Sunday, March 10, 2013

Money, Happiness and Luck

The astrologer in the newspaper column advices me (not specifically to me, but to all, who shares my sun sign) that happiness is not related to money. I smiled reading this, wondering how he knew that I am unhappy because of money. Some times, you should believe in astrology.

Can some one be happy if he gets half the salary for two months? No? Exactly that happened to me this month. Next month also same will happen. Don't think I made some mistake at work and the company fined me. Then why the half salary? It is the Income Tax.

At the start of each financial year, we need to submit our investment plans for tax exemption to our employers. They will reduce Tax Deduction at Source (TDS) based on these plans. At the end of the financial year, we need to submit the proof of our investments. If these proof match with the plans we submitted, then every thing is fine. If not, they will reduce TDS based on the proofs.

So, what happened in my case this month? I have submitted the investment plan at the start of the financial year. At end of financial year, our company allows two time frames to submit the proofs. One week in  December and one week in January. There are many companies that allow to submit investment proofs until February last week, but we are not that lucky. So, if we miss these two windows, we are done. They will reduce the taxes without any tax exception from last two months salaries of the year (February and March).

Then, why did not I submit the proofs during these time frames? No, I was not on vacation. We Indians are not in the habit of taking one month vacation. Then what happened? During the submission window in December, I decided that I will submit in the January. Not due to procrastination, but I wanted to include my payments in the January in the proofs. And in January, I had to go on an official trip on a very short notice.  I have not even get time to think about investment proofs, I am in the flight. When I returned from the trip, Alas, the time frame is over.

Anyway, whatever happened is happened. What is the learning from this? No more agree to office trips on short notice? Well, that is not always practical. Submit whatever proofs available in the first window itself? But, Anticrastination is one of my problems, and I am trying to get rid of it. Change to a company, which allows more time frame to submit investment proofs? I can think of it.

On the other side, what is the impact of this half salary? The money which is deducted will not go for ever. I can claim this from IT department, when I submit IT returns. So, I may get back this money, may be in six months time. So, only problem is managing these two months.

What are the options in front of me to survive these two months?
  1. Go in an aggressive cost cutting mode, to live with half the salary.
  2. Use my emergency funds.
  3. Live on credit cards.
  4. Break one or two of my investments and live on it.
  5. Lend money from friends
  6. Go for a loan.
Well, obviously I will use the combination of 1 and 2, and may be 3 in worst case. If luck is on my side, I will not have to go options below it.

Now, come back to the learning from this. Unlike many of my friends, I planned my investments for the tax from start of last financial year. Continued those investments without fail during the entire year. All these planning and efforts went futile, just because of a bit of bad luck. Yes, I am coming to my point, Luck.

What is the biggest ingredient you needed to get rich? I will say it is luck. I know it is not inspiring, but I believe in luck. Because of luck you are born to this parents. Because of luck you selected the school or college you went. Because of luck you got this job. Because of luck you started investing early. Because of luck you continued your investment for long period. Because of luck you got good returns. Because of luck you are rich.

Convincing? My be not. Just because of luck, you cannot do every thing. For example, you need to put some efforts to start investing early. And to keep those investments even during hard times. But, remember, from where you came to know about the idea of investing early? From a friend? From a book? From a movie? Isn't it because of luck you happened to hear it? Well, many are unlucky not to hear about the idea of investing early in their careers. And some heard, but did not give any attention. Some gave some attention, but did not put efforts to do it.

Thinking more about it, to get rich you need luck and efforts. Only one is not going to work. So if you have not started investing early, at least be lucky enough to start it now. Put on efforts, and luck will follow. One or two times, bad luck may take you over, but not always. Start now. All the best.

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