Nobody is perfect, I am nobody

Old hat. But odd when you see a blind beggar wearing that on his Tshirt!

The fundamentals of personal finance: My slideshow on slideshare

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India's first online weekly onpersonal finance

Does your agent use the information advantage against you?

We hire an expert because he knows more. But does the expert use that information advantage for you or against you? Steven Levitt of the Freakonomics fame, looked at how real estate agents did when they sold their own houses versus those of their clients. You can read the original academic paper here.

Freakonomics is an international bestseller where Steven Levitt and Stephen Dubner explore the hidden side of everything. In a lucid manner they explain how the incentives of the real estate business, for example, encourages the agents to act against the best interests of their customers!

Agents are often better informed than the clients who hire them and may exploit this informational advantage. Real-estate agents, who know much more about the housing market than the typical homeowner, are one example. Because real estate agents receive only a small share of the incremental profit when a house sells for a higher value, there is an incentive for them to convince their clients to sell their houses too cheaply and too quickly. We test these predictions by comparing home sales in which real estate agents are hired by others to sell a home to instances in which a real estate agent sells his or her own home. In the former case, the agent has distorted incentives; in the latter case, the agent wants to pursue the first-best. Consistent with the theory, we find homes owned by real estate agents sell for about 3.7 percent more than other houses and stay on the market about 9.5 days longer, even after controlling for a wide range of housing characteristics. Situations in which the agent’s informational advantage is larger lead to even greater distortions.

How do we reduce the information disadvantage? Internet is a powerful way. We need more information power on sites like one I have started

India's first online weekly onpersonal finance

No FII capital flow is good for the Economy?

Ajay Shah, in an interview with CNBC-TV18 says how the Government cannot fully control capital flows. Watch the video.

He says,

"The basic point is what is India going to do about capital controls. Do we want to become a modern market economy, do we want to integrate into the world economy, do we want to harness the benefits of globalisation or not?

There is a school of thought which thinks that the good old days were better, the good old days when we did not particularly have capital flows and we were more cutoff from the world. That is the point of debate that all of us face today."

http://www.personalfinance201.com

Latest Updates on India's first online weekly on personal finance

Here they are. What do we do to make it better?

• Stock Market Analytics and Investment Strategies at Moneyoga
• How an actuary buys Insurance?
• Update for week ending October 16, 2007
• The fundamentals of tax planning
• Where is your money going and where do you want it to go?
• Update for week ending October 9, 2007
• Look before you leap on ULIP

http://www.personalfinance201.com

How to understand cost benefit analysis

There is a cost to everything. Ouch! Aadisht explains!!

There's no gain without pain. It's unrelated, but that brings me to note that I have completed one year of blogging somewhere in October. And it all started when I was stuck up with back pain! The gains for me is I have been able to look at some real good stuff( no, not porn!, but serious insights and wacky humour) on the web and that I am little more organised about my own finances.

The real gain, I guess, is that I have a sense of direction of what I want to do over the next 5 years or so. And one of them is about this web site

Stock Market Analytics & Investment Strategies for India

Moneyoga: Stock Market Analytics & Investment Strategies for India is live!


Moneyoga will develop a systematic & disciplined approach to investing and trading in the Indian stock market. I have been following Deepak's Blog on investment and I have really learnt a lot from him. He and Kaushik bring with them tremendous knowledge and loads of enthusiasm into this venture. I recently read the following passage from a speech by Theodore Roosevelt on Zoho Blogs and I want the Moneyoga guys to remember that!

It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement.......

All the best, Deepak and Kaushik.

http://www.personalfinance201.com

The Physics of Personal Finance

http://www.personalfinance201.com

India's first Podcast in action: From Sania to Sonia

Indicast is the first Multi-person Indian Podcast and the two resident contributors are Aditya & Abhishek. They have a very entertaining audio content that'll keep you updated with the top things happening in & around India, Indian business, Sports and technology. Their live cricket T20 semifinal/final podcasts were a huge hit.

I have been after Aditya with my set of questions on how two individuals can set up such an amazing site and concept in action. Thanks Aditya for some candid and interesting answers.

1. Where did the idea come from?

I was in the US and we initially had decided to start a business focused blog which didn't excite us as much as we thought so we decided to do something drastically different. This was when podcasting was fairly new and hence we decided to give it a shot. We read a lot of blogs but we felt that blogging wasnt for us and podcasting was the ideal platform cause not everyone can write as well as they can talk. Moreover, through podcasting we had a more informal and interactive alternative as compared to blogging.

2. Is there a research that you have done on the business model?

Yes, the research was done by me and abhishek over a cup of coffee at Dadar CCD on the back of a paper napkin - money could be made though our model but it requires a lot of patience. Its a long gestation business! On a more serious note, We really don't believe in analyst reports and it was good to know that even the VCs dont take the reports seriously. That being said we have spoken to a Media houses and we were pleasantly surprised to know that they are willing to buy inventory on new media like blogs and podcasts. The next step would be video ad embeds but we are getting there slowly. Apart from that the business model is pretty simple and there is only one way to find out if it works i.e by doing it

3. Tell us how you go about constructing a website like this?

We use joomla as our platform. Its highly customizable and best of all its free. But the beauty of Indicast is not in the technology but the presentation style. A platform can be easily replicated but nobody has been able to replicate our themes as of today.

4. How did you actually build Indicast (how much did it cost, where do you host, what did you need to do in terms of paperwork, coding, finding people, etc)?

We have done everything possible to keep our technical costs low. We host our shows on archive.org which is a free service which takes care of our bandwidth costs. Joomla is free and we very adept at customizing it to our (rather our listeners) needs.

As I said technical coding etc is the easiest part of the business. We are short of people who are willing to experiment. We are not looking for experts in finance or technology. We are just looking for people with deep interest in finance/ technology or anything else. We encourage people to help us out part-time not because we dont have the cash to pay them but because we believe that they get good insights working in other fields which add a lot of value in our audio shows.

5. Capital is important for a venture like this, I feel. What are your Capex plans?

Our capital expenditure includes buying good audio - video equipment and supporting hardware. From a software point of view we are not that worried. The major expenditure we see lies in marketing and spreading the word. We are currently going though the word of mouth advertising way because we dont have money to throw away at advertising. We would much rather use it in developing audio-video content.

6. What are your goals with IC? I mean the number of page views,

Our goal, if we get the required financial and advisory support is to hit 1million/year download mark. We are currently doing around 80 thousand to 1 lakh downloads/year. Its enough for us to break even and make a profit. Our calculations show a modest revenue potential of 2-3 crores.

7. How do you market IC?

As you know we are marketing indicast through blogs. We have an affiliate program for Indian bloggers which helps us increase downloads. It is still in testing phase. Apart from that, we havent really conducted any formal marketing campaign. We try to create value to the user and have a good SEO system which helps us attracts users from google. For Example, during the world cup we forecasted that people would be searching for score updates since they'll be working. So we started providing free web based audio commentary for Indian matches and have received a lot of traffic for this service. This service is donation based and whenever India wins we get good donations. We also have developed a lot of goodwill since our commentary is similar to Indicast. We make people feel as if they are sitting with their friend in a living room and watching the match! These commentary listeners end up listening our pod-casts.

8. What would you say to a young person who wants to do something entrepreneurial?

Just get going... you might have ideas but ideas dont make money. Executing the idea does.

9. How enjoyable, frustrating has been the journey so far?

Its both... we are enjoying it whenever we are creating content but its frustrating when we see the month end revenue. But also, something that a VC told me that as an entrepreneur you will only get instant failure but never will you get instant success. This keeps us going.

Thanks, Aditya

web: http://www.theindicast.com

Get started, strategise your spending and understand the difference between being rich and sexy

Ramit Sethi has a straight forward style of telling what he has in mind. And even though reading personal finance articles can phase out most people, reading him is a joy.

Ramit has been featured in an interview by US News where he shares his thoughts on personal finance for the 20 somethings

He mentions the wish list for the 20 somethings as :

how to figure out where our money is going and how to make it go
where we want. Make it simple, make it interesting, and get other young people
to join in on the conversation.

Pretty straightforward. But difficult to implement. Do check out the three things young people can do to improve their financial situation.