The Cost Of An Elite MBA Now Exceeds $200,000

For the first time ever, a business school is telling its applicants that the total cost of an MBA degree will exceed $200,000. New York University’s Stern School of Business is asking incoming students to budget a record $203,875 to cover the tuition and living costs for its two-year MBA program.

As shockingly high as that sum appears, it is a conservative number. At most schools, tuition rises between 3% and 5% for the second year of the program and estimated living costs by a school often are between 10% and 20% lower than what many MBAs actually end up spending. Add in the opportunity cost of quitting a job for two years, and the total cost easily approaches $350,000 for most MBA students at highly ranked business schools.

The new estimate by Stern is $19,343 more than NYU said it would cost only two years ago when Stanford University’s Graduate School of Business topped thePoets&Quants’ list for the most expensive MBA program in the world. Stanford then edged out Stern with a total price tag of $185,052 versus $184,532.

The Stern numbers include $60,744 a year in tuition, $3,884 in registration fees, $25,985 for room and board, $1,980 for books and supplies, and $8,118 in “miscellaneous” charges, which include health insurance and a $1,460 fee for orientation. All told, the one-year total for Stern’s MBA program, based on a nine-month academic year, is $101,938. Last year, the average debt burden for a graduating MBA at Stern was a breathtaking $116,533.

Not surprisingly, Stanford is not far behind. In fact, depending on how you crunch the numbers, Stanford could still be number one. For a single person living on campus, Stanford said the cost of its MBA is now $202,870, a sum that includes a $4,000 global immersion trip. That’s only about $1,000 less than NYU. But if a student lives off-campus, Stanford estimates the total cost to be $212,092, with the required trip overseas.

Most business schools are aggressively increasing their scholarship support of students to help defray the escalating costs of tuition and fees. Stanford says that tuition has gone up by 16% in the past five years, but the pool of money available for scholarships has risen 44% to $12.5 million from $8.7 million. Harvard Business School, which says the total cost of its MBA is now $190,200, is handing out $31.5 million in annual scholarship support.

After NYU and Stanford, the most expensive MBA programs in the U.S. are at Wharton ($195,084), Columbia Business School ($192,936), and MIT Sloan ($192,028). The school with the biggest percentage increase in the past two years was Duke University’s Fuqua School of Business, where the cost of an MBA rose 13.2% to $169,982 from $150,202 in 2012. The increase at NYU Stern was 10.5%.

Even getting an MBA at a public university is no longer a significantly cheaper option. In fact, many of the most prominent public business schools, including the University of Virginia’s Darden School of Business and UCLA’s Anderson School of Management, now exceed the cost of the MBA program at Cornell University’s Johnson Graduate School of Management. A Darden MBA now costs $170,722 versus Cornell’s $163,784.

In most cases, the costs between a resident and a non-resident at an elite business school is negligible. At UC-Berkeley’s Haas School of Business, for example, a resident of California can expect to pay $80,215 a year for the MBA, a savings of little more than $2,500 from the non-resident’s $82,762. For the two-year program, the difference comes to about $5,000–$165,524 for the non-resident vs. $160,430.

The rising cost of attending a top business school is likely to add more fuel to the always-burning debate over whether the MBA is worth it. To Dan Bauer, a Harvard MBA who is founder and CEO of The MBA Exchange, an MBA admissions consulting firm, it’s still a no-brainer. “When I attended Harvard Business School in 1988-90, the tuition was approximately $15,000 per year, and the total cost for a married student with two kids was about $45,000 per year,” he says. “At that time, the investment felt overwhelming — especially when factoring in two years of foregone income. However, my breakeven point came just four years after graduation. Today, nearly 25 years, later, I can easily say that the ROI on attending HBS makes it the best investment of my life.”

Among the most highly ranked business schools, the best deals appear to be at the University of Texas’ McCombs School of Business and Indiana University’s Kelley School of Business. For an in-state student, the total cost of the MBA is $108,996. Even for non-residents, the price tag is comparatively reasonable: $140,064, the lowest for any Top 20 MBA program. At Kelley, the total in-state cost comes to just $104,238 versus $142,158 for an out-of-state student.

The Total Costs For An Elite MBA Will Shock You

Food Waste in America: $452 Million Per Day

Fact: Every day, America wastes an average of $452 million in producing food that is never consumed. On Thanksgiving, chances are, food waste statistics will eclipse that average. In fact, $452 million wasted equates to $18.8 million per hour, $313,927 per minute, and $5,232 per second. But who’s counting?

The problem is that few of us are. And, now is the time to start making all of our food count. Count to feeding the hungry. Count to be used as compost. And, even count to be used as fuel. The food on our tables does not have to go to waste.

The numbers are big with a capital “B”. On an annual basis, $165 billion (that is with a “b”) is wasted on producing food that never gets eaten. This happens all along the value chain - farmers use 80% of our nation’s drinking water supply and 10% of our nation’s energy supply to grow food.

Think of the carrots and potatoes you bought for Thanksgiving. Did you stop to notice that each one was perfect? That’s because all the irregularly shaped produce was destroyed at the farm, because the farmer knew that the grocer wouldn't buy it. Those vegetables were going to be chopped or mashed anyway, so why do we care if it looks a little wonky on the grocery shelf?

When that food is brought home, up to a quarter of it languishes in the back of the refrigerator, and eventually is tossed in the garbage. Some of it is thrown out too soon. We misread “Best By” dates on food packaging, and assume that the food is instantly bad the next day - not so. Imagine walking from the grocery store with four bags of groceries, dropping one in the parking lot, and just leaving it there. That is what we are doing with all the food we waste. It’s up to $2,275 per year for a family of four. That’s real money.

The U.S. also has a responsibility as a global citizen. We are one of the top three producers of food alongside China at number 1, and India at number 2. Plus, the US is the top exporter of food. In many parts of the globe, demand rapidly exceeds supply.

As the global population surges from 7 billion (2012) to 9 billion in 2035 (UN estimates range from 8 to 10 billion), the amount of calories demanded will grow by 25%. This is in part because as the middle class grows in developing countries, demand for meat, dairy and other proteins also increases, which further strains already stressed food systems.

As it stands, our global food system is operating above capacity, while demand for calories continues to grow. As a result, tightened supplies have led to price increases in recent years, and long-term prices of cereals for 2008-2017 are forecast to be 50 percent above average nominal prices for the 2000-2007 period. With higher prices comes an increased pressure on food budgets, and increasingly large portions of the global population now live in a state of food insecurity.

America’s food waste problem is out-of-control affecting the globe. It also affects us right here at home, with 49 million Americans living in a state of food insecurity. A reduction in waste contributes immediately to available calories under current production parameters.

GOAL: We have a goal of decreasing food waste from 33% of total food produced to 17% of food produced by 2035.

And, meeting the goal can start with each one of us.

This Thanksgiving normally characterized by excess, take a recess from excess. Instead, take action to have a “Zero Waste Thanksgiving.” Here are nine tips how to do it:

1. Only buy what you need. Buying in bulk only saves you money if you use the food before it goes bad.
2. Choose recipes that “fit together.” Picking recipes that, for example, call for whole vegetables, entire containers of broth, etcetera to minimize waste.
3. Grow and eat local. Eating locally sourced food, especially from urban farms reduces travel time for your food to reach you and reduces the incidence of food spoiling in transit.
4. Plan ahead for “special” ingredients. For ingredients you do not normally use, think about how you will store, preserve, or use them in other recipes in advance.
5. Don’t trash the scraps. Consider mashing potatoes with the skins on and saving turkey leftovers for stock.
6. Save it for later. Encourage guests to take home rather than throw away what they do not finish. Provide reusable containers for leftovers.
7. Encourage composting in your home and seek out other methods that seek to return biodegradable nutrients back to the soil, enriching the soil for food growth, rather than sending it to landfills. Don’t have compost at home? Search for a composter near you on findacomposter.com.
8. Take excess unopened food to your local food bank.
9. Educate yourself. Get informed about buying habits, food storage, and composting to reduce food waste at How to Have A Zero Waste Feast and on the EPA’s website.

Sustainable America has the goal of cutting food waste in half: (33 percent waste cut to 17 percent by 2035). We do this by raising awareness around food waste issues, and also by helping the public, restaurants and grocery stores save money. Wasted food is wasted money. If you contribute, it can help make a difference, and turn our wasted food into fuel for our society by feeding the hungry, composting, and providing fuel to meet our energy needs.

SBI's Adani loan: Applying Raghuram Rajan logic, offer of collateral alone isn't enough

A few days back I wrote a piece questioning the logic of the State Bank of India entering into a memorandum of understanding with Adani Enterprises to consider giving it a loan of up to $1 billion. My logic was fairly straightforward—Adani Enterprises already has a lot of debt (around Rs 72,632.37 crore as on September 30, 2014) and is just about earning enough to service that debt.

Several readers wrote on social media saying what was the problem if Adani was offering an adequate security against the loan? Raghuram Rajan, the governor of the Reserve Bank of India, answered this question in a speech yesterday. Rajan was speaking at the third Dr. Verghese Kurien Memorial Lecture at IRMA, Anand.

As Rajan said, “The amount recovered from cases decided in 2013-14 under DRTs (debt recovery tribunals) was Rs 30,590 crore while the outstanding value of debt sought to be recovered was a huge Rs 2,36,600 crore. Thus recovery was only 13 percent of the amount at stake. Worse, even though the law indicates that cases before the DRT should be disposed of in six months, only about a fourth of the cases pending at the beginning of the year are disposed off during the year – suggesting a four year wait even if the tribunals focus only on old cases.”

So, just because a bank has a collateral does not mean it will be in a position to en-cash it, as soon as the borrower defaults on the loan. As big borrowers (read companies and industrialists) have defaulted on loans over the last few years, the non performing assets of banks, particularly public sector banks have gone up.

As on March 31, 2013, the gross non performing assets (NPAs) or simply put the bad loans, of public sector banks, had stood at 3.63% of the total advances. Latest data from the finance ministry show that the bad loans of public sector banks as on September 30, 2014, stood at 5.32% of the total advances. The absolute number was at Rs 2,43,043 crore. During the same period the bad loans of private sector banks was more or less constant at 1.8% of total advances. Interestingly, public sector banks accounted for over 90% of bad loans in 2013-2014 (i.e. between April 1, 2013 and March 31, 2014).

All these points have several repercussions. The first is that banks need to charge a higher rate of interest in order to compensate for the higher credit risk (or simply put the risk of the borrower defaulting on the loan) they are taking on. As Rajan said in the speech “The promoter who misuses the system ensures that banks then charge a premium for business loans. The average interest rate on loans to the power sector today is 13.7% even while the policy rate is 8%. The difference, also known as the credit risk premium, of 5.7% is largely compensation banks demand for the risk of default and non-payment.”

Simply put, those who default in effect ensure that those who repay have to pay a higher rate of interest. The irony is that banks give out home loans to individuals at 10-11%. This shows that lending to individuals is a better credit risk for them than lending to infrastructure companies.

As Rajan put it “Even comparing the rate on the power sector loan with the average rate available on the home loan of 10.7%, it is obvious that even good power sector firms are paying much more than the average household because of bank worries about whether they will recover loans.”

Also, a report in the Business Standard today suggests that the RBI is “mulling action in terms of limiting loan-sanctioning powers of banks with stressed asset ratios.”

The stressed asset ratio is the sum of gross non performing assets plus restructured loans divided by the total assets held by the Indian banking system. The borrower has either stopped to repay this loan or the loan has been restructured, where the borrower has been allowed easier terms to repay the loan (which also entails some loss for the bank) by increasing the tenure of the loan or lowering the interest rate.

The Business Standard report carries a list of 14 public sector banks that have a stressed asset ratio of 12% or more. Central Bank of India has the highest stressed asset ratio of 20.49%, followed by the United Bank of India at 19.7%.

If the RBI decides to limit the loan-sanctioning power of these banks, it will do so in the backdrop of the finance minister Arun Jaitley asking banks to lend more. A few days back Jaitley said “We have asked banks to go out there and lend without any fear. They should do proper appraisals of projects and provide loans to infrastructure projects.” Like in almost everything else, he was following the tradition set by his predecessor P Chidambaram.

The stressed assets of many public sector banks did not cross 12% because they did not carry out proper project appraisals. It crossed such high levels because the banks were forced to lend to crony capitalists close to the political dispensation of the day i.e. leaders of the previous United Progressive Alliance (UPA).

Take the case of GMR Infra. For the period of three months ending September 30, 2014, the company paid a total interest of Rs 845.04 crore on its debt. Its operating profit was Rs 101.14 crore. The company had a total debt of Rs 39,187.45 crore as on March 31, 2014. What this clearly tells us is that the company is not earning enough to pay the interest that it has to, on the total debt that it has managed to accumulate.

This is true about many other companies as well particularly in the infrastructure sector, which is dominated from crony capitalists. These companies borrowed much more than they should have been allowed to in the first place. Also, many promoters got away without putting much of their own money in the business.

As Rajan said “The reason so many projects are in trouble today is because they were structured up front with too little equity, sometimes borrowed by the promoter from elsewhere. And some promoters find ways to take out the equity as soon as the project gets going, so there really is no cushion when bad times hit.” This could not have happened without the tacit support of the political dispensation of the day.

And this perhaps led Rajan to quip that India is “a country where we have many sick companies but no “sick” promoters.” “In India, too many large borrowers insist on their divine right to stay in control despite their unwillingness to put in new money. The firm and its many workers, as well as past bank loans, are the hostages in this game of chicken -- the promoter threatens to run the enterprise into the ground unless the government, banks, and regulators make the concessions that are necessary to keep it alive. And if the enterprise regains health, the promoter retains all the upside, forgetting the help he got from the government or the banks – after all, banks should be happy they got some of their money back!” Rajan added.

Another implication of the massive increase in bad loans for public sector banks has been that the law has become “more draconian in an attempt to force payment.” As Rajan put it “The SARFAESI (Securitization and Reconstruction of Financial Assets and Enforcement of Security Interests) Act of 2002 is, by the standards of most countries, very pro-creditor as it is written. This was probably an attempt by legislators to reduce the burden on DRTs and force promoters to pay. But its full force is felt by the small entrepreneur who does not have the wherewithal to hire expensive lawyers or move the courts, even while the influential promoter once again escapes its rigour. The small entrepreneur’s assets are repossessed quickly and sold, extinguishing many a promising business that could do with a little support from bankers.”

This leads to a situation where upcoming entrepreneurs do not want to take the risk of growing bigger by taking on more loans and may choose to continue to remain small.

To conclude, Rajan's speech at IRMA was an excellent summary of all that is wrong with the Indian banking sector. He also made suggestions on how to set it right. The promoters should not try and finance mega projects with tiny slivers of equity, he suggested. Banks needed to react quickly to borrower distress. And the government needed to set up more debt review tribunals. These are simple solutions that need political will in order to be implemented.

Arun Jaitley has been asking the RBI to cut interest rates for a while now. He has also asked banks to lend more. Nevertheless, it's not as simple as Jaitley thinks it is. First and foremost the government needs to ensure that big borrowers cannot just get away with defaulting on loans. This in itself will have a huge impact on interest rates.

As Rajan put it “It is obvious that even good power sector firms are paying much more than the average household because of bank worries about whether they will recover loans. Reforms that lower this 300 basis point risk premium of power sector loans vis-a-vis home loans would have large beneficial effects on the cost of finance, perhaps as much or more than any monetary policy accommodation.”

This is something that Jaitley should be thinking about seriously in the days to come, if he wants banks to genuinely bring down lending rates.

To prepay or not to prepay?

Is Prepayment is wroth-while option.?? Factors to be decided before taken the decision.

Given the Indian aversion to debt, it is hardly surprising that many loan owners are eager to prepay their loans as and when their finances look up. However, this is not always the most economical option and one should consider various factors before deciding on this course.

What is prepayment?
When a borrower pays off his/her loan entirely or in part before the defined due date, it is termed as prepayment.

When considering prepayment, borrowers need to ensure that they factor in the following aspects:

• Prepayment penalties
  Prepayment penalties vary from one financial institution to another, and often, even from loan to loan. These penalties are either charged at a flat rate, or at a certain number of months' interest. Even if the loan contract does stipulate a prepayment fee or penalty, a loan owner must first compare this amount against the overall interest he/she will save in terms of interest. Also, in some instances, the prepayment is made possible after a minimum stipulated period of loan ownership. To make sure they are able to capitalise on these provisions, borrowers must first carefully read their contract or talk to their borrower at length.

• Actual savings
  Loan owners often presume that because they have already paid a substantial number of EMIs, the interest component is much lower, and it hence makes little sense for them to prepay the loan amount. The truth, however, is that the borrower pays the same interest for the unpaid principal amount, since the interest is calculated using the reducing balance method. When considering prepayment, borrowers should hence consider the prevailing interest rate, rather than the loan tenure.
  
  Whether or not to prepay your loan depends on many factors such as the stage of loan payment you are at, the interest rate, and the prepayment charges. An analysis of these elements is a must before you decide to take action.

Understanding Reverse Mortgages

Once a person has crossed his (her) earning years, but has not planned for the retirement years, or financial planning has gone awry due to heavy unforeseen expenses/losses, or inflation has taken away the purchasing power of savings etc., what does he (she) do to live the remaining years on this planet without seeking handouts from near and dear ones? Even if one bites the bullet and seeks financial assistance from his own children, whether they will respond positively is a moot point in this age of nuclear families.

If you had the good sense to invest in a residential property instead of say making fixed deposits in a bank, there is a retail banking product called Reverse Mortgage (RM) which can provide you financial security in your twilight years. The idea is not new. Even though this product has not taken off here in India, despite the pioneering work done by National Housing Bank (NHB), it does not take away the merits of this product. Banks have not been very aggressive in marketing this product and many people are not even aware of RM. Actually, this product has more relevance to India where there is no social security net. Surprisingly, this product originated in developed countries and in USA, for example, there are dedicated reverse mortgage companies.

RM is also a loan against property. But it is not the same as a loan against property. The basic difference between the two is summarized below.

• Loan against property is normally not extended by banks to senior citizens. But RM is specifically targeted at senior citizens. Only senior citizens are eligible for RM.
• Loan against property by way of housing loan is extended to acquire a property. But RM is extended against a property which is already owned.
• Loan against property needs to be repaid in EMI over agreed tenure. But in RM, the proceeds of the loan are paid to the customer in installments or lump sum as agreed. There is no EMI.
• RM is cleared out of foreclosure or repayment. There is no EMI. Loan against property is to be cleared in EMI, and foreclosure is the last resort when loan is not repaid.

The Concept

In a traditional house mortgage transaction, there is an EMI fixed and payment of your EMI increases your equity in the property. Reverse mortgage, as the name suggests, does the opposite. You start with say 100% equity in the property and when loan disbursal starts, your equity in the property goes on decreasing. The target group for RM are the senior citizens owning house property either singly or jointly without any encumbrance on it. Abroad, one can take a RM loan on an encumbered property also, provided it can be paid off from part proceeds of the RM and sufficient equity is available. The collateral is the property itself. In other words, when processing an application for such type of facility, the market value of the property is taken into account rather than the repayment capacity of the borrower. The loan generally does not have to be repaid until the last surviving homeowner permanently moves out of the property or passes away. But banks generally fix a long tenure. The estate (i.e., heirs to the property) has approximately 2 months to repay the balance of the reverse mortgage or sell the home to pay off the balance. Any remaining equity is inherited by the estate. The estate is not personally liable if the home sells for less than the balance of the reverse mortgage. That is why when arriving at the quantum of the reverse mortgage loan, sufficient cushioning by way of margin is stipulated. The age of the homeowner at the time of making the RM loan available and remaining life expectancy is another aspect which needs to be looked in to. A 70 year old applicant is eligible for a, higher  quantum of loan on a property with same market value compared to say a 60 year old applicant. The property offered as collateral needs to be evaluated by a qualified engineer approved by the bank not only for assessing the current condition but also the residual life. The property taxes, insurance are to be  serviced by the home owners along with general maintenance.

The Product

Let us now look at the RM product offered by some of the leading Indian Banks. Theguidelines to Indian banks on RM have been framed by NHB, an entity which came into being through an act of parliament. It's capital is 100% contributed by RBI. Some of the guidelines are mandatory and need to be followed by lending institutions like commercial banks and housing finance companies registered with NHB.

• Eligible borrowers should be senior citizens, that is 60+ years old. The property offered should be a self-acquired, self-occupied residential property free of any type of encumbrances with clear title, and all taxes paid till date. In the event of financing a couple, one should be a senior citizen and the other should be at least 55 years of age. The residual life of the property, as certified by lender's valuer, should be minimum 20 years.
• The quantum of loan shall depend on the value of property, age of the borrower, residual life of the property, rate of interest, requirement of a margin of not less than 10% throughout the life of the loan, and maximum tenure of 20 years. Property needs to be revalued once in 5 years and it is to be ensured that such revaluation does not bring down minimum margin of 10%. If the property value falls during the tenure, then the quantum of RM will need to be reduced.
• RM can be disbursed in agreed installments, in lump sum or tranches or through committed line of credit (LOC). The installment is currently capped at ₹50,000 per month. Lump sum payments are restricted to medical exigencies and capped at 50% of amount eligible with maximum quantum being  pegged at ₹15 lakhs.
• Interest rate on loans may be floating or fixed and no ceiling has been prescribed. In other words the interest rate shall be market determined.
• The disbursements under RM shall not attract any income tax. Basically, RM disbursement is loan disbursement and not an income.

Advantages and disadvantages of RM

Advantages It provides a stream of payments and provides financial security when a senior citizen has no other source of income or source of income is inadequate. The disbursals are tax free. There is no repayment involved as property is sold and loan is adjusted. One can receive disbursements as per his convenience. Instead of taking RM loan if one sells the house, then he needs to pay capital gains tax and also move out of the house. If sale proceeds are invested, then the income from investments may be subject to income tax. The borrower/legal heir shall not be held liable to lender if sale proceeds are less than the amount owed under RM.

Disadvantages Interest on RM is not subject to any tax rebate. The disbursement proceeds need to be used for specified purposes only. If one outlives the tenure of RM, one is at the mercy of lender. If the borrower passes away, the property will be sold by lender, unless legal heirs arrange to repay the loan. Mortgaged properties, when sold by banks, do not fetch the actual market value. There is no system of RM counseling before availing the loan, and as a result one may be in for unpleasant surprises later on. When you have acquired the property with your hard earned money with some sacrifices, it is difficult to contemplate it being sold by the bank. When property is sold to repay the loan, the proceeds will attract capital gains tax.

Conclusion

Perhaps, because of the sentiments attached to the property, senior citizens may find it difficult to accept the idea of property being sold if they outlive the tenure of the loan. Helpage India provides counseling for RM to senior citizens, but most people are not aware of it. The life expectancy has grown due to better medicare. There may be hardly any equity available after property is sold and loan is cleared, for a senior citizen to survive financially in the remaining life span. There are a number of issues including taxation which needs to be addressed before the product can have universal acceptance. Even though, at the nudging of NHB, many commercial banks in public and private sector have this product in their portfolio, actual assets in this category may be one or two per bank! Perhaps it may be worthwhile for RBI to encourage establishment of RM companies, after ironing out some of the taxation issues with finance ministry.

How Accountants Lose Clients

If you want some real answers for how to avoid losing clients, just start asking CPAs how they’ve managed to pick up new clients.

That’s exactly what we’ve been doing lately. Some of the answers are startling. All of them are instructional. Most of the time, accountants can blame the CPA that their new clients were abandoned.

Mirella (no last names), an independent accountant and tax practitioner near Rochester, N.Y., puts it succinctly, “You will lose a client if you charge too much, do not answer their phone calls, do not get their work done on time and do not give them the personal service that they deserve.”

“You may lose a client if you make a mistake,” she adds. “But if you are honest about it and fix it, you may keep them if all the other things are in line.”

We like Howard's take on it, too. “There are all kinds of ways to lose a client,” he says. “However, my experience is that when I pick up a new client, the prior CPA repeatedly made one or more” of the following mistakes:

1. Failure to deliver the product, tax or accounting, in a timely manner.

2. Failure to respond to routine inquiries, e-mails or voice mails in a timely manner.

3. Failure to understand that the key to profitability is to maximize the lifetime value of a client and not in trying to squeeze the most fees out of an individual transaction.

Joshua, who calls himself “the chief numbers guy” at his own firm in the Los Angeles area, is still relatively new as his own practice owner.

But he says he’s been building his new business “by doing three simple things.”

1. Do what I say I'm going to do.

2. Charge what I say I'm going to charge.

3. Ensure that my client understands the value exchanged.

I think most people naturally understand the first and second, but Joshua calls No. 3 “the secret sauce.”

He tells the story of winning a client who had told him, “I just don't understand what that guy did to earn $700." In fact, Joshua is not much cheaper. He may even be more expensive than the accountant he replaced.

But, he explains, “The point is when you charge for a service, if a client doesn't perceive the value, there is no reason to come back.” If the incumbent practitioner did nothing to enhance the experience or the relationship, then any kind of fee can feel unjustified. And, that’s “all that's required to send someone shopping.”

The fact is switching costs are low for most clients, with the exception of audit clients. But overall, the answer seems to come down to setting expectations and then exceeding them. That’s “secret sauce.” Not much of a “secret,” really.

9 Things Successful People Won't Do

They Won’t Let Anyone Limit Their Joy

When your sense of pleasure and satisfaction are derived from comparing yourself to others, you are no longer the master of your own happiness. When emotionally intelligent people feel good about something that they've done, they won’t let anyone’s opinions or accomplishments take that away from them.

While it’s impossible to turn off your reactions to what others think of you, you don’t have to compare yourself to others, and you can always take people’s opinions with a grain of salt. That way, no matter what other people are thinking or doing, your self-worth comes from within. Regardless of what people think of you at any particular moment, one thing is certain—you’re never as good or bad as they say you are.

They Won’t Forget

Emotionally intelligent people are quick to forgive, but that doesn't mean that they forget. Forgiveness requires letting go of what’s happened so that you can move on. It doesn't mean you’ll give a wrongdoer another chance. Emotionally intelligent people are unwilling to be bogged down unnecessarily by others’ mistakes, so they let them go quickly and are assertive in protecting themselves from future harm.

They Won’t Die in the Fight

Emotionally intelligent people know how important it is to live to fight another day. In conflict, unchecked emotion makes you dig your heels in and fight the kind of battle that can leave you severely damaged. When you read and respond to your emotions, you’re able to choose your battles wisely and only stand your ground when the time is right.

They Won’t Prioritize Perfection

Emotionally intelligent people won’t set perfection as their target because they know it doesn’t exist. Human beings, by our very nature, are fallible. When perfection is your goal, you’re always left with a nagging sense of failure, and you end up spending your time lamenting what you failed to accomplish and what you should have done differently instead of enjoying what you were able to achieve.

They Won’t Live in the Past

Failure can erode your self-confidence and make it hard to believe you’ll achieve a better outcome in the future. Most of the time, failure results from taking risks and trying to achieve something that isn’t easy. Emotionally intelligent people know that success lies in their ability to rise in the face of failure, and they can’t do this when they’re living in the past. Anything worth achieving is going to require you to take some risks, and you can’t allow failure to stop you from believing in your ability to succeed. When you live in the past, that is exactly what happens, and your past becomes your present, preventing you from moving forward.

They Won’t Dwell on Problems

Where you focus your attention determines your emotional state. When you fixate on the problems that you’re facing, you create and prolong negative emotions and stress, which hinders performance. When you focus on actions to better yourself and your circumstances, you create a sense of personal efficacy that produces positive emotions and improves performance. Emotionally intelligent people won’t dwell on problems because they know they’re most effective when they focus on solutions.

They Won’t Hang Around Negative People

Complainers are bad news because they wallow in their problems and fail to focus on solutions. They want people to join their pity party so that they can feel better about themselves. People often feel pressure to listen to complainers because they don’t want to be seen as callous or rude, but there’s a fine line between lending a sympathetic ear and getting sucked into their negative emotional spiral. You can avoid getting drawn in only by setting limits and distancing yourself when necessary. Think of it this way: if a person were smoking, would you sit there all afternoon inhaling the second-hand smoke? You’d distance yourself, and you should do the same with complainers. A great way to set limits is to ask complainers how they intend to fix a problem. The complainer will then either quiet down or redirect the conversation in a productive direction.

They Won’t Hold Grudges

The negative emotions that come with holding onto a grudge are actually a stress response. Just thinking about the event involved sends your body into fight-or-flight mode. When a threat is imminent, this reaction is essential to your survival, but when a threat is ancient history, holding onto that stress wreaks havoc on your body and can have devastating health consequences over time. In fact, researchers at Emory University have shown that holding onto stress contributes to high blood pressure and heart disease. Holding onto a grudge means you’re holding onto stress, and emotionally intelligent people know to avoid this at all costs. Learning to let go of a grudge will not only make you feel better now but can also improve your health.

They Won’t Say Yes Unless They Really Want To

Research conducted at the University of California in San Francisco shows that the more difficulty that you have saying no, the more likely you are to experience stress, burnout, and even depression. Saying no is indeed a major challenge for most people. “No” is a powerful word that you should not be afraid to wield. When it’s time to say no, emotionally intelligent people avoid phrases like “I don’t think I can” or “I’m not certain.” Saying no to a new commitment honors your existing commitments and gives you the opportunity to successfully fulfill them.

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Apartment Vs. Independent House – Make the Right Choice

Our cities have started to grow vertically on account of residential apartment complexes, shopping malls and multi-storeyed office space, technology parks etc., being built at a frenetic pace. A City like Mumbai, of course, was forced to grow vertically due to several factors, much before other metros in India had embraced this model of growth. Mumbai also has the dubious distinction of having one of the largest slums in Asia. Apartments as a dwelling was more out of compulsions rather than as a choice of the home owners. Let us try to capture some of the compelling reasons for this vertical growth.

• One reason is population explosion and migration resulting in pressure on the land and land prices reaching astronomical proportions and beyond the reach of the common man. In Mumbai, reclamation of land from the sea has also not eased the situation. Even city development authorities are allotting land developed by them at quite high prices and it is only marginally lower than those developed by private parties. It is also a matter of luck to get an allotment and sometimes after a very long wait.
• The late 90's witnessed the corporate sector accessing funds from the capital markets rather than depending on bank borrowings. The Banks had to rework their asset building strategy, and a new word was coined: "retail lending". In other words, a loan portfolio of individual borrowers. Competition among banks to finance this retail demand resulted in availability of long term finance for housing at competitive rates for acquiring residential houses including apartments. This actually gave the impetus to the real estate market and a demand push. To service this demand many players entered the market and the demand of the masses at the particular price point could be met mainly by offering apartments rather than ready built houses or villas.
• The procedural delays in obtaining various approvals, corruption, the role of black money, frequent changes in government rules and regulations, multiplicity of agencies, difficulties in establishing genuineness in land transactions, and general perception that it is better to deal with a single builder, who will hopefully take care of all the aspects and provide a good title to house property also contributed to proliferation of apartment buildings.
• Most of all, apartments have a much smaller price tag per sqft compared to an independent house as the land cost is shared by all the apartment owners and share in the undivided land is very small compared to the built up area of the flat.

Now that there is acceptability in owning an apartment rather than an independent house we should look at the pros and cons in owning an independent house and an apartment if one had a choice and the financial means to make such a choice.

Advantages in Owning an Apartment

• You have a wide choice of dwellings at various price points at various locations with specifications according to one's  means and choices. It is practically a super market out there!
• You have an opportunity to live in a gated community and develop lifelong friendships and learn to live as a member of a team. Community living at its best!
• The apartment complexes, by virtue of a large number of households, attract a large number of businesses to be set up nearby and within no time the area develops and becomes self sustainable without a need to visit central business district (CBD). This also results in appreciation of the property. Locational advantage over a short period of time!
• With amenities like clubhouse, swimming pool, gymnasium, shopping complexes, ATM etc., apartment complexes can provide access to various facilities within the complex.
• Apartment complexes are comparatively safer and you can lock your apartment and go out of station with minimum worry.
• Apartment complexes have service providers like mason, plumber, electrician, carpenters, laundry etc., on retainership and the services are more easily accessible at standard rates.
• Since it is a large group, apartment resident associations have more clout than an individual to make civic agencies heed their complaints and generally deal with common problems.
• Garbage segregation and collection is done responsibly without stinking up the neighbourhood.
• All common issues are addressed by the association and an individual need not go around trying to address them.
• The appreciation in the value of an apartment is commensurate with the initial investment one makes.
• Selling and buying an apartment is a much quicker proposition than selling and buying a house mainly because of the higher cost of an independent house on account of land appreciation. The size of the deal in the case of an independent house will be much bigger for this reason. Banks finance the deals based on valuation and residual life of the property whether it is an independent house or an apartment.
• Apartments in high rises provide better ventilation and sunlight.
• Accessibility to CBD/workplace, inadequate public transport etc., being important factor for many, it meant going in for apartments constructed in CBD or in close proximity to it at a reasonable cost.
• Property experts advise investing in an apartment complex because private land/house deals are more prone to cheating and fraud. As an individual it is very difficult to remedy such a situation. If the land is allotted by the city development authority, you may not face such situations.
• For senior citizens with no supportive family, apartments may be the best choice.
• Festivals and national events are celebrated as a community in a grand scale by apartment residents. Individual house owners can not match it in sheer size or grandeur.

Disadvantages in Owning an Apartment

• The biggest drawback is that you cannot do any independent add-on construction or alterations.
• The maintenance you need to pay to the owners' association is a regular monthly cash outgo whether you use the amenities or not. The maintenance charges keep increasing year after year.
• One of the main components of maintenance can be water charges. The water requirement is massive in an apartment complex and the civic authorities arrangements for water supply may have to be supplemented by buying water from private vendors at very high cost. It is not possible to control water wastage and water charges end up as a major component of maintenance. Thoughtless residents contribute to wastage of electricity as well in their misuse of elevators, common lighting,  elevator fans left on etc. People somehow do not realize that nothing is free, and the care you take for personal expenses need to be there when you use the common facilities as well!
• You are forced to live in very close proximity with your neighbours even if you abhor them! Some neighbours can be pretty bad!
• Your immediate neighbour's wall may be your wall too! A noisy neighbour who believes in frequent parties or with a brood of noisy children may cause you lot of problems and you will have little or no control over it other than complaining to the association and making your neighbour your number one enemy.
• You are bound by decisions taken by your owners' association even if you personally disagree with them.
• You can at the most keep potted plants in your balcony. You cannot dream of having a garden and growing your favourite fruits and vegetables.
• Keeping pets is difficult if other residents have problems with it and complain about it.
• While regular maintenance is carried out, major works like repainting the apartment building etc., cost a packet and may deplete the corpus fund requiring further contributions in lump sum.
• One has no control over the quality of construction and material used by the builder. A builder bent on maximizing profits at any cost may ultimately hand you a lemon! In other words, an unscrupulous builder may end up providing you a substandard dwelling which may even be a hazard to live in! The frequent media coverage of building collapses due to shoddy constructions should be a warning and make one cautious when selecting the project of an unknown builder.
• If there are legal hassles which was not disclosed by the builder like large scale deviations, illegal construction etc. your dream dwelling may even be demolished by the authorities or eviction orders issued as in the case of Campa Cola society in Mumbai! This, of course, can happen in the case of an independent house as well!
• Human nature being what it is, it is not always hunky dory even in a apartment complex. Sometimes there are groups within groups and infighting which are definitely a negative factor for community well being.

What are the Advantages and Disadvantages in Owning an Independent House?

The answer to  the above poser can be found in the advantages and disadvantages mentioned in owning an apartment.

• The biggest advantage in owning an independent house to my mind is that you have control over the design and architecture of the house along with cost effective use of materials used and the quality. How much of the land is to be used for construction and how much is to be left vacant for gardening or future construction is your decision. Frankly, I have come across many individuals who have regrets over the design and/or materials used etc. after house construction is complete. This mainly happens when one wants to contain costs. What I mean to say is, constructing your own dwelling is no guarantee that you will be 100% happy with your decisions. Some have constructed houses in 100% of the land and park their cars on the public roads causing a nuisance to other road users and reduced to worrying about the safety of their vehicles. In apartments, you can either buy your parking place or rent it.
• If you are the owner of land and planning to construct your dream home later, you always have the threat of encroachment. You need to fence the plot of land and put up notices about your ownership to the land. You may also need to construct a shed and employ a watchman. Now, in cities like Bangalore you also have the nuisance of your plot being used as a garbage dump! These problems are exclusive to independent houses, because the builder takes care of these aspects in the case of construction of apartment complex.
• There are people who have borrowed heavily and built their independent house, and later on sold it as they could not service the loans. There are also people who have half built their houses and could not complete it due to lack of funds. Financial viability is very important when you build your own home because cost escalations can be there, unlike in the case of an apartment where you can have a watertight agreement with the builder with no cost escalation clause. Of course, you can build a small house with provision to add floors later, based on the need and your financial situation. This flexibility is not there in an apartment.
• In this era of nuclear families with both husband and wife working for a living, the preference is for an apartment, whether on ownership or on rent. Hence, in the cities the rental space is preferred in apartment complexes, and enjoy a better demand as well as rent. The reasons are safety, companionship of other children in the complex, community amenities like indoor/outdoor sports etc. The children can be with neighbours during long absence of parents with suitable understanding and reciprocity. This is more so because everybody knows everybody in an apartment complex and live closely as one family. Eviction of tenants is an easier proposition in the case of apartment because supply of alternate rental space is much higher in the case of apartments than independent houses.
• Longevity of an apartment cannot be compared to an independent house because in the latter case, since the land belongs to an individual or joint owners, the building can be refurbished or demolished and rebuilt. In the case of an apartment complex, all the owners have to agree before any such decision can be taken.

Conclusion

For a modern nuclear family on a budget, apartment is the only option in a metro city. This financial logic has resulted in tier II cities also opting for apartments. The builders have sensed the demand and are catering to it. There are more apartments being built rather than villas. Now you have the concept of premium apartments and duplexes to cater to a niche segment of buyers. It has become a status symbol to say you live in such and such apartment complex. The builders are also providing all sort of amenities to attract such buyers.

Banks and housing finance companies have no problems in financing whether it is an independent house or an apartment. There is no such thing that one is better than the other. The choice is entirely left to the individual and it depends to a large extent on individual preferences and one's financial means which gives one the freedom of choice.

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5 Things Super Successful People Do Before 8 AM

Rise and shine! Morning time just became your new best friend. Love it or hate it, Utilizing the morning hours before work may be the key to successful and healthy lifestyle. That’s right, early rising is a common trait found in many CEOs, government officials, and other influential people. Margaret Thatcher was up every day at 5 a.m.; Frank Lloyd Wright at 4 am and Robert Iger, the CEO of Disney wakes at 4:30am just to name a few. I know what you’re thinking – you do your best work at night. Not so fast. According to Inc. Magazine, morning people have been found to be more proactive and more productive. In addition, the health benefits for those with a life before work go on and on. Let’s explore 5 of the things successful people do before 8 am.

1. Exercise. I’ve said it once, I’ll say it again. Most people that work out daily, work out in the morning. Whether it’s a morning yoga session or a trip to the gym, exercising before work gives you a boost of energy for the day and that deserved sense of accomplishment. Anyone can tackle a pile of paperwork after 200 ab reps! Morning workouts also eliminate the possibility of flaking out on your cardio after a long day at work. Even if you aren’t bright eyed and bushy tailed at the thought of a 5 am jog, try waking up 15 minutes early for a quick bedside set of pushups or stretching. It’ll help wake up your body, and prep you for your day.

2. Map Out Your Day. Maximize your potential by mapping out your schedule for the day, as well as your goals and to dos. The morning is a good time for this as it is often one of the only quiet times a person gets throughout the day. The early hours foster easier reflection that helps when prioritizing your activities. They also allow for uninterrupted problem solving when trying to fit everything into your timetable. While scheduling, don’t forget about your mental health. Plan a 10 minute break after that stressful meeting for a quick walk around the block or a moment of meditation at your desk. Trying to eat healthy? Schedule a small window in the evening to pack a few nutritious snacks to bring to work the next day.

3. Eat a Healthy Breakfast. We all know that rush out the door with a cup of coffee and an empty stomach feeling. You sit down at your desk, and you’re already wondering how early that taco truck sets up camp outside your office. No good. Take that extra time in the morning to fuel your body for the tasks ahead of it. It will help keep your mind on what’s at hand and not your growling stomach. Not only is breakfast good for your physical health, it is also a good time to connect socially. Even five minutes of talking with your kids or spouse while eating a quick bowl of oatmeal can boost your spirits before heading out the door.

4. Visualization. These days we talk about our physical health ad nauseam, but sometimes our mental health gets overlooked. The morning is the perfect time to spend some quiet time inside your mind meditating or visualizing. Take a moment to visualize your day ahead of you, focusing on the successes you will have. Even just a minute of visualization and positive thinking can help improve your mood and outlook on your work load for the day.

5. Make Your Day Top Heavy. We all have that one item on our to do list that we dread. It looms over you all day (or week) until you finally suck it up and do it after much procrastination. Here’s an easy tip to save yourself the stress – do that least desirable task on your list first. Instead of anticipating the unpleasantness of it from first coffee through your lunch break, get it out of the way. The morning is the time when you are (generally) more well rested and your energy level is up. Therefore, you are more well equipped to handle more difficult projects. And look at it this way, your day will get progressively easier, not the other way around. By the time your work day is ending, you’re winding down with easier to dos and heading into your free time more relaxed. Success!