October 11, 2008

Coping with uncertainties and tough times

Finally, even the normally gullible Indian people who believe everything that the Government say, are finding out to their distress and disappointment the hollowness of the wonderful stories of economic growth dished out by Chidambaram from the time he became the Finance Minister. He showcased the growth story mainly touting the rising Stock Markets which grew to such high levels as could not be justified by the realities on the ground.

Then slowly, the reality hit the aam admi as well as the not so aam admi in the form of back breaking inflation for which this man acting as Finance Minister kept on blaming global situation and everything and everyone but his own mismanagement. This was followed by the crash in the Stock Exchanges and finally by the huge reduction in Industrial Production reflected in the IIP.

Even now, this man Chidambaram is in the denial mode and keeps on spinning fictional stories to calm the common man. It is doubtful if he on his own can come out with any worthwhile action plan to provide succor to the suffering millions. More likely it is that under the garb of reviving the slump in activity, he may just focus on giving steroids to his favorite housing sector so that they can sustain their price levels which are crashing now. He will also do his best to ensure that the Stock Exchange Indices rise, once again giving everyone a false sense of euphoria that the country is making progress.

Hard times are coming and the people themselves will have to find ways to deal with the developing situation as the Government that has lost all credibility cannot be relied upon any more.

Some practical thoughts on some ways to handle the present situation which is becoming more difficult are given below.

These suggestions are not for:

Those who are blessed with means far more than what they need
Those who know what is best for them
Those who think they know what is best for them

Investing money

1. Keep away from the stock markets. Do not buy shares in a bear market for the present. The prices of shares are a complex result of many factors:
a. The actual situation of a company
b. The actual situation of a specific sector and the entire economy
c. The expectations for the future with regard to the company, the sector and the overall economy
d. The sentiment of the investors which also takes into account global factors
e. The activity of FII (foreign institutional investors), which is a key factor influencing price movements. The FIIs may park their funds temporarily in the Indian sock markets or may be ‘hit and run’ players out to make a quick buck or may invest for speculative purposes. Some FIIs who might have invested for medium-to-long term may suddenly exit for any number of reasons including exchange rate changes, their own distressed conditions or more profitable avenues in other countries.
f. Domestic speculators and market players who may work with specific objectives and influence price movements even during a particular day.

The chart below shows the huge price movements on a single day in Sensex.

Do you have the wherewithal to track the market fluctuations every hour, every day and sustain variations of 1000 points in a single day?

If you are still adventurous enough to take your chances for any rise in prices in the short run, be also prepared to lose close to everything and bring distress to yourself and your family in case the present slide continues. Also note that what is important is what happens to the price of shares you buy and not the Sensex. Prices of certain shares like Realty have lost 75%- 90% in a short time. The uncertainty and risk are simply too high at the present time and to avoid losses and earn even a moderate return you may have to wait for two years. Pure gambling may be another option!

2. If you have money to invest, place the same in a Fixed Deposit in a nationalized bank after comparing the rates offered by a few banks as well as the penalty or loss of interest in case of early withdrawals. Investing in Gold would be the second option. Do not go under any circumstances for Multi Level Marketing Schemes which promise fancy returns for making certain members and carrying forward the chain.

3. Do not purchase a house at the present time when the market is crashing. Defer purchase. Consider the fact that the prices have gone up in the last three years by 350-400% which can not be justified on any grounds at all. The prices have been propped up just as the Sensex. (read article here for a background). The Realty Sector is facing hard times with buyers having disappeared. The Rentals in large cities are also dropping fast as the demand for rental places from domestic or international companies particularly in financial services and other service sectors is drying up. Many major builders are facing financial distress and are unable to meet their commitments. The shares of major Realty Companies have dropped between 75 to 90% since January, which shows the realities. Considering all these factors, it is advisable to KEEP AWAY from buying a house for the time being but keep a watch on the market to buy in case the market begins to rise due to Government policies that have enabled the builders to raise the prices artificially in the past. Buyers’ resistance is necessary to bring the prices down to a realistic level which is broadly 50% of the current levels.

4. DO NOT take a loan to buy a house even if the interest rate goes down. Your loan is what actually fuels the rise and helps the builders to increase their prices artificially. A Housing Loan creates a demand at a price which is not justifiable. Remember that what is really important for the person who takes a loan is not primarily the interest rate but the principal sum that is borrowed. It makes little sense to gain a small advantage in interest rate if the sum borrowed is too large to service. The borrower ends up paying higher interest in absolute terms, the interest saving is gone and more amount is borrowed to finance the unwarranted profits of the builder. This is only one aspect relating to taking a House Loan. The second and more important aspect that affects you for the entire life of the loan is servicing of the loan and interest i.e. EMI. Housing Loans have to be normally repaid over a period of 20-30 years. The borrower has to have a perspective of the entire period of the loan. The longer the period, the greater the uncertainties. Consider that a young professional couple engaged in a service industry and earning a very decent combined income takes a loan. Typically, most of the income of one partner is utilized for paying the EMI to the bank. For successfully servicing the loan, it is necessary that the same comfortable income situation continues for a period of 20 years or more. Most housing loan borrowers taking an optimistic view of the future assume that in normal conditions, they would continue to service the loan over this long period. Is it possible to predict the future over such long time horizon? Is it safe to assume that the conditions would be normal throughout? Will there be no business cycles? Everyone must have become aware that surviving in the fiercely competitive globalised world is becoming an increasingly demanding task. Job security cannot be taken for granted. Whether it is the general economic conditions or the situation of a particular employer or the ability of the employee to perform better or worse relative to others, the uncertainties have grown as much as opportunities. While the decision to take a housing loan should not be influenced by pessimism, but certainly, optimism needs to be balanced by practical considerations, prudence and caution. In our typical case, if for some unfortunate reason one partner loses the job or is required to look after family responsibilities, how would the loan be serviced? In the anxiety to get a house, many borrowers would take a view “we shall see” or “we will manage”. If that happens, all to the good. If the situation cannot be managed and if there are loan defaults and distress when children are at a critical stage in their own career development, how would the situation be resolved? Extensions in EMI installments could be obtained only at a heavy cost, further aggravating the problems. It must also be remembered that in case of defaults in loan servicing, there can be a voluntary repossession or forced repossession. In either case, the consequences can be unpleasant. While the house is repossessed, the liability for the loan still remains. Everyone has seen the disastrous effects of an economic downturn. In USA, many owners who could not make the payments simply abandoned their houses and left. The genesis of the sub- prime crisis in the USA that has had reverberations all over the world and has virtually brought the entire developed world on its knees lies in defaults in repayment of loans taken by individual borrowers. It would be unwise to ignore what is happening before our eyes and which is greatly affecting everyone at this point in time.

Weigh the factors carefully

Normal Expendiure

1. Do not use credit cards to buy things unless you have money in the account. Do not buy with credit cards to spend tomorrow’s income today. Credit cards are convenient as they enable you to make cashless purchase and avoid hassles with handling cash. This must be taken as their limited purpose. Going on a shopping spree on the strength of merely a Credit Card not backed by money in the bank, is financial irresponsibility. To spend today out of future income is to leave that much less for the future. Further, many credit card owners simply pay the minimum amount payable to continue the Card and let the bills pile up. This has a heavy cost in terms of delayed payment charges and penalties collecting of which has become a fine art with the credit card providers. The more the penalties and delayed payment charges, the less money is left for genuine needs. There are many who believe that the more Credit Cards they have, the better off they appear to be in their own esteem and in the eyes of others in front of whom the cards are flashed. This is not true. You need only one good Credit Card or Debit Card to see you through most situations, unless of course, you are defaulting by turns on the many credit cards you collect. Then again, there is a cost to having a credit card which can be easily avoided. Before deciding on the Credit Card to take, it is also advisable to know their charges and penalties policy in advance. Avoid Net Banking unless you are thoroughly familiar with the pitfalls and are able to secure yourself completely against fraud.

2. Do not take any bank or private loans to buy durables, cars, houses, etc. The future is uncertain. Do not buy if you do not have the means to buy today.

3. When buying gadgets, durables or cars, look for the basic functionalities which you require. Any added features that are offered in different models or by different brands need to be compared with the higher price that you may need to pay. Only you can decide whether a particular added feature is actually needed and whether it is worth the price differential. In Metro cities, buy a car only out of necessity, not just for comfort or as luxury or status symbol. The availability of parking places for cars whether in the place of residence or on the roads is woefully stretched and will get worse. There is also an increasing tendency to buy Laptop computers in preference to the Desktop. When you buy a Laptop, you end up paying around 50% more compared to a Desktop, feature-for feature. Buy a Laptop only if you really need it and a Desktop will not do the work. Many branded Laptops have serious servicing issues and the service is oftentimes shoddy and slow. Again, if you are used to traveling with the Laptop and it is stolen or lost, apart from the Laptop itself, you can lose large data created after hundreds of hours of work, unless you routinely back it up on a Desktop.

4. Avoid posh hotels and restaurants where you end up paying atrocious prices just for the ambience and for the pleasure of being seen in such places. Go to more moderately priced restaurants serving quality food at the same time. Try to discover the pleasures of cooking more often at home.

5. Mobile Mania: As in the case of other gadgets, pay only for the features you actually need. Do not be lured into frequently buying new models when your existing mobile exactly does what you need it to do. Avoid getting tempted to go in for various schemes which the service providers constantly keep on pushing through telemarketing at all hours. Remember, for any scheme that they propose as a favour to you, the idea is simply to fix your bill amount at a certain level so that it generates a regular minimum income to them from you. Avoid using the SMS service to send various comments to TV channels over their 5xxxx numbers. Do they care for what you say? It is simply a revenue sharing arrangement between the provider and the TV channel as these SMS are charged at a higher rate. Avoid SMS quizes to win huge prizes for answering simple questions. They are just meant to increase the revenues of the service providers. The more you SMS, the more you spend. Even if the mobile is handy, do not be tempted to talk or call someone or the other unless you really NEED to.

6. Gift Mania: Use your discretion about giving gifts. Do not indulge in needless gift culture by giving gifts indiscriminately. Avoid celebrating Husband’s, Wife’s, Father’s, Mother’s, Brother’s, Sister’s, Teacher’s, Lover’s, Hater’s or Friend’s Days. These are just meant to generate sales for vendors of gifts and cards. The sentiments towards your near and dear ones can be expressed at every opportunity and having a particular day to celebrate for the same is unnecessary.

7. Mall Mania: Malls are pleasant places to shop and pass time with your family on holidays. However, when going to a Mall, take a shopping list with you and buy only what you need and what is there in your shopping list. The shops in the Malls are very adept at using scientific techniques of merchandising and display. The primary intention is to lure and tempt you into impulse buying and somehow make the visitors spend more and more. Do not buy simply based on impulse when you see an article which you do not need. Go home, think, decide whether that article is worth buying and then buy it the next time.

8. Avoid Multiplexes. There is little need to pay 100% higher prices when you can see the same movie in a normal cinema hall which also is quite modern.

9. In general, look to get VALUE FOR MONEY whatever you buy, whether products or services.

10. Take up jobs in your own town or other town where you have a place to stay on a permanent basis. At any rate, avoid Metro cities tempted by somewhat higher salaries. The poor level of infrastructure in these cities makes for harsh living conditions apart from the physical traveling distances and lack of permanent accommodation.

While most of those who read these suggestions may find them mundane or unnecessary, they are given in the hope that a small minority may find them useful. These suggestions do not call for any real 'sacrifice', just for sensible use of what you have. In any case at the end of the day, it is for the people to think deeply and use discretion based on common sense and their own prudent thinking and in the light of their own realities.

If the article is useful, forward to others.

सारे जहाँ से अच्छा, हिंदोस्ताँ हमारा


maanas said...

very very practical advice. i am forwarding to friends.

it should be sent out to as many ppl as possible.

Ashok Pande said...

Pretty good piece, full of so many valuable advises.

I am forwarding it to friends.


india-awake said...

to ashok pande

Thanks for the good words and more thanks for your action.

Sumitra Yaadav said...

particularly the section on taking loans is an eye opener.

the finance minister has deliberately forced banks to reduce housing loan interest to trap buyers to benefit builders. he has destroyed people's dreams.

Ajay Mehta said...

Good in-depth analysis... Mr.Chidambaram will drown the already sinking ship of Congress. This time around the people should tell them that our memory is not weak and we remember all your misdeeds till the time of forth coming General Elections

maniratnam said...

it is a real pity that the finance minister cant be kickd out immediately.

Vishwajeet Rajwaday said...

I agree only with a small part of what you are saying, I disagree with most.

1. Real Estate bubble - yes, I partly agree and have written about this as a guest author on http://punebloggers.blogspot.com/ You may read my views on this there.

2. Most of other stuff you are prescribing will not necessarily work in these conditions. Your prescription of withdrawing from practically every activity will leave much deeper wounds on the economy, a wound which we may not be able to take today. If many people implement your prescriptions, we will be thrown into a serious recession. Understand that any economy in the world grows through credit. Not borrowing at all as you have prescribed will bring the economy to a grinding halt.

I also disagree with Fixed deposits. In most times, interest rates are always lower than inflation. This means if you keep all your money in FDs, you will have capital erosion and your principal amount will become worthless over time.

Gold is good to have as an asset class in any time, but more because it is always liquid. Not for any other reason. Else, investment in gold is akin to speculation. Compare this with investment in equity. Gold just sits there and we expect its value to grow. Ther is no human value addition which happens on gold, and prices of gold are a function of demand / supply and liquidity. Equity investment on the other hand is where you are placing faith on human enterprise, and it's ability to create work, value and build capital for further growth. Gold does not have this quality. Gold is not human, because it does not depend on "Hope and Faith" but rather on fear and despair. (I have written about this on my regular blog - http://spiritofsales.blogspot.com/

Economics is probably the most complicated of sciences and it cannot be simplefied in the manner you have presented.

Having said that, I must thank you for having created this opportunity for debate. Best wishes.

india-awake said...


thanks for your kind comments.

I have not suggested any real 'withdrawal', just sensible use considering the present uncertaianties. It is no more than a suggestion to apply prudence and achieve a better spending discipline while the going is tough or even in a normal situation.

And the primary aim of the individual is to see how he can cope with unexpected uncertainties. A person needs to worry first about how to secure his own present and future rather than impact of prudent management of his own resources on macro issues.

As to FD, of course, if the inflation remains high, the net returns are low but compared to the current stock market uncertainties and risk of losses, would at least generate assured returns in absolute terms. Gold is surely a good option and in the light of what I have stated earlier, the suggestions are meant for individuals who wish to be sure that they do not lose their hard earned money by making risky investments in a fluid situation in order to place faith on human enterprise etc.

Lastly, the article is not and does not claim to be an exposition on economics, but rather deals with mundane-sounding practical issues. As stated in my last para, it is finally upto individuals to use their discretion in the light of their own situations.

Thanks for your valuable inputs and links to your articles which I shall surely go through.

keepcool said...

about Mr. Rajwaday' comments sorry I do not agree. They seem to be based on superficial knowldge of economics and ignoring what is happening now.
how can one say that buying and selling of shares which are already issued can be equated to buillding capital, adding value etc. It can be true of subscribing to new capital issues but even there investment in Bank FD's would contribute more because bankers also lend money for economic activity and after more systematic assessment than what individuals can make. For every rupee of deposit they have, they can lend more than one rupee. About eroding capital, it can be eroded in any investment that is subject to fixed return, if the inflation rate is higher than the return. It does not mean that people should not invest in FD.

Economics sometimes get more complicated because people pick up bits and pieces to come to conclusions.

the article is a great piece of timely advice. The author has clarifed in the very first part that it is not for certain categories of people. I am not in any of the three catgeories he has mentioned but just a person wanting to make good use of money.

I will gladly take his advice to heart.

Sandhya Deshpande, Pune said...

great article with good practical advice on protecting your money in hard times.

his advice on credit cards and loans is particlarly relevant and must be taken to heart.

in fact, the article is very perceptive. Just few days back a brother and sister duo Nairs in Mumbai were forced to commit suicide due to living beyond their means by credit cards and loans.

if we can't learn lessons from what is happening around us and keep thinking of how economy may collapse if we live within our means, we would be not only fools but idiots.

manmauji said...

i sent this article to over 20 friends.

Mallikarjuna said...

I liked your comments

sekhar and chandrika, chennai said...

very timely advice considering the situation which is worsening.

not only our family has taken it to heart, we are also telling our friend circle to adopt these suggestions.

mansukhani said...

agree fully.

regarding comment by Vishwajeet Rajwaday about gold, it is right. but perhaps thats why author has mentioned it as second option.

Vishwajeet said...

Would like to add some clarifications here.

I would agree with most of the things that the author has recommended. My own lifestyle is a reflection of what he has written. - BUT, this advice is great when the first signs of economy overheating appear. Not when we could be standing on the cusp of a possible depression.

If readers read what I have written about real estate on http://punebloggers.blogspot.com/ they will understand my views on property better.

Most readers equate Equity markets with "Share Trading". This is not investing, but speculation very much based only on "Demand-supply" and "Tips". It is creating fictitiuos demand by hoarding large quantities and pushing up the prices. That was what happened last year. That was greed and not investing in human enterprise.

My point is more about the timeliness of such advice. I have been contrarian in my view all along. When the whole world was on a consuming spree, my family were continuously being conservative and prudent, saving a larger portion of our savings. I disagreed with paying 80% of my salary as EMI for a home - because the whole world said property prices would only give up.

I have a simple point - If we as Indians believe that "Roti, Kapda and Makaan" are human essentials, then how come only Roti And Kapda are measured in inflation whereas Makaan is related to wealth? Now, as one reader has so nicely reminded me, my knowledge of ecomonics is superficial, but even with that superficial knowledge, I do not buy the above argument.

I am again speaking about the need to maintain at the present momentum and try to give it a soft landing.

Most of us have heard the news of Jet airways laying off 1900 people. Flying is a "Luxury" which we probably do not need. But these 1900 people (and many thousands more who can get laid off as demand slumps)were consumers of many other goods and services. The Airlines Industry employs (by rough estimates - not factual data) over 3 lac people minimum. All their jobs are under threat. After the airlines, comes the 5-star hotel industry - Another 4 - 5 lac people. In our economy, assuming that only a small fraction of people are employed in the luxury, fashion etc industry, we still may be talking of over a Million jobs. These Million people will stop spending the atleat 5,000 they were spending earlier, which takes out Rs. 500 Crore of monthly spending. As these industries go down, the software companies who were their suppliers will start laying off people. This will affect automobile, investment banking and real estate industry (remember, software professionals have been large car buyers, real estate as well as mutual funds investors). The magnanimity of this is unthinkable. Running around scared will put us in a reverse spiral. We could start seeing foreclosures of our own.

Eventually, in the long run, I think if we consume less, mother earth will probably live longer, but the price we pay in the interim will be too harsh.

Which is why I again say, suddenly scaring people into becoming overnight conservationists will be too painful.

I would love to be criticised after people think through the consequences of such suddenness.

keepcool said...

mr vishwajeet

your sincerity is very much appreciated.

your advice to maintain current spending to help economy smooth landing makes no sense for those whose savings are all gone and whose jobs are in danger or already gone.

all these ppl would prefer to follow the lifestyle you actually lead, i.e. conservative and cautious. they will be betetr off thinking of their own good at this stage rather than worry about things which the govt. should have worried about when they encouraged the consumerist forces. and sudden events have to be met with sudden measures. how jet suddenly cut their expenses? did they think what it will do to economy or others as you suggest?

it is not necessary to scare ppl who are already scared. what they need is some pointers on how to cope.

Anonymous said...

Today, the money is created through debt, if there is no debt then there will be no money, hence no economic growth (http://video.google.com/videoplay?docid=-9050474362583451279").
To maintain a GDP growth rate of say 8% (this is exponential) we need growth in debt as well.
Exponential growth needs exponential use of resources and that is why we are seeing envirnomental changes.
I believe its time to change our monetary system from debt to something better!

Anonymous said...

I would agree to the part of what the author said, but I would say for people who are long term investors to wait until all the Large Caps in the sensex have gotten down to an acceptable stage and then make a buy.

Again what author has said about real estate hits nail on the spot. The only reason why sellers are claiming higher prices is because of bigger disposable income which is generated by IT. But when you see lay-offs, which is inevitable at this point of time. You would see lots of defaulted housing loans, the ones which were taken out of need and ones which were taken out of business needs. When you see actual housing price increase in right bound instead of 100%-200% we can say our economy is stable. Unless the foundation is strong how can we expect to build sky-scrapers?

Surya said...

Under the circumstances and the constraints, I feel Government of India has acquittede itself well in dealing with the present economic impasse. That does not mean that the economy is not being hit or the individuals will not suffer. In fact it is the mature handling of the financial system by the Government with checks and counter checks that have resulted in the country and individuals being spared of the turmoil which is being witnessed by citizens of USA. When there is such an impasse there would be different views on handling the situation and the views may be poles apart. Government has to necessarily select some options. Painful but that cannot be avoided

Rema said...

Thanks for the great article with good practical advice on protecting your money in hard times.

I have taken home loan 7-8 months back and will get possession in next 2 months. And my Pre-EMI already increased by Rs. 2000. And I am bit worried.

Should I go out of home loan (selling the flat)? Please advice.


india-awake said...


thats a tough one since you are already committed.

first, i hope that the builder is financially capable and he does complete the building and give you possession.

second, it looks like you have variable rate option in which case the interest may reduce as well as you go along. but overall, depending upon the size of your loan, you may still be shelling out a large amount on your loan as EMI. Hopefully, you have two earners and both are in good companies. new economy companies such as IT, BPO, financial services etc. seem at present to be rather more susceptible to the changing situation but even old conomy businesses may see a downturn as we go along.

its tough to advise you to cancel the loan which also may involve cost.

you need to consider all the above and most important, how desparate and critical is your need to have the house. e.g. whether you can continue to stay where you are staying now.

hope you have some use of the above comments.

i.awake said...

if you have any other thoughts, you may send an email at my profile email

Agathyaz said...

a perfect information at the perfect time.

it should read by every person residing in metros using credit cards or paying in 500's and 1000's for the purchase of Rs. 10 worth of product.

friends pls forward it to as much as possible.

Agathyaz said...

friends by god's grace i am already plan to follow these suggestions in my life.

i resides in Chennai, few years ago. I deliberately quitted to Tier III city south of chennai.

simply cutting down the credit cards.

closing personal loans stage by stage, anyhow premature closure.

waiting for a better time to invest again.

still that time - just do regular business, earn very minimum for day to day life.

Apoorva Kumar said...

I congratulate you for such a nice article. I guess even if 20% of our new generation( those in age group of 25-35) pay proper attention to the advices given in the article, we will surely witness great change in our lives.
I have stayed in Gurgaon for 2-3 years and I have witnessed the unexplainable surge not only in the property prize but also in every small day to day used commodities.
Can't understand where we are heading. The so called IT/ITES boom (read bubble) can burst any day, it's so uncertain. The irony is even after witnessing the disaster in U.S., which is an ideal nation for a lot many youngsters, we refuse to learn and improve our ways.

india-awake said...

to friends who liked the article:

it will be of real value if it can be emailed by readers to many others by using the email option at the foot of the article.

let more people start thinking.....

thanks for your good words

Praveen said...

Luckily I went through distress of Credit Cards,Home Loans and Stock market in year 2005. I lost significant amount of my money to these Bank Sharks and artificially fuelled stock market.

I invested in stocks only to see my cash evaporated. The bankers where at my door step and humiliating me. In India unfortunately the social security system does not exist. Foreclosure norms like US does not exist in India.

Govt does not give a guarantee for markets, but the Banks expect Guarantee for loans that they give us else they send goondas to our residence. This in fact gives rise to parrallel lawless system on the likes of Dawood who make more money. In India the politicians have people like Dawood as their henchmen.

I took two of the Banks to court and won the case against them and repaid my loans post settlement.

Now I'm much wiser and intend not to be greedy but live by my means. I will not depart by hard earned money to these established goons like Chidambaram.

Only 2% of the Indian population invest in stocks so they are not a big vote bank for the Govt to fight for. FII's and FDI's have law's in their favour.

Anonymous said...

One VERY IMPORTANT DIFFERENCE between housing loans in India as compared to USA is the non-recourse clause. What it means simply is that in the USA if a person stops paying EMI, the bank can repossess the house and the game is over. It does not matter if the market valuse has gone down to even 20% of the original loan amount. However in India, the agreement is such that the bank can repossess the house, sell it in the market at a throwaway rate and then be after the borrower for the remaining amount! This means that in India, you cannot follow the US technique of simply abandoning the house. The bank can come after you hammer and tongs even after they have seized the house! I don't think even 1% of the borrowers are aware of this difference.

karuna said...



it is a TRAP.

keepcool said...

reference comments by praveen,

it is necessary that everyone learns from his experience and avoids taking loans from banks where consequences of default are completely unmanageable for individuals.

it is also completely true that chidambaram has proved himself to be a thug and a crooked person out to make life miserable for the people.

Anonymous said...


It is this kind of advice that left india way way behind all these years. So save all your money. for what? To give to some no good someone as dowry on your daughters wedding?

If people only bought essentials, we can all live on rice/dal (really, you dont really need any other veggie for *survivial* do you? and khaadi cloth(that too, take off when you are home, who is there to see you go around in your langoti?) Problem is then you are better off having naturopathy as a medicine because there would be no other medicine branches thank to lack of research (who pays for all that)

lathika ramanathan said...


whatever is said by him just does not make sense.

the author has given extremely practical and valuable advice in today's tough times. there is no suggestion of any real sacrifice but of proper money management.

the rest of the ramblings about surviving on rice dal and naturopathy do not carry any mature meaning.


keepcool said...

what anonymous has written about leaving india behind is sheer rubbish. is anyone going to reach the moon by spending beyond one's means?

his comment is best ignored.

Anonymous said...

Hi India awake,
I need your advice, i am 30 years old working in IT industry, completed my MBA in USA and was not able to get job their so i came back to Delhi, now here working in IT company. Initially got good salary, but too much pressure, too much politics, i am not able to coup up, in impulsive decision i bought a flat in Gurgoan and am not able to even pay loan. My whole financial situation is mess, their is no job security, intially i thought let me go back to India instead of staying in USA since India seems more secured, all girls were also telling me in Indian marriage market that see in india they don't fire, now same girls disappeared for other more settled boys. These girls also seemed too greedy to me, their father look for paystubs, homes, settlement, horoscope and what not. Now my problem is can't i just tell bank to take away my flat, i am afraid they will ask goondas to beat me to recover money. I made another mistake of borrowing from private bank. Now i don't know what to do and how to correct my life and bring it back to track. This IT bubble is nonsense, no security, all bull shit. Should i go to Canada and start life their, can you give me some guidance on what to do seeing my financial condition, my parents are also fed up and old and they think i am not able to do anything, although my dad has small home in Delhi but thank God he stayed in his means. Can you tell me what to do when i am seeing no light, all my saving got burned in stock market, this flat which i bought and partying. I think i am loosing my mental status also since suddenly i have developed habit of washing my hands, doctors say it is nervousness but again they also want money to treat me. What should i do and how?
Thanks for your help

india-awake said...


please send me blank email on my email add.(see profile) so that I may reply to you.

Charan said...

Hi There..

Just wanted to congratulate you on this wonderful blog of yours.

All of your posts ( I read all of them BTW..) inculcate thinking which is so necessary for the youth of this country. Having grown up in the typical lower indian middle class, I know it is hard for people (like me) to think in terms of the larger problems affecting our society as we first strive to establish a secure future... But these questions do need answering and it is better if we open up ourselves rather than shy away in the comfort of our relatively less puzzling professional jobs ...

india-awake said...

thanks to all readers who have kind words to say on this and other articles on india-awake.

as far as this article is concerned, in today's situation, it would be worthwhile to forward it to as many persons as possible as the economic outlook overall is becoming bleak.

Guha Rajan said...

SIMPLE, like 'Westerners' do not live on the concept of using "Future Money" (loans & Credit cards). Atleast westerners have the benefit of getting unemployement allowance. What do we have???

visit my blog at http://indian-amps.blogspot.com

india-awake said...

good insight by anonymous from andhra, into the realty scene in some places based on local factors.

it proves that there are massive amounts of black money or benami investments in real estate.

his comments also show how political aprties of all shades are indulging in such blatantly unethical practices to get votes from the poor.

guha rajan has rightly drawn attention to the indiscriminate use of 'future money' which can have and is having far more serious impact in the Indian context.

Vishwajeet said...

Very early on reading this article, I had commented that the steps suggested by the author will lead us into deep recession. Well that turned out to be true, and the best of economists the world over are tyring to figure out how the give confidence back to the consumer and get the consumer to start spending again.

The advise in this article is completely impractical and knee jerk. We do not need scare mongers, but rather measures to get our confidence back.

But I can say one thing, such economic disasters are good in the sense that they clean up the system of "non - performable credit" and bring some sanctity to the lending process. Such events also provide excellent money making opportunities to those who have the guts, the patience and the perseverence to do it.

Sandhya said...

just happened to visit this while going through the excellent article on Time for Testimonials.

reference vishwajeet comments, i regret i do not agree with him at all from an individual point of view. an individual has to first secure his own present and in difficult times, the advice given in the article is the only practical advice that people in this situation can follow to save themselves from coming to distress.

keep writing more of such articles with advice.