Tuesday, February 20, 2018

Is Settling in USA worth it for Indians?

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With so many Indians taking up jobs in USA and settling there to enjoy better life, we can see in any major Airport in India not less than 100 persons travelling to USA daily. We can see both younger persons who are going to study or to take up a new job in USA or returning after a brief vacation in India and also senior citizens who are travelling to the country for a brief stay with their wards.
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But how many of us know if all the persons who have moved to USA and settled there with Green cards are living happily or regretting their decision of settling there.  Here is an interesting article by Mr. Venkat Ankam( Lives in Fairfax VA)  posted  QUORA Q & A

Let me portray the typical life cycle of Indians in the USA with their living conditions and then I will let you decide whether settling in the USA is worth or not.

As an Indian immigrant in the USA, I have been asking myself this question for a quite long time. The reality is 95% of the Indian immigrants are settling in the US and only 5% of the immigrants are going back to India. I wondered if the “Major chunk(95%) of people settling in the US are making a wise decision or the small chunk(5%) of people going back are making a bad decision?” So I asked this question to my friends and colleagues from the 95% category but I could not get any subtle or profound answers. It looked like people are just following the crowd or falling into the trap, and not be able to go back later in life. So I did my own research asking specific set of survey questions to different age people. So let me share my findings.

First of all, why do Indians migrate to the US? One single answer for this question is scope for higher income, savings, low stress and a happy life without any common issues we experience in India. Now let's see how these objectives are met during the life cycle of these Indian immigrants. Let me use the word NRI to describe them better.

My survey was limited to NRIs in the field of science and technology who are mostly in working class and also to a few business class NRIs as well. I took ratings on a scale of 0 to 10 (0 is low and 10 is high) for earnings, savings, stress levels, family relationships and happiness from different age categories with their typical activities in their life cycle. I realized that not every NRI in the US opens up because of ‘private space’ concept. So I chose people I have good relationship with and who are really open and can share feelings of their life. The Survey was conducted with a casual talk/discussion rather than a professional way of conducting surveys.

Based on the survey results and experiences shared by participants, I categorized the life cycle of immigrants into four different generic phases (Transform, Settle, Growth and Suffer) as shown in the graph below. Every person’s life is different so the depicted life cycle or living conditions may not apply to every NRI. It may vary for few people and life events may overlap between phases. This might be totally different for the new NRIs coming to the US because of longer green card wait time and ever changing immigration policies.

Now let me describe these phases with typical life events.

Transform Phase (21 to 28 years): 
This an excitement phase which starts right from India after getting the US visa. One tries to get to know the culture of the US, what to do before and after entering the US and starts living the American Dream. Parents feel proud of this great achievement by their kids and start making big expectations and hopes. Starts sharing this news to neighbors and relatives and throw a big party as if their kid already succeeded in life. Arrives in the US without the awareness that he/she broke generations of living together and unity in their families. Typically nobody think or care about how life will be in the US after 40s, 50s or 60s in this stage. One gets really amazed with the best infrastructure of America and starts loving it. Gets used to American life style with few hiccups. Starts making some money and will have parties, shopping, vacation trips and realizes that life is very comfortable in the US. Transfers money to India to support family and talks to relatives and friends and shares the greatness of America. Parents will start looking for a bride/groom. Starts green card process to continue living in American dream.

NRIs are very happy in this phase with lots of excitement and joy that American life brings in.

Settle Phase (28 to 40 years): 
After a couple of trips to India, gets married and spouse arrives in the US. Couple is very happy in the beginning with vacation trips and parties. Realizes that expenses are higher than living as a bachelor. First baby arrives and parents and in-laws visit America. Advances in green card process, switches jobs and moves to new locations. Second baby arrives and then visits India with kids. Realizes that their parents are not quite happy staying alone in India. Also realizes that India has changed a lot and quite expensive than ever. Thinks that they may not be able to fit in India and also India is not a right fit for the kids. NRIs usually decides to go on the path of settling down in the US with a backup plan of going back. Buys Town Home/Condo and switches to luxury cars. Realizes that single income is not really sustainable in the US. Wife decides to do a job instead of getting bored at home. So Income doubles, savings doubles but stress levels go up.. Green card arrives and they feel relaxed of immigration issues. Vacation trips becomes hard with little kids so no big vacations.

Happiness level comes down due to missing family relationships and not able to take care of ageing parents.

Growth Phase (40 to 50 years): 
Moves on career ladder and starts making big bucks and also start making big bucks from secondary sources of income like stocks. Some might start a startup company or any business. Usually pretty busy with kids school and extra curricular activities. Buys a single family home and moves to a bigger home. Kids are grown up now so vacations are back. Parents are not able to visit because they don’t like to stay in the US. Also parent’s health will become a big concern. Makes few arrangements for parents in India but they are always temporary. Few realize that their friends in India have made more money in India than them. Realizes that they need to focus more on health aspects so starts some physical activities to keep their body fit.

Higher income, higher savings and most successful phase (professionally) for most people but happiness level further comes down because of lack of relationships.

Suffer Phase (Above 50 years): 
Kids usually finish their high school and go to a college.. All savings will vanish in kids college education. Kids finish their education and start their job at a different place in the US. The couple is alone at big home away from parents and away from kids. They cannot think of going back because of kids and setting up everything from scratch in India would be a daunting task. Whenever they visit India they clearly see that family relationships are faded away because of settling in US. Most people thought that early in growth phase would have been an ideal situation to go back to India before kids enters middle school with a mind set of going back in settle phase.

Most people expressed that “We got everything we wanted in life, but we lost all relationships”. Some people expressed concern like “I wish I knew the downsides or effects of immigration later in the life”.

Starts indulging deeply in social and charity activities to keep them busy and also for social recognition. Usually takes up American citizenship in this phase while some takes up in growth phase only.

Works until 65 years of age to pay off mortgage and retires at the age of 65. After 65 years they start getting social security and healthcare benefits from government. But they continue to work in some retirement jobs to keep them busy or to earn some extra income for unknown expenses.

Just to summarize, life is happy in the beginning but happiness tends to fade away and brings suffering to life after 50s. Materialistic culture of America makes you a successful person professionally and materialistically, but deserts your life. 

One interesting observation during this study — most of the people who immigrated to America had no plans to settle in the US and most of the settled ones said, “We are not sure we might go back”.

Every NRI looks like a happy person from outside but everyone has a dark side story to tell from inside of their heart.

Life in the US rotates around profession, immigration process and kids. NRIs tend to “sacrifice their life for kids of next generation.” Kids seems to be happy with no complaints about life as they are in young age; the second generation, Indian-Americans, will have friends but might not have family relationships too? So they might end up in the same boat after 50 years age? Needs further research…

Thanks to my friends, colleagues and elders from community who humbly shared their deep thoughts from life for this small write-up and also helping me to make a strong decision to go back to India.

Hope this helps. Everybody’s requirements are different. So just a make a firm decision to settle here or to go back based on your own requirements and priorities, not based on what other NRIs are doing.

People who expressed negative sentiment are still in transform phase in US or few youngsters in India (Probably with American dream)
Interestingly this was found to be true for other immigrants/expats too, not just Indians.

Most of them expressed a feeling that this is a problem for the first generation of immigrants. Later generations will not have such problems. Need to research this further.

Many people who expressed positive sentiment felt that situation might be similar in India as well. Need to research more in this area. 

Courtesy: Mr. Venkat Ankam( Lives in Fairfax VA)  posted  QUORA Q & A

Saturday, February 17, 2018

TIps to improve the quality of our Life

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Ben Shahar

Did you know that at Harvard, one of the most prestigious universities in the world, the most popular and successful course teaches you how to learn to be happier?

The Positive Psychology class taught by Ben Shahar attracts 1400 students per semester and 20% of Harvard graduates take this elective course. Ben Shaha is the author of the international best sellers Happier and Being Happy, which have been translated into 25 languages.
  • Being Happy: You Don't Have to Be Perfect to Lead a Richer, Happier Life (2010) originally published in hardcover as The Pursuit of Perfect (2010)
  • Happier: Learn the Secrets to Daily Joy and Lasting Fulfillment (2007)
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  • A Clash of Values: The Struggle for Universal Freedom (2002)
  • Heaven Can Wait: Conversations With Bonny Hicks (1998)

According to Ben Shahar, the class - which focuses on happiness, self-esteem and motivation - gives students the tools to succeed and face life with more joy.

This 35-year-old teacher, considered by some to be "the happiness guru", highlights in his class 14 key tips for improving the quality of our personal status and contributing to a positive life:

🚩Tip 1. Thank God for everything you have:  
Write down 10 things you have in your life that give you happiness. Focus on the good things!
🚩Tip 2. Physical Activity:
Practice physical activity Experts say exercising helps improve mood. 30 minutes of exercise is the best antidote against sadness and stress.
🚩Tip 3. Breakfast: 
Some people miss breakfast for lack of time or not to get fat. Studies show that breakfast gives you energy, helps you think and perform your activities successfully.
🚩Tip 4. Be Assertive: 
Ask what you want and say what you think. Being assertive helps improve your self-esteem. Being left and remaining silent creates sadness and hopelessness.
🚩Tip 5. Spend your money on experiences..
a study found that 75% of people felt happier when they invested their money in travel, courses and classes; While only the rest said they felt happier when buying things.
🚩Tip 6. Face your challenges:
 Studies show that the more you postpone something, the more anxiety and tension you generate. Write short weekly lists of tasks and complete them.
🚩Tip 7. Put everywhere nice memories, phrases and photos of your loved ones:
 Fill your fridge, your computer, your desk, your room, YOUR LIFE of beautiful memories.
🚩Tip 8. Always greet and be nice to other people: 
More than 100 inquiries state that just smiling changes the mood.
🚩Tip 9. Wear comfortable shoes: 
If your feet hurt you, you become moody, says Dr. Keinth Wapner, President of the American Orthopedics Association.
🚩Tip 10. Take care of your posture: 
Walk straight with your shoulders slightly backwards and the front view helps to maintain a good mood.
🚩Tip 11. Listen to music (Praise God): 
It is proven that listening to music awakens you to sing, this will make your life happy.
🚩Tip 12. What you eat has an impact on your mood:- 
Do not skip meals, eat lightly every 3 to 4 hours and keep glucose levels stable.- Avoid excess white flour and sugar.- Eat everything! Healthy- Vary your food.
🚩Tip 13. Take care of yourself and feel attractive:
70% of people say they feel happier when they think they look good.
🚩Tip 14. Fervently believe in God: 
With him nothing is impossible! 

Happiness is like a remote control, we lose it every time, we go crazy looking for it and many times without knowing it, we are sitting on top of it ...

Thursday, February 15, 2018

Income Tax-Saving Options Beyond Section 80C Limit

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Income tax deductions on life insurance premium, an employee's contribution towards EPF (Employee Provident Fund), PPF (Public Provident Fund), children's tuition fees, pension plans, principal repayment on home loans and a host of other investment options are covered under Section 80C of the Income Tax Act.
Under Section 80C, the maximum tax exemption limit is Rs 1.5 Lakhs per annum. The various investments that can be claimed as tax deductions under section 80C are listed below;
  • PPF (Public Provident Fund)
  • EPF (Employees’ Provident Fund)
  • 5 years Bank or Post office Tax saving Deposits
  • National Savings Certificates (NSC)
  • ELSS Mutual Funds (Equity Linked Saving Schemes)
  • Children’s Tuition Fees
  • Life Insurance Premium
  • Sukanya Samriddhi Account Deposit Scheme
  • SCSS (Post office Senior Citizen Savings Scheme)
  • Repayment of Home Loan (Principal only)
  • National Pension System
  • NABARD rural Bonds
  • Stamp duty charges for purchase of a new house
Many taxpayers exhaust the Rs 1.5 lakh tax deduction limit under Section 80C. Additional investment in the various options will not provide further tax benefits. Here are some of the sections under income tax laws, apart from Section 80C, that help in cutting down the income tax burden.

1) NPS ( National Pension Scheme )

Additional income tax deduction of Rs 50,000 is allowed for contribution to the National Pension Scheme (NPS) under Section 80CCD. This extra deduction of Rs. 50,000 on NPS increases the total deduction allowed under Section 80C and 80CCD to Rs. 2 lakh.

2) NPS Contribution Routed Through Employer.

Under the NPS corporate model, an employee can deposit the contribution directly or route the contribution through the employer he or she is working with. Employer's contribution to NPS up to 10 per cent of basic salary (plus DA) is allowed deduction under Section 80CCD (2). There is no cap for this deduction but the total deduction claimed for contribution by the employer should not exceed 10 per cent of the salary. 

3) Deduction of interest on housing loan.

Under Section 24B of the Income Tax Act, interest paid up to Rs. 2 lakh on housing loan is allowed as deduction from taxable income. On rented properties, the borrower can only claim deduction of up to Rs. 2 lakh per year after adjusting for the rental income. And the amount above Rs. 2 lakh can be carried forward for eight assessment years.

4) Deduction under Section 80EE

Under Section 80EE, an additional deduction of Rs. 50,000 is available over and above the limit of Section 24B on interest paid on home loans if the person is buying a house for the first time (the person must not own any other residential property on the date of sanction of loan).

5) Deduction under Section 80D

An individual can claim deduction of up to Rs. 25,000, if he or she is below 60 years of age, and Rs. 30,000 if above 60 years of age, towards medical insurance premium paid for self, spouse and children. Additional deduction of Rs. 25,000 is available if one has bought medical insurance for his parents. This deduction can go up to Rs. 30,000 if parents are above the age of 60.

6) Deduction under Section 80E

A taxpayer can claim deduction for interest paid on education loan for him, spouse or children. There is no upper limit on the amount of deduction.

7) Deduction under Section 80DD

If an individual has dependants who are differently-abled, he or she can claim deductions up to Rs. 75,000 for expenses on their maintenance and medical treatment under this section. This deduction can increase to Rs. 1.25 lakh in case of severe disability.

8) Deduction under Section 80DDB

An individual can claim deduction of up to Rs. 40,000 for treatment of certain diseases for self and dependants. The deduction can go up to Rs. 60,000 if the taxpayer is above 60 years and up to Rs 80,000 if above 80 years.

9) Section 80GG

If you don't receive HRA from employer and make payments towards rent, you can claim deduction under section 80GG towards rent that you pay. The deduction is lowest of the following:

(a) Rs 5,000 per month


(b) 25% of total income


(c) Rent paid less 10% of income

10) Section 80G Donations To Charity

Donations to charitable organisations are entitled to up to either 50 per cent or 100 per cent deduction but the highest deduction allowed is capped at 10 per cent of the donor's total income.