House vs Car: Resale price

Repost from the original

Did you know that the re-sale value of a car goes down by 15% by the time you take your first ride home? I thought property is forever, but recently I have discovered that apartment prices are different when the seller is a builder vs. seller being an owner. The difference in price could be 10-15% on per square feet basis.

Furthermore, anybody who has sold/bought a second-hand car would agree that optional features like alloy wheel, music system with woofer, Stanley seat covers get a fraction of the value when we sell. In a house second car park, vitrified tiles, modular kitchen, bathroom fittings are given away for free with the property. WHY?

George Akerlof in his paper “Market for Lemons” contributed it to price asymmetry. Unlike the builder, the owner does not have all the documentation & permits in proper order. Most owners list their property just to understand what it is worth and do not have any serious intention/pressing need to make the transaction. This makes the resale property transaction messy, long drawn and prone to last minute surprises. As a result nobody buys the houses unless they are priced cheaper than prevailing market price.

We at Khatoni.in are there to bridge this gap. We help buyers offload all their headaches of document verification to us. We even guarantee the quality, meticulousness and completeness of our property document verification with doorstep pickup and drop. This allows you to pick your chosen home at the cheapest possible price.

This post is in continuation of my previous post on the same topic

Oil: Saudi & US

Last year when oil prices were falling and threatened to reach lowest in the decade, everybody was blaming Saudi. Saudi officials went on the record asserting that “Stone age did not come to an end because we ran out of stones. Same is the case for Oil Age.” Fancy words to say Saudi is going to continue to pump oil and flood the market irrespective of the prices. Since new oil rigs had primarily opened up in America, they projected themselves as victims.

However this latest deal with Iran has raised some interesting questions:

  1. The deal primarily allows Iran to sell oil in the open market. In the short term the oil prices fell by $1.5-2 per barrel and are expected to go down even further. By adding a new oil producer, they essentially are sealing the fate of the new oil rigs that opened up in America.
  2. Most Middle East oil sells at Brent, but Americans sell at WTI price, which trades at $5-7 discount. The reason for this discount was American policy which prohibits export of unprocessed crude oil.
  3. Cheaper energy usually benefits mass production and long distance freight. So it benefits Chinese industry much more than it does to American economy.

Everybody at that time believed that new oil rigs, fracking, sand oils had caused a glut in the market. US from being an importer of crude has become an exporter of crude. What is worse that this transition happened in the winter season where the oil requirement for heating/furnace goes up substantially.

But if this was the case and oil lobby is really as strong as they are projected to be, then how did this treaty got ratified? Iran has a history of reneging from its promises, so I doubt if this has a long term benefits. However in the short term issues 1 and 3 got worse and issue 2 did not get resolved. I am sure there is a logical & strategic reason behind all this, but I know for sure that the reasons that were citied 6 months ago were all farce.

Cost of working Saturday

A friend of mine was offered a job offer, where the total annual compensation remained the same, but the working hours were reduced drastically (from 60 to 40 hours a week). Normally such an offer is attractive only for someone is on the threshold of being burned-out, or as a last ditch attempt to save the marriage or a female/male who is guilt ridden for not being able to meet social/family commitments/obligations. Unfortunately he is neither of the three, yet should he seriously consider the offer. What is more important your annual salary or what you make per hour?

On the face of it seems like a career suicide. Being busy, frequent international travel and long distance telephonic meeting are considered as telltale signs of a power executive. Power executives are destined to stock-options, early promotions and insane salaries that we read only in the papers. In today’s world where even colleagues don’t understand what the other team does, working longer hours is the only conclusive quantitative metric to evaluate the most valuable employee. So trading all this for a quieter life, means giving up on the race to success.

Tele-commuters or part time employees often are last to get promoted, first to be fired and receive the smallest increments in the team. Many employees work long hours to get job security, a signal that it will take two guys to replace them and so rather than replacing them with a younger and cheaper talent the management will have to shell out two salaries. No wonder so many people sacrifice their evenings & weekends to professional life even though they get no overtime or incentives.

My friend understands that any job switch comes with a transition cost. Inflation correction/annual increment clock is rest (loss of ~5%), plus another 10-15% of the loss in bonus/performance (existing employer often does not pay up for the existing part of the financial year and new employer will pay pro-rata/reduced pay out), add to it the relocation and other transition related expenses. So even with a matching pay, for this financial year, savings will take a major hit.

Most people still will look at annual salary rather than how much they are compensated for every hour they work. There is no doubt that Indians, Chinese & Asians in general work longer hours than their counterparts in Europe, America & rest of the developed worlds. Add to it the longer commute time due to congestion, meetings at odd hours and travel, the work-life balance is heavily skewed towards work. WHY is it we attach no value to our weekends, spending time with our family, pursuit of hobbies?