Life in phases and slices
"My kid is a honor student in 'Lincoln elementary school". The bumper sticker proudly adorned a Lexus which I almost fender bendered in a bumper to bumper traffic. I was stuck in the usual San Jose peak hour traffic and I started to lose myself in a chain of thought this harmless sticker triggered. There seemed to be no dearth for doting proud parents in the bay area. Currently I can only vicariously enjoy the pleasures of proud parents. While empathizing their pride, I could not help but ponder over some questions that went through my mind which are summarized below
. why some people who shine brilliantly in kindergarten end up as no ones in life?
. why some people who top their class relegate to mindnumbing mediocre jobs ?
. why most succesful CEOs weren't the 'most probable stars' in their school years?
. why do most people who were 'most probable star' end up as insurance agents and friggin' car salesmen?
I dont have much experience in life. But whatever I have learned, life is not one monolithic block of granite. Just because your life is slick and sweet at this moment does not mean that you are entitled to happines for ever; you have to work to make sure the happiness gets carried forward to the next phase in your life. Similarly if life seems to be one big sucker at this moment it does not mean it has to be the same way till the end - unless one assumes that way and takes one's life unable to cope up with current pressures in which case it becomes a self fulfilling prophesy.
Life offers everyone different hats to wear - different roles and responsibilities at different stages of lifecycle. Just because you are miserable in the current role (especially if the role is thrusted upon you which is normally true when you are young) does not mean you are doomed to fail in your life. Try to cope up - if not possible just wait it out while learning and honing up the skills in the fields in which you have interest. Having a sense of humor and jotting down the ironies that happen currently will be very helpful when you grow up. This is best narrated in obe of the most interesting books I have read - JD Salinger's "Catcher in the Rye".
In my opinion (it may sound very simplistic), many suicides and homicides can be prevented if this fact of life is known to everyone especially to the kids who have a miserable teenage in schools. Consider the Columbine kids. There were 2 sets of troubled teenage kids from the same school district. Both the sets are skeptical about the events happening around them and cynical about the people surrounding them. One set - Stone and Parker waited it out, grew up and made parody of not only the people around them but the whole world and left behind an amusing legacy through their now famous South Park comedy. The other set - Harris and Klebold, did not know about the phases nor did they have the patience to wait it out and all they left behind were 15 dead bodies.
"Honk.... Honk...." "Move it buddy"; the weakest link in my chain of thought was broken by externalities and I started moving with the traffic. The car that went past me had a curious bumper sticker - "My son kicked your honour role son's ass" :)
Peace out
sai
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Knowing the math behind real estate
Have you attended any real estate seminars of late? To a widemouthed gullible audience, the real estate agent would be selling the American dream (which is basically to live the rest of your life in debt ;)). And he would be talking about some numbers and math and RoI and before you grasp his confounded logic, would conclude that "Hence, if you dont purchase a house now, you are losing $2000/week". Let's cut the crap out and take a look at how to exactly know if you are making any money out of selling the house.
The first thing you need to do is to calculate the opportunity cost of buying a home. i.e., the cost incurred because you bought a home ceteris paribus (everything else remaining the same).
For instance if by moving to your house, you drive more, then the marginal gas expense is the opportunity cost of buying the house. But if you have a new kid and there are expenses due to that 'life changing' event, even though you bear that extra cost, it is not an opportunity cost of buying the house.
Even though Mortgage interest and home equity interst are tax deductible, you cannot simply cut 30% from the mortgage you pay because your Alternate Minimum Tax (AMT) may kick in especially for double income families. So, for calculating the true saving on tax, (assuming T1 is the tax paid in the 'bought home' scenario and assuming T2 is tax paid in the 'did not buy home' scenario) one has to subtract T1 from T2. This is a huge difference from what is told to the consumers in the realtor expos. To take an example, let us say you pay $10000 in mortgage interest in the year, the realtor will tell you that the real expense is only $7000 because the mortgage is tax deductible. But using the above line of reasoning I gave, you should consider the actual expense as (($10000 + T1) - T2). In short, the realtor tells you that you can itemize the expenses when you buy a home. But what he does not tell you is that if you did not buy a home you still can get the standardized deduction.
If your home is big , then the utility charges are considerably more expensive, you have to add the differential to the cost of buying home as well. For full details of the elements in calculating opportunity cost, take a look at this presentation and feel free to modify it as per your needs.
The principal you pay towards your mortgage and home equity is not included in my presentation as opportunity cost as they build your equity in the house. But there is a hidden opportunity cost there as well. viz., the interest lost on the prinicipal. So one need to carefully include that loss of interest over years (because of the compounding).
In the slides, I have given the example that excluding the principal, you get an annual opportunity cost of $15000 and you paid $1000 towards principal. The opportunity cost on the principal is $70 (assuming 8% interest and $10 maintenance fee in well established funds such as Vanguard S&P 500 index fund). So, in that year the opportunity cost is $15070. Let's say you do the same for 2 years, then the opportunity cost is (($15070 * 1.08) + $15070). Let's say you do the same for 3 years, then the opportunity cost is ($15070*1.08*1.08) + ($15070*1.08) + $15070). You get the picture.
Let's now come to the fun part. If you sell the home for some sale price P, you wont get that in your hand. There are many middle men (wolves) in the way. For instance, you pay 5-6% of the sale price to your selling agent. The banks will want the unpaid loan amount (which is only fair). After all these overheads, if the money you get in hand is more than the opportunity cost you calculate in the above paragraph, then it means you had a lucrative deal. Otherwise you are sucker :) Note that if you decide to postpone your selling by a year to make the sale lucrative, the opportunity cost also goes up and you have to take that also in to account.
Peace out
sai
ps. Caveat: This part of the story is told purely from the financial point of view. It is not possible to quantitatively describe the sense of pride of ownership, sense of satisfaction in smelling the rose in your backyard and other such intangibles.
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Memoirs of a village life
“Sastha is coming this way”, the local village kid cried while running. That was not a shrilling holler. It was nothing more than a shout which a boy of fourteen can give while huffing and puffing his way through the alleys. But all the people in the village came out as if they were expecting someone to yell those words around that time. Sastha is the local deity which is believed to be the protector of the village. The priest, who does the rites in the small temple under a banyan tree 3 miles from the residential area, is considered a living deity on special days. And that day, lunar New Year was one such day.
Residential area is a stretch-word for the 300 something modest homes in Beemanagari, a village of around 1000 people at the southern tip of India. Two of those houses were rented for municipal offices and one was dedicated as the local post office. These offices were almost always locked up. The mails for the residents of this village came from the nearest town. Those mails are few and infrequent and the head of the local post office lived in the town. His wife could not handle the stringencies of the village and goaded him to make the move to the town. The post master employed the services of his home servant to dispatch the local mails.
In addition to being the New Year, that day, the village head wanted the priest to perform a special rite for saving his 15 year old from the hands of the death angels. As is the custom among the wealthy farm land owners of the village, the head’s son is educated in Madras, a metro known for good schools. He was a spoilt brat who is fit neither for farming nor for academics. His only claim to fame was being the only son of a wealthy man. He was often surrounded by head’s thugs and senile village council members who pampered him to get favors from his father. The son got into the village water tank armed with the swimming capability of a heavy lead ball. A farmer’s son who was around that area spotted him drowning and he dragged him out of the well. While the village head attributed this ‘miracle’ to the local deity and called for the ceremony, the reward the real savior got was a deep bite mark from the imbecile son. Not many in the village opposed the ceremony, as any occasion is good enough to please the local deity.
As was the custom in the village, while the rites were performed, the residents could not go near the temple. Only the priest could talk with the deity and hence the excitement surrounding the homecoming of the priest. For the next few hours, the residents had to treat the priest with at most respect as he is Him personified. In reality, though, the priest was an incorrigible drunkard who was often seen in the fields after overnight drunken orgies with the thugs of the village well-to-dos. The softer, humbler and more modest residents of the village with values attributed this behavior to the end of times. “The dark side is taking over” they would observe and would mind their business. Even they would treat the priest with reverence on those special days and get the sacred ash from the priest. It wasn’t an irony that was overlooked. It is the way the cookie crumbles in the village, except that there are no cookies in our village in India.
Even in this modest village the cuisine is very indigenous and rich. White Bread is considered as the diet of a recuperating patient and biscuits are something that the Englishmen eat because their lazy women don’t do real cooking. At least 5 vegetable curries are present in daily lunch with rice, sambar, rasam and thayir (Calling them lentil soup, tomato soup and yogurt is unconscionable and akin to butchering mercilessly, the carefully prepared food items). The staple food is rice and the village women would boast of 200 odd recipes using rice - coarse ground, powdered, boiled, half-boiled, par-boiled or fried. Somehow, the Atkins fad never caught up in our village. One would better not bring the topic of low calorie diet lest one be relegated as a city slacker. Even though the farmers live penuriously compared to the standards of the city, the farm products are aplenty. Rice need not be slow cooked with a special setting in Betty Crocker. The rice in boiling water fueled by burning logs can be cooked no sooner than 75 minutes for 4 servi
ngs. The women are all home makers and they take huge pride in their culinary skills. A typical day starts at 5 AM long before the men wake up and lasts until 9PM long after they hit the sack. Apart from the daily chores, there isn’t much time for anything and they seemed to care less of the fact. Sastha ceremony is much anticipated by the kids not for any spiritual reasons but for a more mundane reason – lot of different variety of foods. The whole village gets together in a public hall and the sumptuous feast is enjoyed almost in a manner identical to that experienced by the ancestors a thousand year earlier.
Nothing much changes in the village. The daily chores happen without the aid of electricity and the activities are dictated by the rising and setting of the Sun. Because of the proximity to the Equator, the days neither grow longer nor shorter. Beemanagari is surrounded by impressive mountains (~2500-5000 feet peaks). Because of the presence of mountain passes, we get very strong winds. People sleep out in the open enjoying the bliss of the pleasant breeze. To answer nature calls in the night, people use hand held torches - wooden log fueled by kerosene. That’s pretty much the technology used in the village. If you are a light sleeper, you can see a lot of Statues of Liberties walking past you. Occasionally you hear someone giving a heads-up on a snake that has creeped in from the fields. That didn’t discourage people from sleeping in the open. The village druid - more of a witch doctor, is a famous personality in the village for obvious reasons - the MBBS doctor is in the town and it will take 3 hours before a patient can be taken to the town. The Indian government’s goal of electrifying every village, town and city hasn’t reached this far and no one seemed to complain about that.
School is a luxury that can be afforded only by the wealthy or by the perseverant, with empathetic parents. The nearest school with higher secondary education is 8 miles away in the next village and one has to cover the distance by foot. If you are the son of a wealthy person, then you get the privilege of getting higher education in quality schools in the metro 300 miles away. A local majordomo is sent with those kids to alleviate their tribulations away from home. If you don’t take up education, the path of least resistance is to learn farming from the parents or become one of the thugs under the wealthy. Men also took up cooking profession and traveled many miles to cater to marriages and other functions. My family was very supportive in giving me education. I did my schooling in the next village and got into an engineering program in a city 150 miles from the village. I was treated to a hero’s welcome every time I returned home for the semester holidays. Now, after finishing my masters and taking up a job in the valley, I am even farther away from my village. But in one of those rare moments away from the maniacal deadlines imposed by my profession, when I have time to muse, my mind wanders and my heart yearns for the western breeze from the mountain passes, for the love of simple minded but big hearted denizens of the village. If I concentrate hard, I can even smell the rusticity of Beemanagari and the sacred ash from Sastha’s temple. If I concentrate harder, I can even hear my own voice, “Sastha is coming this way”, while huffing and puffing my way through the alleys years ago; for, I was that local village kid.
Peace out
yours truly
ps. I submitted this work for Cupertino Library Rural Scribe competition and am glad to say that they published this in their newsletter. I also got an opportunity to read the article infront of the Cupertino community audience in the city hall.
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Crescent city - A heaven on earth
Just got back from our 4th of July
trip. Priya managed to get some time off between her projects and we both explored the area around Crescent City, a sleepy north western Californian coastal city. The beautiful redwood forests adorn one side of the city and on the otherside is the adorable expanse of the Pacific ocean.
We pitched our tents in the KoA campgrounds and did a bunch of day hikes to the nearby riveria. Travel in any direction for 15-20 mins, you are in the middle of secluded redwoods. Those big ass trees are a sight in themselves. They are much bigger than the ones in the Big basin state park near the San Francisco bay area. The Smith river (north fork, south fork, central fork, north central fork and all combinations thereof) runs through the c
ity and we took 20 mins trip from Crescent city to see the place where it merges with the grand Pacific. Priya and I sat in the Pelican dunes beach, one of the many beaches in the area, for 3 hours (a lot of sunscreen) and we had the beach all to ourselves, well excepting the Pelicans ofcourse. If the redwood forests allowed me to experiment with a lot of shades and lightings and with taking photographs of elegant ferns, the beach provided a feast of sunsets. At the end of every day, when we were tired of er.. relaxing, we hit the beach near the Battery Point light house, which is a witness to the 22 feet waves during the 1964 tsunami that claimed the lives of 15 denizens of Crescent City. We bot
h concurred (ahem..) that this place is as close as it gets to a heaven on this Earth. Well... all good things will end and so came the 5th of July when we have to bid adieu to the north western californian redwoods and floor the pedal to get to the concrete jungle we so lovingly call the friggin' bay area ;). For a photo essay, please point your browser to my yahoo photos page and set the slide show to 'slow' mode.
Peace out
sai n' priya
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