National Pension System - An effective way to save tax and compound money!

Let me begin this article by citing a Jewish proverb - 'Taxes grow without rain!'. Income Tax is the most dreaded and probably the most hated word even for those who are patriotic. Especially in countries like India, there is often a social dilemma, whether, the tax money collected is efficiently utilised? That's a separate discussion. Remaining within the Legal boundaries, can you reduce the impact of Income Tax?

Yes. Thankfully yes. To make this sound more interesting, let's crunch some numbers:

Let's say, Sandeep starts working at the age of 25. The organisation he joins offers him NPS as one of the Compensation item, where he could opt to contribute INR 100,000 per annum through Employer. But, he chooses not to. His Employer deducts, INR 30,000 as tax (assuming at 30% tax).

So Sandeep receives INR 70,000 post tax and this money he has to invest in certain other products (Gold, FD, Real estate etc.,) to create wealth.

In Economics, there is always a trade-off to your decisions. Is there something which Sandeep is foregoing, with this decision of taking a 30% cut.

With three assumptions let's looks at what these 30,000 per annum chunks would have turned into

1. Sandeep would have retired at 60
2. Yearly contribution through Employer for the remaining 35 yrs kept at INR 100,000
3. Assuming 8% return on INR 30,000 chunks 
   

Amazing isn't it! The amount saved if otherwise would have been paid as taxes would have grown to INR 52 Lakhs! The corpus which Sandeep could have built is INR 41 Lakhs!

Let us also look at, what % of return is needed to match NPS returns, if Sandeep would have invested in Equity Mutual Funds. Post Tax, Sandeep is left with INR 70,000. Let us compare this with an Annual investment of INR 100,000 over a period of 35 years.

Above picture shows an investment of INR 70,000 made every year over a period of 35 years in a Mutual Fund. Gains on Equity mutual funds, currently are taxed at 10% on profit above INR 1 Lakh.

Now let's compare this with investment made in NPS. Remember in NPS, subscriber has an option to allocate up to 75% of their contribution towards Equity. Remaining 25% of the contribution let's say is invested in Corporate Bonds / Government Securities.

1. Assuming the Equity portion i.e 75% of the contribution mimics the gain of Equity mutual fund

2. Assuming the other 25% of the contribution grows at 8%

The above table depicts the returns which Sandeep will be able to generate - Tax free, if he opts for NPS. Even if your Equity Mutual Fund generates a return of 15% per annum, even then it won't be able to match NPS over a long period of time.

So, don't be in a hurry to invest your money. Think well before you make any investment.

Credits: https://www.rapidtables.com/calc/finance/compound-interest-calculator.html

Disclaimer: The income tax rates / assumptions are taken at current rates / ease of calculation purposes. Please treat this as an awareness post but not as any advise. 

I have not considered inflation, expense ratios etc.,

So with that, I will try and write a few more posts on the advantages of NPS

Until my next post!

Future Belongs To?

For those of you who read the 1970's classic by Toffler, Future Shock, I bet would have been mesmerized by the capacity of someone to think out of the box. At least I was.

So here is my uncanny attempt on who will be a Future Leader. (Some of the ideas here are already made into movies / were the sources) Lets see if we could mix some mythology to make things interesting.

1. The competencies of Nations would be redefined not by the number of nukes they possess but how effectively they shield their resources against nukes. The future belongs to that nation which first comes up with a metal / fiber which can withstand nuke impact. Is it possible? Oh my freaking Kevlar! yes!
   
   A Hindu Mythological story thus goes that, baby Hanuman - a just born monkey god leapt up to Sun. There must be something either an ornament / pendant made by a unique material or food which could have kept him alive
   
2. According to Criminal Psychology, people with better Social relations are less prone to commit crimes. Be it Communism, Democracy or Monarchy, nation which realises the importance of equality to reduce crime so that all citizens can continuously strive for the future will be decisive factor
   
   Indians still cherish and most often use the word 'Rama-Rajya'. Just Google the term for the rest.
    
3. Its not about Mass Production, its about quality. Its not about 'how' much one has produced but 'what' is what matters. Ask a soldier what do they pack as food? Nuts. Chocolates. Canned food.
   For all those Dragon Ball Z lovers, remember Sensu Bean. (Sensu Bean is a small pea sized pill which gives instant energy)
   
   Sage Viswamitra, a renowned sage to Hindus, teaches the art of preserving energy to Ram and Lakshman. This art is called Bala-Atibala.
   
4. Its not about decoding your enemy's messages but also about learning how to communicate with other animals. A step forward, using them in your military armed forces. Its not about training them. Its the next level. Animals are known to have better senses than humans. They can predict an impending danger - Natural or otherwise. Its about involving them in your team. Plants perform precise arithmetic calculations at night to survive! Who knows what mysteries they reveal.
   
5. Underground housing, think of a sky scraper / colonies built inside earth or Ocean. Of course, it will be masked with challenges. Ants have been doing so since ages, a leaf or two could be picked up from the tiny creatures.
   
6. Causing Earthquakes at will: Imagine you possess a competency to cause Earthquakes on any part of earth! Won't this take warfare to a new level. Tesla has already demonstrated this by inventing a device which can cause Earthquakes using natural vibrations. According to Hindu mythology, Earth is supported by 'Astha Diggajams' (Eight Elephants). This may Eight tectonic plates. It is a matter of figuring out natural frequency and matching vibrations.
   
7. Beat the speed of light:  If one were to travel beyond the speed of light, one would need material / alloy which can withstand friction and should be able to reintegrate itself at halt.
   There is a pillar in India (Iron Pillar of Delhi) which is made of an alloy which wouldn't rust with time.
   
8. Getting close to Zero: Its reducing the point of impact to a point which is close to Zero. Human body has an amazing immune system which daily destroys at least one cell which can potentially turn into a tumor. Its about striking the cell precisely close to 'Zero' second. On the other hand, devising weapons which give us the capability to strike close to Zeroth second.
   
9. How do you preserve knowledge? In case of a D-Day, how well do we encapsulate and protect information? DNA! Yoga? Telapathy?
   
   Well that's all folks I think these are some of the points which might determine the competitive advantage of nations or probably Earth. More for later. See you around.
   
    

Rise Of Nations Extended Edition Start Game Strategies

Rise Of Nations, I learnt about this game in early 2004 and till date this has kept me hooked on. Of all the war-strategy variants AOE - 1,2,3; Travian, Age of Mythology etc., I like this game a little more as this game I feel is much closer to reality with respect to ages, warriors, military technologies etc., Of course, there are some drawbacks - Natural resources can't be unlimited etc., 

Anyway, if you have laid your hands on this absorbing game you'll slowly realise that this is much more than a game and you will need a strategy in place.

I will mention the strategies I have used to gradually increase my level:
*All games were practiced with Toughest level. Custom teams (Teams of 4). No Wonder points / territory victory. Conquest mode.

Before you jump to play, make a note of all the nations and their advantages and pick 3-4 Nations which suit your game style. Practice a lot with those 3 or 4 Nations in various scenarios . I personally prefer:

Lakota (you need not build farms / granaries which translates to at least 20 citizens count saved and I can use the numbers saved on farmers for producing military units. On the other hand, number of citizens at the beginning of the game are less when compared to other nations)

Egyptians (You can build wonders an age ahead. Building a Super-collider at Age 7 can work wonders. You can construct 7 farms / city but which according to me is only helpful during the start game)

Americans (You get a free scholar when you build a University, since they have power of innovation. They have other advantages of cheaper military unit upgrades, First wonder built instantly etc.,)

1. Map - I have practiced a lot on Australian outback where you get your own island, then slowly moved to East meets West and then Random Land map
2. Custom teams. Usually Teams of 4 and 8 Nations
3. It is ideal that you keep changing your opponent nations to assess the strengths of each nation

Start Game: The initial 10 - 15 minutes of the game. There are several strategies, how you would begin your game.

Sharpening the Axe move: Ideal for Land / Sea maps

One of my cousin uses this trick frequently. He usually picks Egyptians. Uses all the available food to produce citizens and then builds farms with them. Each farm constructed gives +20 food.

Simultaneously scout is set on search for ruins which are usually (not necessarily) found along the edges and these ruins usually yield Timber as citizens are put for farming already.

Military is researched first and a Barracks is built. 1 Slinger 1 Archer and 1 Slinger are created in that order

Once army is built / being built citizens are put to collect Timber

Commerce is researched if the Map has a Sea and a Dock is built with a Fishing boat reaping +10 Food and Gold (no need for a caravan for sometime) and +10 Food and Metal (even before reaching Age 2 you can accumulate metal). Create merchants and collect as many Rare Resources as possible especially Dye, Silk, Papyrus (papyrus reduces Science costs which in turn reduces other research costs) Furs, and Silver

If there is no sea, Civics could be researched with a village constructed between Mountains or next to a forest

Fisherman Move:

You can try this with Lakota especially if the map has Sea and have to take your chances as it is slightly risky

Set out scout in search of Ruin Bonuses

Research Commerce. Build a Dock. Build two / three Fishing Boats. Put them on Fish and accumulate Food and Gold. Whale will yield Metal only if you have reached Classical age. Keep an eye on other players' age advancement.

Build enough citizens for collection of Timber (Food is generated automatically)

Build a market and try to collect Rare resources

Build a watch post / Lookout

Research Classical Age as soon as possible and guard your fishing boats

Once any enemy reaches Classical age immediately Research Military:

Apx time spent by enemy

Time to research Commerce 2 - Coinage needed to colonise - 18.3 Seconds
Time to Build Trireme 15 Seconds
Time to Build Bark 10 Seconds
Time to build a Slinger 10 Seconds
Time to build an Archer 11.3 Seconds

Assuming you'll be attacked with 2 Slingers and 1 Archer; you'll have a min. of 49.6 Seconds

Time you will have at your disposal apx
Time to research Mil 1 - 13.3 Secs
Time to build a barracks - 28 Secs
Time to create a slinger - 10 Secs
Time to create Archers - 11.3 Secs

You'll need 72.6 Seconds

While researching Military simultaneously build one Tower towards Enemy cities or most likely on a route your enemy can attack you.

Garrison your Archers and extra Slingers in the Tower. You can eject them from the opposite side, and you can create your chances by attacking the enemy from behind

Essentials for start game:

• Try to collect Marble and Tobacco
• Colosseum is a must have - Guard it with your ass, you'll thank heavens for the extra population limit during end game
• If you're not an offensive player construct Terracotta army
• Have a sizable army
• If you have more of any particular resource, sell them in market
• Move your capital when needed

PS: You can share your Start Game tips too!