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Should you buy or live on rent?

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Buy house

Buying the house is perhaps the biggest and the most common dream of every professional. Though buying a house has high emotional quotient, it is a decision that has to be financially prudent. A wrong decision could result in excess debt and an illiquid asset. Due to increase in property prices many people prefer to rent the house. Renting is associated with expenditure. However, renting gives flexible lifestyle option, high level of mobility and is easy on the purse when compared to the Home loan EMI.

Buy or Rent house

A study report by ArthaYantra compares property prices and rentals in seven top cities. Know the cities in which you can buy a house and where it’s more cost-effective to rent. ArthaYantra compared the property prices with rentals in seven top cities across India, taking into account the income and saving potential of the buyer, the cost of capital, as well as the increase in property prices and rentals.

A key outcome of the study is the ArthaYantra Buy versus Rent Score (ABRS) assigned to each city. ARBS score indicates that whether it makes financial sense to buy a house or live on rent in a particular city. Since affordability is a function of income levels, the ABRS is calculated for six income levels, beginning from Rs 8 lakh a year up to Rs 25 lakh a year. ARBS score is given below.

ARBS Score

Highest score here shows that rents are very high and it is advisable to buy. Lower score means can afford to rent but can’t afford to buy.

Reading Report Findings:-

Delhi NCR: The low rental values compared to high property prices makes it a place where renting can be easily afforded and the EMI associated with home loan in high. It is advisable to rent for a professional with a salary range of 8 – 25 lakhs

Kolkata: The ABRS score of 75 for a salary range of 8-12 lakhs signifies the fact the rental value is critically high but a professional in the salary range can’t afford to buy. A professional whose salary range is between 13 – 25 lakhs is better off owning a home than renting it.

Mumbai: The score of 65 signifies that though the rents are high, it is advisable to rent because the property prices are also high. The EMI payments to be made in case of ownership are not affordable.

Pune: For a professional with a salary range of 8- 11 lakhs in Pune, it is advisable to rent. A professional with a salary of 12- 15 lakhs falls in the neutral zone i.e. he can afford to buy and it is advisable to buy but have to make few adjustments to the current lifestyle in order to afford the additional amount for EMI payments. Professionals with a salary range more than 15 lakhs are advised to buy.

Hyderabad: For a professional with a salary range of 8- 9 lakhs in Hyderabad, it is advisable to rent. A professional with a salary of 10- 11 lakhs falls in the neutral zone i.e. he can afford to buy and it is advisable to buy but have to make few adjustments to the current lifestyle in order to afford the additional amount for EMI payments. Professionals with a salary range more than 12 lakhs are advised to buy.

Bengaluru: The score of 55 for a professional with a salary range of 8-14 lakhs signifies that the

monthly cost of renting is cheaper than that of buying by more than 70%. The low rental prices also mean that though a professional with a salary more than 15 lakhs can afford to buy a house, renting is a better option.

Chennai: The score of 55 for a professional with a salary range of 8-19 lakhs signifies that the monthly cost of renting is cheaper than that of buying by more than 70%. The low rental prices also mean that though a professional with a salary more than 20 lakhs can afford to buy a house, renting is a better option.

If you plan to buy a home, go through the excerpts of the report for more such nuggets of information. It might help you in taking an informed decision on buying a house or renting one.

Multibagger Stocks that gives magnificent returns

Returns from Stocks

When you buy a product, say, motor car or bike, do you consider investing in the manufacturing firm (Hero Motocorp or Mahindra & Mahindra) as well? If the company is good, perhaps you should. Small amounts that you spend on your favorite products would have grown to if you had invested the same money in buying the stocks of the Company.

Here’s how much you would have made if you had bought the shares of some such reputed companies several years ago.

(1) Sun Pharmaceuticals:-

Sun Pharmaceuticals leads the race with an incredible 21,282% growth since November 1996.

Besides spending Rs 300 a month for medication from this leading pharma company, if you had invested in its shares, your money would have grown 21,282%.

Sun Pharma

Rs 300 worth of pills in 1996 = Rs 64,147 today

(2) Hero Motocorp:-

Hero Motocorp is second in race with magnificent gains of 10,508% since July 1995.

You might have purchased Hero Honda CD-100 motorbike years ago? If you had made stock investment in the same company, your money would have grown by more than 10,000%

Hero

Rs 30,000 motorbike in 1995 = Rs 31.82 lakh today

(3) Crompton Greaves:-

Crompton Greaves is third in race with returns of 7,779% since June 2001.

Though Crompton Greaves’ stock price has taken a beating during the past year, for home renovation you must have purchased electrical fitting of Rs 2,500, the money would have grown more than 76 times.

Crompton

Rs 2,500 worth of electrical fittings in 2001 = Rs 1.91 lakh today

(4) Mahindra & Mahindra:-

Mahindra & Mahindra stock has given returns of 7,393% since September 2001.

If you had bought a Rs 7.5 lakh multi-utility vehicle from M&M back in 2001, and had also purchased its stock, your investment would be worth Rs 5.6 crore today.

Mahindra Mahindra

Rs 7.5 lakh utility vehicle in 2001 = Rs 5.61 crore today

(5) Asian Paints:-

Asian Paints stock has given returns of 4,696% since April 1999.

You might have used this paint brand for your house years ago.

If you had invested an equivalent sum in the company in 1999, your investment value would have increased 48 times by now.

Asian Paints

Rs 20,000 worth of paint coating in 1999= Rs 9.59 lakh

(6) Colgate-Palmolive:-

Colgate Palmolive stock has given returns of 1,201% since June 2004.

Every year you spent Rs 600 to buy Colgate toothpaste this small amount would also have made for a good investment. Your money would have grown 13 times, or 1,201%, by now.

Colgate

Rs 6,00 toothpaste in 2004 = Rs 7,813 today

(7) BPLC:-

BPCL stock has given returns of 899% since April 1999.

Suppose you spend Rs 6,000 on petrol 1999 on BPLC petrol pump, if you had also placed an order for an equivalent value of BPCL shares, you would have had nearly Rs 60,000 today.

BPCL

Rs 6,000 worth of petrol in 1999 = Rs 59,917 today

(8) Indian Hotels:-

Indian Hotels stock has given returns of 458% since September 2001.

Did you enjoy a stay at one of the hotels run by this company while on a vacation? If you had bought its shares at the same time, the investment would have grown 5.5 times today, or 458%.

Indian Hotel

Rs 3,000 per night hotel stay in 2001= Rs 16,725 today

Essence of this article is to make yourself aware that you spend small amount on various needs think of investing same amount in stock of good company to fulfill your long term goal.

What “Bhagvad Gita” Teach us about Wealth

Bhagavad Gita and wealth creation are still perceived as odd combinations.

In Hinduism, if you want to take the spiritual path, the first advice is to ‘give away all your money and wealth and head towards the Himalayas.’

Who needs money in a Himalayan Cave? But to be spiritually oriented and to live in a society we need money and we need to generate wealth.

Generating wealth through hard work is not a sin. To live a better life money is as essential as water.

Bhagavad Gita helps us in striking a balance. Geeta shows us how to create wealth. To create wealth the brain has to be challenged every moment. We have to make use of it for family, society, market, and business deals.

bhagvad gita arjun krishna

In a simple sense, we need to do Karmas and face the realities of life.

In Bhagavad Gita, Arjuna when faced with the realities of life wanted to take refuge in meditation and spirituality. Krishna scoffed at Arjuna who could not face reality.

Real spirituality is the one that is practiced in society and not in Himalayan caves.

Looking at the profiles of successful entrepreneurs in independent India, the majority of them faced reality and addressed the challenges boldly. They did not take refuge in caves or fate.

Today spirituality is like spending time in the satsang, visiting temples, and donating money in the hope that the Lord will make you rich automatically.

Everyone has their own method of spirituality. But according to me, it is better to realize that God is residing in us, so we should realize our hidden potential and put it into action.

Arjuna was finally ready for action once he realized Krishna was in him.

When we stop searching for God outside of ourselves and realize he is us and we are him and we take action with this knowledge, certainly wealth and success are sure to follow.

When the spiritual strengths are realized inside, this will overcome the physical and intellectual strengths that we may be lacking. This is what “The Secret” is all about. It is not a new concept, just an old concept with a nice new package.

Many of us do not like to work and are forced to do so to make financial commitments.

If we learn to enjoy a type of work, we automatically start to excel in it, and then wealth and success follow.

Quite often instead of enjoying the work, we worry more about what we will get from it.

Examples –

  • Instead of concentrating on cleaning the table, the waiter is more bothered about the tip.
  • The programmer is thinking about bugs or results.
  • The player is thinking about the endorsement.

The net result is that we do the job badly, we don’t enjoy the work or the moment and ultimately all the monetary dreams are shattered.

Shrimad Bhagavad Gita says

Work done with selfish motives is inferior by far to the selfless service or Karma-yoga. Therefore be a Karma-yogi, O Arjuna. Those who seek the fruits of their work are verily unhappy (because one has no control over the results).

हे अर्जुन – निःस्वार्थ भाव से किया गया कार्य निःस्वार्थ सेवा या कर्मयोग से कहीं कम है। इसलिए कर्मयोगी बनो।

जो लोग अपने काम फल की आशा में करते हैं, वे वास्तव में दुखी होते हैं (क्योंकि परिणामों पर किसी का नियंत्रण नहीं होता है)।

कर्मण्येवाधिकारस्ते मा फलेषु कदाचन। मा कर्मफलहेतुर्भूर्मा ते सङ्गोऽस्त्वकर्मणि।।

इस काय का है भाग, भाग बिन पाया नहीं जाता, कर्म बिना नसीब फ़ल,तोड़ खाया नहीं जाता।

Our selfishness is always thinking about the end product and creating wealth without hard work. Put heart and soul into whatever you do because it is more worthwhile than chanting mantras. When you work wholeheartedly, you are indulging in the creation and it touches the spirit in you and you experience spirituality. Wealth, success, and fame will automatically follow.

But what if I fail? This is a lack of self-confidence.

This comes out of unnecessarily thinking about the fruits of your work. Rarely does one achieve success in the first attempt. Each failure teaches us several lessons. Each failure takes us close to success. Every work creates a result, so work without getting attached to results.

Shrimad Bhagavad Gita says

A Karma-yogi gets freedom from both vice and virtue in this life itself. Therefore, strive for Karma-yoga. Working to the best of one’s abilities without getting attached to the fruits of work is called (Nishkaama) Karma-yoga. 

कर्मयोगी को इसी जीवन में पाप और पुण्य दोनों से मुक्ति मिल जाती है। इसलिए कर्म-योग के लिए प्रयास करें। कर्म के फल में आसक्त हुए बिना अपनी क्षमता के अनुसार सर्वोत्तम कार्य करना (निष्काम) कर्म-योग कहलाता है।

दु:खेष्वनुद्विग्नमना: सुखेषु विगतस्पृह: । वीतरागभयक्रोध: स्थितधीर्मुनिरुच्यते ।।

When we succeed we are happy, when we fail we are sad. But what was our state of mind when we were working? Gita is more interested in the state of mind when you were working. Krishna asks Arjuna to enjoy the moment and do the work efficiently. Arjuna should think about the first arrow that he will aim at Bhishma not about the last arrow striking Bhishma.

Similarly, each moment you have to stand up to challenges and take risks and by enjoying each moment, you slowly move towards victory.

A person in steady mind in work Bhagavad Gita calls such a person ‘Sthiraprajna’ – a person of steady wisdom and self-knowledge who cannot be shaken. To create wealth and to enjoy it, you need to be a ‘Shiraprajna’ and then you will realize that your very nature is happiness.

Understanding Shrimad Bhagavad Gita

I do accept that understanding every aspect of “Srimad Bhagavad Gita” is very difficult but you need to find out your own method to understand it.

The simplest way I have for you is just to observe the front photo of the Bhagavad Gita which shows that “Rath of Arjun is driven by Lord Krishna that Rath has Four Horse Dharma, Arth,Kama & Moksha.”

bhagvadgita front page

Similar to this Lord Krishna is also driving Rath of our Life containing these horses if we spoil any of karma towards it (Dharm, Artha, Kaam & Moksha) Lord Krishna beat this horse/us by the whip to redirect us the correct way.

What is your understanding of Bhagwad Geeta?

If you have yet not read Bhagavad Gita, I hereby request you to pick up the “Srimad Bhagavad Gita” and read it and I am sure you will find the answer to all your problems. After reading you will be full of wonderful ideas and thoughts.