Dont regret while you die

 

Bronnie Ware, who has been a nurse by profession, has shared incredibly special times with aged people during the last three to twelve weeks of their lives. 

In her blog "Inspiration and Chai", Bronnie shares that she  experienced a variety of emotions, as expected, denial, fear, anger, remorse, more denial and eventually acceptance. Every single patient found their peace before they departed though, every one of them.

When questioned about any regrets these patients had or anything they would do differently if given a chance to live their lives once again, common themes surfaced again and again.

Here are the most common five:

1. I wish I'd had the courage to live a life true to myself, not the life others expected of me. 

2. I wish I didn't work so hard.

3. I wish I'd had the courage to express my feelings.

4. I wish I had stayed in touch with my friends.

5. I wish that I had let myself be happier.

These reasons and her blog attracted so much attention worldwide that it culminated in a book " The Top 5 Regrets of the Dying". I would encourage you to go to her blog and read in detail about all these regrets because these will definitely help you get the perspective of how people feel at the end of their lives and what matters most to our lives. We can take a learning, and also make required corrections in the way we approach our lives.

While all these 5 regrets are so heartwarming and true, i want to specifically focus on one of these regrets as a topic of discussion for this post - "I wish I didn't work so hard".

If you go on to read her blog, she describes more about this regret specifically:

"This came from every male patient that I nursed. They missed their children's youth and their partner's companionship. Women also spoke of this regret. But as most were from an older generation, many of the female patients had not been breadwinners. All of the men I nursed deeply regretted spending so much of their lives on the treadmill of a work existence."

I see most of my friends around me so engrossed in the "treadmill" or a "rat race" that it is truly worth halting for a moment and harping upon the fact that it is very likely to become a "regret" by the end of our lives, as it did with "all" male patients and "almost all working female" patients she nursed. 

We may still try to ignore this known fact that life has to be much more than earning money for the 2-5 people in your family. It has to have specific goals beyond your immediate family needs - goals that provide you bliss, true happiness and a reason to exist on this planet. You have got to find those goals and dreams if you have not found them yet, lest you might not even be lucky enough even to express the regrets of your life to someone like Bronnie Ware.

We do not know the last day of our lives. It could be 50 years from now. It could also be tomorrow. No one knows. I am not trying to inculcate a fear of death in you but i definitely want to push you so that you do not keep procrastinating this critical aspect of your lives and have a sense of urgency towards creating some worthwhile goals for yourself - goals that go beyond your daily treadmill of earning money. Do not breathe easy till you have found those goals. 

While i was fortunate enough to identify my dreams / goals almost 10 years back, the biggest obstacle in front of me, at that stage, that was hindering me from going all out in pursuit of my dreams was the fact that i was not sure of who was going to take care of my family if i start pursuing my goals. I have a responsibility towards my spouse, my parents and my children. I just cannot ignore that responsibility in pursuit of my dreams. It is at that stage i realized that i need to find a solution to this obstacle first. 

I read thousands of books, explored hundreds of websites and within 2 years i realized that the solution is in my hands. It is at that stage i started off on my journey towards financial freedom. I realized that financial freedom may not be an end goal but it can definitely become a means to help me achieve my end goals. You can achieve it too. If you want to be "free" in life so that you can pursue your dreams, make sure you are able to take care of your family first by achieving financial freedom. 

If you are thinking that it is too difficult, then let me re-assure you that anyone can achieve financial freedom within a span of 6-8 years even if you start from scratch. It is a matter of discipline, knowledge, planning and execution. If you are serious about not "regretting" at the end of your life, this will be your first step in pursuit of your dreams. My upcoming book "From Rat Race to Financial Freedom" will guide you step by step on how to achieve the same.

I sincerely wish you all the best to be able to find your dreams and then also be able to chase them.

Regards

Manoj Arora

Related Posts:

Dreams

Goals

Rat Race
Financial Freedom

What is a Financial Year or Fiscal Year

 

What is Financial Year

This is also termed as a Fiscal year in many countries. This is typically used for calculating annual ("yearly") financial statements in businesses and other organizations. Fiscal years vary between businesses and countries. The "fiscal year" may also refer to the year used for income tax reporting.

Does it vary across countries

Yes, it does vary across the world. There is no globally consistent mechanism for a Financial Year. Here are some glaring examples

In India, the government's financial year runs from 1 April to 31 March (Example 1 April 2012 to 31 March 2013 for the current financial year (2012–2013).

The U.S. government's fiscal year begins on 1 October of the previous calendar year and ends on 30 September of the year with which it is numbered. For example, the United States government fiscal year for 2013 ("FY 2013" or "FY13") is from 1st October 2012 to 30th September 2012

The Australian government's financial year is 1 July – 30 June. The year ending on 30 June 2011 is referred to as "financial year 2010–11" or sometimes just "financial year 2011". This applies for personal income tax and the federal budget, and is the standard for all financial entities in the country.

In China, the fiscal year for all entities starts on 1 January and ends 31 December, consistent with the calendar year.

In the Arab Republic of Egypt, the fiscal year starts on 1 July and concludes on 30 June.

Why Financial Year has to be different from a Calendar Year

Every country has some logic for start and end months for the fiscal year. This logic is primarily based on some historical and cultural reasons and has continued till date.

e.g. These are the reasons why financial year starts in April in India.

1. India was ruled by British for around 150 years, who followed the accounting period of April to March after the adoption of Gregorian calendar system of accounting.

2. Harvesting season starts in April. Being an agricultural country, money starts flowing into the hands of agriculturists and related marketeers only in April. During the British rule, since most of the Britisher's taxes were from the crops, the ruling government prepared its annual budget keeping these crop patterns in mind.

3. Almost in all parts of India, regional new year falls around 13th or 14th April. That is why the Govt. fixed 1st of April as new financial year.

4. One of the other reasons why fiscal year start and end differs from the calendar year start and end (ie Jan to Dec) is also to avoid "year end activities" like X-mas, New Year celebrations etc and financial accounting activities to clash at the same time.

In the next post, i would try to distinguish the Financial Year with the Assessment and Calendar Year.

Happy reading

Manoj Arora

Are you paying TAX on your FD interest

As you approach Financial Freedom, you would realize that the world of money brings its own challenges. Someone once asked me : "There are 2 different sets of money problems in the world - One set comes with having no money and the other set of problems come with having a lot of money. Which one do you prefer?". I chose the latter.

Most of us who are still stuck in our rat race may have never realized that we are earning interest through various bank Fixed Deposits and even if we are earning a single rupee of interest, we are liable to include that as our taxable income and pay tax on the same. This might not seem to be a big issue while we are in the rat race because the amount of interest is not significantly high and you may feel that your bank is anyway deducting tax at source, but once you start dealing with millions of rupees of interest, you got to take a re-look at your entire approach.

While you would see comprehensive details around Fixed Deposits in the upcoming book "From Rat Race to Financial Freedom", let me give you a quick summary.

Fixed Deposits (FDs) are one of the most popular and traditional debt instruments. They are much more popular than other debt saving instruments like Provident Fund, Post Office Deposits etc because of the high interest rate and liquidity that these deposits offer. But so often, we fail to realize the tax implications of the interest earned through such deposits. Whether you are financially free or not, it pays to understand the tax implications arising out of Fixed Deposits.

I would try to keep these tax rules as simple bullets so that it is easy to understand and follow. so, here we go...

1. Every rupee that you earn through Fixed Deposits is taxable. Yes, every single rupee. Do not get confused if you have heard something like a interest limit of Rs. 10,000.

2. The income through FD interest is added to your total income under the header "Income from other sources" and then taxed as per the income slab you are in, for that specific financial year.

3. The interest income from fixed deposits are taxed on "accrual basis" and not when actually received. This means that the tax on interest income earned at the end of financial year have to be paid even if the interest is credited at a later year. For e.g. if you are investing Rs 75000 in a  fixed deposit for five years, you will have to pay tax on liable interest for all financial years it spans, even though the interest will be credited at the end of fifth year.

4. Tax Deducted at Source (TDS) is deducted by the banks on your Fixed deposit interests if the interest amount exceeds Rs 10000 from one or through multiple investments put together.

5. If you think that your total income does not fall under the tax bracket, then you need to submit Form 15G (non senior citizens) and Form 15H (for senior citizens) which instructs the bank not to deduct any tax at source.

6. These forms (Form 15G and Form 15H) have to be submitted every year to avoid TDS, if applicable. The reason is that your tax bracket may have changed from one year to another.

7. Even FDs in name of the minor attract TDS, if the interest exceeds the limit of Rs. 10,000.

8. The TDS deducted by the bank would be at a fixed rate of 10% (if you have your PAN no. registered with the bank) or at 20% (if your PAN Number is not registered). At the end of the financial year, bank will also issue you a tax certificate mentioning the tax it has deducted at source(Form 16A).

9. If you fall in a different tax bracket - lets say 20% or 30%, you would have to incorporate that as a part of your income tax returns that you are filing for that financial year.

10. The NRI's, who earn interest on their NRO's account, are subject to 30% TDS

11. Since TDS threshold of Rs.10,000 interest is calculated at the branch level, you can avoid TDS by splitting your FDs across multiple bank branches OR by submitting Form 15G/15H OR by opening a FD in someone else's name, but all these techniques are just delaying the inevitable. You are liable to pay your tax on every single rupee you earned as interest on FD during the year. In all such cases, you will have to pay tax and show the same at the time of filing your income tax return.

I have tried to cover as much around Fixed Deposit taxation. Do feel free to leave a comment if you need any clarifications.

Cheers

Manoj Arora

What is the purpose of your life?

 

Swami Vivekananda once said : "Take up one idea. Make that one idea your life - think of it, dream of it, live on that idea. Let the brain, muscles, nerves, every part of your body, be full of that idea, and just leave every other idea alone. This is the way to success."

If you think of any successful person (whosoever you consider as "successful"), you would realize that they all followed what Swami Vivekananda said, whether you talk of Mother Teresa, Mahatma Gandhi, Thomas Edison, Bill Gates, Michael Phelps, Michael Jackson or any one else. They all focused on one thing and devoted their entire life towards fulfilling that idea or dream or passion. They focused so much on that single objective that they forgot any other ideas in life and this focus helped them become the best in their own areas.

Most of us may not have even identified that dream of our life right now, which is completely fine. There is no need to worry or panic. There is no need to even get surprised that how could you live so many years of life without chasing any single goal or dream. It is never too late. You will be lucky if you get this realization that you must have one mission of your life, and you would be luckier if you are able to actually identify one and pursue the same. 

Trust me, and i am telling you by my own experience, that it is not easy to find your mission of life. It takes time. It takes enormous efforts in most cases. It takes lot of internal thinking, discussion and debate with your own self. It takes going wide, and trying multiple things quickly in life (and perhaps failing in most of them) until you can narrow down on one thing that brings happiness and cheer to your inner self. 

How would you know whether you have found your mission of life? It will always strike through your inner voice immediately. You will not have to think twice. You will know it immediately. You will get the feeling of bliss and the satisfaction of having found that idea that you have been looking for so many years, through your unconscious mind.

And once you have that idea or dream finalized and crystallized in your mind and heart, then you will start seeing the magic. You can, then, safely divide your entire life span into two parts: "Life before your dream" and "Life after your dream". These two lives are going to be absolutely different. While earlier you were driven by circumstances, you would now be driving the circumstances and situations. This one dream will change everything within you and around you. Your family and friends will see the difference in how you talk, work, walk and behave. You will see yourself as a more confident person in every aspect of life. You would start enjoying discussing your dream with others, and also wanting to know what other people are dreaming about. You will attract things and situations in your life that would help you chase your dream.

I was blessed to have realized my mission of life at the age of 32. It took a few months to crystallize the same  and i have been pursuing that for the last 8 years. Financial Freedom was my means to go and freely pursue the ultimate mission of my life. Having achieved that, i am now a "free man" - free to think, free to decide, free to work, free to do what i truly want to do in life, free to pursue my passion without worrying about the money.

So, here you are at the crossroad of your life. You may read this article, may be you would like it as well, and then you might flip over to see what is next on Facebook or what is the next blog you should read. Few lucky ones would halt here, take a deep breath and take a decision to find a mission for their life before they move ahead. They will start working on it everyday till they are able to find one. As with other good things in life, the choice will always be in "your hands".

So, If you still haven't got that mission of your life, it is still not too late !! Go and find it, and then forget everything else....& then go and chase your dream...

Every moment of your life would be worth living only after that !!

Cheers

Manoj Arora

Preserve your Property Gains

 

Real Estate, as an investment tool, normally rewards you with enough annual returns, sometimes in line with what stocks can provide you. Though Stocks / Equity still remain the best choice considering relatively smaller investment, liquidity and extremely high return potential, Real Estate (in developing countries) remains the 2nd best option.

Though the upcoming book (From the Rat Race to Financial Freedom) would guide you on how to truly invest in real estate, there are a few tips you should keep in mind when you are selling your real estate investment to book profits or to subsequently invest your profits somewhere else. Knowledge of certain rules and laws would only help you to preserve your gains that you realize through this investment tool.

Short Term Capital Gains

If you sell your property within 3 years (36 months) of the date of acquisition, your property would qualify as a Sort Term Capital Asset (STCA) and the gains that you realize out of this sale would qualify as Short Term Capital Gains (STCG)

Here are the salient taxation laws for Short Term Capital Gains

1. Any STCG is considered as your taxable income for that year and should be included as your income when you file your income tax returns.

2. Since the profits are qualified as income, they are taxed as per the income tax slab applicable for you for that financial year.

3. This is the least efficient means of getting returns from real estate as an investment. One should consider this option only in case of emergency need of funds.

Long Term Capital Gains

If the holding period for your property exceeds 36 months,such property qualifies as a Long Term Capital Asset (LTCA) and the gains realized from its sale as Long Term Capital Gains (LTCG)

Here are the salient taxation laws for Long Term Capital Gains

1. LTCG is taxed at a flat rate of 20% after indexation of cost

2. Indexation of cost is very important and has a significant positive impact on you wrt the tax liability. 

3. Indexation of Cost typically means that for calculation of your gains, the cost of the house is uplifted by the inflation index for each year till the sale is made. So, your net indexed gain is less than the actual gain, resulting in reduced tax liability.

It makes lot of sense to wait for more than 3 years if you are selling your property for investment gains. Let us understand in some more detail through a simplified example.

Example:

Let us assume that you bought a house with the following details

Cost of Purchase : Rs. 20 Lacs

Expenses on improvement : Rs. 5 Lacs

Total Cost : Rs. 25 Lacs

Selling Price : Rs. 40 Lacs

Case 1 : House is sold within 3 years

Applicable Gain : STCG

STCG : Rs. 40 Lacs - Rs. 25 Lacs = Rs. 15Lacs

Taxable Income : Rs. 15 Lacs

If you are in the highest tax bracket (30%), your total tax : Rs. 5 Lacs.

Case 2 : House is old just after 3 years

Applicable Gain : LTCG

Indexation adjusted cost of purchase :  Rs. 33 Lacs (assuming approx 10% inflation every year for 3 years)

LTCG : Rs. 40 Lacs - Rs. 33 Lacs = Rs. 7 Lacs

Taxable Income : Rs. 7 Lacs

Your total tax (flat 20%) : Rs. 1.4 Lacs.

Summary : 

1) You saved Rs. 3.5 Lacs on taxes just by waiting for 3 years to pass by.

2) Education cess is applicable in both cases of LTCG and STCG, though not considered in the above example, just for the sake of simplicity.

3) Note that money spent on house improvement is also included in your cost, and helps you reduce your tax liability.

4) There are laws that help you save or re-invest the LTCG, thus avoiding any tax at all. That topic would in the scope of the next post.

Cheers

Manoj Arora

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5 reasons why everyone will never get rich

 

"Happiness is a state of mind, and my mind stays in a healthy state if there is enough money in my pocket :)"

Don't worry, i just made this up. But this remains a fact with so many of us, at least definitely with me.

Is there anyone reading this article who hates money? If that is the case, then this article is not the best one for money haters like you. This article is for those who truly wish to get rich in life. When i say rich, i mean really wealthy. What you do with the money after getting rich is totally up to you, and is not the point of discussion in this article.

Most of us want to get rich, with a few exceptions. But then why is that 99% of the worlds population is not rich. Why only 1% could get really rich? What stops us from achieving a real wealthy status? We want it, isn't it? We work hard for money, then what is missing?

While i was shooting for my promotional video for my upcoming book, i realized that there are few key traits that we lack, which results in most of us living a life of mediocrity. I analyzed and summarized 5 key reasons for most of us not being able to become rich

1. Wealthiness does not strike us

The fact that we have been born and brought up in an environment where we have hardly seen rich people around us, makes us believe that its a norm not to be extremely wealthy and wealth comes only as an exception to the fortunate few. We never had rich friends, rich neighbors, rich colleagues at office. So, how am i supposed to be different? I am normal. I am as most of us are. It never strikes us that we can be truly wealthy irrespective of what surrounds us. We can be that "exception". We deserve to be rich. 

2. We never "decide" to get wealthy

I love talking about this. Many of my friends come to me and ask me to list down the steps from 1 to 10 - whatever they need to follow so that they can get rich. Fine, i say, "Tell me your dream." They are confused with my response and re-iterate their wish to tell them the steps needed for achieving financial freedom. I have to keep reminding them that your dream is going to be your first step. If you have not yet identified a dream in your life, a single purpose in your life for which you are ready to sacrifice anything, you are not done with Step 1, and unless you are done with Step 1, all other steps are meaningless. In fact, all the subsequent steps after your dream are so common for everyone and available so easily in books and across multiple internet sites that anyone can learn from them and follow them. But your dream is something that will not be available anywhere else. It has to be searched and dug out from inside you. A dream would be something that excites you, that single purpose of your life that ignites you and makes you passionate about everything that you do. It took me 15 years to search for my own dream and purpose of life, but once i found it, financial freedom was a just a series of steps that took 7 years to execute. Most of us want to jump over the first step of identifying our true dream because identifying that takes time and effort. It takes a lot of time and lot of effort. Unfortunately, there is no short cut here.

3. We always have enough excuses

"I am too old to fight for my dream now", "I have a family to support and secure", "It is too early for me to talk about retirement or freedom", "I don't have time", "Money is not a very good thing to have", "Money cannot give you happiness", "I am busy", "Happiness is a state of mind",  etc etc etc....the list is endless. I only have one point to tell all my friends who have some "reason" for not getting wealthy - Either you can make excuses or you can make money, but not both. The choice is in your hands. the choices that you decide every day make your destiny.

4. We do not appreciate delayed gratification

Most of us understand the compound interest calculation but it is very rare for someone to truly appreciate the amazing power of compounding and delayed gratification, unless they have experienced it in life themselves. In this fast paced world, we are all looking for instant results, and if we do not see instant results, we want to change our goal itself. Well, nothing worthwhile in life can be achieved without spending enough time and effort. It takes time to get rich and the growth is exponential. You have to have patience in the first few years when it might seem that you would never reach the goal, and then suddenly you would start realizing the amazing exponential power of compounding. Do not quit your goal till the compounding power triggers off its magic.

5. We are all in our comfort zones

"Well, whats wrong with my life? It is going just fine...", said a fish to her peer, lying in the fish aquarium inside a house. Doesn't that sound familiar? Nothing wrong actually - they are being fed on time, they are being saved from their potential enemies, they are being taken care of with clean water - then why should they try anything different. Perhaps, they forgot the real meaning of life - to "live" and "experience" life and the situations it poses on you. It is a very similar story for most of us. We have got used so much to our comfort zones that it pains to make an extra effort to "live" life. Is it easy to come out of such a comfortable zone? No, not at all. Is it worthwhile? Definitely yes. what is "living" life unless you have your personal freedom in your hands.

So, while most of us want to get rich, only 1% of us who will learn the skill to manage the above 5 constraints, will actually get rich. It is a fact that not everyone can get rich...Rich would always be divided in the ratio of 1% to 99%. 

But you can definitely decide the category you want to be in. The choice is in your hands !!

Cheers

Manoj Arora

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One person can make ALL the difference

Your Dream is your First Step

Have Hope.. and Dare to Dream !!

Big things will happen by doing Little things right

Did you ever realize that your future results, and your destiny, could be determined by those little things that you do everyday. When i say "little" things, i have no intention to mean that they have "little" value. I only mean to say that these things seem to take relatively lesser time, and probably may not have an immediate major impact on the outwardly results that we see, or so we may feel.

These so called little things could be as simple as polishing your shoes, cutting your nails, keeping your house neat and tidy, making sure you keep the shoes and towel in its place after using them or even keeping a book back in its shelf after reading it. Well, you may wonder what impact these little things have to do with the outcome of your life. The fact is that the way you do little things says a lot about how you will handle the big things in life.

Resigning yourself to mediocrity around your minor pursuits clearly sets you up for mediocrity when it comes to the major ones. If your home and your office desk is well organized, i can almost bet that your life is also well organized. A well organized life would mean great relationships, happy family, and also sound financial planning, which ultimately leads to reduced stress levels and a happy existence, apart from the achievement of your dreams.

If you are paying attention to the birthdays and anniversaries of your friends and their families, i am sure you are paying equal attention to the larger projects and opportunities that come your way in your personal and professional life. If your office desk is tidy and spotless, i am also sure that this will reflect directly in the quality of deliveries that you make to your client.

The reason for this correlation is very logical and simple to understand. A tidy house or office directly means an organized mind. Have you ever felt that when your office is untidy, you are more ruffled in your approach to issues and situations that come your way? Did you ever notice that when things are untidy at home, you scold your child more often? 

If you have never tried this, you can try it any day. You can see the result the end of the same day. When you go to office tomorrow, just try this. Make a conscious effort to make your office desk and its surroundings more neat and tidy than what it normally is. Don't tell me that it is already neat and tidy and you cannot improve it further. When you go to office and see your desk and think about it, you would yourself realize what improvements are possible. Once you have done that, then only you start the work for the day. 

Do not let it become cluttered during the day as you proceed with your work. Keep arranging and organizing the things as and when you feel the need & recheck the status of your desk for a minute after every 1 hour. At the end of the day, you would realize that not only you could do more work that day (which means you became more efficient), but the quality of your work also goes up. You will be able to resolve issues with better solutions, be handle relationships with your peers and seniors much better than you normally do. It is because when your mind is focused only on one thing at a time, it can focus more and give you many alternative answers to the same problem than when it is focused on multiple things at the same time.

I have a peculiar habit of taking a fresh sheet of paper everyday morning as soon as i reach office. Before i open my emails,  I jot down what all i need to handle in the day, from what is there in the mind. I keep adding more things as they accumulate during the day. I also keep scratching out the action items that i complete (The very act of scratching completed items give lot of satisfaction !!). Of course, i cannot complete all tasks in the day. But, when i come back the next day, i never continue adding more action items on the same sheet of paper although that sounds a more logical approach. I take a fresh sheet of paper again and rewrite all pending items from the previous day and then add if there is anything new. What is the difference? Seems such a small thing, but a fresh and uncluttered paper keeps your thoughts aligned and uncluttered as well. I have seen the results over time. Whenever i use a fresh paper, i am much more efficient and am normally able to complete many more tasks than when i continue on an existing sheet of paper. It is such a small thing, but imagine what can be the cumulative result of making this small habit at the end of the year if my daily productivity goes up by 15-20%. Not only i can show better results at the end of the year, i have more time with me. I can use this time to spend with my family, or to pursue my other dreams and passions. 

You can bring this kind of efficiency in every so called "small thing" that you do in life. You would realize that your life is changing for the good in every sphere where you bring this change.

So, pay attention to the details. Focus on the small things in life. Keep yourself and your surroundings neat and tidy. These habits will bring a change in your thought process. Fresh thoughts would lead to a better action. Better action would yield great results. And consistently great results would ultimately define a powerful destiny for you.

So, the next time, when you see your cars key lying aimlessly around on the table rather than on the shelf where it is supposed to be, don't ignore it. Make a habit of correcting this untidiness there and then. Because, with every such change, you are tuning your mind to become more effecient in everything it does.

Cheers

Manoj Arora