17 Lessons I learnt from the book Rich Dad Poor Dad

Rich dad and poor dad is an international bestseller written by Robert T Kiyosaki and edited by Sharon Lechter. It is based on his own life story where he mentions the learning from his two fathers. One is his own father who is a hard-working Ph.D. holder, a salaried but worried professor; The poor Dad. And the other one is his knowledge-giving source, his teacher cum financial advisor, and a businessman; The rich Dad. After reading this book I have extracted certain learned points which I am going to share below. It is totally based on my grasping ability and my way of representing the book. Hope you all put it to good use.

 

Financial Education or financial literacy:

1. Financial education is a major lack in the current education system. Although we dedicate our whole childhood to our conventional education methods, the main grind of adulthood to earn, manage, and grow money is not taught properly in a single book or subject. 

2. Teaching about earning money and teaching about growing money are two different things. Financial education shouldn't be such that it teaches us to run for money throughout our lives. It should be such which teach you how to manage money and let money work for you. When your money with proper management and decisions increases by itself without your personal time investment, it can be said that money is working for you. This whole concept is termed financial independence.

3. Conventional lectures and blackboard classes are not the modes to teach life lessons. Life being the biggest teacher is the best course which pushes you in every moment to learn something. It may be some random skill or lesson but life chores teach it most simplistically. Therefore, practical educations with life examples along with theoretical understanding are the most genuine and the most effective form of education.

4. Conventional education is designed to teach a student to avoid mistakes. But mistakes are part of real life. People that are scared to make mistakes never grow, but schools teach you to be scared of mistakes. In life there's right and wrong, good and bad, winning and losing, success and failure. Most people want to be right, but that's not reality. 

5. With proper financial education, financial independence as well as financial freedom can be achieved. Financial education should include basic accounting practices, proper investment practices, basic rules of the financial market, information related to tax, tariff, or levy. Financial independence is achieved once you take care of all these practices. But financial freedom is achieved when you get up to a stage where you are free to take the decision avoiding the number game.

Decision-making power:

6. Decision-making power is what makes people different from others. Each intersection in life street allows you to make a decision. This decision decides your future destination, will it be luxurious or abstemious is decided in that instant. So, if you don't cultivate instant decision-making power, you can't keep up in the race of making money. Your decisions will thrash you to a compromising position where you find yourself behind from what you projected and from others too.

7. There are three broad divisions based on our decision-making power (poor, middle-class, and rich). Poor and middle-class people work for money, and money works for the rich. Poor and middle-class lives are governed by fear and greed. Fear is often misused as security pushes the decisions of the poor and middle class to take the safest and secure path. Whereas calculated risks and aggressive approaches are mostly taken by rich people. 

Avoiding the rat race:

8. In your childhood, your parents push you to think of getting a job and earn for your lively hood for the rest of your lives. This indirectly fuels your decisions to sell yourself to the concept of salary, job security, financial security, etc. Even the education system teaches you to follow the contemporary approach to have some and adjust with that. How a rat runs continuously in a rotating wheel powered by it tied with a slice of cheese in front of it, your life resembles the same pattern. 

9. A job is a short-term solution to a long-term problem. The real intent to go to a job is to earn. When a salaried person says that he doesn't have any interest in making money, he is blatantly lying and is trying to cover up his real instinct. The salaried person confuses himself in between earning and making. This confusion leads to a path full of traps, the traps in the web of greed and fear. The greed of earning more and the fear of losing more makes him more vulnerable, fickle and stressed. 

10. Every person has something which can be quantified by money and few other things which can't be quantified. If most of your things are fueled by money, you develop fear and greed. This is inherited from generation to generation until a radical and unconventional heir breaks the chain.  

11. In fact, the origin of inflation, adulteration, and depression are caused due to this ever-rising trait of greed and fear in the masses. This gradually widens the gap between the rich and the poor. The downfall of many big historical civilizations was due to this rising gap only. 

Distinguishing between Assets and Liabilities:

12. Asset is something that brings money to your pocket. Liability is something that takes money from your pocket. Therefore, the rich collect assets, and the poor collect liabilities. Liabilities are some form of responsibility too where you don't only spend your money but also spend your time. A rich will never invest his big chunk in buying big liabilities. In fact, having big liabilities like luxurious cars and lavish houses is never a sign of being rich. It's in the mindset that distinguishes the rich and the poor. It's the smart sensing capability to differentiate between liabilities and assets. It's the decision-making capability to acquire more assets. 

13. Houses, cars, and jewelry are not termed as assets until they put money into your pocket. If a house gives you a profitable rental income, it can be termed as an asset. Asset and liability can be identified based on the cash flow. If the cash flow is inwards, it's an asset. If the cash flow is outwards, it's a liability. With proper learning and implementation, liabilities can also be converted into assets.

14. There are broadly four asset classes that are business, real estate, papers (stocks, mutual funds, and savings), commodities.  Businesses or companies are the best modes of assets if properly run and managed. Robert's cash flow quadrant says there are employees, self-employed, businessmen, Investors in each corner of the world's cash flow.

15. Business and investments on paper control most of the cash flow than the other two. Real estate can be an asset if you can learn to use debt. Proper management of real estate can become some of the biggest assets a person could ever have. Papers are stocks, bonds, mutual funds, and savings. A distributed investment plan can make the papers some of the exponentially increasing assets in your account. Commodities like oil, gas, gold, etc. will not go down soon and can be some of the well-reserved assets for future growth. 

Speculating inside out: 

16. Asking questions to yourself, to your surrounding, to your silence, about your problems makes you improve from what you were. A question opens the mind, a statement closes the mind. Poor people often end the possibilities of solving a problem but rich people are keen to retrospect, introspect and interrogate to solve a problem. At least the rich people are accounting a probability of solving it.

17. Not speculating your current scenario is directly escaping from success. Learn about accounting, learn about your financial statement, the numbers of your income and expenditure. Make your balance statement and income statement. Dig into your assets, your liabilities and find out the best possible outcomes for the current and future scenarios.

Share:

Read More

Websites to look upon while buying an apartment in Odisha.

Buying an apartment is a very tedious and complex task. If you would have read my previous blog about "How to buy an apartment?", you would also agree with the fact. In this blog, I will give you a list of websites you can visit before buying an apartment in Odisha. So let's start with the list.

1. RERA-Odisha: This is an Odisha state government website of the Realestate Regulatory Authority that records authorized real estate projects, registered agents, their application status, etc. You can use this website to scrutinize the authenticity of the apartment project you are investing in. It clarifies if the project is made following the rules and regulations laid by the Govt. of Odisha. 

From a new consumer perspective, if you are entering the website, you need to check for a few important things which will help you in the long run of hunting your dream apartment or house. Firstly you need to click on the act and rules tab where you can find a file named "Odisha Real Estate (Regulation and Development) Rules, 2017." In this pdf file, go to the Annexure-A page (Agreement for sale) where you can find the full format of the builder-buyer agreement/ agreement for sale. The agreement for sale format is the legally accepted format registered by RERA and is admissible as evidence in the court of law.

You need to download the format and cross-check it with the builder's provided format (if any). Before initiating any advance payment to the builder, you need to sign the agreement of sale with him for your future security. You may also take the help of a legal practitioner or lawyer for drafting the agreement. To know more about the Agreement of sale, read my blog, " How to buy an apartment?"

Secondly, you need to click on the projects tab > Offline/ Online projects > Registered projects. Select the project type as residential, fill up the project name and the registration number of the project to be provided by the respective builder(promoter). By filling in any of the above information, you can also get the full details of the project you are investing in. Project documents like registration certificate, approval letter of the planning authority, approved building plan, and layout plan can be downloaded from there as proof of authenticity. If you are consulting with an agent, you can also check his credentials by filling up his agent registration number in the real estate agent tab. You can also file a complaint against the faulty real-estate practices you faced from a promoter or an agent there.

2. IGR-Odisha: Inspector General of Registration Revenue & Disaster Management Department is a government of Odisha website. This is the most important website to visit for a property buyer. Starting from the government-allowed property benchmark value of each area to the online application of sale deed, you can reduce numerous complexities just by utilizing this website. 

In the property benchmark valuation tab, you can know the areawise property valuation allocated by the government, stamp duty on a plot, and registration fees of the respective plot by following simple steps. You can also apply for the encumbrance certificate by clicking over the "apply for encumbrance certificate" tab. There is a complete guide on how to draft and file an online sale deed too.

3. Development Authority/ municipal corporation website: There are specific development authorities for different cities. Each development entity has there own website. Basically, on these websites, you can check the signs of progress prevailing or the executed in the nearby locality based on your preferences and proximities. 

For example, if we consider the case of Bhubaneswar, the BDA website is what you should refer to. BDA approval is also a vital document to look for while buying a property. The websites help in doing so.

4. Bhulekh Odisha: Bhulekh Odisha is the land record web portal of Odisha maintained under the surveillance of the Government of Odisha. By simply entering the proper location and the khatiyan or plot number, you can download the Records of Right from the online land record register held by the Revenue department of the state government. ROR has all the information regarding the land property and the chronological history of the holers of the land. By default, you are taken to the ROR view page. 

On this website, you can input the district name, tahasil office, village name, and either the plot number or the khatiyan number to download the RoR pages.  

5. Bhunaksha Odisha:  As Bhulekh Odisha gives the RoR copy of the plot, similarly Bhunaksha Odisha gives the map copy of the plot. By filling up simple information about the location of the plot, you can download its map from the land map record archives of the revenue department, Government of Odisha.

6. E- Pauti: E-pauti is the land revenue payment web portal of Odisha hold by the Revenue and Disaster Management Department. You can pay, download and verify revenue receipt/ property tax receipt only by knowing the proper location of the plot you are willing to invest in. 

6. Real estate company website (if any): And lastly you also need to check the real estate company website to further verify its authenticity. You can look for information like the project brochure, project floor plans,  project layout plans, etc., and can cross-check it with the data provided to the RERA- Odisha department. By doing so you can know are the project owners portraying and serving the same thing that they have registered for or not. 

I hope you all enjoyed the read. From time to time I may upload more information to my blogs based on the updates from the government websites. Therefore, please follow me and my blogs constantly to get recent updates regarding property buying in Odisha.

Share:

Read More

How to buy an apartment?

Recently, I bought an apartment and while doing so I faced a lot of troubles until redeeming it. Hence, as a blogger here I am writing about my dwellings, the problems I faced, the rectification I made, notes scribbled, the fuels I burnt, the papers I juggled, and whatnot. While buying a property, I hope this blog content might be helpful to you all. Thank you.

In this financial-centric world, you need to have good financial planning to succeed economically. Financial planning sums up to a process where a person can draw a roadmap to meet expected and unexpected needs in his/her life. The process involves assessing one's net worth, estimating future and financial needs, and working towards meeting those needs through proper management of finances. Investment planning is one of those areas which determines suitable investment practices and asset allocating strategies based on risk, time, and goal sets.

Having an apartment is an essential asset and the big investment must be planned properly. Here is the step-by-step plan for buying a flat or apartment. The order of steps may vary from consumer to consumer but the basic buying algorithm will always hold within all these points. Do take a notepad and write down all the bulleted points along with your desired input aside from it.

1. BUDGET- 

This is the investment amount you need to set under which range you will be buying the apartment. The minimum and maximum amount range will give you a specific and filtered outlook to search for such properties which will fall within the range. You will also need to decide the purpose of the investment, i.e. Is it for the purpose of a permanent residence or just for a side investment to generate rent or so. By mentioning this, your perspective will be roughly sorted in terms of quality (Interiors, Furnishing, Accessories, etc.) and quantity(Carpet Area, No of bedrooms, size of rooms, etc.). If you are looking to opt for a housing loan, do compare the interest rates of different banks. For more vivid information and help, you can also contact the relationship manager of your respective bank.

2. PROXIMITY- 

In this context, proximity means closeness to a certain place in terms of distance. Suppose your family has two school-going children, your one of the priorities must include the distance of your apartment from the school they are in or the nearby schools where they are going to be admitted. So, while buying flat proximity is considered one of the important factors. Now, coming to the categories of proximal areas, you should see educational spots, workplaces, health care areas, shopping locations, and connectivity/transportability broadly.  For a businessman, the choice of proximity would similarly vary according to his potential profit areas and development.

3. LOCALITY- 

Your choice of the locality may vary according to your culture, health, environment, vicinity, neighbor preferences, ambiance, etc. Proximity is into measurements whereas locality is more related to physical, mental, emotional, and social well-being. Your preferences are to be noted down in this section, which will give you peaceful positive vibes and boost your outlook and output. You need to choose 2 or more localities taking proximity and budget into account too. Write them down and start searching for apartments in these areas. Also, consider nearby areas as per availability and cost.

4. SPECIFICATIONS- 

Let us assume you have chosen the locality where you want to find your dream home. Then comes the specifications of the apartment/ house you want to buy. Based on your requirements, you need to select one from the lot by considering the area of the house (sq. ft.) (carpet area, built-up area, super area), no. of bedrooms, living area, no. of bathrooms, type of kitchen (Open or closed), No. of balconies, the direction of the entrance, etc., etc. This defines the whole specification of the house you are going to buy. Vaastu plays a very important role while looking at the specifications of any house. The age of the construction is also a strong specification to choose your house. The age decides whether your house is an old construction ready-to-move type resale apartment or a new one going to be constructed and is yet to handover. If you are choosing an old house, you need to check how the house is being maintained, are there any cracks or seepage occurring at the walls, the proper functioning of sanitary wares and plumbing, the exterior and interior coloring of the house, proper working of electric wirings and switchboards, etc. If anything is found faulty it is needed to be informed to the house owner for proper treatment or repairing.

5. FACILITIES- 

When you buy a house, you also look for different facilities available with it. Like if you are buying a duplex or an apartment you look for safe premises with proper security arrangements. The basic facilities include proper electricity with a separate meter box, 24 hrs. of water availability with a water treatment plant for filtration, proper sewerage and respective treatment plant, proper fireproofing systems, dedicated two-wheeler, and four wheeler parking, etc., etc. Similarly, if you are lenient towards luxury, you look for facilities like the greenery on the campus, children's park area, Gym area, swimming pool,  inside market complexes, etc., etc. And yes with all this variety of facilities comes a maintenance fee. Please collect all the information regarding this fee and how it is to be paid from the apartment supervisor or any other concerned person.

Here's a list of facilities generally offered by an apartment.

1.Security Services. 

2.Gym 

3.Terrace access 

4.Parking area 

5.Society hall 

6.Swimming pool 

7.D. Generator 

8.Children’s park 

9.Green corridors 

10.Water TP 

11.Sewerage TP 

12.Fire protection 

13.Lift 

14.Camera Surveillance 

15.Club house 

16.Sports room

6. LEGALITY- 

The legal aspect of the apartment is a must to be checked upon. Check if the owner provides you the sale deed. Read the deed carefully. Issuing an encumbrance certificate from the office of the Tehsildar gives you all the information needed to clarify the authenticity and legality. If there's any dispute in the ownership, you can directly know it all by simply taking out the EC. Look for revenue clearances and municipal clearances too. They can also help you to determine the authenticity of the records.

Here's a list of legal documents useful while buying an apartment.

1. No objection certificate (from builder/ society committee/ RERA/ FEMA)

2. Sale deed 

3.Water bill 

4. RERA certificate  

5. Encumbrance certificate 

6. Builder Buyer agreement 

7. Occupancy Certificate 

8. Floor plan drawings 

9. Loan documents (if any) 

10. Completion Certificate 

11. Electricity bill 

12. Property Tax Document

To look for RERA-certified projects, you can just collect the Realestate company registration number and the project name (apartment name in most cases), then go to the Official state-wise published RERA websites. For example; If you want to check RERA-certified projects in Odisha, go to the O-RERA website (https://rera.odisha.gov.in/registered-projects/) and insert the registration number and project name. You can see the status of the project instantly.

The Builder buyer Agreement or the agreement of Sale is an agreement made by the promoter/ builder/seller and the buyer/ customer which contains the time of project start and completion, buyer's right to cancel or assign the property, refund policy, grace period to be taken by the builder(if any), force Majeure clause, property specifications, facilities to be provided, all fees, and charges, payment timeline, mode of payment, property particulars, advance, and final payment details, etc. You can consult a lawyer to draft your agreement of sale. You can also draft it by yourself by referring to the file format provided by the registered RERA website.

If you want to buy an apartment in Odisha, I have also shortlisted all the important websites to visit in the blog, link provided below: Websites to look upon while buying an apartment in Odisha.

7. COMPARISON CALCULATION

Before comparing in between two apartments, you need to know some technical terms for ease of calculation. The technical terms are built-up area, carpet area, common area, super built-up area, loading area.

Briefly describing the terms as follows:

Built-up area: It is the total area visible inside your flat including the area covered by the walls (computed as 50% is shared with the adjacent flat), columns (computed as 50% is shared with the adjacent flat), balcony area, and roof or terrace area.

Carpet area: If we simply go by its name, it is that area where you can lay down a carpet inside your flat. All the visible interior area comes under the carpet area excluding the walls, columns, roof, balcony, verandah, etc. However certain percentage (10 to 20%) of the balcony, roof/ terrace, or verandah is also included in the carpet area too. It values approximately 60 to 80% of the super built-up area. 

Common area: These are the common spaces, sharable to every flat owner of the apartment. Areas like the staircase, lift working area, Lobby or corridor, lift machine room, electrical power supply room, generator room, clubhouses, security rooms, sport rooms, community hall, gym, general toilets, rooms of maintenance staffs, and security, etc.

Super built-up area: It can be defined as the sum of the built-up area and the common area in the most simplistic way. It is also called the saleable area which is sold by the builder/ owner to the customer. However, it doesn't include the area falling under the sump and septic tank, compound wall, open walkway or corridor, open greenery, parks, or open-air swimming pool. 

Loading area: It is the difference between the super-built-up area and the carpet area. It includes the common area as well as parts of the balcony and terrace or roof. Generally, a 30% loading area is included and is being taken into account with a 70% carpet area to make up a 100% super built-up area. The result can determine the difference in carpet areas of different apartments with different loading factors.

Simply going to an example of calculation:

Let's say you have shortlisted two different apartments to purchase with the same super built-up area of 2000 sq. ft with different prices per sq. ft i.e the 1st one is Rs.2500 per sq. ft. and the 2nd one is Rs. 2,200 per sq. ft. A common man would definitely choose the 2nd option as the price of the 1st apartment is 50 lakhs and that of the 2nd apartment is 44 lakhs. But if there's a difference in the loading factor, the carpet area's value may differ drastically. 

 Let's say, the loading factor in the 1st apartment is 30% i.e. 0.30 and in the other one, it has 40% i.e. 0.40. So the carpet area of the 1st apartment will be ((1-0.3) x 2000)= 1400 sq. ft. and in the 2nd carpet the carpet area will be ((1-0.4) x 2000)) = 1200 sq. ft.  Hence, we can see that the 1st apartment has a higher value of carpet area.  And if we calculate the value of price per sq. ft. in terms of carpet area, the 1st apartment will have a price/ sq. ft. of  (50,00,000/1400)= Rs. 3,571.45 per sq. ft. whereas in the second case it will be (44,00,000/1200)=Rs. 3666.66 per sq. ft. Therefore in this case choosing the 1st option will be a good deal rather than choosing the second apartment.  

Ahh! Alas, after settling all these bulleted points you are ready to buy an apartment. For further simplification, I have attached a form here. You can just download it, take a printout of it and you are ready to hunt for your dream apartment.

Checklist to buy an apartment: DOWNLOAD

Share:

Read More