Friday Photo – Mahidharpura Diamond Market Street – Surat

One of the enterprising and busiest place in Surat.

Mahidharpura Diamond Market Street – Surat

Mahidharpur Diamond Street - Surat (click to enlarge)

Is your salary more then your wife’s sister’s husband?

One respected Business leader once said that people are more likely to be satisfied with their salary if they earn more then their wife’s sister’s husband.(in Gujarati wife’s sister’s husband is know as Sadu-Bhai)

salary-diamond-industry

Let me share one similar situation of a person who started working in Mumbai Diamond Market 3 years back. As a fresher, he started working for 7 thousand per month. Back then he said that in 3 years of career growth, he will be very happy if he started earning more then 30 thousand per month.

Today he is earning about 50 thousand per month but still complaining about his employer. Go out with him for a cup of Tea, all you will hear is cribbing about how low is his Salary.

On further asking he told me that people who work with him are not as skilled as he is but they make more money then him. “How can people sitting next to you make more money then you?” “Isn’t the world so unfair?”

Some of the wise people I know tell me that there is no guaranty that if you earn lot of money you will be happy. Our mind always looks for relativity.  Knowingly or Unknowingly our mind has set up a figure and we believe the only way I can feel happy is if I cross that figure.

Between at this point of time I will feel very happy if you subscribe for DiamondBhai SMS service. Common now! This is a free community project and only way it can become successful – if you take part in it. Watch below YouTube video to know more.

Why my NRI cousin not buying car in India?

This weekend my cousin brother, who has lived for several years in US, moved back to Mumbai for good. I asked him ‘What Car are you planning to buy?’
He replied ‘None!’

NRI Spending Behavior

After talking further here’s what he explained me. A person who has lived for a few years abroad is tuned to spending and earning situation to that foreign land. Financial conditions from previous countries will continue to influence his or her buying decision for sometime. He is pretty much avoiding to buy anything big.

On further analysis I understood that this behavior pattern is not limited to NRIs. This can also happen to a person who moves within India. Take an example of a family who has lived whole life in Mumbai and decides to move to class B town – say Bhavnagar. If they rush in to buying stuff as soon as they move, they might feel free to spend more then what is necessary.

My cousin finally said that he is going to wait for at-least 12 – 18 months before he even starts to think if he needs Car. Once he has lived for 12-18 months in new location, he will be more tuned to correct buying habit.

By the way, 6 years back, this same cousin, went to US for the first time, didn’t spend 3 dollars at the American Airport to get a luggage Cart. He thought 3 dollars was too much money to spend for a Cart. He had lived in India all his life. His Indian spending pattern made him feel 3 dollars for cart was too much to pay.

How Business smart are you?

Indian News Papers

Remember that horrifying Swine Flu or H1N1 crisis. Anywhere you go people were wearing mask on their face. Our news media which has to run 24 hours a day of news supply, were completely on top of situation. News TV Channels and News Paper were talking about one thing – ‘H1 N1 is here and it will kill you’

Do you know how many people have died in India due to H1N1 or swine flu in last 3 years ?
Probabaly 100 or less than that.

Now let me bring a surprising fact in front of you.

Do you know how many people have died due to Tuberculosis (TB) in last 3 years in India?
At-least 1 lakh people.

Yes TB which we never talk about has killed lot more people than Swine Flu. So why did we find Swine Flu so terrifying ?

Reason is our Mind and all information that surrounds it. Our mind can be influenced to feel things. People predict severity of something based on how easily an example can be brought to mind.

Do you remember Economic Crisis in Greece and many other European nations? Just few months back News Channel was all over it. And it looked like it will put whole Euro for toss. It brought down our stock market.

Reality is after all these months situation with Euro has even worsen. Things are worse then what they were 3 or 6 months back however no one seems to be talking about it.

Do me a favour – today when you are travelling in train or when you get quite 2-3 minutes. Ask yourself what information you have been surrounded with in last few days. Is that causing your mind to think in certain way?

3 Tips from Champion Customer Representative

Last week I called a Customer Service of one company. They took couple of minutes and solved my problem. The call was full of ‘Thanks’ and ‘apology’ and lot of other formal words. I started wondering how can a company who hires thousands of employees to talk to customers (many of them are angry customers), make sure that representative is always polite and uses formal terms from start till end.

3 Tips from Customer Representatives

I spoke to one of the my friend who has worked at more than one back-office-company-customer-care-company. Here are few interesting  ideas which he shared with me.

Number 1) Never use negative words like ‘We can’t help you’ or ‘This is your problem’ or ‘I won’t transfer your call to my Manager’

Number 2)First talk about offering a not-so-cool solution to a problem. Once customer thinks about this ‘not-so-cool’ option, offer a better option which company can afford to provide. for eg: ‘contact one of our local technician to fix the problem‘ after few minutes say ‘Do not worry – we will send a technician to your place to fix it‘

Number 3) Never say ‘Since you didn’t pay contract money now you have to pay 1000 rupees to fix problem’ instead say ‘Lets get this present problem fixed for 1000 rupees and then I will start new contract for you, give 3 months free’. So instead of using statements like ‘if you do x then we will give you y‘ say something like – ‘Lets first do X and then Y will be done‘

There is a checklist of initial greeting and the way call gets ended. They way call gets forwarded to next department. However in addition to all the standard checklist items, depending upon how customer sounds, a smart customer representative changes his tone.

Test your Business Decision Making in 2 minutes

In past weeks we have posted interesting articles on how we look at same money differently. If you have not read below 2 articles, spend 5 minutes they are worth reading it. These articles show how our mind unknowingly influences our decision process.

Why Rs 100 is not same Rs. 100?
In this post our friend puts extra efforts to save 100 rupees when he is buying 400 rupees worth of item. However when it comes to big purchase of 9000 rupees, he doesn’t care about putting effort to save 100 rupees.

I want your Diwali Bonus back
we explained how we look at money we get in bonus differently compared to regular salary we get. Post explains that a bonus money is considered as an extra/free money and most of the people end up spending it on things which they would never buy with regular salary. In reality money you got in bonus and money from your salary is all same, it is part of your income. However we create Mental model which makes us look at some money differently from other.

Business Decision Making Test

Anyways, Today we have one more experiment for you. I am going to give you two scenarios and ask how would you make decision. Let’s test your decision making 🙂

[Scenario 1]
Let say you bought advance ticket for next Aamir Khan movie for 250 rupees. On day of show you walk in to Theater – you realise that you have lost the ticket. It was in your shirt pocket – but now its gone.

Man!
What would you do next?
Buy a new ticket?
Or cancel the idea to see movie?

Ask yourself this question and keep answer with your self. No-No hold on! Ask yourself seriously. What would you decide? Take 5 seconds.

Alright! Now let’s talk about next situation

[Scenario 2]
You wanted to see new Aamir Khan movie. You know ticket cost is 250 rupees. You check your shirt pocket – it has 250 rupees. You reach theater – realise you lost money somewhere. Money is gone.

Man!
You lost 250 rupees. What to do?

Would you remove money from your wallet/pant-pocket or borrow from friend or use credit card ?

Would you still buy ticket?
Or
You would walk back home?

Make a decision. I give you 5 seconds.

Results
Here’s what happened when above two scenarios were test on a group of 100 people:
In [scenario 1]  out of 100 who lost tickets – only 44 people bought new ticket again.
In [scenario 2] out of 100 who lost 250 rupees – 80 people arranged for additional 250 rupees and bought movie ticket.

Did your decision making matched with above result? Let us know what you think about it.

Conclusion: In both the cases person lost 250 rupees but people make decision differently. I have no idea why we do things differently. Thriw these scenarios in front of your friend while traveling in train and see how they make decision.

Friends please help me spread word about DiamondBhai.com. Support us by hitting ‘Like’ button. Visit our facebook page and hit ‘Like’. Call your friend and tell them about diamondbhai.com. If you dont send diamondbhai.com link to 5 friends in next 10 minutes – an angry crow will come down and do _____ on your head. Don’t believe it? Just wait for 10 minutes.

Every Enterpreneur Should know Rule of 72

Below Guest post is written by Hemant Thaker. Hemant is a business owner in Mumbai Diamond market. His company ‘AllYours‘ is one of the fastest growing partner for buying diamonds & Jewelry. AllYours has a website www.allyours.in to enable customer-friendly style of diamond and Jewelry buying. You can also visit AllYours on facebook

Some of the wealthiest long term investors do not make more than 15 – 18 % per year. However one thing which makes the fortune for a long term investor is patience. A typical good long term investor makes only 15%  per-anum but he repeats this year-on-year. Compounding a small amount for several years gives a very big number.

Everyone should know essence of Compound Interest. One Lakh rupee compounded at 18% gain for 10 years becomes ~5 Lakhs, however if you continue it to grow for 20 years it becomes 27 Lakhs.  In compounding longer the period – more multiplying returns you get.

Let me share one cool math trick known as ‘Rule of 72‘ . Whenever you hear anyone talking about percentage use this rule to understand situation. The way ‘rule of 72’ works is if you divide (69 or 70 or 72) by percentage(rate of interest) – you will get number of years in which amount doubles.

Example 1 : If your uncle tells you that his bank is offering 10% interest on savings for senior citizen. Divide 70 by 10 = 7 years. Approximately in 7 years his savings will double the present value. If he keeps 1 lakh rupees in 2010, in 2017 it will become 2 Lakh and in 2024 it will become 4 lakhs.

Example 2: If you read in newspaper that population in some city is growing at 5 % – divide 70 by 5  – gives 70/5 = 14 years. It means in approximately 14 years population of whole city will double.

Example 3: On National geography documentary when you hear that pollution in atmosphere is increasing by 1% every year- divide 70 by 1 gives 70/1 = 70 years. If it continues to stay like that in approximately 70 years pollution will double from present situation.

At what percentage is your business growing?   Now you know how to calculate numbers of years in which you will double your empire.

Experiment on Loss making and Risk Taking

Risk Taking & Loss Making - behavior

“No gains without pains”  “Big gains accompany big risks” “A person who risks nothing gets nothing” – google Risk-Taking and you will find 100s of stories and conclusions about risk taking.  We take risk now and then, with different things we have -life, health, money, relations, values etc.

Here’s one interesting experiment done by economists and they found thought-provoking result on how people think about “risk-taking” and make decision in situation where they make loss.

To make it more meaning full – While reading – ask yourself what you would do in below experiment. Decide answer in your mind before reading answer given in experiement results.

Study 1
Two options are given to you:

Option A
Take 500 rupees, put it in your pocket and go home. Money is yours, no question asked.

Option B
Toss a coin, if you win, you take home 1000 rupees. If you loose toss, you get nothing.

Please stop here for 10 seconds – ask yourself which option would you choose.

Alright! have you thought of the option? Cool! now let’s read further.

It is found – most of the people choose Option A. People think – if I am getting 500 rupees for doing nothing, let me just take it. Taking 500 rupees seems like smart thing to do.

What was your answer? keep your answer with you for now.

Now next experiment

Study 2
I invite you to my home for a cup of tea and towards the end of our meeting I give you two options

Option A)
When you leave my house, pay me 500 rupees as cost of tea

Option B)
Let’s toss a coin. If you win – you pay nothing. If you loose – you pay 1000 rupees.

Hold on! Hold on! Think your answer here! Take 10 seconds and decide what option would you choose.

Done? Alright read further:

It’s found that when people are given second experiment they tend to choose Option B. They want to toss. What option did you choose?

Now some explanation of result and relate it to real world situation.

In Study 1, we like assured profit or gain and we will take it, without taking risk.   This behavior is all around us – I have many relatives who choose to put his or her money into a bank account with a low but guaranteed interest rate, rather than into a stock that may have high returns, but also has a chance of becoming worthless.

In Study 2, people strongly prefer risks that might possibly undo their loss. You bought a stock which has gone down 30%. You realise that may be it was not a good trade however you will not take loss on it, now you want to gamble. The pain of making loss is high and you want to avoid it and you do this by taking more risk. In Gujarati there is a saying “Haryo Jugari bamno rame” – a loosing gambler doubles his bet.

Conclusion:
When we make loss, we choose to take more and more risk (Study 2). However if we get some assured gain/profit. We quietly take it.(Study 1)

Meeting with Richard Loncraine, British film director.

Last week I got call from a person who introduced himself to be part of production team which have created many good Indian movies including recent movie Udaan. They told me that they were looking for information on Indian diamond market. While researching on internet, they found Diamondbhai.com and decided to talk to me. After 2 -3 phone conversation, I got to meet them in person. Turns out team also includes a British Film Director – Richard Locraine.

Richard Loncraine, British film and television director.

I met these creative people and found lot of interesting things about the way they brainstorm ideas and collect information. More than anything else I was excited to meet people who make films. I love films – who doesn’t?

Some interesting observations I made about Richard Locraine:

Curious for details – Richard took lot of information about Diamond market. He asked questions to understand how things work, how a deal is done and how diamond goes through rough to polish stage. I am sure in his mind he was visualizing what part of information he needs to pick from everythign I said.

Good Listener – we were group of people and he was carefully listening to all the ideas and points that were thrown in to discussion without deviating away from topic at hand.

Passionate leader: while talking to him I could sense how passionate he was about his work. He was so nice and easy to talk to that I didn’t realise that I was talking to such an experienced Film director.

Richard, you have no idea how glad I was to meet. Thank you for opportunity!

It’s been less than 6 months DiamondBhai.com got started and we have seen more than one incident, when some person who are not part of Diamond market approached for local information. So far, I had an inquiry from one local Mumbai magazine, one fashion TV from France and this recent meeting with Richard’s team. This only shows potential of Internet and community projects like DiamondBhai.

In last few months, we also got inquiries about business interest from non-diamond-market professionals, in and out of India. If you (Diamond market professionals) would love to talk to any such person, please let me know, I would forward such future inquiry to you.

Bottom-line for me is – I need to keep this community – vibrant, cool and honest.

This is why we like Gaddafi

Gaddafi going Insane - what are you doing about it?

Not really! No one should like this man, he should have stepped down last week instead he is killing his fellow citizens in Libya. We are sorry about people in Libya.

Anyways, here’s one interesting take on the situation.

Libya exports close to 1/10 of Oil that comes out of gulf land and near by area. Gaddafi is causing trouble and oil prices have gone up. Things are bad for Oil companies in India and all around the world.

Should you runway from Oil companies that have been impacted presently due to rise in oil price ? May be! May be not!

Once again let me remind you one thing.

Diamondbhai.com will always sound stupid.

We will talk about loss management, ponzy schemes, blunders, bankruptcy, saving money – when whole market is talking about India shining.

In contrast when almost all of your friends talk about how things are bad in market – diamondbhai.com will talk about taking risk, buying value and right actions.

I am making a promise (imagine me taking oath, keeping my hand on my laptop and www), this blog will always sound stupid and not in sync with rest of the world around you. We will sound negative when whole world is talking about good times. We will talk about risk taking and value investing when everyone else is talking about running away from market.

Anyways, Gadaffi is acting insane, markets went down globally, Oil companies in India are loosing money. Hindustan Petroleum, Bharat Petroleum, Indian Oil are loosing crores of rupees everyday. Mr. Pranav Mukherjee doesn’t want petrol price to go up. Hence petrol companies who buy petrol at high price have to continue to sell it at loss. The only other option they have is shutdown operation. Read somewhere that these 3 companies HP BP and IOC – all together are loosing about 400 crores every single day.

What do you think people around you are doing to these petrol companies in stock market?
These companies have got whacked!

Are these companies good? Ofcourse! They sell you Oil at petrol pump.
Will they go up sometime in future? May be! May be not! I dont know!

Diamondbhai.com says – “these oil companies are good companies at low price”
Your friends are saying – “do not touch oil companies, stay atleast 10 feet away from them”

I am making two promises today
1) I will continue to sound negative when everyone else is positive and I will talk positive when rest of the world talks negative.
2) I will never forget promise number 1. (Alright! Alright! I copied that from warren buffets saying – but still it sounds good)