Theory | wealthymatters

Savitri Jindal’s Assets

August 26, 2012 6 Comments

wealthymatters.com Have you ever wondered about the assets of the really wealthy?Personally I have always been interested in knowing just where wealthy people have their money.My take is that wealthy people didn’t get that way or don’t stay that way without knowing a thing or two about keeping and growing their money safely.That is why I was interested when I came across her statement, given before the returning officer, while filing her nomination papers in 2009 for the Haryana Legislative Assembly elections.

Savitri Jindal is India’s richest woman. She is the widow of the late O.P.Jindal.In her statement given before the returning officer,Savitri Jindal states that she has moveable property worth Rs 17.75 crore and immovable property worth Rs 25.94 crore.I think it’s interesting to see how much of her money she has in a liquid form.Compare this to our asset allocation.Most of us are bound to have most of our money stuck in our houses.A house is a necessity, but it makes sense to acquire one’s fortune and then splurge on fancy houses rather than try to become wealthy by sinking money in our homes.

Savitri Jindal does not own a car.I think this lady shows us women a way out of owning a depreciating asset-claim you don’t drive.Having a car at one’s disposal is good but owning it might not be so wise wealth-wise.Keep the luxury car purchases for after you reach the stage of acquiring luxury homes. Read more of this post

Filed under Theory, Tool Kit Tagged with agricultural land, art, asset allocation, assets, bank deposits, cars as investments, cash, depreciating asset, Gold, Gold Jewellery, gold ornaments, immovable property, India's richest woman, Investing In Gold, Investing in Gold Jewellery, investing in homes, investing in silver, life insurance policy, Luxury Cars, moveable property, Mutual Funds, O.P.Jindal, postaday, real estate, Savitri Jindal, shares, Silver, silver utensils, Urban Estate Hisar

Some Real Estate Facts To Mull Over

August 21, 2012 11 Comments

wealthymatters.com (1)Long term returns from residential real estate

Robert Shiller, by tracking the US home prices data from 1890 concluded that in the longer run, property prices grew at an annualised return of around 3%, just keeping pace with inflation.Housing price rises could not outstrip inflation in the long term because, except for land restricted sites, house prices would tend toward building costs plus normal economic profit.

I have no such data for India.But here is what I can attest to:an ancestral house acquired 120 years ago for 6000 Rupees is now valued at 1.2 crores-an annualized return of about 6%.I think this is close to the long term inflation rate in India.

(2)Is home ownership all that it is touted to be?

In a poorer country like Bangladesh, 90% of the houses are owner occupied. Whereas in a richer country like Switzerland, only 33% of the houses are owner occupied.

Europeans are more comfortable with renting compared to Anglo Saxons and we Indians need to decide whose model we choose to follow.Read what Niall Ferguson has to say about property ownership. Read more of this post

Filed under Theory, Tool Kit Tagged with ancestral house, capital appreciation, Case-Shiller index, depreciation, EMI to income ratio, fluctuations in income, illiquid, inflation rate, keeping pace with inflation, liquidity, long term contracts, Long term returns from residential real estate, monopoly, mortgage insurance, Mortgages, Niall Ferguson, postaday, property ownership, property-owning democracy, real estate investing, rent rate, rent ratio, Robert Shiller, volatility

Priya’s Story

August 21, 2012 11 Comments

wealthymatters.com Here is a story I came across on the internet today.Thought I’d share it with you.

Few things I learned after Mithun:

We always believe we will live forever. Bad things always happen to others.

Only when things hit us bang on your head you realise… Life is so unpredictable….

My husband was an IT guy…all techie…And I am a chartered accountant…Awesome combination you may think…

Techie guy so everything is on his laptop…his to do list… his e-bill and his bank statements in his email… … He even maintained a folder which said IMPWDS…wherein he stored all login id and passwords for all his online accounts…And even his laptop had a password… Techie guy so all the passwords were alpha-numeric with a special character not an easy one to crack…Office policy said passwords needed to be changed every 30 days…So every time I accessed his laptop I would realise it’s a new password again… I would simply opt for asking him ‘What’s the latest password’ instead of taking the strain to memorise it. Read more of this post