There is a saying that, "1 Rupee Saved & Invested is 10 Rupees earned"Well, what it means by the above saying?.well...it means that,... when you earn 1 Rupee.... you pay 30 paise (30%) to the government as a Tax (assumed that you fall in a 30% Tax bracket).So now remains 60 paise only after paying a tax to the tax man.Now you got to market for a shopping.
you have already paid the Tax of 30 paise. so you do a shopping from remaining 60 paise.But wait, the problem here is that the thing you buy from the market has already tax inclusive price. so you pay Double Taxation on your hard earned money.One Tax you pay to government from your salary before you do any other expense from your pay check and second Tax you again pay to the same government when you buy a thing from the market which prize is inclusive of all Taxes.so what it means?....
You pay roughly 50 to 70 paise (50-70%) Tax to buy the item of 30 to 50 paise.So it means that to buy 30 to 50 paise item you earn 1 Rupee.Now Suppose you earn 2 rupees and pay 60 paise Tax (30%) to the Taxman.from rest of the 1.40 rupees you expend 40 paise and save 1 rupee.So what it means?well.... you have saved 1 Rupee so actually it means that you have saved 1.60 Rupees. because 1 rupee saved means 1 rupee saved plus 30 paise Tax saved.plus you haven't shop from this 1 rupee so you have bypass the double taxation.So it means that in reality you have saved 1.60 rupee (1 rupee saved + 30 paise Tax to Tax man + 30 paise double Taxation).Now you have invested this 1 rupee (virtually 1.60 rupees) to any asset. say from example stocks and put this amount there for 10 years.So what happens?....
your 1 rupee now has earned another rupees.And the Investment Income is totally Tax Free.So it means that, 1 rupee saved and invested now work as your employee in the market. everytime it generates more employees (rupees) of its kind and these more employees generate even more employees next time and so on....
But here, the advantage is that, the rupees that your originally saved 1 rupee has earned is a Tax Free Income even though it is a earned Income (by your rupee).And everytime these rupees generate more money all of them are Tax Free....So Remember,...- 1 Rupee saved & Invested is 10 rupee earned- Save & Invest as much amount of money as possible- The money that you earn is 100% Taxable but the money that your money earns are totally Tax Free.- So understand the fact and save more money....
You pay roughly 50 to 70 paise (50-70%) Tax to buy the item of 30 to 50 paise.So it means that to buy 30 to 50 paise item you earn 1 Rupee.Now Suppose you earn 2 rupees and pay 60 paise Tax (30%) to the Taxman.from rest of the 1.40 rupees you expend 40 paise and save 1 rupee.So what it means?well.... you have saved 1 Rupee so actually it means that you have saved 1.60 Rupees. because 1 rupee saved means 1 rupee saved plus 30 paise Tax saved.plus you haven't shop from this 1 rupee so you have bypass the double taxation.So it means that in reality you have saved 1.60 rupee (1 rupee saved + 30 paise Tax to Tax man + 30 paise double Taxation).Now you have invested this 1 rupee (virtually 1.60 rupees) to any asset. say from example stocks and put this amount there for 10 years.So what happens?....
your 1 rupee now has earned another rupees.And the Investment Income is totally Tax Free.So it means that, 1 rupee saved and invested now work as your employee in the market. everytime it generates more employees (rupees) of its kind and these more employees generate even more employees next time and so on....
But here, the advantage is that, the rupees that your originally saved 1 rupee has earned is a Tax Free Income even though it is a earned Income (by your rupee).And everytime these rupees generate more money all of them are Tax Free....So Remember,...- 1 Rupee saved & Invested is 10 rupee earned- Save & Invest as much amount of money as possible- The money that you earn is 100% Taxable but the money that your money earns are totally Tax Free.- So understand the fact and save more money....
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