Getting a Great Deal on a Car

I bought a car yesterday. And during the 2 weeks I was finding the right car learnt a few interesting lessons. Finding the right car isn't easy. But getting a great deal is.I managed to save almost $2,000 on a car that cost under $20,000. And the best part is that I had to do very little.

I stumbled upon the savings completely by chance. I wanted to test drive a Honda and so visited a Honda dealer. I test drove the car and quite liked it. Unfortunately the attitude of the sales person left a lot to be desired. And the pricing being offered seemed to be unreasonable.

Wanting to get a better deal I looked for dealers and deals on the internet. And stumbled upon a couple of sites. They all promised to get the best and cheapest quotes from dealers near you. I had already finalized the car, the model and the color. All I needed was a price.

I put the details in the online forms of a couple of sites and in under an hour I started receiving quotes from around 3 - 5 dealers per site. They also had representatives calling me which was kind of irritating, but worth the savings.

I negotiated further with each of them, not only on the price but also on the financing and finally went and purchased it from the dealer who gave me the best deal. And this minor investment of a couple of hours saved me a couple of thousand compared to the deal I had got when I had walked into the showroom.

I later found that even CNN has an article on getting the best deal.
http://articles.cnn.com/2008-08-20/living/aa.car.buying.tactics_1_dealership-new-car-trade-in-value?_s=PM:LIVING

And now I wonder if this will work for houses ?

School Open House

On Wednesday there was a open house at Reia's school. And unlike what I've experienced in India, this was not during the day. It was at night between 6.45 and 9 p.m. I thought that this was a great idea, since it meant that unlike India, we did not have to take a day off.

And after attending found that the timings was not the only great idea. The students have a total of 8 classes or subjects that they take. And these are rotated every day. The Open House too had 8 slots. And we got to follow our kids routine. Except that they do it for 45 minutes with a 5 minute break between classes. And a lunch break.

We had 10 minute classes with 5 minutes in between classes. Rushing between the classes gave us an idea of our kids schedules. And then the best part. In each class the teachers had a 10 minute session. For us parents. Where they talked about what they were doing, why, how, what they expected from the kids, what we could expect and any other questions that parents had.

What I loved most was the diversity of how each teacher handled their class. They seemed to have the independence to decide the format they wanted both for teaching as well as assessing. And they were at their creative best. Each of the 8 classes I went too had completely different methods for teaching as well as assessing. And each of them seemed effective, meaningful and completely fair.

It was very refreshing as each teacher took tremendous effort to convince the parents about what they were doing and how it would benefit the kids and thus make the parents happy. For want of a better analogy, it was almost as if they were marketing themselves and their classes.

Whilst there were many differences in each teachers style, there were 3 similarities. Passion. Pride. Love. All of the teachers without exception had passion for their subject. They took a great deal of pride in what they did. And most importantly they all loved kids, especially the kids in their classes.

Peter Drucker said, "Teaching is the only major occupation of man for which we have not yet developed tools that make an average person capable of competence and performance.  In teaching we rely on the "naturals," the ones who somehow know how to teach."

Seems like Wilton managed to find the ones who do know how to teach.

Credit Score

In the US life seems to revolve around your credit rating. So whether you want to lease an apartment, get a credit card, get a lease on your car, or get a mortgage on your apartment, you need to have a credit rating.

Now whilst this appears fair to most people, the problem is for people like me who have newly moved here. Credit rating agencies base the credit scores on how you've handled credit in the past. However if you are new to the country, you obviously have no credit. And so, no credit score. And so you can't get any credit. And hence will be unable to get a credit rating. And this Catch 22 situation goes on.

The only way out, is to get what is called a secured credit card, which is nothing but a pre-paid card, that takes a fat fee from you to pretend that its a credit card and report your transactions to the Credit Bureau who will begin to track your credit history and so generate against you the elusive credit score.

In my opinion this whole system of credit rating agencies and credit scores has several flaws. And whilst I personally feel victimized by what I believe to be a completely unfair system, there's a much larger macro issue. And it is this issue that in my opinion was a major contributor for the collapse of the housing market and the global financial recession of 2009 from which the world has yet to recover.

To know whether there's any merit in my conclusion, we need to understand what exactly does a credit report do and how. Whilst you can learn more about it by visiting the sites of the various credit bureaus, a quick summary is that the credit score is an indicator of your current record in handling (repaying) credit and therefore your probability of repaying credit that may be given to you. This therefore is used by lenders to determine whether or not to give you a loan as also the rates they can offer you, based on the perceived risk, which is determined by your credit score.

The method used by credit bureaus to calculate the credit score is reasonably simple. Lenders send them a monthly report on their customers, their credit, their payments, their outstanding as well as their defaults. These numbers are maintained by the credit bureau. To calculate a credit score they use an algorithm that basically sees how much credit you had and how well you repaid them. Hence someone who has been using his credit card for a few years, and has always paid his bill on time, will have a great credit score. And a person who has defaulted or missed a few credit card payments, will have a poor credit score.

https://www.transunion.com/sites/personal-credit/credit-education.page
http://www.cibil.com/about-us

So this sounds like a good idea. It measures a trend of taking credit and repaying. And so should be a pretty accurate measure of the persons tendency to pay back lenders. And therein lies the issue. The above makes 1 basic assumption. The first is that a tendency to pay in the past, implies the tendency to pay in the future. And if this assumption is incorrect, the complete credit rating becomes meaningless. And the fact is that this assumption is grossly incorrect.

There are 2 reasons. The first is that the assumption that a person who repays in the past is likely to repay in the future works only when the individual in question is not aware that his behaviour is being measured. The moment he is aware, his behaviour changes. Knowing that not repaying will affect his ability to get credit. ensures that he repays the credit, when the amounts are small and affordable.

The 2nd issue is that most human beings are at heart good. And would like to repay their debts. This is reflected in their credit history being without blemish. The issue is ability. It does not matter about how good his intentions are. When he just cannot afford to repay, he defaults.

And this is exactly what happened. Lenders were happy to lend based on credit scores. And when the housing market stagnated and then prices started dropping, people who had borrowed on the basis of their property appreciating began defaulting. Starting the collapse.And then aggravating it.

You would think that the above is obvious and so after the bubble burst, changes would be made. Guess what. The only change made is that now lenders want to be more careful. And so they will only lend to those with even higher scores than before. Leaving themselves open to the next collapse.

TV Politicians

In the last 2 weeks the Republicans and the Democrats had their Conventions where they formally selected their candidate for the Presidential election in November. And the acceptance speech of the candidate was his opportunity to put forth his credentials before the American people.

Its very likely that the single biggest factor in determining the next President will be Television. The power of the media is to be seen to be believed. The conventions of both the parties lasted for 3 days.

The Republicans held theirs in Tampa, Florida.

The Democrats theirs in Charlotte, North Carolina.

The key speakers were scheduled to speak between 10 and 11 which is considered prime time and all channels cover the convention.

You can check out their websites for the details and much, much more.
Republicans : http://www.gop.com/
Democrats: http://www.democrats.org/

Both parties had their best speakers paraded during that time. The spouse of both candidates spoke on the penultimate day of their respective conventions. And the candidates rounded up the Convention on the final day with their acceptance speech.

To succeed in American politics, its very important for politicians not only to be very good at politics, but also to be Master actors with phenomenal Television presence.

And most of the Speakers were very good. And lived up to the expectations of their party. Each speech was analyzed ad nauseam, by reporters and analysts on various channels. And every newspaper covered it.

Now one would assume that since the whole event is televised live, you would get very similar reports and evaluations. And you couldn't be more wrong.

Every article picked up only those portions of the speech they'd like to attack or defend. And then went ahead and made the speakers look inept, incompetent and in many cases Liars. This is not only acceptable, but considered good journalism.

The biggest difference that I see from the media in India is "Opinion". This in my "Opinion" has more negatives than positives. The positives are rather obvious. It puts forward a point of view and allows the reader to analyze the information from several different points of view.

The negatives are not readily obvious, but could be potentially dangerous. There are 2 main risks. The first is that the political affiliation of the newspaper or channel biases their opinion and then the individual reporter's personal preference also gives different shades to their article and does not allow for an unbiased opinion.

The second is that there is a conflict of interest. Both the parties spend several million dollars on buying advertising in the media. And its likely that the spends and selection of media is likely to depend to some extent on favourable coverage.

The Television show, "The Newsroom" gives an insight into how the media manipulates and is manipulated.
http://www.hbo.com/the-newsroom/index.html

And finally an unbiased opinion on which party is likely to be better for America's economy and thereby for America. After listening very carefully to both parties and their arguments, and analyzing the impact of their policies, the simple answer is "I don't know". The reason is that both parties have spoken in generalizations and like most things in life, the results depend on the execution. So the party that's able to best execute their plan should win.

So here's hoping that the best actors with the most money are also the best executors.

Happy Birthday to me !

Today's my birthday and I was going to write a nice, long philosophical piece. But my elder daughter Freia wrote a blog. And brought me down to earth. With a quick reality check.

I thought you too should read it. 


Sunday, September 2, 2012

Happy Birthday Daddy! :)

So it's my dad's birthday today, and he now lives in the US so I decided to make him an e-card.

(You should look at his super awesome blog)

Initially I thought of writing some senti emo I miss you crap but that's not my style, and certainly not the relationship I share with my dad.

So I wrote him a very old school poem, something I might have written when i was 9.

Check it out-

It's that time of the year again
and boy, you're getting older

Getting closer to the half century,
Getting shinier, getting golder ;)

When everyone tells you how much they love you,
Cause you know, you're quite the star

And how you're so cool and so reliable
(Though honestly, i find it bizarre)

SO instead of telling you today
That you'll always be young at heart

I thought I'll just remind you,
You're really not so state of the art

Like, look at you bro, you're balding
The hair is falling off

Memory failing, ears gone bad
Am I hearing a sustained cough?

My my, it won't be too much longer
Only a matter of time

LOL JK I LOVE YOU DADDY
BUT OMG YOU'RE 49! :O

 
http://www.themumbaigirl.blogspot.in/2012/09/happy-birthday-daddy.html