this amazed group.

Do you have an email list of 32000?

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This Dhanteras, bring home prosperity with Diamonds!

Posted on October 23, 2011 by Ranjan

Happy Dhanteras!

Though if you can buy diamonds, you are already prosperous, right! (btw, the title was an ad copy of a diamond brand that I saw in the papers today)

Yes, money makes money and you can use the power of compounding.

That also explains why the gap between the rich and the poor is increasing.

The tradition of buying precious metals during dhanteras is believed to be a sign of good luck.

This Dhanteras, my wishes to you would be to make your own luck

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Innovations in the Insurance Industry

Posted on October 22, 2011 by Ranjan

When the private insurance companies started their operations in 2001, that is a decade ago, there was widespread optimism that customers would benefit out of the competition.

But please tell me about the customer centric innovations that have happened over the last decade. I can think of two major developments.

1. ULIPs was popularized in a big way. In the last few years, roughly 80% of the premium generated by the insurance companies came from ULIPs. And by the way, ULIP was not really an innovation as such plans were available where you could buy insurance and investments together. These plans were sold by LIC Mutual Fund and UTI and the LIC product was called Dhan Raksha.

And you all know how the cost structure of ULIPs was so opaque and high while the entire risk of the investment lay with the buyer. So it was not really a customer friendly development for sure.

The good news is that you and I are more informed and this appears to have an impact on the sale of insurance policies.

The insurance industry is actually showing a slowdown in sales with the premium income being heavily down from last year. The Aug’11 data available on IRDA journal shows Individual single premium as Rs 6466.07 crores as against Rs 17221.25 crores. That’s – 62.45% . The individual non-single premium is a bit better at Rs 13190.67 crores as against Rs 18487.45 crores. This is – 28.65%.

The second development is customer centric but it has not really done well.

2. The availability of online term insurance plans. Aegon Religare kicked off with iTerm and ICICI’s iProtect followed.

This is a huge positive for customers. But have these online term taken off in a big way? Please correct me but my knowledge is that such plans have been bought by less than 25000 people. Though it’s a good start.

Do you ever wonder why these big Financial Institutions, who spend thousand of crores on advertisements, could do better on the customer centric activities?

This post on Harvard Business Review on 5 reasons why companies fail at business model innovation can help.

One reason that I found interesting is the following:

Part of the thinking by line executives in most organizations goes like this: “the last thing we want to do is risk any of our current business. It’s hard enough being at war with the competition in a battle for market share. Why would we want to compete against ourselves?” These sentiments tend to be voiced whenever new business model ideas threaten to cannibalize existing sales. When executives look at new opportunities they see them through the lens of the current business model and view them as competing with the current way the organization creates, delivers, and captures value. Organizations fail at business model innovation because they blindly take cannibalization off the table even if a new business model may have significant upside potential

What are the innovations in the insurance industry in India? What are your suggestions or expectations from the Insurers?

Two reasons to speak up. One, because they must listen to customers. And two, you get what you deserve. If you are not demanding enough, all you get is crumbs thrown at you at their will!

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Why Charge Customers For Prepaying Loans?

Posted on October 21, 2011 by Ranjan

NHB has announced no prepayment penalty for housing loans. I came across the term, Prepayment Penalty while I was working with a Housing Finance company in 2003. I was intrigued and I asked around why there was such a charge.

Here’s the script I used if there was such a question from a customer:

1. Our charges are just 2% while this so-n-so private bank charges 4%. (note: This is not an answer. It’s devised to diverge the question and lead to bashing up the so-n-so bank)

2. There’s this asset liability projections that we have for our loans and these projections go awry if there are prepayments and so we have to charge. (note: this uses heavy jargons and people keep nodding their head without understanding any bit)

3. If the customer is well informed and persistent: Well, I will try to get a waiver from my Regional head and it will take some time. Often it takes more than 15 days.

The effect of this script was that there were hardly any waivers.

The takeaway here is that even though companies are India are not customer friendly, you can get waivers if you are informed and persistent. (Both!)

It’s also good to see regulators cracking the whip on companies to be more customer friendly. I am sure the RBI regulation for banks will come soon. NHB’s regulation applies for housing finance companies alone.

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The Secret behind Success; From The Psy-Fi Blog

Posted on October 20, 2011 by Ranjan

I enjoy reading this blog on a look at Psychology and Finance called the Psy-Fi Blog. Check out this post on the secret of a healthy, wealthy life

Excerpts:

…People, we know, generally aren’t very good with money. …. Yet what’s interesting is that there is a small, but significant, group of people who overcome these problems with apparent ease.

What’s even more interesting is that there’s a simple way of picking out these people from the age of four: and all you need is a couple of marshmallows.

The marshmallow test is a test of self-control: a four year old is offered the option of a marshmallow now or two later. To gain the extra sweetie they have to wait an indefinite period of time – usually fifteen or twenty minutes in actuality – and unsurprisingly most can’t manage this.

However, nearly a third of children do manage to wait long enough for the additional treat and this effortful exercise in self-control turns out to be amazingly predictive of future life chances.

Related post: Money grows as a tree, not on it

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