Indians Are The New Mexicans!?!?

I have been browsing though some Desi Pundit blogs and came across this one by Ash. It is a blog by Brijesh. Read the full blog here: link (as of 10 April 2007, the blog keeps getting commented on. Read the comments for the most updated discussion)

Here is an extract:
By US law it is illegal for the employer (desi consultant) to make employee pay for the H1B Visa expenses. But for desi consultants they have their own law. The way the desi consultant works reminds me the agents who work to recruit laborers to Middle East. They are fooling the educated people and the sad part is that educated people fall into this trap due to their greediness for earning dollars.

This is my comment to it:
(Brijesh, )you are right about the problems caused by these consultants to deserving applicants. Desi consultants (head hunters) are not the only ones doing it. There are plenty of consultants that hire other nationality people.

Some of the unfortunate ones that come here to get a masters fund it through loans and such...and when they can not find a job, they go to the consultants. They probably 'train' for a few months then 'sit on the bench' if unlucky or get a project if lucky. It at least helps pay the dues.

I am not in agreement with the immigration laws too. If you and I know about the consultants malpractices, you think the US govt. does not??? They will do what benefits them. Back in the day, they encouraged Mexican immigrants because they wanted interstates to be built and crops to be harvested. Once done, they shut the doors at the border and put a guard on it. Where is the fcuking homogeneity in that? I do not disagree your discontent with the consultants, but this is the ghee-with-tedhi-ungli case.

Does that make us Indians the new Mexicans. If the government (US Govt.) knows about these consultants, which I seriously think they do, are we being brought in for cheap to build their IT highway?

Disclaimer:
I do not intend to talk about Mexican immigrants in a derogatory way. If you consider me a Hispanic-hating racist, it is purely your biased opinion and I encourage you to keep it to yourself. It is not an entire fact but a part of the fact. This post is not an opinion but an argument and a debate.

Re: Why Your Home Isin't the Investment You Think It Is.

I posted a blog with reference to an article in the Wall Street Journal (March 12, 2007) about why investing in homes may not be the best financial decision. Read the original here if you wish: link

Here is a comment on the blog:
Anonymous said...

You are missing a key point here. If you finance your home with an interest only loan, you will pay less than renting to live in a likely appreciating asset, while maximizing your tax deductions. This is teh best of both worlds. Less near term cash outflow,(which you could invest in the market), and an equity stake in an appreciable asset. Of course yoru house could depreciate, but so could your stocks. In addition, for your low low down payment on $100,000 house you can earn 2% -20% on that entire amount, while investing that down payment of let's say $20,000 ,you only earn maybe 11% in the market on that 20k. This is what the stock broker boys and girls never fully disclose, and why real estate has and always will be a nearly gauranteed form of wealth creation.

Therefore, I went ahead and made a few more calculations to my Loan Calc spreadsheet. The screen print you see on the right hand side is from my spreadsheet. It re-affirms Mr. Anonymous that I stand to make a potential profit of over 28% with my three year investment. The best C.D. that I know of gives me around 6% every six months (maybe 12% a year...I am not really sure). Even a 12% is not close enough to the 28%.

I guess my thoughts are headed towards the classic Risk-Return graphs. I could play roulette and have possibly HUGE returns on my little investments but I stand on a high risk too. I appreciate Mr. Anonymous for carrying this debate forward. I am not taking a stand that investing in houses is not right. I guess it would make more sense to read the full article on the Wall Street Journal, but I can not publish a subscriber-only article without breaking copyright laws.

The article also refers to people that bite more than they can chew only to make that killer investment in homes. Further, people borrow against their home loan to plan vacations, renovations and big-screen televisions.

I have bought the author of the article, David Crook's book on home investments. I haven't gotten around to reading it yet, but I am going to before I put my money down on a house.

Why Your Home Isn't the Investment You Think It Is

I have been looking at homes and housing markets in Jacksonville to plan for a prospective home in the early future. Looking at the way the city is set up and the way of life that people are accustomed to, I should either buy a condo at the beach, or a single family home (an independent home siting on a private lot). Condos at the beach go for over $400,000 which make them above my price range. Now that I know that a single family home is my aim, what should by budget be? What drives my budget? A monthly mortgage payment, of-course. What should my mortgage be? I would be comfortable with a low $1000 mortgate payment including taxes and insurance. So, I have created a spreadsheet that you can view here .

I also came across an article in today's wall street journal that speaks about why some people bank too much on their homes as a nest egg (retirement fund) and why that is not the right thing to do. Some people think buying is better than renting.

Here is a part of the article. I hope I am not infringing on copyrights doing this:
Q: But it's certainly better to buy a house than to pay rent.

A: That depends on when you buy, and how long you own. Buy at the wrong time -- like during the kind of buying frenzy that much of the country has just experienced -- and you could well end up wishing you had rented instead.

Boom market or bust, home buying has so many extra costs -- from upfront "points" paid to a lender to title insurance and appraisal fees -- that over the first five to seven years, a renter who invests the equivalent of a down payment in stocks could easily do better overall than a house buyer. Compounding that problem: Most homeowners move within seven years.

As the ownership timeline stretches out to 15, 20 or 30 years, however, the buyer will almost certainly do better than the renter, especially given the tax benefits of paying mortgage interest over traditional rent and the big rebate when the owner finally sells.

But the typical buy vs. rent argument clouds the more important point: A house is an inefficient way of building wealth.

Q: But I have to live somewhere! And I have to pay something for a place to live. Certainly it's better to pay "deductible" mortgage interest than rent.

A: Buying a house with a long-term mortgage is just another form of renting.

Mortgage interest is rent that you pay to your lender for the use of its money rather than to a landlord for the use of his house. Yes, the government picks up a portion of that with the tax deduction, but most of your monthly payment neither builds equity nor is deductible. It just goes down the same black hole that sucks up any other renter's money. And it takes 20 years before a typical borrower pays more principal each month than interest.

"I have to pay something" is a rationale that home buyers use for going deeply in debt and paying tens or hundreds of thousands of dollars in interest to buy a house that, they mistakenly believe, will make a big profit for them down the line.


These two answers made sense to me and got me thinking. The spread sheet was an outcome of that thinking process. I just hope I make prudent financial decisions. I thank all my friends and colleagues for their patience that are current home owners / renters that I keep pestering with my many small questions on home-ownership.


Update, April 2007:
My further investigation here: link