How much money is enough for you?

Do you know how much money is there in this world?

It’s $36.8 trillion (or 2569 Lakh Crores)

What if you get all this money? Imagine you wake up one day and your bank balance shows 2569 Lakh Crores. However, you also find that you are the only person left on this earth while every other person is missing.

All the malls, all the shops, all the movie theaters, all the entertainment parks, all the jewelry shops, all the real estate, all the fruits and restaurants and everything you can imagine is intact. It’s all available there.

how much money is enough


So what can you do with all that money with you?

The answer is NOTHING.

You can’t do anything, because you can only exchange money with something and if you already have everything available on earth lying there and already available to you, the money just loses its role completely. That 2569 Lakh Crores with you is nothing but trash.

Coming back to our life, at the start we do not have much and money is something which can help us get access to lots of things in life. However, we move from having “Nothing” to “Something” to “Good enough” to “A lot” and then slowly “Almost everything we wanted”

In this transition over years, the importance of money comes down in our life. We already have most of the things we can wish for. You already have a house, a car, nice furniture, a second home, great vacations, eating out, etc. etc.

The Race of Earning Money

While money is very important in life, we are conditioned to think from our childhood that money is the solution to everything in life. We are subconsciously in this race of earning more and more money without setting a target. More is always better it seems.

Note that.

  • There is a limited amount of food you can eat in this world
  • There is a limited number of vacations you will take
  • There is a limited number of houses you can live in
  • There is a limited number of cars you can drive
  • There is a limited number of things you need to have a great life

How much money do you need?

5 crores, 10 crores, 50 crores?

I strongly suggest that you need to target a number or a range after careful thought and then let that number define your speed. There has to be a number which is ENOUGH for you.

You will be able to lead a very good, desired lifestyle in that much money.

Trust me you will eat the same thing and dress quite in the same manner if you have 10 crores or 50 crores. Rakesh Jhunjunwala or Mukesh Ambani eats the same thing as you do.

running after money

It should not happen that you keep acquiring wealth in life, and later it turns out to be nothing more than trash.

The Dalai Lama when asked, what surprised him most about humanity, he said:

Because he sacrifices his health in order to make money.
Then he sacrifices money to recuperate his health.
And then he is so anxious about the future that he does not enjoy the present;
the result being that he does not live in the present or the future;
he lives as if he is never going to die, and then dies having never really lived.”


So what is the role of money in your life?

You need to define how much money you are targeting to acquire in your life. How much money is enough for you? Are you in a mindless race, acquiring all the money you can imagine and later, think where did my 60 yrs go? Or you are going to define the range which you want to acquire?

Something like “10 crores” is good enough for me once I retire. This is important because whatever time you give to earn money can potentially go somewhere else.

  • If you are working later hours for money, and coming home at 11:00 pm at night, then it means that you can’t wake up early and go for an exercise.
  • If you are working in some other city away from your family to earn a better income, it means you can’t spend that much time with your loved ones
  • If you are away from home during festivals so that you can earn/work extra, that means you are not going to spend that particular time with your family.
  • If you are not attending a wedding for your close friend, because you don’t want to lose those 6 days of a pay cut, that means that you will have that money, but then you will not have that memory of your friend’s wedding
  • If you are not taking your family to a nice vacation, then you will have that money in the bank, but you won’t have something to talk about years later when your kids grow.

Just like these examples above, there are multiple instances in life, where we have to decide between using our money and exchanging it with something.

Your Target = 1000 times your monthly Expenses

A simple calculation tells us that when a person accumulates around 400-500 times of their monthly expenses, they have enough to last for another 30 yrs.

This means that if you have monthly expenses of Rs 1 lacs per month, then 4-5 crores is a reasonable corpus for you. Let’s take 1000 times? So for a person, 10 crores if enough to last his lifetime (a very high-level calculation tells us that). In the same way, you should know what amount you are targeting for yourself.

So make sure you are clear about the importance of money in your life. While we have seen that a lot of people are not working hard enough to achieve all their financial goals targets, we see that a lot of people are putting too much emphasis on earning money and spending all their limited time into the race of earning money. While earning money is not bad in itself, make sure you know how much you need in life?

Question for you

I would like to know from you – “How far are you from your target?”. Do you think money has a bigger role to play in our happiness or a smaller role? Please comment below

Note: Note that I am not saying money is not important. I understand and acknowledge that money brings peace of mind, a sense of security and makes us powerful in away. I am only trying to give a perspective about the role of money in life. I am not saying that earning more money is bad or good. So in case you have hate comment, please read the article once again fully and point of the para or line which you want to debate on.

How much tax benefit can be claimed u/s 80D? (Rules + Limits)

Are you clear about the tax-saving which you can do when you pay health insurance premiums every year? You will be glad to hear that it’s over and above sec 80C.

Yes, it comes under a separate section called section 80D!

What is section 80D?

Health Insurance policies have become very famous in the last 10 yrs and to encourage it, the govt gives tax benefit when you pay the premium for yourself, your family or your parents

Section 80D defines all the rules and limits related to health insurance premium payment and tax saving.

what is section 80D of Income Tax Act, 1961

How much can you claim under section 80D?

One can claim a deduction of premium amount on health insurance of self + family (spouse + dependent children below 18 yrs.) and parents. If one pays a health insurance premium of his brother or sister then he/she will not be able to claim a tax deduction. To make it more clear, I have mentioned the list of people who will come under this benefit –

  1. Self
  2. Spouse
  3. Dependent Children (below 18 yrs.)
  4. Parents

How much you can claim Tax benefit u/s 80D?

  1. You can claim a maximum Rs. 25000 of the deduction for premium paid on health insurance of you, your spouse and children (under the age of 18 yrs.), if you are below 60 years
  2. The same amount of Rs. 25000 you can claim for deduction of premium that you pay for your parents (father+mother).

And if the age of you or your parents is above 60 years then the limit will increase to Rs. 50,000/- in each case. In the above limits, exemption of Rs. 5000 for yearly health check is included.

For getting a clear understanding of the calculation part you can refer the info-graphic given below.

these are the tax benefits u/s 80D

image on 80D exemption limit

Let us now understand this through some examples –

Case 1 – Ram (35 yrs.) with a spouse and 1 kid + parents (mother 55 yrs. and father 57 yrs.)

In case 1, Ram pays a yearly premium of Rs 15000 (for self+spouse+1 kid) and Rs 34000 (both parents). So now let us see how much exemption Ram can claim u/s 8oD.

As self + family exemption limit is Rs 25000 and Parents exemption limit is Rs 25000. Then Ram can claim exemption of Rs 40,000 (15000 + 25000) u/s 80D.

Case 2 – Rakesh (48 yrs.) with a spouse and 2 kids + parents ( father 75 yrs.)

In case 2, Rakesh pays a yearly premium of Rs 32000 (for a self+spouse+2 kids), Rs 63000 (for father) and Rs 8000 (preventive medical check-up). So now let us see how much exemption Rakesh can claim u/s 80D.

As self + family exemption limit is Rs 25000 and parent (senior citizen) exemption limit is Rs 50,000. So, Rakesh can claim exemption of Rs 75,000 (25000 self + 50,000 parent). As Rakesh has already exhausted his self exemption limit so he won’t be able to claim his preventive medical check because preventive medical check is already included in the self exemption limit.

2 Benefits into 1

I think getting tax deductions on health insurance is a wonderful thing. Health Insurance in itself is a very important financial product most people should buy and you are also getting some tax benefits on it. So, do buy health insurance for yourself, your family and parents to protect your wealth and save tax.

Let us know your views in the comment section about this article.

Should you buy car insurance from dealer?

Myth: As car insurance is mandatory, I have to buy it via car dealer !!

Reality: It is mandatory to have valid car insurance but, not mandatory to buy the same from your car dealer.

image on buying car insurance via dealer

Buying car insurance is mandatory under the motor vehicle act, 1988. As it is mandatory car dealers bundle up insurance with other services and quote it all to you in one invoice. But, insurance can be separated and you can choose an insurance company on your own. Most of the people buy it via a dealer, either because they are unaware of separating insurance from car purchase cost or they just seek convenience as getting it via dealer is much easier and convenient.

But, now the time has changed. With the help of the internet, it has become very easy to compare different insurance plans online and buy the best suitable as per your requirements. So, no question of hassling in the lengthy paper process. It is not like you should never buy car insurance via a dealer, there are disadvantages as well as advantages.

Advantages of buying car insurance from a dealer :

No doubt the process of buying insurance from a car dealer certainly saves you a lot of time. And there are a few more advantages of buying it via dealer:

  • The entire process of insurance purchase is streamlined and more convenient when it is through a dealer.
  • You may receive bundling discounts on the purchase of the car and the insurance from the car dealer.
  • You can get in touch with the car dealer to get clarification on the coverage or at the time of claims. The dealer will efficiently assist you in such matters.

Disadvantages of buying car insurance from a dealer :

A very limited number of options: A dealer is there to sell the car and not insurance. So, he won’t be able to offer you too many options when it comes to insurance. If he has a tie-up with two or three insurance companies, so he will be able to offer policies only by those companies. And this will limit you from selecting the best option that you can avail by doing your own research.

Premiums can cost more: As buying car insurance via dealer will be offline so it’s very obvious that it will be costlier than what you can get from online mode. In spite of this, car dealers enter into tie-ups and arrangements with insurance companies for which they get the commission, which can go as high as 40%. This will have an impact on the policy price, and for you, this can translate into high premiums.

Add-ons offered may not fit your requirement: Car insurance add-ons must be chosen keeping in mind the specific requirements of the car and its owner. As car insurance premium is recurring cost, to attract more buyers, a dealer may provide you basic insurance plan which will be cheap but, even then if you compare the premium of the same plan online you will find it cheaper, eg. if insurance via dealer costs Rs. 25000, it will cost Rs. 15000 if bought online. (40% costlier).

The main intention of the car dealer is to earn extra by bundling up all for you in one basket. As insurance is the basic requirement for every car buyer, he may influence you to take insurance from him, which may be very basic insurance not having important add-ons required.

It must be noted that add-ons are extra covers that can be opted to enhance the protection offered by a basic car insurance plan. Knowledge about what add-ons are suitable is important. Few essential add-ons that can be included to the base plan are:

  1. #Zero or Nil Depreciation: This add-on offers complete coverage without factoring in the depreciation of parts like plastic, fiber, rubber, and glass.
  2. #Engine Protection Cover: This add-on cover provides protection against damage to the car’s engine due to water ingression leading to hydro-static lock.
  3. #Roadside Assistance Cover: This add-on provides emergency roadside assistance services such as help in changing the flat tyre, roadside repairs, emergency fuel refilling and towing facility.
  4. #Return to Invoice: This add-on ensures that in the event of complete loss or theft of a car, the policyholder gets the car’s original invoice value and not just the Insured declared value.

So, it’s suggested that you should go for an insurance policy which should provide extra coverage to your car, by allowing you to customize it as per your needs.

Final Word :

Who doesn’t want ease and convenience? When we buy a car, we feel like ending up all the proceeding in one place. However, if you are internet savvy, hassle in buying insurance is not a question for you.

Should you buy 2nd house as an investment? (28 min video discussion)

I along with my teammate Sagar, recorded a 28 min video discussion related to this topic – “Should you buy 2nd house as an investment?” yesterday. We talked about various pros and cons which are often missed by those investors who are thinking of buying the second house for investment. Watch the video below

What we discussed in this video?

  1. When does it makes sense to buy a 2nd house?
  2. How does it impact your cashflows and stress level?
  3. Why are investors so attached and attracted to buying “Real Estate”?
  4. What are the real-life issues which investors face after buying the 2nd house?
  5. Is it an emotional decision or a financial decision?
  6. Why buying just 1 hour is enough for 95% of investors?
  7. Why illiquidity is a big issue with buying a 2nd house?
  8. How 2nd house can create a good second income, and in which cases?

Do let us know if you have any comments after watching the video!