One Of The Related Companies Tax Exemption Rider: Fill & Download for Free

“Did you know that I never paid taxes before I came here? The Edema don’t own property, as a rule.” He gestured at the inn. “I never understood how galling it was. Some smug bastard with a ledger comes into town, makes you pay for the privilege of owning something.”Kvothe gestured for Chronicler to pick up his pen. “Now, of course, I understand the truth of things. I know what sort of dark desires lead a group of men to wait beside the road, killing tax collectors in open defiance of the king.Patrick Rothfuss, The Wise Man’s FearThis is actually a pretty great question, Dave. I apologize in advance, this answer might get a little on the lengthy side for today’s TL;DR culture, but I know you’re personally likely to read the whole thing and would most likely appreciate the depth.Why are people so averse to tax increases, when those increases would lead to a much higher quality of life for themselves and others?This depends on where you live, what station in life you occupy, and what your perceptions of the quality of government and politics are.And it really depends on whether or not tax increases do lead to a perceptibly higher standard of living for yourself.I was just having this very conversation with two relatives about two weeks ago.We were discussing the economy and the relative fragility of it if some bubble were to burst right now (which I think will be either student debt or another dotcom bubble in FAANG stocks,) the government is currently not taking in enough revenue to adequately fund the kind of spending it will need to prevent it from being a deep recession, possibly even depression. That led to discussions of taxes, which quickly led to Ocasio-Cortez and the marginal tax rate.For context, I grew up in a rural, heavily Republican area that broke about 62–32 for Trump. My family was in leadership in the Grange when that still existed. I was probably in college before I met a Democrat. And while my family tends to think Trump is a terrible human being and pray that someone confiscates his phone, they’re generally supportive of conservative policies.I’m a slightly center-right person and a never-Trumper, myself. In certain parts of my family, that has put their perception of me somewhere on the left roughly between Marx and Chavez as of late.The first question I was asked in this conversation after I suggested that we are not taxing the wealthiest enough was why I want to punish rich people for being successful.It is important for me to give a brief primer on the three basic types of taxes: regressive, flat, and progressive taxes, for those who are not already familiar with them.Regressive taxes are where the lower your income, the higher a percentage of your income the tax takes. Flat fees are regressive taxes. The policy here is equality: everyone pays the same amount.Example:A poor person making $1000 a month who has to pay a $100 fee pays 10% of their income. They have $900 remaining to budget for the month.A middle-class person making $10,000 a month who has to pay a $100 fee pays just one percent of their income. This person has $9,900 remaining to budget for the month.A wealthy person making $100,000 per months who has to pay a $100 fee pays just one tenth of a percent of their income. They have $99,900 left to budget for the month.Note that this tends to be hard on poor people and almost meaningless to a wealthy person. Each order of magnitude up in income doesn’t increase income by 10x after the tax, it’s greater than 10x.Flat taxes are a flat rate. The percent remains unchanged as the income increases or decreases. The policy here is fairness; everyone pays the same percentage.Example:Our poor person making $1,000 a month paying a 10% tax pays $100. They have $900 a month to live off of.Our middle-class person pays $1,000. They still have $9,000 left to budget for the month. They’re paying in taxes what our poor person makes in a month.Our wealthy person pays $10,000 in taxes, ten times the total income of the poor person and ten times the taxes of the middle class person. They still have $90,000 remaining to budget for the month.Note that our wealthy person has seven and a half times as much remaining for the month as our poor person would make in income in a year if we didn’t tax our poor person at all. Our person in poverty is still in poverty.But, from the perspective of our wealthy person, he’s shouldering the same tax burden as half a dozen other less well-off individuals.Progressive taxes are where the higher your income, the higher your percentage of your income it takes. The policy here is ability to pay; everyone pays what they can afford.Example:Our poor person pays 0% taxes. They have $1,000 for the month to budget.Our middle class person pays 10% in taxes. They still have $9,000 remaining for the month to budget, 9x more than the person in poverty.Our wealthy person pays 40% in taxes, because the math is easy and it’s a nice big number. They still have $60,000 remaining for the month to budget.Our wealthy person is footing a massive tax bill, but still has five times more per month than our person in poverty has in a year. They have as much left over after taxes in three months what the person in the middle class has left over after taxes in twenty.Now, in reality, these are usually taxed in brackets. Our wealthy person isn’t really paying the full 40% in taxes. Assuming our brackets are just between our hypothetical people, they would pay 0% on the first $1,000 per month, 10% on the amount between $1,000 and $10,000 per month, and 40% on the amount over $10,000 per month. The math gets slightly tricky, but the effective overall rate would be somewhere closer to 30% here.Certain flat taxes function more regressively, particularly “consumption taxes” such as sales taxes, value-added taxes, etc. While the wealthy pay the same sales tax on a product, that product and associated tax are a comparatively smaller proportion of their income than for the poor, simply because it’s just not possible for them to consume a proportionately greater share of products than the corresponding increase in their income.The gasoline tax, for example, is a flat tax that functions regressively, particularly on populations that need to drive more as a function of living such as rural populations.These can be hybridized to an extent. For example, one way to make flat taxes more progressive and less impactful on poor people is to exempt a certain amount; say 25% on everything over $50,000. A person making less than $50,000 pays no tax at all. A person making over $50,000 pays 25% only on what they make over $50,000; i.e. if they make $100,000, they pay tax only on $50,000, or $12,500 in tax rather than $25,000.It sadly needs to be explained that this is how marginal tax rates work, which is what progressives are suggesting be raised. Nobody is seriously suggesting that we tax the wealthy at a full 70% total; the first ten million dollars annually would be exempted.First person that starts bitching about Ocasio-Cortez and socialism in the comments because they read that last bit, skipped the rest of the answer, and jumped straight to the comments to argue gets put out the airlock.Higher taxes generally provide very little increased standards of living to the rural poor.Americans, particularly rural Americans, have a few things working against them.First, they’re often less educated in particular when it comes to civics.Not a single member of my family knew the difference between the basic types of taxes. They have vaguely heard of the idea of a flat tax replacing all the various sales taxes and stuff, and they like that idea, but that is the extent of their knowledge regarding tax policy. The argument with my relatives started because they were trying to figure out whether certain retirement account dollars are taxed when they are taken out and how the economy will affect their retirement.Very few people from my home area have any trust or love of government and see it at best as keeping the roads plowed and salted.And they have reasons.[1]Many of them have bought into the idea that gubbmint takes their money and sends it all down to Madison and Milwaukee to the lazy people who don’t work and live fat off the public trough.Whether this is true or not, it feels true to them. Why?You have to understand, where I grew up, most people live hand to mouth and struggle for that. It’s mostly manufacturing and small dairy, both industries that have been especially hard hit in the last thirty years. Milk prices are lower than they were when I was a child, and when you figure in inflation and the increasing cost of overhead (diesel fuel, electricity, etc.) it’s impossible to keep a small dairy running these days. One of the largest manufacturers in my hometown folded and took probably a quarter of the local economy with it.These people are utterly convinced and have been since Reagan that government, particularly regulation, is the problem.The farmers constantly complain about how those idjits in Madison who wouldn’t know one end of a cow from another come out and tell ’em how to do things when any person with common sense coulda toldja that was stupid and costly for no actual benefit.The schools are largely funded by property taxes. In rural areas, who are the biggest landowners? And who are the ones whose land values keep going up? Farmers.My grandfather used to talk about being land-rich, money-poor. And he’s right.Land is a valuable asset, but not a liquid one. So, every year the assessor comes out and tell you that your land is worth 2% more, so your taxes are going up 2%. And you’re sitting there knowing that milk prices haven’t budged, soybeans and corn are down, seed is going up, and you’re out of notches on the tight end of the belt.And then the school says they’re broke and needs a referendum for a new auditorium. It’ll raise your taxes another 1% this year. Another couple of thousand bucks. That could be an acre’s worth of soybean seed.Do those taxes feel enough like a punishment yet?Even if you’ve got kids in school and you know that auditorium is in disrepair or hasn’t been updated since it was built in 1965, how are you going to pay for that tax increase? Sell some land? Sell some cows? Sell some equipment?Most folks where I grew up ain’t got it to spare.So, when that “smug bastard with a ledger comes into town, makes you pay for the privilege of owning something,” yeah, it sure feels like a punishment for having anything of value.Now, add to that the perception that these people feel at least like they’re not getting a fair shake at life and government isn’t doing much to help it.What are they getting? Their roads are crumbling.[2] [3] Their schools are failing if not just plain closing, and teachers are fleeing in droves from rural districts to better paying urban ones.[4] [5] Health insurance premiums and deductibles have continued to go up.[6] Their kids are dying of suicides and overdoses.[7] [8]My people don’t feel like their quality of life is improving with higher taxes.And then some guy from Milwaukee wants to take tax dollars and build a choo-choo that’ll never go anywhere near their farm.[9]That’s what these folks see.Now, it is also true that the rural poor benefit a great deal in ways they don’t consider from the higher taxes. The New Deal built the vast majority of the infrastructure where I grew up. My grandfather remembers when their farm got hooked up to electricity and telephone thanks to the rural electrification efforts. Rural roads all over the state were paved to keep dust out of the milk; there are more miles of gravel roads in one non-dairy county in the western part of the state than the rest of the state combined. The CCC planted millions of red pine hedgerows to slow down the dust storms and erosion in the Central Sands region and practically built the town of Stevens Point. Kids still go to school in buildings constructed through WPA grants.A large tax push in the 1960’s also built a substantial piece of educational infrastructure; the University of Wisconsin System constructed the vast majority of the classroom and dorm buildings for both four-year universities and two-year community colleges in the late 1960’s, and many communities around the state built new elementary and secondary school buildings, particularly in rural areas, at the same time. Many of those rural schools now sit vacant, sold off to private businesses, or converted into local government centers as districts consolidated buildings. (When I was in first grade, I started at a rural school south of town and our class moved to a renovated school in town over Christmas break; the building was eventually sold to a local construction company that still uses it.)Tack on the Farm Bill and agriculture subsidies, the fact that many of those people are in school districts that are well over 50% on free and reduced lunch, many qualifying for the earned income tax credit, and more, and it adds up quickly to rural poor getting far more back in benefits than they pay in.The three major urban centers in the state (Milwaukee, Madison, and the Fox Valley area) generate a significant majority of the state’s revenue, and receive less back than they generate, even after taking into account major road projects such as several recent interstate overhauls.Not only that, but Wisconsin made a deal in 1911 with the municipalities of the state: in exchange for a state law prohibiting cities and municipalities from instituting local income taxes, they would get more state aid. Since the 1990’s, the state legislature has reneged on that deal, and state aid to counties and municipalities has continued to decrease. In 1995, 53% of Milwaukee’s budget consisted of state aid. For fiscal year 2017, it was 36%. Urban areas are losing a greater share of state aid every fiscal year, while paying in more.But rural counties have also been heavily hit.This reduction in local aid was drastically heightened under the Scott Walker administration, who reduced county aid so significantly that many rural counties had to cut mowing county road ditches down to perhaps once in the summer. One county where I have a friend on the county board has had to start asking for farmers to volunteer to mow their areas. The school aid formula hasn’t been updated in nearly 30 years and doesn’t account for transportation costs, which have been hammering rural districts with rising fuel prices to bus kids in from long distances.And that’s with taxes continuing to stay flat or only rise a little bit.Rural health care options have been declining for a long period of time, in part because they aren’t profitable, and in part because some complex procedures just aren’t performed often enough that health care providers are able to keep the staff trained; even birth services are being dropped because of the risk of complications or c-sections.[10] [11] [12] [13] There just isn’t a lot of trust in government to keep things like this from happening.Essentially, these folks might see the cost of their health insurance decrease with a switch to universal health care, since the rural areas are largely already poor enough that they’re heavily subsidized through the current ACA system[14][15], (though they still generally have higher premiums anyway,)[16] but likely wouldn’t see any increase in quality of care.Most of the tax benefit they see just doesn’t seem terribly visible to them, while any increase in taxes is quite visible. Thus, these folks have no reason to believe that their quality of life will increase if they pay higher taxes, even if they could afford it.And ultimately, the tax increase necessary to fund the kind of infrastructure, public utilities and services, and programs such as universal health care for rural populations would be massive if the burden fell on them alone, simply because of population density.Higher taxes don’t improve the standard of living for the already-wealthy.The vast majority of the economic recovery in the United States after the 2008 recession went to a) the largest urban areas of the country, and b) to the already wealthy.[17]For the wealthy, higher taxes are not only highly unlikely to result in a higher standard of living, they’d be prone to decreasing the standard of living that a wealthy person already enjoys.For the most wealthy, what they would receive from social programs such as Social Security is less than a rounding error in their annual income just from carried interest on their assets. The benefit from a buy-in option for Medicare is meaningless when a person can pay for platinum-level insurance plans with the change in their couch cushions, if not simply outright own the hospital.For them, universal health care is probably a step down. They’d likely have to maintain supplemental insurance to cover what they currently have. They’d basically get the same care they get now at more or less the same price, except now it wouldn’t be optional for them to pay in.They benefit somewhat from public investments into infrastructure; after all, what’s the use in driving a Bentley or Beamer around if the roads are terrible? Private jets don’t work as well without GPS and traffic control towers at the airports, even if you have a private hangar.Edit: Kagan Hudayar brought up a couple of very good points about ways that I had not listed that the wealthy benefit from higher taxes put back into national investment. Better infrastructure reduces the friction costs for business - this is why we have an interstate system. (Contrary to popular myth, Eisenhower didn’t come up with it as a way to move military forces quickly; he saw how it improved German industry with its ability to quickly move resources.)Public infrastructure such as transit also reduces employment costs. Employees that can get to work efficiently are more productive for the wage costs, and allows employers to get labor from a wider geographical region, which improves their ability to recruit better workers.Poverty is more heavily correlated with crime than anything else. People in poverty are more desperate, more likely to be willing to turn to illicit means to make things happen. There’s little good in having a million dollar mansion on a hill when you’re afraid to leave it or get robbed. And if things are bad enough, all the security forces in the world are not going to protect you when the mob with torches and pitchforks decides they’ve had enough with the plutocrats.[18]Kagan also worded this better than I think I could paraphrase it:And additionally, the ONLY way the wealthy can keep their wealth and grow it from generation to generation is by ensuring a well educated, well fed, and economically advantaged middle class. It doesn’t matter how I make my money. If the masses can’t buy more and more widgets, my business will shrink, my stocks in companies who sell widgets will diminish in value, and ultimately, we will enter a recession that is impossible to get out of. It seems to me, what the wealthy conservatives actually want is a system more in line with banana republics and under-developed nations. What they fail to realize is that the end-result will also be the same as it has been for these impoverished nations.He’s exactly right. If you want to grow the economy, give money to poor people. They will buy things. When people can’t buy things, the whole system falls apart. The wealthy can only stay wealthy, and continue to grow that wealth, if there is sufficient distribution of it to the rest of the world to support it.That perspective, however, is tempered with the idea that they shoulder the vast majority of the tax burden - as much as 70% of it.[19] [20] [21] [22]That feels heavily unfair to them. As a percentage, they’re basically subsidizing the rest of us poor schmucks.On the other hand, the richest 10% of Americans control more than 90% of the overall wealth.[23]Depending on what side you look at it from, it can either seem totally unfair to place the tax burden on the wealthy, or that they are not shouldering their fair share.One way to look at it is that fewer than 10,000 people control 90% of the nation’s wealth - shouldn’t they pay 90% of the nation’s tax burden? Or, alternatively, fewer than 10,000 people are effectively paying for all of the rest of us to have Social Security and Medicare and don’t benefit hardly at all from those programs.If you’re already wealthy, what perspective would you be prone to taking?This is why they fight tooth and nail to keep the carried interest loophole[24], repeal or raise the exemption amounts for the estate tax[25], use offshore accounts to disguise their assets[26] [27] [28], and to raise the amount of pass-through income for LLPs and LLCs.[29]These people see no standard of living increase from higher taxes, and for the ultra-wealthy, would probably mean having only the smaller yacht to get to their villa in Tuscany for the winter. The shame. What will the Carlisles say?The main people who visibly see a rise in the standard of living from higher taxes are the urban poor and the suburban middle class.The urban poor generally see small percent increases in taxes, but because of the overall concentration of people in one area, tend to get the most benefit from reinvestment back in the community.For example, urban areas are more likely to have public transit systems which make it possible for the urban poor to move about without the costs of owning a vehicle and insuring it. The rural poor do not have this advantage; no car = walking, biking, or getting a ride.To keep public transit systems affordable for riders, they are generally subsidized with tax dollars and are not self-sustaining. So, the urban poor get a comparatively higher benefit from that tax investment.The urban poor are much less likely to be landowners[30][31], and if they are, the value of the properties owned by the urban poor is significantly less than rural landowners simply by virtue of location and size.[32] An urban poor to lower-middle-class person might own a home, but it is unlikely to be larger than half an acre of property or valued at higher than $250,000. A rural poor farmer with almost any acreage very likely has an asset valued at at least as much; a rural poor farmer with 360 acres of total land may have a net worth on paper of several million dollars, but often with very little net income.This significantly impacts property taxes, which are the most common way that local municipalities are funded.The urban poor combined pay a lot in property taxes, in smaller individual amounts, and receive back infrastructure that simply due to density and availability is more tangibly and visibly raising their standard of living.The rural poor, on the other hand, pay larger individual amounts of property taxes that simply due to density issues don’t amount to as much, and end up supporting comparatively less immediately visible infrastructure.Both urban and rural poor would probably benefit significantly from social programs such as universal health care. But, as discussed above, the rural poor are more likely to be significantly distrustful of whether they will actually benefit from that program.The urban poor, on the other hand, are unlikely to be working jobs that have health benefits at all. Universal health care would be an enormous benefit to them, and because of the population density, they are more likely to have access to excellent medical options in metro-area hospitals.The suburban middle class is who really sees a lot of benefit for their tax dollars.Their density is slightly less than the urban poor, but the value of their properties is likely to be double. (This is highly dependent on geography; it is far more true in the Midwest than on the East Coast, for example. But, the overall trend is this direction.) Overall, the combined tax revenue from the suburbs compared to its population density means that almost everything in the municipality is likely to be better funded and require less infrastructure in some ways.For example, suburbs generally do not require a public transit system - most people there are in the lower-middle-class and likely have a car and a garage to park it in. So, that’s one big urban government expense municipalities don’t have to worry about.Smaller population densities means fewer police, fire, and EMS are required to service the same area. Schools can service a greater area without being overcrowded, but without having to extend themselves into such a great area as to require substantial student transportation in order to have enough students to justify having a school at all. Suburbs are dense enough to justify public works infrastructure such as centralized water and sewage treatment, but not so dense as to make such works difficult to construct, maintain, and run.That all means more money per capita that can go into schools, police, fire, and public works and services.Universal health care would be an enormous benefit to the suburban middle. These people are more likely to be working full-time with benefits including health insurance, but are also very likely to have seen drastically rising costs associated with that insurance.[33] [34] [35] This group of people is most likely going to see a significant decrease in overall personal costs if the nation were to move into universal health care. They would gladly pay more in taxes because it would likely mean a greater increase in compensation from full-time employment and less than the projected tax in current payment of deductibles and premium co-pays.Additionally, they’re likely to be close to major metro area hospitals that provide full-service care, much unlike the rural areas that are seeing care options decline significantly, which means that universal health care would provide them with advanced care at a cheaper price than they’re paying right now.All of this combined means a significantly more visibly higher standard of living for a comparatively small tax increase than urban or rural areas.Overall, higher taxes generally tangibly increase the standard of living for the suburban middle class and urban poor, but not for the rural populations or the wealthy.Now, there are lots of ways we can take this into account and tax intelligently to spread the burdens out based on ability to pay, but there simply will be wealth redistribution, particularly to the rural population, for any kind of efforts. It’s just absolutely unavoidable if you want to give them the same or comparable standard of living as suburban populations with a lower population density.But as it stands, just raising taxes would not provide enough revenue to significantly improve the rural standard of living (if placed only on rural populations, at least), raising taxes on the wealthy to pay for improved standards of living for any other population will justifiably feel to the wealthy like they’re subsidizing the standard of living increase for the rest of the population, and raising taxes just in general will most tangibly benefit the suburban middle class and urban poor.I’ll give you three guesses as to which of those two populations are most represented in Congress as Republicans and which two are represented as Democrats, and the first two guesses don’t count.You’ve read a long answer with no pictures. Here, enjoy a picture of a fuzzy kitten as a reward.Mostly Standard Addendum and Disclaimer: read this before you comment, goddammit.I welcome rational, reasoned debate on the merits with reliable, credible sources.But coming on here and calling me names, pissing and moaning about how biased I am, telling me to go push my commie values in Venezuela, et cetera and so forth, will result in a swift one-way frogmarch out the airlock. Doing the same to others will result in the same treatment.Essentially, act like an adult and don’t be a dick about it.Additionally, as aforementioned and because it bears repeating, first person that starts bitching about Ocasio-Cortez and Elizabeth Warren and socialism and taxation is theft! gets the airlock. Walk down the road to Galt’s Gulch and you’re out the door. These are bad faith arguments that have been repeatedly debunked, and I am ornery enough not to put up with it today.If you want to discuss, rationally and with reliable, credible sources, what kinds of tax policy would actually have a meaningful impact on the standard of living, fine. I will even let you argue supply-side economics if you think you’ve got a line of reasoning that hasn’t already been proven wrong by the annals of history, so long as you’re making good faith arguments about it.Also, getting cute with me about my commenting rules and how my answer doesn’t follow my rules and blah, blah, whine, blah is getting old. Again, ornery enough today to not put up with it. Stay on topic or you’ll get to watch the debate from the outside.If you want to argue and you’re not sure how to not be a dick about it, just post a picture of a cute baby animal instead, all right? Your displeasure and disagreement will be duly noted. Pinkie swear.I’m done with warnings. If you have to consider whether or not you’re over the line, the answer is most likely yes. I’ll just delete your comment and probably block you, and frankly, I won’t lose a minute of sleep over it.Debate responsibly.Footnotes[1] Amazon.com: The Politics of Resentment: Rural Consciousness in Wisconsin and the Rise of Scott Walker (Chicago Studies in American Politics) eBook: Katherine J. Cramer: Kindle Store[2] Audit: Wisconsin DOT significantly underestimated highway project costs[3] Infrastructure spending: Which state is falling apart the worst?[4] School’s Closed. Forever.[5] Western Wisconsin Schools Grapple With Falling Status Of Teachers[6] Health Costs A Burden For Wisconsin's Middle-Income Families[7] Wisconsin suicide rate has increased 25 percent since '99, mirroring national problem[8] ER Visits For Opioid Overdose Double In Wisconsin[9] Breaking News, Analysis, Politics, Blogs, News Photos, Video, Tech Reviews - TIME.com[10] Rural hospitals retreat from delivering babies; small towns pay the price[11] Only 42% of Texas' rural hospitals will still deliver babies: A majority of rural hospitals in Texas are opting to discontinue delivery services as the number of births fall and the cost of providing the service rises, reports the Texas Tribune.[12] Another Thing Disappearing From Rural America: Maternal Care — ProPublica[13] Rural Hospitals Are Dying and Pregnant Women Are Paying the Price[14] Health Insurance Coverage in Small Towns and Rural America: The Role of Medicaid Expansion[15] The Role of Medicaid in Rural America[16] ACA Premiums Costlier in Rural America[17] Poorest Areas Have Missed Out on Boons of Recovery, Study Finds[18] The Pitchforks Are Coming… For Us Plutocrats[19] Diving into the rich pool[20] http://www.aei.org/publication/cbo-study-shows-that-the-rich-dont-just-pay-a-fair-share-of-federal-taxes-they-pay-almost-everybodys-share/[21] High-income Americans pay most income taxes, but enough to be 'fair'?[22] Tax burden on the wealthy has trebled since the 1970s, Telegraph analysis shows[23] Wealth Inequality - Inequality.org[24] What is carried interest, and should it be taxed as capital gain?[25] The GOP wants to repeal the estate tax—here's how to know if that affects you[26] How rich people avoid taxes by parking money offshore (legally)[27] Opinion | How Corporations and the Wealthy Avoid Taxes (and How to Stop Them)[28] Paradise Papers Expose Rich And Famous Using Tax Havens  [29] What you need to know about the Senate's pass-through tax debate[30] The Definitive Guide to Who Rents and Who Buys in America[31] The Incredible Rise of Renting in the U.S.[32] https://www.jstor.org/stable/1017275?seq=1#page_scan_tab_contents[33] Cost of Employer Insurance Growing Burden Middle-Income Families[34] Middle-Income Americans Take The Biggest Hit With Obamacare[35] Steep Premiums Challenge People Who Buy Health Insurance Without Subsidies

The causes of the American Revolution revolve around one central issue: taxation. I will also focus on some other issues though. This is going to be a very in-depth answer, so I hope you have the patience to stick around.1763You see, before 1763, British administration of the American colonies was very hands-off, and the colonies were allowed large degrees of autonomy, with most state functions (including taxation) being delegated to local assemblies such as the Virginia House of Burgesses.After the end Seven Years War in 1763, the new Prime Minister George Grenville had three major issues to deal with.How to defend Britain’s overseas holdings.How to check the colonists’ unceasing claims on Native American lands.How the fuck are we supposed to get money?The plan for point one was to have British regular troops man a line of forts from Canada to Florida, to protect the colonies from enemies on all sides. While this was ostensibly for the colonists’ protection, the colonists themselves felt like the troops were more of an occupation force. Their thought process was “Well, we just won a war against the French, so the biggest threat to us is gone. Now you station troops in our lands?” The whole thing reeked of despotism, and the colonists didn’t like it one bit.The second point was addressed by George III, who announced the Proclamation Line of 1763, which was a line drawn down the Appalachian Mountains. It restricted the colonists to the east side, and left the western side to the American Indians. Unfortunately, all this really did was stir up resentment for Britain, as land was becoming a rarer and more expensive commodity in the colonies.The third point was the big one. Britain had accumulated over £120,000,000 in debt by the end of the war with the French. Grenville needed to pay for this somehow, so he resolved to raise taxes on the people of the empire. At this point, he did not tax the colonists too hard; he merely thought that they should send more tax back to the mother country than the meager amount they were currently paying in tax to the central government. So the Prime Minister passed the Sugar Act.1764The colonists had been evading the six pence duty on molasses by bribing the agents who were supposed to monitor it with one and a half pence, so they would keep quiet. Grenville thought that by cutting the tax in half, that the colonists would be encouraged to use their money for paying the tax, rather than bribing the agents tasked with collecting it. They were not expecting any sort of pushback whatsoever.They were wrong in this assumption. The formerly lax tax collectors were replaced with incorruptible and diligent agents. This made the bribery (yes, the colonists still planned to do that) nearly impossible, and the colonists were stuck with paying twice what they used to be able to bribe the tax collectors with. On top of this, the Sugar Act reached the colonies during a post-war economic recession. This further angered the colonists who had little money to spare.The colonists began urging Parliament to repeal the Act. Some did so on purely economic terms, but others began arguing that Parliament did not have the right to tax the colonies, because the colonists were not represented in Parliament. The idea that your property should not be unjustly taxed went all the way back to the English Civil Wars. Where property rights existed, there was liberty. Where property rights did not exist, tyranny reigned. The colonists believed that they had the right to not be unfairly taxed, because, after all, they were proud Englishmen.1765Grenville’s ministry didn’t really pay much attention to the opposition, and decided to go ahead with phase two of their revenue plan: the Stamp Act. It was a tax on paper. The paper would be distributed by officials from Britain, and it was required that most printed materials would be printed on the stamped paper. The act was scheduled to take effect November 1, 1765.Opposition to this Act was strong, however, and dissidence rang throughout the Thirteen Colonies. In the Virginia House of Burgesses, Patrick Henry made his first appearance on the revolutionary stage with a vehement speech opposing Parliament’s taxes, and the next day, the Virginia Resolves were passed by the House of Burgesses. They stated, as follows:Resolved, that the first adventurers and settlers of His Majesty's colony and dominion of Virginia brought with them and transmitted to their posterity, and all other His Majesty's subjects since inhabiting in this His Majesty's said colony, all the liberties, privileges, franchises, and immunities that have at any time been held, enjoyed, and possessed by the people of Great Britain.Resolved, that by two royal charters, granted by King James I, the colonists aforesaid are declared entitled to all liberties, privileges, and immunities of denizens and natural subjects to all intents and purposes as if they had been abiding and born within the Realm of England.Resolved, that the taxation of the people by themselves, or by persons chosen by themselves to represent them, who can only know what taxes the people are able to bear, or the easiest method of raising them, and must themselves be affected by every tax laid on the people, is the only security against a burdensome taxation, and the distinguishing characteristic of British freedom, without which the ancient constitution cannot exist.Resolved, that His Majesty's liege people of this his most ancient and loyal colony have without interruption enjoyed the inestimable right of being governed by such laws, respecting their internal policy and taxation, as are derived from their own consent, with the approbation of their sovereign, or his substitute; and that the same has never been forfeited or yielded up, but has been constantly recognized by the kings and people of Great Britain.Resolved, therefor that the General Assembly of this Colony have the only and exclusive Right and Power to lay Taxes and Impositions upon the inhabitants of this Colony and that every Attempt to vest such Power in any person or persons whatsoever other than the General Assembly aforesaid has a manifest Tendency to destroy British as well as American Freedom.The Virginia Resolves (coming from the largest and most influential colony) circulated throughout the colonies during the summer, and many colonies passed similar resolves. The first signs of colonial unity began to show.In Massachusetts, the opposition took a more violent approach. An effigy of a stamp distributor was hanged from a tree, and when a sheriff tried to take it down, he was stopped by an angry mob. That night, a shoemaker led a crowd down to the stamp distributor’s offices by the docks. They smashed the offices to splinters. Then they went down to the distributor’s home, carrying the effigy. They beheaded it in front of the house, and then stamped it into the ground (hahaha, these guys are a riot). They then smashed up the distributor’s house, before retiring for the night.The next day, a delegation from the mob contacted the stamp distributor and said “Why don’t you just resign?” and the distributor said “Yeah, I think that would be good.”In August, the mob reconvened. They managed to get themselves very drunk, and decided to attack the house of the local governor, Thomas Hutchinson. They gave it the same treatment as they did to all the other houses they systematically dismantled. The destruction, however, was highly organized and disciplined. This stoic opposition to a law that wasn’t even going into effect for months shocked and startled the politicians back in Britain.Grenville was replaced by Lord Rockingham as Prime Minister in July, and Rockingham quickly started looking for a way out from under the policies of Grenville. In October, the Stamp Act Congress met in New York City, with delegates from nine of thirteen colonies in attendance. They met to discuss a joint response to both the Sugar and Stamp acts.They concluded that Parliament did not have the right to levy “internal taxes” (taxes to raise revenue), but that they did have the right to levy “external taxes” (taxes to regulate trade). At the same time that the Stamp Act Congress was meeting, the first signs of non-importation were brewing. Non-importation agreements would grow to become a crucial building block of colonial opposition to Britain.Parliament convened in December, but while they wanted to repeal the Stamp Act itself, they also wanted to assert their right to tax the colonies however they saw fit.1766By February, they had reached a decision. They repealed the Stamp Act and the Sugar Act, but they also passed the Declaratory Act. It stated that “[Parliament] ought to have full power and authority to make laws and statutes of sufficient force and validity to bind the colonies and people of America, subjects of the crown of Great Britain, in all cases whatsoever.”Only a few colonial leaders really saw what the Declaratory Act foreshadowed. Mostly, celebrations for the repeal of the Stamp Act ran rampant throughout the colonies. In the first major showdown between the colonies and Britain, the colonies had won.1767Back in July of 1766, Rockingham had been dismissed as Prime Minister, and replaced by William Pitt, a strong advocate for the colonies. But Pitt was old, and frequently absent from Parliament. So his divided ministers battled it out for control. The most influential among them was Chancellor of the Exchequer Charles Townshend.He used his position to pass what are now called the Townshend Acts. These were actually five interconnected bills, but the most important to the American colonies was the Revenue Act. It stipulated import duties on commodities such as lead, paper, printer ink, glass, and tea. If you recall, the Stamp Act Congress had conceded that Parliament had the authority to levy external taxes for regulating trade: exactly the kinds of taxes stipulated in the Revenue Act. Well, turns out they were just saying that.A Board of Customs was formed to enforce the paying of these taxes, so even more British agents would be running around in the colonies (something the colonists had shown their dislike for). On top of that, the government agents would be paid with the revenue from the duties, rather than by the colonial assemblies. Before, the colonies had been able to exert a degree of influence over the agents, (they were paying them, after all) but not anymore.Charles Townshend himself would not live to see the blowback to his Acts, however, as he died in September 1767. The power vacuum left by his death was filled by some guy who you don’t need to know about because he’s not important. Opposition in the colonies was slow to get started as I mentioned, as everyone was still weary from the opposition to the Stamp Act.Opposition was somewhat muted, as the Stamp Act riots had been exhausting to the colonists and they didn’t have much energy to continue resisting. However, John Dickinson’s Letters from a Farmer in Pennsylvania, which began circulation in December, gave the colonial opposition a second wind. The letters reinforced the idea that Parliament did not have the right to tax the colonists at all, internal or external.1768By February, Samuel Adams had been able to drum up enough support in the Massachusetts House of Representatives to push through a petition to Britain to repeal the Revenue Act. He followed this up with a Circular Letter to the other colonies, urging them to send similar petitions to Parliament.While the news of the Circular Letter was making its way to Britain and back, the Board of Customs launched a series of attacks on John Hancock, both of which backfired. First, they sent an agent onboard one of his ships to search it. He went below deck where his search warrant did not extend; thus, he was thrown off the ship by Hancock, and his actions were upheld by a local court.The second attack was when the Board seized one of his ships and held it on a technicality. When the Navy tried to move the ship out of port, a mob coalesced and managed to stop Hancock’s ship from being taken away. The mob, like the one during the Stamp Act Riots, was disciplined and under control.Back in Britain, news of the Circular Letter finally reached Britain. The new Colonial Secretary had no way of knowing that affairs in Boston had already progressed to organized mob violence. He ordered the governor, Francis Bernard, to order the House of Representatives to rescind the Circular Letter or be dissolved.The House of Representatives voted 92–17 not to rescind. Bernard, in turn, dissolved the House.The merchants of the colonies were starting to get pretty pissed about the new taxes and custom agents, and they began discussing a new non-importation agreement. However, each city was afraid to make the first move, because they feared that if they did, that business would simply move down to the next city who didn’t join the agreement. Non-importation, it seemed, was an all or nothing kind of deal.Massachusetts proposed the first successful non-importation pact on August 1, which was to commence on January 1, 1769. New York and Pennsylvania quickly followed suit, and Rhode Island signed on too, with a little “persuasion-not-a-trade-embargo.”Remember the mob violence that took place over John Hancock’s seized ship? Well, the administration in Boston had called 4000 troops down from Halifax to keep the mob under control. The Massachusetts Assembly tried to reconvene, but were shut down by the governor. An unofficial convention of towns met in Boston a week later, to try to urge the governor to reconsider. It was ineffective however, and on October 1, British soldiers began disembarking onto the docks of Boston.The radicals in Boston decided to cease overt resistance, but there was still resistance. That was evidenced by the fact that the soldiers could find no one willing to rent them lodgings. It took them weeks to get suitable winter quarters in some leased warehouses.1769In Boston, tensions continued to boil between the civilians and the loitering soldiers, who were a constant pain in the neck for the commoner in Boston. They did all the things that soldiers do: get drunk, flirt with the girls, etc. All they did was stir up further resentment among the colonists for the central government in London.In the rest of the colonies, the non-importation agreement adopted last year was expanded to Virginia, and thus the rest of the southern colonies. George Washington (yes, that George Washington) and George Mason helped push the pact through the Virginia House of Burgesses.The Townshend Acts, like the Stamp Act before them, seemed to be becoming more trouble than they were worth.1770In January, George III finally relieved that one guy whose name doesn’t matter of his duties as Prime Minister, and replaced him with Lord North, who had previously been Chancellor of the Exchequer. This guy will be around for a while, so I no longer have to try to stick in awkwardly worded paragraphs about British politics.In Boston, an 11-year-old boy had been shot and killed in February, and a crowd of thousands turned out for his funeral, which was more a show of political force than in memorial to the boy. Over the next few weeks, tensions rose rapidly, with fights between civilians and soldiers a common sight on the street.On March 5, the culmination of months of frustration, anger, and brewing enmity finally took place. The Boston Massacre.A sentry named Hugh White was talking with some of his comrades near the Customs House, when a civilian made a joke about his commanding officer. He punched the guy in the face, and his comrades ran off, leaving him to deal with the mob himself. He backed up against the Customs House with his gun drawn.Captain Preston of the Customs House garrison quickly saw that the situation would not resolve itself, and led his eight soldiers through the crowd. He had them form a semicircle facing the crowd. Guns drawn.For fifteen minutes, taunts, heckling, snowballs, and ice rained down on the soldiers, who were growing more and more jumpy by the moment. Finally, a private at the end of the line was hit, slipped on ice, and when he pulled himself back up, he fired his musket into the crowd.The whole group of soldiers was soon firing into the crowd. 11 men were hit; five died, and six were wounded. The mob fell back, but was only dispersed when Thomas Hutchinson, the acting governor, promised a full inquiry, and Preston and his men were arrested the next morning.John Adams defended the soldiers in court, and he got almost all of the soldiers acquitted with his eloquent defense. A propaganda war was waged between the conservative and radical presses in Boston, each trying to spin the story to suit their own ends.The Townshend Acts were finally repealed in April 1770. However, Parliament opted to leave the duty on tea in effect. This was to keep in place the precedent that Parliament could, should, and would tax the colonists whenever they saw fit. This was a nice impasse, really. The colonists were free of Britain’s incessant money grubbing, and Parliament maintained their right to tax the colonies. This ushered in a period of relative calm.1771Not much to say here. Non-importation ceased, and both sides of the crisis seemed to think that this was the beginning of a return to normalcy.1772Nothing to report until June, when a ship called the Gaspee ran aground while chasing smugglers off the coast of Rhode Island. A mob of patriots quickly boarded the ship, seized it by force, and burned it. This was a sign that hostilities had not yet ceased.Remember when Parliament took the right to pay the governors away from the colonial assemblies? Well, that hadn’t been repealed with the rest of the Townshend Acts, and later that year, Parliament decided to expand this to all the judges in the colonies. The colonists were, of course, enraged at the judiciary becoming a mere puppet of the Crown. Committees of Correspondence were again formed to discuss a response.1773In January, Thomas Hutchinson started off the year by making things ten times worse. He made inflammatory declarations that Parliament’s authority was supreme, that the Committees were completely wrong and should never have convened, and, most significantly of all, he said that “no line can be drawn between the supreme authority of Parliament and total independence of the colonies.”See, he thought that independence was so absurd even to the most radical of radicals that the supreme authority of Parliament would be the only logical option left to them. However, all he did with this statement was legitimize the small independence movements beginning to take shape.In May of 1773, the years of calm in the colonies finally ended, with Parliament passing the Tea Act. This act would allow the floundering British East India Company to import their tea directly into the colonies, totally bypassing the colonial merchants who made their living as middlemen.This shouldn’t have made such a large impact in the colonies, but then again, nothing else that Parliament did should have, so of course it had lots of opposition right off the bat. The greatest fear of the colonists was that this was only the start of other British companies being able to import directly into the colonies. This might be better for the consumer, but long-term, it would destroy the colonial economy, and reduce them to manual laborers harvesting raw materials.Around this time, some secret letters from Thomas Hutchinson and his conservative allies to someone in Britain were leaked by Samuel Adams and one of Benjamin Franklin’s friends. The letters contained explicit recommendations from Hutchinson that certain civil liberties be suspended in the colonies. These letters all but confirmed every conspiracy theorist’s wild theories, which, once regarded as nothing but wild speculation, now seemed like the truth.Opposition to the Tea Act spread through the port cities of the colonies. Spearheaded by John Dickinson, the Philadelphia merchants led a resistance campaign, and convinced the merchants of several major port cities to stop any tea from being unloaded.On November 28, the cargo ship Dartmouth arrived in Boston, carrying assorted cargo. Among that cargo: East India Company tea. They were planning to unload, take on some more cargo, and sail away. The Sons of Liberty, however, were not planning to allow the tea to be unloaded. Giant “public meetings” congregated in Boston daily, with a sole objective of preventing the Dartmouth from offloading its cargo. The mob gave the ship one choice: get the fuck out of here.The poor owner of the Dartmouth had no way of knowing that he wouldn’t be able to unload his tea, however, and so he requested permission from Hutchinson to leave. Hutchinson responded with “no, you haven’t cleared customs yet.” But of course, to do that… the cargo had to be unloaded, and the owner couldn’t exactly do that. So this poor owner is stuck in the middle of the conflict between Hutchinson and the Sons of Liberty, and has no way of getting out.The Sons of Liberty, out of necessity, began considering drastic measures. There was a law stipulating that if a ship spent 20 days in port without paying customs, the ship would be seized and have its cargo unloaded. They couldn’t have that, of course. Just as the Sons were considering their options, two more tea-carrying ships sailed into port.On December 16, a public meeting was convened, where it was decided that the Sons of Liberty would board the ships and dump the tea into the ocean. So, of course, that’s what they did. 90,000 pounds of tea was dumped into Boston Harbor. This would become known as the Boston Tea Party.1774When news of this incident reached Parliament in late January… boy, were they pissed. They summoned Franklin to the Privy Council to defend the actions of his countrymen. They attacked him viciously and tore down his reputation. He stayed silent. After this incident, he swung decisively into the independence camp.In response to the Boston Tea Party, four bills were passed by Parliament between March and May, dubbed the “Coercive Acts” in Britain, but which were called the “Intolerable Acts” in the colonies.Boston Port Act: Trade in Boston was blockaded, and nothing but a few necessary commodities were allowed into the city. The blockade would remain in effect until the East India Company was reimbursed for the lost tea.Massachusetts Government Act: Massachusetts’ charter was taken away and the colony was placed under direct control of the British crown. Nearly all administrative posts would be appointed by the governor, Parliament, or the King.Administration of Justice Act: Royal officials accused of crimes could be tried in Britain if the governor ordered, and not by the local colonial courts.Quartering Act: The governor was given the authority to order civilians to house soldiers in their residence if suitable quarters could not be found.There was also another bill, technically separate but often lumped in with the previous four bills: the Quebec Act. This act extended the province of Quebec southwest down the Proclamation Line, and it cut off the colonies’ ability to expand further west.The colonists began to debate what they should do in response. There was divisive debate, but conservatives and radicals alike thought that representatives from all the colonies should meet and discuss a joint response.The First Continental Congress convened on September 5. 56 delegates from twelve colonies (not Georgia, they actually wanted British troops to help with an uprising) met at Carpenter Hall at Philadelphia. While they deliberated, meetings of the Committees of Correspondence in Boston passed the Suffolk Resolves on September 9. These resolves:Urged the citizens to boycott British goodsEncouraged the citizens to ignore the new taxes altogetherSuggested that the colonists acquaint themselves with the local militias, and be seen under arms at least once per week.The Resolves were endorsed by the Congress on September 17, which basically guaranteed that the radicals would be steering the ship from this point forward. The Massachusetts delegation felt secure enough in their position to propose a new step in opposing Britain: non-exportation.Debate was heated all through late September and October, but a blanket non-exportation pact was pushed through, with only two exceptions: Virginia would get to ship out its latest tobacco harvest, and rice would be exempted for South Carolina. Non-importation was scheduled to begin December 1, and non-exportation would begin September 10, 1775.The enforcement of the boycotts would be overseen by the Continental Association, which formed local committees to oversee that no one disobeyed the boycott. These committees would become a crucial part of colonial organization when the war finally broke out in the spring of 1775.The response in Britain was apoplectic, as Lord North began discussing plans for a continental blockade, to prevent the colonies from trading with anyone. Thomas Gage saw how badly the Intolerable Acts had backfired, and sent dispatches to Parliament urging them to repeal the Intolerable Acts. Parliament responded by sending three generals to act as his advisers, because they thought he wasn’t the best man for the job. These three generals, Howe, Clinton, and Burgoyne, would become the leaders of the British side in the coming Revolutionary War.1775On April 18, Joseph Warren received intelligence that British troops were on the move. This was confirmed by another source, and so Warren sent Paul Revere and William Dawes to Lexington to warn Samuel Adams and John Hancock that they were about to be arrested.Revere sent some men to the Old North Church to light a signal, so that there would be a horse for him on the other side of the Charles River. He arrived at Lexington around midnight, and he told Hancock and Adams to run the fuck away, before moving on to Concord with Dawes and another rider, Samuel Prescott.The three were ambushed by a British cavalry patrol on the road to Concord. Prescott and Dawes escaped, Prescott managing to ride on to Concord. Revere was captured, and told the British troops exactly who he was, what he was doing, and also that five hundred militiamen were massing in Lexington. (That was bullshit.)The British led Revere back to Lexington to test his bluff, but as they approached, they heard gunshots. They ran to inform the main British force that an army of militiamen was massing in Lexington.Revere raced back to Adams’ and Hancock’s house to check that they had gotten safely away, but was shocked to find that they were still just sitting around. With some more urging, they finally decided to leave, and were able to evade capture when the redcoats arrived in force the next day.The next day, the British regulars arrived in Lexington, and they had an intense staring contest with the militiamen. The commanding officer of the redcoats ordered the militiamen to disperse, and after a few seconds, they did.And then, someone fired a shot.No one knows who, and no one knows why.But one thing was for sure: The American Revolution was on.

HOW TO SAVE RS.10 CRORE“A 30- year old, spending Rs. 50,000 per month now, will need this amount at 60 ” Times of India (13th June 2016).The article explains how to build a corpus of Rs 10 crore which will be needed to handle your expenditure when your pay cheques stop coming. Monthly expenses of Rs. 60000 today will balloon up to Rs. 4.6 lac after 30 years at an inflation rate of 7 %. To sustain those expenses for 20 years in retirement you need a corpus of Rs. 9 crore, it says. It warns that the healthcare expenses will grow faster than the inflation and the actual corpus needed may be more. It advises to start saving as early as possible, that monthly surplus of Rs. 15000-20000 to build that kind of corpus.I will therefore extrapolate your question a bit more – from 10-20 years to 20-30 years.It will be enlightening to see the magic of compounding. If one invests Rs. 10000 every month and increase the investment by 10% every year as his income grows, if he can find an investment generating 14% per year, his corpus after 30 years would grow to Rs. 10 crore. A higher investment will generate proportionately higher corpus.One must keep the impact of inflation, about 5 – 6 %, on return from investment. It will reduce the real return by 5 to 6%.The second important factor is taxation. As the corpus grows and the annual return rises, one comes in the top bracket and one third income is taken away by tax.Where should one invest?Let us compare the following options1. Forget the Insurance policies. These are THE WORST OPTION.2. Bank Fixed Deposits, Bonds3. Gold and Gold Bonds4. Stocks and Mutual Funds (THE BEST OPTION)5. Buying a house or Plot (THE BEST OPTION)1. The WORST OPTION - Life Insurance (endowment plans)–Mixing Insurance with investment and Buying Endowment Life Insurance is the WORST DECISION. These give 5% post tax returns or NEGATIVE RETURNS after inflation.If insurance is the aim one should instead go for TERM PLAN Insurance – which is much more economical option with similar benefits. A cover of Rs One crore is available for about Rs ten thousand per year. Check comparative premiums, claim settlement record, additional riders and go ahead. Younger the age of entry lesser is the premium.2. Bank Fixed Deposits, Bonds, Debt Funds, NSC: Taxable return 8% - (post tax 5 to 6 %) - Negative return after inflation. Data shows that majority of people withdraw from savings within two years. Lump sum expenses like education, vacation, buying a nice car, medical expenses, marriage etc keep eating in to these regular savings.Savings should be deployed in more efficient avenues.PPF, interest rate 8.5-8.7 %, TAX FREE is a good option. But it has long maturity period (15 years). (There are part withdrawal options after 5 years)3. SOVEREIGN GOLD BONDS (SGB)- issued by RBI are better option than physical gold. Gold has given 8-9 % return in long term. These earn interest @2.75% over and above the capital appreciation. No risks and costs of storage. No making charges and purity issues. No tax on capital gains.(https://www.rbi.org.in/scripts/FAQView.aspx?Id=109).4. STOCKS via Mutual Funds is the best option- Stocks have given 14- 15 % return in long term.BENEFITS OF INVESTING IN A MUTUAL FUND?Qualified professionals manage our funds. One can regularly invest even Rs.1000 in a Systematic Investment Plan SIP. Management expenses are low 1-2%.Tax benefits. If redeemed after 12 months, capital gains (Profit) are exempt from income tax. Dividend income too is exempt. But this benefit may be taken away soon as mentioned by our PM.(EDIT- This has changed from 1.4.2018. Long Term Capital Gains Tax is leviable at 10% after initial exemption on one lakh)With open-end funds, you can redeem all or part of your investment any time at NAV. The performance of MF is regularly reviewed by rating agencies. SEBI (Securities Exchange Board of India) regularly monitors them.SIP – (Systematic Investment Plan)SIP is the best method of investing in Mutual Funds. You invest a specific rupee amount at regular intervals. As a result, your money buys more units when the price is low and fewer units when the price is high. So there is little impact of market volatility. You can update/cancel SIP anytime. You can start as low as Rs. 1000 per month.A monthly SIP of Rs. 10000 increased by 10% every year grows to Rs. 21 crore in 35 years if it can generate a return of 14%. Tax impact not yet known.HOW TO BUY MUTUAL FUNDS:SEBI has prescribed certain requirements relating to KYC "Know Your Client". This entails In-Person Verification (IPV), verification of identity and address, financial status, occupation etc.Click on the following link to know how to invest in MF: Know Your Client (KYC)- Birla Sun Life Mutual FundDIRECT PLANS: Investors can now directly invest in mutual fund schemes without involving distributors or brokers. They need to visit AMC website. There would not be any distribution fees. Due to this, expense ratio would be lower and returns higher between 0.5% to 1.5% p.a., as compared to regular plans.Some good Equity Mutual Funds in different categories and their approx compounded annual returns in previous 3 years are mentioned below. However this return is a dynamic figure and one must check most up to date figure.Large Cap Funds …….. compounded annual returns in previous 3 years SBI Blue Chip Fund …………… …………………………18 % (Crisil Rank 1)DSP BR Focus 25 ………………………….. 16.8 %Birla SL Frontline Equity (G) Direct…………….… 17.1 % (Crisil Rank 1)Kotak Select Focus Fund – Regular ………..… 20.2 % (Crisil Rank 1)Balanced Funds -- ----- compounded annual returns in previous 3 years HDFC Balanced Fund ---------- ----- 19% (Crisil Rank 1)Birla Sun Life Balanced 95 ----------------.18.25 %DSP BR Balanced ------------------------------ 17.74%ICICI Balanced ---------------------------------- 18.64%Tata Balanced Fund - Regular (G) ------------18.2 % (Crisil Rank 1)L&T India Prudence Fund (G) ----- 18.14% (Crisil Rank 1)Small Cap Funds –------- compounded annual returns in previous 3 years DSP-BR Micro Cap Fund - RP -------40.5% (Crisil Rank 1)Franklin (I) Smaller Cos (G) -----------31.4 % (Crisil Rank 1)Mirae Emerging Bluechip Fund (G) 32.6 % (Crisil Rank 1)Diversified Equity Funds ------ compounded annual returns in previous 3 yearsBirla SL Advantage ------------------------------------21.7 % (Crisil Rank 1)Birla SL Equity ------------------------------------------ 22.4 % (Crisil Rank 1)Principal Emerging Bluechip(G) ---------------------28 % (Crisil Rank 1)ELSS Funds -------- compounded annual returns in previous 3 yearsDSP BR Tax Saver ……………………………. ………….. 20.5%Reliance Tax Saver ---------------------- ………………23% (Crisil Rank 3){Investment in ELSS (Equity Linked Savings Scheme)is deductible from taxable income under section 80 C within the overall limit of Rs 1,50,000. There is a lock in period of 3 years}A word of caution: Past performance is not a guarantee of future performance. Equity based funds are subject to market risks. Be advised to carefully study all the related information before investing in these schemes.Some of the web site - moneycontrol, mutualfundindia, nseindiahttp://www.sebi.gov.in/faq/mf_faq.html5. Buy a plot or houseA piece of land matches/beats returns from Stocks and Mutual Funds. But it needs large funds to buy it and investment is quite illiquid. THAT makes it better than stocks/Mutual Funds. You cannot sell it easily when it appreciates a lot. You cannot sell a part of it as in the case of Mutual Funds. Your investment stays and grows. The compounding can be seen taking effect in this and not in Mutual Funds/ stocks where the temptation to book profits it too big to resist.DisclaimerThis may not be treated as an official advice from an expert. I am an investor myself and and speaking from personal experience and study.I hope I have been able to answer your questions. Please feel free to ask for any further details.Edit:Thanks for your up votes.Comments section drew my attention to more explanation of some points.It is not only about the inflation. Over the years the basic nature of our expenses changes. Talking about my young years, we used fans and later coolers which are a passe. Air Conditioners is the thing. Scooters were in vogue then now even small cars are considered below status. Our tourism was restricted to North India. Foreign tour was not even dreamed. We visited many countries after my age crossed 55. The size of the house we lived in has balooned. We did not have a phone. Now multi phones. From Radio to TV and home theaters. If I were to make an estimate of our expenses 25–30 years ago I would have missed many things. And of course health bills have gone up a big way.Inflation has increased expenses on the items that continue to be used. So we can talk about this in a very general sense. Still if we cannot foresee clearly that does not mean that we do not have to provide for the future. There are big ticket expenses which have not even been touched. Children education , their marriages, buying a car, changing to a higher version, buying a house, tourism, foreign tour, domestic gadgets.In a nut shell start saving early and invest in high return instruments.A BLUNDER - MIXING INSURANCE WITH INVESTMENTIT MEETS NEITHER THE INSURANCE OBJECTIVE NOR RETURNS OBJECTIVES.https://www.bankbazaar.com/term-insurance/term-insurance-vs-endowment-policy.htmlTerm Insurance vs Endowment PolicyWhat is Term Insurance?Term insurance is a financial protection tool that offers protection cover for a specific number of years. During this term, if the policyholder dies, then his family is entitled to receiving a death benefit in terms of a pre-determined lump-sum amount.What is an Endowment Policy?An endowment policy, unlike term insurance is an insurance cum investment instrument that offers both protection in times of crisis and simultaneous growth ofMONEY INVESTED. The life cover offered is known as the sum assured of the endowment policy.Difference Between Term Insurance and Endowment PolicyTerm InsuranceEndowment PolicyA pure risk cover instrument for uncertainties of life. An absolute must financial tool for those who have dependentsA combination product of both insurance plus investmentNo maturity benefit is associated with term insurance plansMaturity benefit is associated with endowment policy. This benefit is paid at the end of the policy periodSum assured as death benefit is mostly 20 times the annual income of the policyholderSum assured as maturity benefit is not greatOnly death benefit is offered by term insuranceDeath and maturity benefit both are associated with endowment plansWhich One is Better, Term Insurance or Endowment Plan?The need for insurance should not be mixed with the goal to invest and grow your money. Financial experts are of the view that insurance should not be mixed with any other financial goal. Hence, pure insurance products like term insurance have an edge over endowment plans.Endowment plans invest your money in the stock market and various other instruments and hence their returns are tied to the movement of the market. This means that there are no guaranteed returns for endowment plans and as such there may be times when an endowment plan offers returns way below than expectations. ALSO, THE PREMIUMS FOR ENDOWMENT PLANS ARE MOSTLY HIGHER THAN THOSE WHICH ARE PAID TOWARDS TERM INSURANCE. Experts suggest not to mix insurance and investment so that returns reaped are effectively more.Endowment plans invest your money in other instruments and hence charge a higher premium that goes towards insurance as well as investment. These plans also deduct mortality and other charges and return only the amount that remains, to the policyholder, on maturity. Often, the return offered by endowment plans is very low as compared to the premiums paid towards the same.IT IS ADVISABLE TO GO FOR A PURE INSURANCE PLAN IN CASE THE PRIMARY NEED IS TO AVAIL PROTECTION. Similarly, for those who already have a term insurance plan in place and are looking for investment avenues, endowment plan could be a good option. Since, pure term plans come at really low premiums, buying the same for protection purposes is the best strategy.Endowment insurance is THE MOST INEFFICIENT PLAN - give 6-7% returns – over very long duration of 25-30 years – don’t even beat inflation of 6 – 7%.LET US COMPARE endowment plan with term plan for a life cover of Rs 30 lac.Plan Endowment Total Premium in 5 years 1556100 - (311220 per year) - Maturity 72 lacTerm Plan - 1,96,920 - (6564 per year )- If you invest the premium savings of 1359180 in MF average return @14% - Maturity amount will be over SIX CROREENDOWMENT PLAN: Besides it is not easy to spare a heavy amount of over Rs. 3 lac in a year.TERM PLAN: Annual premium of Rs. 6500 is quite light on the pocket.Insurance companies dangle the carrot of investment in endowment plans. This investment yields a paltry return of 6% which does not even beat the inflation.