Who makes us wealthy & prosperous so that we are able to live happily ever after kind of life?

There are 2 answers to this and they are just too obvious;

•          The Government
•          Yourself

The first may seem a bit weird but is true. It is weird because it does not touch our lives directly. Well the question still is how does the government make us wealthy? It’s quite simple to understand. Our most painful expenditure, something that given a choice we would never like to incur and by bearing this expense we never seem to get anything in return for that. I am talking about “Taxes”, which these days is levied on practically everything except thankfully the air we breathe. This expense for us is the government’s income. Now the good news is that everything the government earns they are suppose to spend for our benefit and in true spirit they allocate funds for general development of our society. But the bad news is that after allocation most times it does not reach / fulfill the objective for which it was allocated. We all know the reason for that. A related part of the story is that there is an 80/20 rule (could be 90/10 or 95/5) working here. 20% of the earning population pays taxes to support the balance 80% of the population. The others simply don’t come in the tax net or find ways to evade it whether legally or illegally.

There is a special category of people that deserves a mention. These are the one’s who cheat, use black money and evade taxes, normally the traditional family run business houses, many communities and sects engaged in specific trades and who have found their illegal way to prosperity. For them money saved on taxes is money earned. Hence with so many years and years of tax evasion they have amassed piles of wealth. This money is completely out of the system, it generates more money as unsecured cash loans, earns a fairly high rate of return. But it is all in hard cash – it is a different world that you perhaps have not seen and don’t know of. The sad part for us is that every day more and more money is sucked out of the system by these people and this money will never come back into the main system unless some really hard measures are applied. However this is quite unlikely because if the government musters courage to do this – there will be a massive hit on their own machinery as most of their own people will be involved here as well irrespective of which party is the ruling party. Thus this category of people has become wealthy and prosperous by cheating and evading taxes because they think that the government is also full of cheaters and corrupt people like themselves so there is no point making them rich rather why not help themselves.

In the light of the all this, the government also does their little share for us and they do it so smartly that we do not revolt in fury and beyond that they also know that we do not have more time. They develop roads, improve ports, build / re-build airport, talk about privatization to keep us happy that someday it will happen for e.g. all the state run oil companies are in quite a delicate position, fuel is India is amongst the most expensive in the world and yet our government is talking about privatization and market linked pricing since over 5 or so years now. Nothing has moved. The quantum of funds we are talking are so large that we cannot imagine. If a small section of that is creating an infrastructure boom in our country can you imagine what the larger picture might be?

So the government does their wee bit to make us rich and keep us quiet. However, our government making us wealthy is not only a distant dream but perhaps a utopian thought.

Now comes the real question – So what do we do, given that we cannot be a part of government or the special category? The answer is obvious if you seek to become wealthy – You have to take the charge and decide with unflinching zeal that you will make yourself wealthy. Exploit every legal provision. If you know that equity investment entitles you to zero long term tax and gives you the maximum returns why are you wasting time, money, energy & resources by investing in FD’s and other fixed interest products. You get measly returns on which you pay 30% taxes which adds to the governments wealth, further your money is then given as loans at rates between 2-8% higher than what you earn which adds more and more to everyone else’s kitty except yours.

Time to rethink isn’t it?