Jul 26, 2009

Post from 24" IMac

Posting this from a 24" imac in istore on MG Road. Will wait for the day when i will buy this... 

Cheers

Jul 23, 2009

Warren Buffet’s Simple Advice for 2009

We begin this New Year with dampened enthusiasm and dented optimism. Our happiness is diluted and our peace is threatened by the financial illness that has infected our families, organizations and nations. Everyone is desperate to find a remedy that will cure their financial illness and help them recover their financial health. They expect the financial experts to provide them with remedies, forgetting the fact that it is these experts who created this financial mess.

Every new year, I adopt a couple of old maxims as my beacons to guide my future. This self-prescribed therapy has ensured that with each passing year, I grow wiser and not older.

This year, I invite you to tap into the financial wisdom of our elders along with me, and become financially wiser.

  • Hard work - All hard work bring a profit, but mere talk leads only to poverty.
  • Laziness - A sleeping lobster is carried away by the water current.
  • Earnings - Never depend on a single source of income. (At least make your Investments get you second earning)
  • Spending - If you buy things you don’t need, you’ll soon sell things you need.
  • Savings - Don’t save what is left after spending; Spend what is left after saving.
  • Borrowings - The borrower becomes the lender’s slave.
  • Accounting - It’s no use carrying an umbrella, if your shoes are leaking.
  • Auditing - Beware of little expenses; A small leak can sink a large ship.
  • Risk-taking - Never test the depth of the river with both feet. (Have an alternate plan ready )
  • Investment - Don’t put all your eggs in one basket.

I’m certain that those who have already been practicing these principles remain financially healthy. I’m equally confident that those who resolve to start practicing these principles will quickly regain their financial health.

Let us become wiser and lead a happy, healthy, prosperous and peaceful life.

Image source: BusinessWeek

P.S : Thanks to my friend Anjali, for directing me to this article

Jul 14, 2009

The Hot Chip Case Study

Yesterday, when i came back from office, there was a power cut at home. I was getting bored &  I wanted some thing to munch. So, I went into the main street to the nearest Hot chip store.

I bought 250 gm of potato chips for Rs 45. During the 5 min i spent at the shop, i saw that he could sell 1.5 kg of potato chips. I came back home and enquired my mom about the cost of potatoes. She said that the maximum price she had paid in her experience was Rs 25. I couldn’t resist from making these quick calculations

The calculations shown here are very conservative, considering the sale of only 2 kg of chips per hour.

Chips (in Kgs) sold per hour (Minimum)

2  
No of operating hours (Minimum) 6  
Total number of Kgs sold/day (Minimum) 12  
No of business days 30  
     
Revenues Per kg (Rs) Per month (Rs)
Selling cost of potato chips 180 64800
     
Expenses (Conservative) Per kg (Rs) Per month (Rs)
Raw potatoes 25 9000
Edible oil 10 3600
Salary of the only employee who makes chips 14 5000
Rent of the shop 19 7000
Electricity 1 300
Raw material transport 1 500
Miscellaneous expenses 8 3000
     
Total Expenses 79 28400
     
Net Income from potato chips/month   36400
     
Profit margin on each kg   56 %

Rs 36,400 is the profit (Munafa) which the 22 year old boy in the shop makes per month by selling potato chips.

The story is not over here. The raw material (Potatoes & Oil) cost is actually much less than Rs 25, as he buys them in bulk. Potato chips is only one of the items he sells at the shop. There are at least 10 other varieties of chips.  I haven’t included the calculations for other items as i don’t have the data. So, the boy in reality is earning much more than Rs 36,400. Accounting for other uncertainties and losses, he would earn a minimum of Rs 36,400. 

The boy’s profit is more than what an average engineer earns during his first year of job. I don’t intend to insult the education system or the highly qualified engineers in the country. The point i am trying to drive is as follows.

Some smart guys realize the business man in them at a very early stage. They know the magic of Dhandha.

If you start-up your business at the age of 18 after PUC and invest 4 years to make it a profitable business, you are an independent and successful business man by the age of 22. Wah, what a feeling

The guess the boy in the hot-chip shop is doing the business for a survival. Some don't do it for survival. They grow every year, investing in the right areas and build a mighty empire around them. For example, Steve Jobs built “Apple” during the same years of his life and was worth 10 million USD at the age of 22. When ever i feel low, i listen to his commencement speech at Stanford University. Only accomplished people can deliver such great speeches.

Dhirubhai Ambani is an Indian example of such heroes. These heroes don’t mind the initial risks and set-backs. They are very clear about their objective and are highly confident about reaching there. That’s why they are famous. They accomplished what many other people holding 3 to 4 academic degrees couldn’t.

In this thought process, I remembered the movie “Guru” (based on Dhirubhai Ambani’s Life story) by Maniratnam. I would have watched it over 10 times by now. Will watch it once again over the weekend for a dose of inspiration.

I wish i die as a founder of at least a small company or at least a shop, and rather not as a retired employee. Today is not the day. I wish it comes asap :) (A day of successful business, not death)

Jul 12, 2009

The Tea Cup Story

Story shared by Ananthu from Navadarshanam

There was a couple that used to go to shop in the beautiful stores. They both liked antiques and pottery and especially teacups. One day in this beautiful shop they saw a beautiful teacup. They said, "May we see that? We've never seen one quite so beautiful."

140_154_Indian_Claycup 

As the lady handed it to them, suddenly the teacup spoke.

"You don't understand," it said. "I haven't always been a teacup. There was a time when I was red and I was clay." My master took me and rolled me and patted me over and over and I yelled out, "let me alone", but he only smiled, "Not yet."

"Then I was placed on a spinning wheel," the teacup said, "and suddenly I was spun around and around and around. Stop it! I'm getting dizzy!" I screamed. But the master only nodded and said, "Not yet."

Then he put me in the oven. I never felt such heat. I wondered why he wanted to burn me, and I yelled and knocked at the door. I could see him through the opening and I could read his lips, as He shook his head, "Not yet."

Finally the door opened, he put me on the shelf, and I began to cool. "There, that's better," I said. And he brushed and painted me all over. The fumes were horrible. I thought I would gag. "Stop it, stop it!" I cried. He only nodded, "Not yet."

Then suddenly he put me back into the oven, not like the first one. This was twice as hot and I knew I would suffocate. I begged. I pleaded. I screamed. I cried. All the time I could see him through the opening nodding his head saying, "Not yet."

Then I knew there wasn't any hope. I would never make it. I was ready to give up. But the door opened and he took me out and placed me on the shelf. One hour later he handed me a mirror and said, "Look at yourself." And I did. I said, "That's not me; that couldn't be me. It's beautiful. I'm beautiful."

"I want you to remember," then, he said, "I know it hurts to be rolled and patted, but if I had left you alone, you'd have dried up. I know it made you dizzy to spin around on the wheel, but if I had stopped, you would have crumbled.

I knew it hurt and was hot and disagreeable in the oven, but if I hadn't put you there, you would have cracked. I know the fumes were bad when I brushed and painted you all over, but if I hadn't done that, you never would have hardened; you would not have had any color in your life.

And if I hadn't put you back in that second oven, you wouldn't survive for very long because the hardness would not have held. Now you are a finished product. You are what I had in mind when I first began with you."

God knows what He's doing (for all of us). He is the Potter, and we are His clay.
He will mold us and make us, So that we may be made into a flawless piece of work to fulfill His good, pleasing, and perfect will.

Now that we have understood the moral, lets read a real life story. For everyone who wants to witness the heights of positive thinking, the following article is a must read. (click on the name)

Naga Naresh Karuturi

P.S: Image source - www.firstflush.ee

Jul 2, 2009

Focus on Performance, Not Power

Quote of the month for July, 2009

I have a bad habit. My life’s greatest ambitions come to memory when i switch of my bedroom light and try to get some sleep. So, i lay in my bed awake for a long time thinking about the glory when i get there. While having big ambitions in life is good, i think i am wasting a lot of time thinking about the day when i get  there. It doesn’t help me much and  worse, reduces the energy for next day.

Recently i read the following story by Colin Powell, former secretary of US state and a retired four star General and it had a transformational effect on me.

“There was a brand-new second lieutenant who was very ambitious and wanted to be a general. So one night at the officer's club the young officer spotted this old general sitting at the bar. So he went up and said, "How do I become a general?" And the old general answered, "Son, you've got to work like a dog. You've got to have moral and physical courage. There may be days you're tired, but you must never show fatigue. You'll be afraid, but you can never show fear. You must always be the leader." The young officer was so excited by this advice. "Thank you, sir," he said, "so is this how I become a general?" "No," said the general, "that's how you become a first lieutenant, and then you keep doing it over and over and over."

Throughout his  career, Powell says he had always tried to do my best today, think about tomorrow, and maybe dream a bit about the future. But doing your best in the present has to be the rule.

You won't become a general unless you become a good first lieutenant.

Ground Rule: Do your best in the Present. Focus on Performance, Not Power

GEN_Colin_Powell colin_powell_official_secretary_of_state_photo

Images: Colin Powell as a General and as the Secretary of State

Story Source: Online Fortune Magazine on money.cnn.com