Understanding Depreciating Assets

A key to health and happiness is having a balanced and comprehensive understanding of personal finance. This post by Jeffrey Strain discusses the concept of depreciating assets.
Not all assets are created equally. When you purchase something, it's usually an appreciating asset or a depreciating asset. During your financial life, you want to purchase as many appreciating assets as possible as these are purchases which will gain in value over time. On the other hand, you also want to purchase depreciating assets only when it's necessary since these items will lose value over time. Understanding the difference between appreciating assets and depreciating assets is important to improve your overall finances.

The purchase of a home is considered an appreciating asset. While it's certainly true that the value of homes can fall over short periods of time, the general assumption is that a home will increase in value over long periods. Since a home will general increase in value over time, it often makes sense to purchase one as you can actually make money by purchasing and holding onto it. On the other hand, there are a lot of purchases that we want to make, but they are depreciating assets. Timeshares, boats and recreational vehicles are all good examples of depreciating assets. These are usually "wants" and not "needs" of the person buying them, but they lose a huge portion of their value the instant that they are purchased. Boats and recreational vehicles can lose 20% or more the instant that they are purchased. Timeshares are so bad that you can lose 90% or more. Except in very rare occasions, you are going to lose a lot of money on these purchases if you ever decide to sell them at a later date.

Happy Birthday, Jimi Hendrix!

Hendrix was born on November 27, 1942. His life and death are an important lesson for all who connect the use of drugs with creativity. Happy Birthday, JH!

While it is natural to eulogize and worship the body of work that Hendrix left behind, it is also pertinent and prudent to reflect on the senseless waste of creative talent and life and to filter our adulation with caution that not everything that a role model embodies needs to be emulated.

I grew up at a time when to play guitar like Jimi did was my goal, and he did it stoned, so getting stoned was the goal for budding young blues guitarists of our times, but nobody told anybody then that not only was drugs the greatest ambition killer but it also killed human beings in every way imaginable. Nobody talked about his washed out non performances concerts, the physical violence, the arrests and the humiliation that his lifestyle, his personality and his drug use entailed. Many of my friends and I myself have been blessed not to have died from our stupidity and our love for the “jimi thing,” in its various forms, but the millions of lives that have been snuffed out by drugs is testimony to how close we were to losing our lives, our sanity and our purpose in life.

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Stop Searching for Happiness

Most people “look for” happiness. I mean really look for it. You google for it on the internet, you seek it in money and material possessions, you try out drugs, hairstyles and partners just to make sure it is not hiding there, and you will throw your last penny after long haired solutions that promise to make you happy. Then, once you realize that it didn’t work. you pick yourself up and start looking for it all over again. Why do we struggle so much to find happiness? And why do we so often find misery instead in our quest to be happy? The answer lies in the age old cliche of the person looking for his reading glasses all over the place while they are perched on his head all the time.

The laws of intent, manifestation and attention explain that what we “tend to” tends to manifest itself. Is it possible that our search for happiness is really an excuse to rationalize our circumstances, that our search for happiness is ultimately really a search for misery? I say this from personal experience after having spent a third of my life searching for the pot of gold at the end of the rainbow in all its reported haunts, from drugs to sex, wealth to asceticism and from self help books to helping others. It was only when I woke up to the fact that joy, contentment, peace and meaning were not somewhere out there for me to discover, but were right here within me, in the present, that I understood that the first step in being happy was to stop pursuing it.

What do you want to be in life?

November 18 is a day of great importance for the future of our world. It was the day (1930) that two men formally established what is known as the Value Creation Society, an organization devoted to the pursuit of peace, culture, education and enlightenment. It is also the day on which I was able to see a lot of things more clearly as I brought a chapter of my life to closure and embarked on a new life exactly one year back. I had been reflecting for a while about what I would post today and had not been able to come up with something that would appropriately convey the significance of this date in all its mystic wondrousness.

Recording the Unplugged Special

I was reading a post on “what do you want to be in life” on Rajagopalan Ratnaraj’s wonderful blog The Beautiful Mind when I recalled an incident from my childhood that shaped my personality, and perhaps even made me a little fearful of sharing my opinions and my vulnerability. This trait stayed with me through much of life, and prevented me from experiencing the true richness of life, relationships, and trust. As I read his thought provoking post, I realized I had found what I wanted to post today.

Is Facebook Porn The Work Of Hackers?

There are growing reports from across the world that indicate that Facebook users might be facing a serious security issue. Reports of Facebook accounts being hacked have done the rounds periodically, but right now the numbers seem to be growing alarmingly. Many people have been pointing a finger at the hactivist group Anonymous but there is no evidence to corroborate it. Moreover, there has been no official response from Facebook either.

Users began to complain about Facebook porn, or graphic images of sex and violence showing up on their feeds with indications that they or a friend of theirs have “liked” it. The evidence so far points to a video feed item that says something to the effect of “I lost all respect for Kim after seeing this video,” but when the feed item is clicked on, no action takes place. Many are of the opinion that this feed item being clicked led to the user’s account being hacked. 

Here are some ways that you can prevent this flood of unwanted sex and gore on your facebook page from Lifehacker.

What Kingfisher Airlines Can Teach Us

(I wrote this post in late 2011, and over the last half a decade, it has taken the most extraordinary turns. I have tried my best to update it as I could, but the developments have often happened faster than I could keep track of.) 

Kingfisher Airlines has been in the news for its inability to service debt for quite some time, but the recent cancellation of flights across sectors has brought it into sharp focus. While people are up in arms over whether the government should play a role in helping it find funds, the Bankex has been taking a hammering. Giants like SBI, ICICI Bank, and IDBI Bank have more than fair exposure to the debts of Kingfisher Airlines. What is more worrisome than the temporary blimp on the sensex or the troubles of stranded passengers is the possibility that we are just beginning to see what the corporates and the financial institutions would have liked us not to see.

Kingfisher Airlines has been in the “red” for all of its existence. Yet, the service that it has rolled out has been exemplary in terms of quality, elegance and value for money. It has not scrimped on the frills, the advertising, or the sponsorships. It has maintained its price point, in many cases even lowered it to meet the competition. Yet it was losing money and going deeper into debt all of this time. When did we come to know about in a big way? When the oil companies and the ground handling services refused to entertain the debts any more.  Are the oil companies and the ground handlers also in debt? Yes. So you have services being offered on credit to someone who himself is deeply in debt. Remind you of anything that you have heard of in the last five years?

(Update: Nov 12, 2011:  Kingfisher Airlines has issued an official statement in response to media reports about the cancellation of flights, etc.)

(Update: October 4, 2012: After some movement towards raising funds, Kingfisher Airlines announces a partial lockout after labor woes and government warnings.)

(Update: October 4, 2012: Wife of KFA employee commits suicide leaving a note blaming their financial condition following non-payment of salaries for six months.)

(Update: March 12, 2016: Mallya leaves for UK after media, banks and courts object to his defaulting on 9000 crores of loans. The ED and the DRT issue notices for him to appear. Mallya tweets out his annoyance and arrogance.)

(Update: October 2016: Mallya blames Indian govt policies for failure of Kingfisher and claims he is a victim. His assets fail to reach reserve price when put up for auction by banks in India.)

How To Photograph Children

Children make wonderful subjects for photography, and the world over, the third most popular image category is that of children. But try taking some pictures of children yourself, and you will realize that it is a different ball game altogether. You will end up with pictures that are blurs, distorted angles, strange expressions, your subject looking away, or rolling his or her eyes, or sneering menacingly at something to your left. It can be very annoying to find that out of the hundreds of pics you took, just a few are up to the mark. You want to take wonderful pictures of children, but you end up with a whole lot of crappy ones. One of the most puzzling question for aspiring photographers, especially parents is how to photograph children and get good looking photographs. There are a few simple tricks of the trade that you need to have under your belt when photographing children.

Here are my top tips on how to photograph children so that you get to take the kind of pictures of children that you really want. 

How to Use Guest Blogging to Generate High Quality Backlinks

Guest blogging has emerged as the most powerful tool for driving readership and traffic in the recent years. In many instance, backlinks from guest posts have shown better results than other blog promotion tools. To a great extent, this has to do with the evolving nature of the blogosphere. With growing numbers of people choosing to use this medium as their preferred communication tool, whether it be for a social cause, business marketing or just altruism, the parameters used by readers to adopt or discard new content has also been evolving. Readers are becoming more discerning, and quicker to look past SEO and other tricks used to attract eyeballs and clicks.

A quick look at what guest blogging is all about for those who might not be familiar with the concept. Many bloggers and blogs offer others a way to use their platform to showcase their blogging abilities in the form of a guest post. This helps both the host and the guest in various ways. The host benefits from having good content and promotion taken care of by the guest. The guest benefits from having access to the larger readership of the guest, and the endorsement of his writing by the more reputed blog or blogger. Most blogs will have a link that will help you familiarize yourself with the guest blogging protocols for that particular blog.

Here are some expert tips that will help you use the guest blogging technique to build high quality backlinks.

A Crisis of Civilization

Today we witness the perils that accompany the insolence of might; one day the whole truth of what the sages have proclaimed shall be borne out - ‘By unrighteousness, man prospers, gains what appears desirable, conquers enemies, but perishes at the root.’ - Shabhyatar Shankat, Rabindranath Tagore

Rabindranath Tagore’s 1941 essay The Crisis of Civilization seems to be taking on a new significance more than 70 years after it was written. Social commentators are of the opinion that we are standing at a major crossroad from where we can choose to go towards prosperity and welfare, or towards strife and oppressive suffering. I am an eternal optimist, and I believe that what we are faced with is the greatest opportunity since the Industrial Revolution, to write the rule book for a fair and just world to pass on to our future generations.

My Father outside Rabindranath Tagore's House in Kalimpong

The last decade saw a recession caused by inadequate safeguards against uncontrolled greed. It is not only at a banking level that this recession occurred. The sub-prime mortgage bust, in many ways, was caused by the same mentality that causes people to get into a credit card mess, transferring balances to new cards without establishing good enough collateral for the credit. The same recessive trend has been experienced by the people who later found themselves at the receiving end of layoffs, governmental austerity measures, and revised contracts. In India, we are seeing double digit inflation, spiralling interest rates, wilting industrial productivity and export numbers, along with an overall slowdown in many sectors.

If we look at the corruption and the scams that have led to widespread protest not just in India but now the world over, the root of it is similar too. Short term gains are now leading to long term pains, but while the gains were shared by the few who had their arms and trunks in the till, the pain is being passed on to all, including those who never knew that there was a till to have your hand in. Along with the business corporations and the financial institutions, career politicians are now in trouble too, with skeletons coming tumbling out as toes get stepped on.

This never was and can no longer be brushed aside as merely a failure of governance. The paradigm of “people’s representatives” itself has to be revisited. While decisions that affect national and global economies are indeed made by governments, corporations, and financial institutions, the reason that they work is because at some level or the other they feed the needs of a large section of society. For example, a “liberal and open economy” feeds the need of a “consumeristic society.” And all of these decisions and policies are again made with the interest of profit making corporations and individuals in mind. Before passing the blame on to “people’s representatives,” it is essential that we look at what we, the people, intend through our lives and our actions. If we wish, as a civilization, not to perish at the roots, it is time we start looking at those very roots.

What Are You Made Of?

Thank God for frogs, snails, slugs, puppy dogs’ tails, sugar, spice, and everything nice, since that is what all of us are apparently made of. But for a lot of us, it is really Thank God for Google, or else we would have never got answers to our existential questions. My parents taught me to seek answers within myself, taught me to tap into my spirituality instead of religiosity, and taught me to question all that I was instructed to subscribe to. When I study web searches and key words, I find people searching for who they really are. I am not referring to ego-surfing or doing a google search for your own name. I am talking about the popularity of searches like “what is my true self” and “how to find purpose."
Our environment is but a reflection of our selves

I have had the good fortune of learning a lot about what we are really made of in the last few years. When I wonder why I didn’t hear these vital, yet difficult messages earlier in life, I realize that it was the din of busy-ness, the haze of material pursuit and selfishness, and the worship of short-term pleasure that had kept me from hearing them. Here are four simple shifts that you can make in your life even as you are reading this post that will allow you to open up to the message that your life has for you.

Seven Billion Of Us - There Is Hope

India sees more than one birth every second, and a population which will double in 14 years. More than one in every seven people on this planet is an Indian, with our 2011 census number of 1.2 billion.  I just found out that I was the 3 billion 356 million 447 thousand 998th person on earth when I was born. If you are really curious, you will be able to go to one of the many sites that now let you calculate what your number is among the world population of 7 billion and actually figure out my exact age by working backwards. When I was in my teens, I had stern wives of American presidents, (which is perhaps where the phrase "Ladies First" comes from), looking out at me from anti-drug campaign ads in magazines and asking us if we were the one in seven, and if we were, what hell lay before us. In the world of Steve Jobs and Bill Clinton, however, the one in seven probably referred to those who have never inhaled. Now this decimal tail of pi has become a nice way to refer to Indians.

This huge demographic number is just as much reason to rejoice as it is to worry about. Just as Alvin Toeffler had predicted in Future Shock, the rate at which we are hitting a new billion people on this planet is getting faster and faster. What is not keeping pace is food production, provision of basic amenities like clean water, healthcare, education, electricity, the right to livelihood, and of course, the right to a fair and equitable social system. Cost of living across the globe has been rising, with a proportional decrease in earning opportunities across all income groups.

It took us 12 years to get from 6 billion to 7, while it will take less than 10 years for us to get to 8 billion. We have gone from 3 billion to more than double in just about 50 years. The newspapers and the media have been proudly proclaiming the fact that the 7 billionth baby was a girl child born in India. What we are not tom-tomming that loudly is the skewed aspirations that we have created as a society, thanks to a very great extent by the same media.

It is interesting to sit and watch news television, for example. I was watching a program about gender discrimination in Rajasthan. Among others, the program is sponsored by a fairness cream and by an insurance company that shows the parents of a girl child brightening up as the insurance solves their problem of the wedding expenses. In the fairness cream commercial, we see a dusky beauty who is a great singer, but is unable to sing in public because of her complex(ion). Then she starts using the fairness cream and within a few weeks, hey presto, she is able to sing at contests and win admiration and success. Of course, we all know what wedding expenses for a girl child alludes to. End of commercial break and back to social activists in designer kurtas and ethnic silk saris debating the gender inequities in our system.
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