Let’s understand the key considerations while investing and we will then take each of them one by one:

  • What amount of risk you can take?
  • What is your investment horizon?
  • What is post tax return?

We will start from the third one. What is the impact of tax on different instruments we can invest money.

  • So say hypothetically one instrument offers return of 10% annually which is taxable and another offers 8% which is tax free.
  • If your effective tax rate is 25%, then the post tax return in first is 7.5% which is lower as compared to 8% in second option. But if your effective tax rate is 15%; then first option offers returns higher.

Below table depicts the four scenarios-

  Instrument 1 Instrument 2
Return 10% p.a. 8% p.a.
Tax Treatment of returns Taxable Tax free
Tax applicable    
Scenario-1- 25% Tax 7.5% p.a. 8% p.a.
Scenario-2-15% Tax 8.5% p.a. 8% p.a.


The key point is while looking at the return of any instrument you must look into post tax return of the instrument in terms of instrument and your tax bracket.


Positive * Positive  = Great Day

Morning started a bit hurried for me. Had forgot to put alarm & had slept late in night . So got up late . Rushed to get ready . Somehow managed to do that in time. Cab also booked . Was showing 10 mins waiting which was fine considering I was getting time to have breakfast . 

There was traffic & vehicle finally arrived after 35 minutes . The moment I opened the door of vehicle the driver greeted me apologised for delay & expressed his concern that I might have got late. This was a welcome surprise . I was little frustrated & worried . But then it just changed . 

The time till I reached my office was a different journey today inspite of traffic on the way . 

He enquired about why a particular building I stay in is named that . Then he shared his experience of taking a customer to a particular bungalow & why it was named so. 

Then he  shared that he started ola/Uber two months back & that his mother also prefers Ola / Uber . The reason why he thinks people / prefer this mode. 

He had views on almost everything you could imagine . Today’s generation, we adopting western culture & western culture adopting our things . The politics & the progress & bottlenecks . 

good day
source : pixabay

I spent 1.5 hours on a trip which normally takes 45 mins. But it was one such day where I was not complaining because of this amazing experience . 

These are some of the rare people who are themselves positive & engaging and spread this to people around them .