FINANCIAL PLANNING FOR BEGINNERS

A request came to me for explaining the Basic Principles of Financial Planning for beginners, which can help today's rich youngsters. Financial Planning is no rocket science, its pure common sense- never keep all eggs in one basket. For saving money the common baskets are:-

1. Debt
2. Equity
3. Asset Creation[Property, car,two-wheeler]
   
4. Pure Life Insurance Policy/s maturing at the age of 60 or 65.
5. Gold and other jewellery/precious metals
6. Commodities and Foreign Currencies.

Before understanding the baskets let us understand the special features of the thing called MONEY.

• Money is like a cricket pitch-action takes place at both ends and all round it.
  
• It is a science as well as an art.
  
• Money can be invested or gambled in the name of investment.
  
• Money is the laziest thing created and also a rocket which goes up and down at the craziest of speeds imaginable.
  
• Money can make or break you, it does not respect age, status, power or wealth. YOU RESPECT MONEY AND IT WILL KEEP YOU LIKE A KING.

Let us understand these traits in some detail:

Managing money goes on simultaneously in all areas depending on individual circumstances.
The saying goes "the science of investment" and "art of managing money". Economists and financial wizards realised that higher the risk-greater the return is the science behind money. The risk factor brings in an element of fear which leads to irrational behaviour, hence cannot be science alone. A scared person will not listen to reason and the art of managing is based on perceptions. Mature persons manage money in a scientific manner which is investing, whilst others follow the herd mentality which is gambling. When dealing with money, never be greedy or in a hurry.

This becomes the basis of next trait of money. A very very thin line separates investment from gambling. There is nothing wrong in gambling for fast returns. But here invest only what you can comfortably lose. Do not invest your life savings but create a small corpus separately for sake of excitement and thrill and indulge yourself as long as some money remains in this fund. Once it is wiped out[which it would] you would have hopefully matured and grown up to respect money.

Money is very docile when kept in form of cash or bank saving accounts. Money in fixed deposits of Companies are normally safe but can become dicey, hence gets you a higher return than bank deposits. The risk element keeps increasing when investing in various debt instruments hence better returns. Money comes in its glorious best when invested in equity. The Stock Markets up to January 2008 had given returns beyond widest expectations. The subsequent crash [see my post[GLOBAL MELTDOWN-A LAYMANS VIEW] has wiped away life saving of many even before they could blink.

This meltdown has not affected everyone the same way. I came very close to grief but fortunately the safety net[see post EQUITY- FRIEND OR FOE, THE REAL MONEY PLANT and MONEY PLANT REVISITED] which I had put in place held and all my investments are safe. My respect for power of investing is keeping me like a KING - so far.

Now let us understand the baskets through which financial planning is given shape and body. The amounts mentioned for each baskets would differ from person to person and are my own guesstimates not based on any study. The baskets are arranged in order of my priority.

Investment in debt should be the starting point for anyone. Bank Fixed Deposits is the place to start with. I recommend Rs 10 lakhs as fixed deposit[FD] over a period of time. HDFC and Bank of India allow Over-draft[OD] facility on FDs which should be availed of. This has lots of advantages explained in my post THE REAL MONEY PLANT. Once Rs 2 to 3 lakhs are in place, the next basket can be used. Of course for Income Tax purpose second basket can be availed of first, as deductions upto Rs 1 lakh under Sec 80 C saves tax outgo. This amount should be invested in equity dominated tax saving schemes of Mutual Funds. This process should be repeated year after year till your target of Rs 10 lakhs FD is achieved.

Basket No.3 should be thought of only after meeting the demands of Basket Nos.1 and 2. Two or Four wheeler should always be purchased by availing loan as paying interest works out cheaper in the long run. Property should be thought of only when surplus remains after Auto loan. Before actually investing in property find out the loan amount which would be required. Take a pure life insurance policy for an amount which covers all your loans, including ODs [Basket No.4] and then only finalise the property deal.

In my assessment when today's youngster retires they would be requiring Rs 1.5 crores in saving to survive his/her old age in comfort. Pension schemes are a part of Basket No.1 and should have separate target over and above Rs10 lakhs FD. Personally I prefer Mutual Funds to Pension Funds. The target for life insurance policy should be Rs 50 to 75 lakhs. The purpose of this policy is not investment per se, it is part of the safety net. The logic behind spending this money is that in a worst case scenario the loans would get paid by the insurance money without adding to the miseries of the family, in the best case scenario the maturity amount would help in meeting the target of retirement fund.

By the time I could think of Baskets No.5 and 6 my funds had run out on me. I have no knowledge about these investment baskets. Anyway any beginner who reaches these baskets would be requiring the services of a professional financial advisor who would be knowing about these baskets.

Before closing this post I would repeat the guru mantra which is always balance your investments 50-50 between debt and equity. This gives you the safety net. Those who wish to live on the edge can alter this ratio as per their capacity of absorbing loses.

GLOBAL FINANCIAL MELTDOWN- LAYMAN'S VIEW

The present global financial meltdown is something unbelievable. So many people of repute, trustworthiness, international icons and experts all became greedy at the same time. This is not individuals or local areas but Institutions with enviable linage going back 150 years becoming willing partners. This just cannot be a mistake or error of judgement. The various check and balances built into the system by our fore-fathers just failed or should I say were ignored.The only motive driving them collectively across nations has to be GREED. This never happened in the past but unfortunately can happen again in the future.

To grasp what happened one has to visualise a large swimming pool full of people and a forest fire together. People individually can be at the deep end and enjoy the cool water without disturbing the persons around them. For any reason one person panics and grasp two different persons, with each hand. Had a solid support been available within reach the situation would have been controlled without much fuss. In the absence of such a support, the persons grasped would in turn try to hold on to persons around them, result total chaos. Likewise an out of control forest fire burns everything coming in its path.

Meltdown has two aspects:

1. Physical destruction of asset.
2. Asset is not destroyed but only its value is downgraded.

The first by definition has to be a local situation, maybe wide spread but not global in reach. The second has no boundary as it is not based on strict facts but on perceptions. Perceptions may or may not be based on facts. This peculiar but standard business practice has stood the test of time and asset values were upgraded or downgraded on principle of supply and demand. Like all good things this also had the potential to become a tool of the Devil. People the world trusted and respected, decided to become agents of Devil and start using this wonderful tool for devilish ends-- out of the main human failing-GREED. Since good always prevails over evil there is nothing to be afraid of. It will only take time to heal.

We all know that one should not buy based on the packaging alone but buy only if satisfied with the contents. This basic truth was kept aside and major transactions started based on packaging without due diligence of contents. Risky loans were given on higher rate of interests. These were then combined into exotic investment instruments and traded amongst the financial institutions as special packages. Since the rate of interest was high, institutions started making lots of profits. In turn these high profits justified higher pay packages and bonuses to the executives of the financial institutions. More risky the loan, higher the rate of interest resulting in more money going into the pockets of these people.

Since people entrusted with the responsibility of keeping a check and balance, like CEOs and Senior Executives, became a part of this greed, the entire phenomenon became as simple as taking away candy from a baby's hand. One of the positive fallout of this was busting of the myth that 'Capitalist Model' was superior to the 'Control Model' as market forces were the only honest reflection of what is good for the human race. For the first time a real level playing ground has been created. Both 'models' could be easily manipulated by GREED FOR MONEY OR GREED FOR POWER. Finally the State had to intervene to bring back stability and trust in the market. A combination of both models will show the way forward.

What is true for the economy is true for individuals also. I sympathise with persons who lost their shirt in the fall of the share markets. Those who lost all their savings when banks went bust will have to take solace from karma theory. They were in the wrong place when the forest fire approached. All others who would like to invest wisely, the following ideas may prove useful:

1. Control your natural greed. Do not try for maximising your returns from investment. Higher the risk better the return. Be satisfied with reasonable return in keeping with your risk profile.
2. Spread your resources within the asset classes, keeping the golden rule in mind always-50% in debt 50% in equity. To get better returns within this spread see my two blogs[ The Real Money Plant and Money Plant Revisited].
3. If you plan to take loans for vehicle, house or any other purpose, do so only after building up bank fixed deposits equal to two years EMI for each loan. You will not regret as these FDs will prove useful in more ways than one in the future. Yes, you can take these FDs towards the debt component of your investment plan.

I know what I have suggested would appear as excess caution to many. I can only once again strongly recommend them as they saved my shirt in this meltdown. Wish there was a way to hold all these greedy persons accountable and prosecute them for criminal negligence atleast. I know this is wishful thinking.

DO NOT BE DISHEARTENED. YOU WILL ALSO MAKE MONEY THE WAY I HAVE.

GOD BLESS.

MONEY PLANT REVISITED

I had written my blog [The real money plant] in the early stages of the present global meltdown. Since then I have become wiser as the southward journey of the share markets continued. It was gratifying to realise that my model for financial planning has passed the litmus test, though it needs a little straightening in the safety net area.

Along with the power of overdraft, one more instrument for improving your investment returns, with somebody Else's money, is to take LOAN AGAINST SECURITIES[LAS]. It works like this:-

Before investing in Mutual Fund check with your Bank which mutual funds are eligible for loans. Out of that list select the funds you like and make the investment. Once a sizable portfolio is ready you can open your account by pledging these units with the bank. After formalities are completed the bank will give you a limit which would be 40/50% of the current value of your units pledged. The limit gets revised as the value of the units change. The limit you get is what you invest again to buy units in any fund of your choice. The circle can be repeated endlessly. One has to decide the amount of loan one is comfortable with. Care should be taken to opt for final limits right at the beginning as it would save duties/expenses applicable whenever limits are increased. The limits sought are not linked to the value of units pledged.

Please remember that money plant is like any other plant. It will take time before giving fruits. Yes if you have sufficient funds in one lot right at the start[like just retired persons or after selling a property], this period can be cut short. Following steps by way of safety net are recommended from personal experience.

• My Bank does not allow part redemption's of the pledged units. After achieving your desired LAS limit, it is adviceable to duplicate your investment in the same funds but do not pledge them. This will provide you with additional liquidity in the form of free units which can be sold for booking profits if the need arises. The free units sold can be purchased again when the market falls.
• Keep atleast 25% of the limit availed in Fixed Deposit. You can link it to the OD account but avoid using these funds even for short or medium term requirement. This arrangement would prove very usefull in a meltdown like in 2008 or at the time of closing the account.
• By experience you will know the level below which your LAS limits will not fall, this amount also becomes part of your safety net.
• As markets grow you will soon reach the LAS limit. A stage will come when the value of the units pledged is higher than the LAS limits opted. This differance also becomes part of your safety net. At this stage review your position and set new targets for debt and equity investments.

Students of economics will recall the concept of deficit financing which they had studied. Liveraging of today is a flavour of this concept. If done in excess it will lead to meltdown and doom, if not done at all you will remain at the present standard of living. The choice is difficult but not impossible to make. Find the right mix you are comfortable with. What is life without some RISK.

Wish you a comfortable journey of making money with somebody Else's money. WIN WIN for all

What makes Golden Sunset Resorts viable?

Based on my observations and discussions within the group of senior citizens, I had visualised the concept of Golden Sunset Resorts. Two important aspects missed or misunderstood by present entrepreneurs in schemes for housing for Senior Citizens, are according to me :

1. Senior Citizens are vary of schemes where they have to outright purchase the property. They have lost money in the past as such projects were not completed or were of inferior construction.
2. Senior Citizens in Group 2 [see post: The Golden Sunset Resorts] are not bothered where the resort is located. They would opt for it if facilities provided are good and expenses are within their budgets.

The project can be viable if it is situated outside the city limits where land rates are still lower. A larger plot should be purchased as it would facilitate expansion/other usage in near future.The construction should be prefabricated, which can be dismantled and shifted when necessary. It should be near an urban center where medical facilities are available within a reasonable distance. Like all resorts the project should be on occupancy bases i.e. rental basis. Special packages can be offered for monthly bookings for rooms/services availed. Guests should have the option to walk out if they are not satisfied.

The layout and construction would be different for Sunset resort. Golden resort should have both rooms and dormitory. My feeling is that Senior Citizens would finally prefer the dormitory as privacy looses its priority as age advances. Being together would be most prefered option. This could bring down the cost substantially. All structures should be single storey with a wide veranda all around. Nothing can replace sitting/lying in the sun, weather permitting.

Apart from normal Spa services in the Sunset Resort, especial provision of services liked/required by Senior Citizens should also be planned for. These can be like simple oil massage in the sun, physio-therapy type body massages/baths. After all guests of Golden Resort would be regular customers of the Sunset Resort. Young persons from the neighbouring villages can be encouraged, in their spare time, to be with the guests for odd jobs and earn some pocket money.

Both resorts should be beautifully landscaped, have a common meditation cum praying center, areas for playing/entertainment. At the planning stage itself provision for expansion and alteration should be incorporated. Once the nearby urban area engulfs the resort area and land prices sky-rocket, the resorts can be relocated outside the city limits and the investor can go for the kill. The concept has the potential of becoming a national and international brand chain.

In India the natural urge to leave property/assests to children is very strong. This normally overlooks the treatment child had melted out to the parents. Even reverse mortgage would take time to become acceptable in our country. By providing an option on rental basis, we can attract a larger group who can sell their property and invest the money. Their monthly expenses can be met from the investment income. The amount invested goes to the children after both have commenced their final journey.

The beauty of this proposal is that resorts support each other. Main customers of Sunset Resort would be the residents of Golden Resorts-for some facilities if not all. Likewise children, friends and relatives of residents of Golden Resorts will have a place to stay in Sunset Resorts and hence can conveniently visit them as well as have a holiday them self. A win win situation all round.

Credit Cards-Devil within

A friend of mine had a very interesting experience with his credit card. Cards were stolen from bags left outside front door of his flat [this is an interesting story which I may write about one day]. The cards were misused that night itself and the next day. He did not go out for two/three days. The credit card operator telephones him to confirm some transactions which were suspicious according to them. He immediately informed all the concerned Companies about loss of cards.

Now as per requirement of the Company he went to the local Police Station to register the FI R. Police agreed to register the FIR only when told that card was used at an ATM in Pune [ruling out the train] and since the purse was not taken the theft cannot be in the bus[no pickpocket will put the purse back]. The most likely place of theft was outside the flat when the bags were left unattended. The credit cards had been used at various locations for about Rs 40,000. The issue has not been resolved yet, however it made me wonder whether his experience was unique or others are also facing similar problems. I am sure many are.

Problem is who pays for Rs 40,000 for which the cards were used. Everyone I have asked this question without hesitation says it has to be paid by my friend. This does not appear fair to me. In a situation like this there are three main stakeholders

1. The Bank which issued the credit card.
2. The credit card holder.
3. The commercial establishment which accepted the card in lieu of cash.
   

All three stakeholders are benefiting from the use of the card and hence have an obligation of trust and fair play towards each other. The Agreement which each stakeholder signs have to be within this perimeter. Unfair advantage by any stakeholder will invoke the Consumer Protection Act. Amongest all three stakeholders the commercial establishments have the most crucial role to play. Misuse of credit cards is not possible if laid down procedures are followed by all stakeholders.

This in short means that No 2 should inform No1 the moment the card is stolen. No 1 should block all transactions thereon. The main success would depend on No3. Why? The credit card consist of two parts- the physical part and the signature part. Commercial establishments would check the signature on the charge slip with that on the card and only then accept it as payment.

We know that the level of expertise available at the premises of No3 cannot identify 'good' forgeries. But to expect the expertise of a reasonable prudent person in matching the signatures cannot be faulted. Unfortunately this is not being done. We all must have noticed or can notice now, that normally the credit card is returned to us along with the charge slip for signature. In such situation even a causal glance at the signatures is not possible. No1 expects No2 to pay for all cases irrespective of blatant crude forgeries or still worse, no signatures at all.

The question arises why is No1 reimbursing No3 in such cases and demanding payment from No2. Simple answer would be that two business groups are joining hands to take undue advantage of the helpless unorganised No2. This would become an issue once the proposal to create an all India data-base of all loan takers is in place. No2 would be forced to succumb to the dictates of No1 as otherwise he is likely to be blacklisted by all loan giving agencies. If this is not the reason then what can it be?

Can Old Wine find New Bottle ?

The result is the same, but inputs were totally different. Indian way of family relationship is gradually merging into the American model, but for different reasons. With the advent of 'nuclear' family concept, parents and their children prefer to reside separately after their marriages, even when living in the same city/town. Parents are happy as after a long time they can live according to their own likes and style, children likewise have Independence In fact the new wine had comfortably settled in the new bottle.

This comfort zone extends into retired life as both, parents and children, are financially independent. This phase of freedom lasts for around 15 years in which parents can travel, visit places of interest and indulge in all activities which had been postponed due to 'children' considerations. The only limiting factor of this phase should have been the physical health of individuals(for details see The Golden Sunset Resort). Unfortunately sometimes this does not happen and the comfort zone is shaken due to family compulsions.

Children of yesterday decide to be parents of today. Bringing up an infant into babyhood and then to boy/girlhood needs the gentle touch of grandparents. Are today's grandparents willing to give up their new found freedom? If yes in what form. Nobody wants to repeat the pain from breaking of the joint family all over again, Americans are looking eastward and we are looking westward as both are not happy. What form or shape will the new arrangement take is a million dollar question.

My generation, the one before us and the one after us i.e. 3 generations where caught in the turning point of Indian joint family system. We had taken care of our parents, confident that when the time came, our sons will look after us. We never thought of planning for our old age. Suddenly things started to change. Nuclear family become the order of the day due to sheer compulsion, small flats or NRI status. After retirement parents had to decide how to spend/utilise their time. Once everything is in place over a period of time the issue of having issues which requires grandparents presence becomes a tricky issue. It becomes difficult to drop everything and rush to look after the grandchild that too for limited period.

The question is further complicated as parents and new parents have conflicting motives for their actions/thoughts. Having accepted the nuclear family can the children take it for granted that parents have to come to their aid. Similarly parents have to reshedule their plans and also cope with an unknown fear- will they be able to live alone again after coming so close to their grandchild. Likewise how can anyone ignore or overlook the needs of the little one.

In this entire scenario which grandparent do we have in mind? Reflex answer always is ofcourse the boy's parents. This was true during the joint family system, but today an additional option has been added. In reality it is the girl's parent who are called for duty invariably. The reason is very simple in today's circumstances. Girls are more comfortable with their mother than mother-in-law. Mother-in-laws are aware of this hence wonder whether it is worthwhile to drop everything and go to the son's house. This again raises issues.

Both are right in their thinking yet the grandchild is the main sufferer in the end, hence an equitable solution has to be found. Each aspect will have to be examined in depth before a workable solution is arrived at. Can the old wine, which at tremendous cost, converted into new wine revert back into old wine and find a new bottle? Future bloggs will try to look into this very difficult area.

Equity - Friend or Foe

My friends, especially senior citizens, were very uncomfortable whenever the question of investment in equities was discussed amongst the group. Nobody said no, but they did not invest in equity either. This made me to think why this mind block. I remembered my service days when I was equally scared of putting a larger chunk of my savings in equity. I preferred life insurance. Apparently we all suffered from the fear of the unknown.

We have a pretty good idea about pricing of most of the assets class of investments. Equity is one big black hole where pricing mechanism knowledge is concerned. Major factor in pricing of equity is the intrinsic valuation of the industry it relates to. This part everyone understands and has no problem with. Second and far more influential element in pricing is the perception of future earning possibilities of the particular company/industry. This brings in an element of personal arbitrariness bordering on gambling. Most of us are very uncomfortable with this hence prefer to stay away, which is sad.

One fact cannot be overlooked. Equity is the only liquid investment opportunity to keep pace with and stay ahead of inflation. In short, equity is both Dr Jekyll and Mr Hyde. By controlling our natural greed we no doubt reduce the returns from equity but also drastically bring down the risk of losing the hard earned money. One has to find ways to befriend the good and avoid the evil- something we as it is do every moment of our existence.

Equity for us has to be a long term investment. If we need to encash part of our investment we should do so well in advance as otherwise the market may fall and we suffer avoidable loss. This is the nature of this market hence we have to plan accordingly. When people play the stock market for short term gain, it should not concern us as they win or lose heavily, fully conscious of the risks involved. The fact someone lost heavily should not scare us or keep us away from the market.

Today investment in equity has been made easy for us. Mutual Funds are a recent entry which reduces the risk element and therefore give lower returns. These lower returns are in comparison to direct investment in equity, but still higher than any other return on investment. Mutual Funds are nothing but collective investment in number of companies in small lots. If some company makes a loss another may make profits thereby averaging out the returns for us.

Mutual Funds come in both debt and equity and in various combinations thereof. One can select a fund as per his risk appetite. Mutual Funds allows cumulative growth or annual payment of dividend if one so desires. Dividend again can be reinvested or payouts taken. The dividend option has again two components: long term capital appreciation which is retained and annual profits which are distributed. Mutual Funds allow partial redemption of units for greater flexibility.

My experience shows equity is the best friend anyone can hope for. DO NOT WASTE TIME. For more information on mutual funds see my write-up "The Real Money Plant".

The Real Money Plant

I should start with a disclaimer. I do not have any academic qualification in finance or investment subjects. My knowledge is totally street acquired. It has benefited me tremendously hence would like to share it with anyone who would like to listen. It is the most easy thing to make, one should only know how to do it. Yes I am talking MONEY.

Never work for money, always think and plan how money can work for you. Earning from someone else's money is called the POWER OF OVER DRAFT. Without a business/employment one cannot reach within striking distance of money-hence put everything in to get something started. I am saying this so that your priorities are clear and no rash steps are taken.

From whatever you earn, save what you can. Amount saved depends on individual circumstances but the key word is constant conscious effort to save money. Initially do not bother about investments, simply convert your savings in bank fixed deposits. Again how much depends on individual circumstances-any figure between 5 lacs to 10 lacs would be a good beginning. Ask your bank to give you OD facility on your FD. This varies from 70 to 90% of the FD original amount(HDFC and most public sector banks have this facilities as far as I know). Now you are ready to make money work for you.

'Fools buy houses and intelligent people stay in them'- still holds true. Property is a great investment but not as a starting point. Property accretions are locked in till the same is sold. Therefore think of buying only when your investment income can cover the EMI (your salary/business income should not be locked in property). The best investment is in mutual funds. You can try shares if you have the feel for it, I don't have it. It is a wrong time to talk of equity, but for me the India growth story is intact for the next 20 years at least. The present crash is only a short term regularly recurring phenomenon. My experience shows that 30 lacs invested in mutual funds gave 30,000 per month dividend income(apart from capital appreciation) before the January 2008 crash. This figure should help in planning. This is the big picture. One follows this path at his own comfortable pace to reach the desired destination.

At this stage the power of over draft will act as a booster. The 5 lac overdraft limit which you have will earn for you in the following ways:

• The OD facility should be attached to salary account. Withdraw 1 lac and invest in mutual fund. Salary gets credited thereby reducing the loan on which interest has to be paid to bank. For monthly expenses draw when needed. Payments by credit cards come up at the end of month. Bank charges interest for days of actual OD availed. Interest saved is money earned. Earnings on 1 lac invested extra.
• We always keep some cash balance in our bank accounts for emergencies and needs in immediate future. This amount is sleeping as it would seldom be eligible for any interest earning. Once the account is overdrawn, money is available when required, but you pay for actual withdrawal. Any payments received in between start earning bank leading rate, from the moment of deposit the same principle applies- interest saved is money earned.
• Timing the share market is next to impossible. Whenever the market undergoes a major correction, you can use the OD limit to make investment and repay the loan from receivables. In the longer run you will earn a respectable amount from this source.
• For greater flexibility keep increasing your fixed deposits (with OD limits) as this will also help in balancing the portfolio through investments in debt.

By now it should be apparent that investments in mutual funds is like having an orchid of wonderful fruit trees. The more care you take of it, better the returns. Replace old trees from time to time. Money requirement will keep changing, but the returns from mutual funds will keep flowing in. This would ensure a comfortable old age. Mutual funds are the real money plants in our life.

Golden Sunset Resorts

Yes we are talking about two resorts in one. Golden Resorts for Senior Citizens only, Sunset Resorts for others. Senior Citizen also consist of two groups-Group 1 upto 70 years and Group 2 above 70 years. In fact Group 2 includes all senior citizens who feel like over 70 years irrespective of their actual age. Group 1 would like to enjoy their new found freedom to the hilt, hence stay in cities and towns and laterally paint the CITY RED.



It is wonderful to realise that more and more parents have planned for their retirement and independent life. They have surplus income and created a ''nuclear family'' of their own. But unfortunately this phase lasts only till their health permits. Finally they also need support for their balance life span. This is the only reason for creating two groups which ultimately merge into one. At this stage Working Couples/NRI children are totally at a loss as to how to look after their parents. This is where the Golden Resort comes in.



Old Homes, run by charity or government is not a viable option. Customer (senior citizen) would like the surroundings and services to be up to the standards he can afford to pay. Since this customer can pay well, a resort can definitely be built for them. Cost of land would be the biggest huddle which can be managed if the resort is situated away from the city. Only ground floor level construction is required hence prefabricated or local material can be used provided it protects the 'customer' from the elements. My suggestions have to keep in mind that this resort is for group 2 SC who have already lost all fascination/interest for city life.



What role does Sunset Resorts play in this scheme of things? Apart from improving the financial viability of the twin project, it also serves a very vital need. Children, relatives and friends of resident senior citizens, local and NRI, can enjoy a vacation at Sunset Resort and also bring untold happiness to the resident of the Golden Resort. In fact Sunset Resort should be planned as a health resort for all. I would not be surprised if maxium business of Sunset Resorts came from relatives and residents of Golden Resorts.



Lots of exclusive schemes for senior citizens are coming in the market. These schemes are proving to be very popular and waiting list for entry is getting longer. The focus of existing schemes is outright purchase of property by the senior citizen which in turn is sold to another senior citizen once the owner proceeds on his heavenly journey. Indian psyche is not comfortable in selling the existing property and ultimately leaving cash for the children. Also a big chunk of 'surplus income' of SCs comes from investments income. Mortage schemes are yet to catch on. Readjusting this income may not be a practical option. In my module these issues do not arise as no capital expenses are involved only running expenses. You can simply check out of the resort with no hassle's of 'selling the property' in existing schemes, whenever better options come in the market.



This project has prospects of growing as a chain. For promoters of my scheme the icing on the cake is the land itself. All cities/towns are expanding outwards. This expansion would reach the resort in some time frame. Land utilisation can be re-engineered to book the potential profits and in the meanwhile serve the society in their hour of need. The entire scheme can be replicated at a new location.

Achiever's Nest

Working couples have a very tough choice to make-- To be or not to be DINKS. This is unfair just because joint family support is no longer available to most of them. I am surprised some entrepreneur has not encashed this major demand as yet. I am not referring to day schools/centres which are not a pleasant experience for majority of kids. Why not give the kids a place they would love to spend unlimited fun time, PRODUCTIVELY.

Basic Concept: To replicate the joint family system minus its negative features. Children get brothers, sisters and other relatives which their parents cannot afford. Discipline is maintained within a club like enviorment. Academic needs of the child are fulfilled as well as creative and fun opportunities provided in plenty. Child grows in a safe and protected atmosphere with no one looking over his/her shoulder all the time. In short working couples have money to spend on their children but cannot give them what they need most-TIME. We have to not only give these children a home away from home, but also any emotional surroundings which nurture achievers. Yes, a truly a Achiever's Nest. The best joint family system were producing.

Let us visualise such a place together:

• The target group should be 5years to 15years. (flexible)
• Instead of ayahs and servants, we can employ children from lower middle class families who seek salesperson jobs in small shops. They already have experience of looking after siblings at home
• Groups of 6 kids (3 boys n 3 girls) are formed as a unit. Each unit given separate name/identity. This will fill the gap of brothers n sisters in today's nuclear family. Each unit would be like cousins of other units.
• Common dormitory layout for resting, studding and playing. Separate rooms provided for music and drama classes.
• Arrangements for assisting in home work and if necessary tutions can be made.
• Option for hobby classes and foreign languages would be a good idea.
• Install video cameras so that parents and other relatives can see the child enjoying him/her self and also speak to him/her if they so desire
• Build a rain dance enclosure as children love water.
  

Revenue streams:

1. Basic fee plus extra for activities opted
2. Looking after children for short duration when parents have to attend to urgent commitments.
3. Allowing non-resident children for attending hobby/foreign language/tuition classes.(depending on space availability)
4. Taking in children of parents doing night shifts as the space is not being utilised and such parents would prefer a safe place rather then leaving children alone or with friends.
5. Renting rain dance facility to families on Sundays/holidays and slots when resident children have gone home.

In conclusion, what I have started above is only a bare outline. It can be developed with creativity, as i have done for my satisfaction. The concept has potential to spread as a chain, locally and nationally. The Working Couple is doing a great job single handedly against all odds. They deserve all the help we can give so that they decide not to be DINKS. I wish I had the financial strength to implement my idea.

Greening the Family Tree

Present trent of opting for nuclear family to earlier joint family has thrown up a new peculiar situation. I tried to remember the names and birthday of my grandparents but got stuck. I could recall the names of my father and mother's parents, but not their birthdays. I had no clue about my grandparents parents. I clearly recall whenever in the past we assembled for family functions, stories about someone from the past were always recited. Surely I am not the only one who cannot recall the names of our great-grandparents.

Today I have two grandchildren. My grandchildren already have a PAN card, Passport and Bank account in their names. They would be 1 year and 2 year old in July 2008. Suddenly a brainwave struck me. The bank account could be used among other functions for greening the family tree.

Since I know the names and birthdays of my and my wife's parents the process can be set rolling. On the birthday of our parents I have started the ritual to deposit a fixed amount in the bank account of my grandchildren. This among other objectives, will ensure that my children and their children will always remember the names and birthday of our parents. Our names and the names of parents of our baburanis can be added when our grandchildren have their children. The family tree will start growing as time goes on.

Yes, the most obvious benefit apart from greening the family tree is meeting the financial needs of the child as he grows up. I personally feel this arrangement also meets a very private need which coming generations need but hesitate to accept. The importance of relegious belief in our lives. Let us see the similarities one by one:

We have not met the Gods and Goddessess who love us as family,only seen photo/idol as shown to us by elders. Same holds true for our Great-Grandparents. Someone we trust atleast vouches for them hence it becomes easier to relate and accept their bonafides. It is accepted by everyone that parents may have issues with their children, but when it comes to grandchildren only one emotion remains- LOVE nothing else matters.

The money credit in pass-book on thes special days (birthdays of G-GP) is similar to getting prasad in the temple after praying. This symbolises the responce we seek from the almighty.

If God responds to our call for help, How can we doubt our own Great-grandparents will not? Longer the Tree, more potent the responce.

Remembering our Great-Grandparents will get us the same PROTECTION and BLESSINGS which we look up to Gods to provide.

I felt so happy to remember the birthdays in order to make the deposit, I can visualise how thrilled my grandchildren would be, once they reach the age of understanding what is happening.

The entire concept has so many other facets it can be discussed at length.

Hi There

This is my first post. In fact, this is the first time I am really using the Internet. Will get my bearings and start blogging soon. What about? This that and everything. I have a lot of crazy ideas which I hope somebody someday will be able to convert to reality. Until then, as my blog title says, this is all loud thinking. Anybody listening?