Marketing Fear| A stitch in time saves nine

Repost from the original
We live in a world where the car mechanics only talk about the number of frivolous upgrades that the car owners buy. No of unnecessary repairs/replacements they are able to push it through the client’s wallets. The hospitals evaluate doctors based on number of pricy diagnostics they refer, no of specialist consults and expensive branded medication (that are pushed by sales reps) they prescribe. Lawyers are no different, they are like psychiatrists. Once they get a hang of the patients inner-most fear, they leverage it to their maximum advantage. Infact sometimes I feel that the whole world is out to get you and exploit your vulnerability.
Is it healthy, is it ideal? I don’t know, but I know for sure that sometimes we build up mechanisms which do more harm than good. Most people procrastinate visiting their doctors esp. dentist till it is absolutely necessary. Yes there is naturotherapy, body does heal itself, but over the years what I have realized esp. the poor sometimes wait till they are inches away from death before they make their first doctor’s call. As a result the chances of recovery becomes remote. What could be a cured by a couple of pills and some bed rest requires a complex surgical procedure. A car is no different, we wait till a breakdown, or red check engine light or repeated reminders from the service company for annual checkup before we turn our cars in. For our property, there are so many steps if taken timely could help us limit our exposure. However we often wait till a notice is served before we react.
Sometimes the fear of getting cheated, taken advantage off makes things worse. All we need is a trustworthy source that rather than exploit our vulnerability help us cover our tracks and limit our exposure. Is it too tough to ask?


Renault Duster: Petrol vs Diesel.

How do you choose between different fuel variants of the same model of the car?

  1. Driving experience:
    1. Just check if you are doing apples to apples comparison. Some times in order to price it economically for taxi segments, some companies come up with an underpowered diesel base variant. Like Renault has a 85PS diesel, 100 PS petrol and 110 PS Diesel (sports variant). Higher power means better acceleration and riding experience.
    2. Turbo-Charger: Some diesel engine has a turbo booster that kicks in at 2000 RPM which greatly improves the car pick-up. Also the torque rating of a diesel engine is inherently superior.

Just because they have replaced one make of the engine with another, does not mean that it is the same. Please test-drive the car and make your own judgment about the real worth and driving experience for the vehicle variant.

  1. Ability to pay
    1. Check your financing options. If you believe that the base version itself is a stretch for you, the more expensive diesel version will only compound to your problems. There is a saying in India “Jis bageeche kea am nahi khana, uske ped ginee ka kya fayeda.” There is no merit in counting the trees of the orchid whose fruits you can never taste.
    2. Car is a depreciating asset, so no point in spending too much today if you are going to replace it every 5-7 years. Buy one that suits your needs, helps you maintain your prestige in the community and is easy on your pocket.
    3. Company financing options. Typically sometimes they have special promotional scheme for one variant (but not for another). Interest free loans or low interest installment options.
  2. Cost of ownership:
    1. Assuming the on the above four criteria, you are OK or ambivalent, then you should put the cost of ownership on a serious excel file and compute for yourself
    2. I have taken 2.4 L as the premium (inclusive of road tax and exercise duty) between the two variants. Don’t forget the taxes as they difference between ex-showroom price and on road price is significantly different.
    3. The insurance cost is typically linked to a % of asset value. Hence diesel would have a higher insurance outflow. Similarly the Upkeep/service/maintenance cost of the diesel vehicle would be higher.
    4. Then you should compensate these additional expenses with the higher resale value of the diesel variant. For same amount of miles & age of the vehicle, the people prefer the diesel vehicle as the operating cost is low and the difference between the petrol and diesel variant is minuscule.
    5. Then based on your expected driving behavior you need to compute the miles that you are going to put on the vehicle. The difference in the mileage between the two engines & the difference in the fuel prices could lead to a substantial saving.
    6. Finally you should sum up the yearly cash flow. (please add any more parameters that I might have skipped)
    7. Compute the IRR of the 7 year (longer based on your forecast).
    8. Finally if you get a IRR that is higher than your cost of funds (interest on bank loan + own capital) then you should go for the diesel variant, else petrol variant is suited for you.
    9. Add the financing charges/sops/dealer discounts to the computation to make it more wholesome.
Year 0 Year 1 year 2 year 3 year 4 year 5 year 6 Year 7
Asset price   (240,000)      70,000
Insurance cost        (1,000)          (800)          (600)          (600)          (600)          (600)          (600)          (600)
Maintenance cost      (1,000)      (2,000)      (2,000)      (2,000)      (3,000)      (3,000)      (3,000)
Higher mileage of Diesel      15,000      15,000      15,000      15,000      15,000      15,000      15,000
Less expensive then petrol      30,000      30,000      30,000      30,000      30,000      30,000      30,000
Net cash flow   (241,000)      43,200      42,400      42,400      42,400      41,400      41,400    111,400
irr 10.0%
  1. Other considerations:

As a rule of thumb, if you are using for more than 1,000km per month, then diesel makes more sense. Also 12% should be the cost for your own capital and SBI gives car loan at 10.50%. So for a 70% financing your cost of capital is 30% * 12% + 10.5% * 70% = 11%
Bangalore there is a difference of 20/- between petrol and diesel prices, in Goa the difference is much lower. Plus government has publically announced that they will reduce the price


Indian Aircraft Carrier| Need?

Did you know that India has second largest fleet of aircraft carriers in the world? Next only to USA’s navy. Countries like Britain which once had as many as 40 aircraft carriers have all disbanded them down and currently own none. Even Russia has decommissioned or sold all of its aircraft carriers and currently own only one (maintained primarily for prestige reasons and not for tactical). What is worse that India is buying these aging decommissioned assets and taking great pride in retrofitting them.
Why does India need 2 aircraft carriers? Why is it building a third? Aircraft carriers are a purely offensive military asset meant for creating a mobile airstrip far away from the nation’s borders. So any country that is not planning to cross the seven seas to bomb or air raid should not own one.
Secondly: basic but stupid question: Where on earth are we going to have enough trained pilots & aircraft to actually man the aircraft carrier? Indian air force has been complaining for decades that its pilots get only Flying Coffins (MIGS that were designed and made in the 70s, yes 35 years ago)
Thirdly: The two biggest threats Indian Navy is facing today are: How to prevent 2008 like amphibious raid and pirates that threaten to hijack cargo. Should not any wise country focus on these problems? How does an aircraft carrier solve them?
Fourth, if you have seen India on a map, you would realize that the biggest threat comes from the long borders in the North West that we share with Pakistan. Most of our aircrafts are committed there. Incidentally India did a very successful naval blockade in 1971 and even raided the port of Karachi (Operation Trident & Operation Python). Surprisingly our aircraft carrier was not used. It was deemed too expensive to risk.
Aircraft carrier is a huge liability. Its weight & size makes evasive maneuverer almost next to impossible. No wonder whenever this behemoth leaves for the high seas, half the fleet (ships, submarines, patrol boats, helicopters etc.) need to accompany it. For a country like India, which actually has a very small naval fleet, this means that security elsewhere needs to be compromised. There is a common saying in India, “If you want to bankrupt someone, gift them a white elephant.”
This is the reason why China, in spite of its aggressive & military intentions does not rely on aircraft carriers. It leases ports from friendly countries like Myanmar to achieve the same results. Also it has huge dredging operations in South China Sea to convert small islands into a stable & large air force cum navy base. Simple logic, it is much cheaper to build, does not require special aircrafts to operate because of the large landing strip & sufficient hanger space. Also you cannot sink an island, nor you need to replace them periodically.
If India believes that it might be targeted though a large naval assault in the near future, why does it not develop its military bases in Andaman & Lakshadweep further? They are aptly suited to guard our left & right flanks. If it has developed them to the full capacity & still India needs three aircraft carrier, then I think we are overspending on military.
The worst thing any country can do is commit huge funds for ornate demonstrations. Indian basic military infrastructure is what major needs revamp, not these white elephants which will never leave the port.


Is Property verification guarantee for real?

Repost from the original
Did you know that Khatoni property verification guarantee is the next best thing to Title insurance that you get in USA?
At we have a simple promise; we treat your property as our own. This means:
1. We will verify the ownership claims of the seller
2. We will verify if the property is DC converted properly
3. We will check for any claims/notification/pending litigation
4. We will check if the certifications /permits are in order
5. We will check if the construction is as per the master plan (the seller has not encroached or constructed illegally or the neighbors have not encroached on your property.
After the verification, we will provide you will a detailed report on the defects. Help you mitigate your risks; even negotiate better with the seller to compensate you for the deficiencies. However if our services were not performed properly and you suffered from a loss because of it, WE WILL INDEMNIFY YOU. We will not only cover your loss (capped to the transaction value) but also associated legal fees (lawyer & court fees included). After-all derelict of duty should be harshly penalized and our risk should not be capped to the verification fees paid.
Why don’t you give us a call to understand our services better?