Lesson #22: Why Property is the best investment ever OR How to Buy a Property Without Being a Millionaire

Ah, Property. A chunk of land that you can call your own. Property, is, and will always be, in my humble opinion the best investment a man can make. Whether it is commercial property or resedential property that you're buying, in a country like India, there will always be demand for your chunk of land. Investing in property has two benefits:


1) The price of land, one of the most precious resources, will always go up in a country like India, where the population is ever increasing. The more the population increases, the higher property prices will be.


2) You can always rent out your property. Huge sums of money are being paid in rent today in places like Delhi.


Say you buy an apartment worth Rs.50,00,000. You spend Rs.25,00,000 from your own pocket and take a loan against the very same apartment  for Rs.25,00,000. Say you decide to pay this loan back over a period of 10 years at an interest rate of about 12%


It works out to roughly Rs 35868 a month. Now assuming that you put that apartment on rent. The average rent you can make is roughly 20,000-25,000. So your monthly expenditure works out to  Rs 10,868. And you continue to pay your EMI (Estimated Monthly Installment) till the end of ten years. Each year your rent rises by 10% and assuming that value of property appreciates. The same property would be valued at Rs 75,00,000 or even Rs 1,00,00,000. And your rent is now roughly worth your EMI or even higher.


So, as you can see, even if it requires taking a loan, buying a good property is the best investment one can ever make.


Happy Property Buying.
 
Madhav Behl  [On behalf of Doodle inc]

Lesson # 21 : The Art Of Penny Pinching

Penny pinching is the art of being smart enough to limit cash outflow and maximize cash inflow. Though common people may define it as being miserly what should be noticed is the fact that a lot of billionaire's are penny pinchers.

From Donald Trump who confessed the same in his book to Warren Buffet who till date believes that buying a brand new car is overrated to Azim Premji whose latest buy wasn't a BMW or Audi but a good
old Toyota.

The point is that it pays to be cheap in most cases.

For instance, A Taxi or Auto ride amounts to say 36 rupees and you don't have it in lose change. So you hand the guy a 100 rupee note. The guy refuses to pay you the exact amount and hands you over sixty bucks instead. The point is that if you would have handed him forty rupees or even fifty rupees with even a five rupee coin you would have lost out on barely a rupee.

So the question is that how does this affect you? Assuming that you let go of six rupees.And you travel around 5 times in a week. That makes it 10 round trips a week or 40 trips in a month or 480 trips in an year. That's 2880 in an year or 28.880 in 10 years on travel expenses alone.

But if you go out on a date and ask the girl to pay that is simply being impolite and chances of you going out with a girl again are extremely low. Similarly, not tipping a waiter when  he's served you well is just being cheap. But if you pay a service tax of say 10-12% then it's all right to not pay the waiter.

The point is that 'Little Strokes fell great oaks'. Every rupee you save adds to your wealth and in turn reduces your financial goal.

Happy Penny Pinching,

-Doodle