Do you want to be rich? Most of us equate "rich" with "money" – and we take it for granted that more money is a good thing. We daydream about winning the lottery and quitting our jobs, traveling the world, and buying all the expensive gadgets we want.
Study after study, though, shows that more money doesn't make us happier. Of course, if you're living on the breadline, it will – but past a certain, fairly low, salary, there's no relationship between salary and happiness.
I think that real happiness comes from other types of riches. You might not have loads of money, but if you've got enough to live on, how about focusing on some of these ways of getting rich instead?
Time-Rich
You've probably come across the phrase "money rich, time poor". This, perhaps, sums up the reasons why more money doesn't result in more happiness. Often, the more you earn, the more time you spend earning – or taking care of your money and the trappings which come with it.
Being time-rich means having the freedom to spend as much of your life as possible doing what you want. Having an abundance of time can bring rewards that no amount of money can buy. Time-rich parents, for instance, have the chance to really engage with their kids. A time-rich painter or writer might not make millions, but might produce some truly outstanding pieces of art. A time-rich academic could revolutionize a particular discipline.
Money can be earned, exchanged and horded. Time goes past constantly, however much we might like to stop it. Being time-rich means engaging fully with life.
Get time-rich:
Health-Rich
If you lose a lot of money, you can recover. It might take some time, but you can turn around your personal finances and get out of debt. You can close a failing business and start a new one. You can borrow money from family or from the bank.
If you destroy your health, there's often no going back. Some chronic illnesses, such as ME, are caused by periods of overwork and stress. Is it worth wrecking your health for the sake of a few extra hours in work?
One of the most powerful stories I've come across about this is in Jonathan Field's book Career Renegade
I'd been working nearly seventy-two hours straight, each one more excruciating than the one before. But, missing the deadline meant losing $100 million for our client, so I pressed on until we finally closed the deal. I staggered into a cab, passed out for a few hours, then headed straight to my doctor's office. [...] Weeks of relentless hours had literally collapsed my immune system, allowing a softball-sized infection to ravage my intestines and eat a hole through them from the outside-in.
Get health-rich:
Interest-Rich
If you have a rich and varied set of interests, you're likely to have a fulfilling life. Spend time discovering what you really care about (whether or not it's what your parents or your friends want you to do). Having a life full of things which interest you is much more likely to make you happy than spending eight hours a day doing a job you dislike, just because it pays well.
Plus, when you get to retirement, you'll want hobbies and interests which give you meaning and purpose – and enjoyment.
You may well have lots of interests already. Are there any which you've neglected – perhaps because you think you don't have the time, or because they seem self-indulgent? If you feel that you lack any real hobbies or passions, make it your mission to find some! Try out new things (even ones which you think won't be right for you) ... and see if you surprise yourself.
Get interest-rich:
What sort of riches do you have in your life? Do you really need money to be rich – or would more time, better health or stronger interests make you happier?
Written on 5/3/2010 by Ali Hale. Ali writes a blog, Aliventures, about leading a productive and purposeful life (get the RSS feed here). As well as blogging, she writes fiction, and is studying for an MA in Creative Writing.
Avoid the Audit: Six Red Flags That'll Put You in Tax Purgatory
Posted by SoMeOnE at 12:20 AM Labels: Freelancing, Money
Around February, my commute home starts to give me a knot in my stomach. That’s because my bus passes a tax-preparation shop where, as tax season draws nearer, a woman stands outside wearing a Lady Liberty costume and holding a sign that promotes the shop’s services. Oh, great, I think, it’s time to dance with the IRS again.
I don’t know why, but the idea of doing taxes terrifies me. All those forms requiring detailed numbers and asking questions I don’t quite understand—there’s so much room for error! The consequences of messing up are even more intimidating. I’ve never been audited by the IRS (knock on wood), but I can imagine it’s a nerve-wracking process. However, even crossing all my Ts and double-checking my math doesn’t guarantee an audit-free year. As a tax novice, I decided to read up on the matter, and now that I’ve done some homework, it’s clear that a few factors make the IRS more likely to pay extra attention to your tax papers.
One Potential Solution: Protecting Yourself with Paperwork
According to Jeff Schnepper, a writer for MSN Money, one of the most common reasons tax forms get scrutinized is that they’re riddled with math errors, incorrect spelling, typos, and so forth. The first line of defense against an audit is not giving the IRS a reason to look twice. Remember that the IRS receives financial records from your bank and anyone you’ve earned a paycheck from, so make sure that you’re providing that same information—numbers that don’t match up are suspicious.
Sorry, owners of small businesses and freelancers—the IRS tends to look closely at your information. First, it needs proof that you’re running a for-profit operation, not a hobby. Second, it wants to make sure that you’re reporting income accurately and that the small-business deductions you take are accurate and fair (i.e., not claiming personal expenses as business write-offs). Also, if your company’s taken a significant financial hit, that sets off a mini-alarm for the IRS, since it’s possible that you’ve been misrepresenting figures. Sandra Block, a writer for USA Today who covered this topic in 2000, recommends providing an explanation, along with tax papers, to avoid raising any red flags.
The IRS uses a computer program called the Unreported Income Discrimination Function System to compare each person’s tax deductions and credits against what the IRS has determined is average for certain income brackets. If your DIF score is considerably different from that of others in your category—as in, you earn $60,000 a year but reported a $40,000 charitable deduction—that’s a big IRS red flag, as CNNMoney.com staff writer Christian Zappone described in 2007. The program’s main purpose is to scout out individuals who’re most likely to owe more money after further analysis.
Back in the day, a common complaint come tax season was that the rich were somewhat protected from audits. But these days, the IRS is more concerned with lowering the country’s astounding tax gap (the difference between taxes owed and taxes paid). “If you’re a millionaire, you’re a lot more likely to hear from the IRS than taxpayers in any other income bracket,” IRS spokesman Terry Lemons told the Wall Street Journal in 2009.
The problem with both of these deductions is that too many people claim them for inappropriate reasons. A home office isn’t just a room that you happen to work in once in a while. And when it comes to job expenses, there’d better be a good reason why your bosses didn’t reimburse you in the first place, so it’s an iffy deduction right off the bat. There are detailed rules for deductions, so unless you want a tax tangle in the future, don’t claim anything unless you know it’s right.
The IRS’s computer program triggers many audits, but some come courtesy of tipsters—including individuals, media sources, and public records—reporting potentially faulty tax returns. “The Examination Process,” an explanation of auditing on the IRS’s Web site, lists “information from compliance projects that indicates a return may have incorrect amounts” as one of the reasons for extra examination.
Luckily, there are steps you can take to protect yourself if you fall into one of these categories. The best means of self-defense is a thorough record that backs up your claims. Keep receipts, bank statements, and all pertinent paperwork that proves that what you put on your tax forms is true. The book What the IRS Doesn't Want You to Know
The IRS has up to three years after you’ve filed to audit, so keep that in mind when spring cleaning your office. It may feel silly to save a receipt from two years ago, but if it relates to a suspicious deduction you’ve claimed, it’ll come in handy if the IRS comes knocking.
Information is power when it comes to protecting yourself from an audit. If you recognize that there are factors that set you apart from the average taxpayer, send in tax forms with an explanation of the situation, via either a note or paperwork that serves as evidence. However, there’s such a thing as giving away too much information that the IRS didn’t ask for, and that can slow down return processing. If you feel that your tax information could lead to an audit, take your return directly to a tax-preparation professional’s office before you fill out any forms on your own. You may think dealing with a professional is too much of a hassle, but it’s a far friendlier alternative than a stand-off with an IRS auditor.
Written on 3/19/2010 by DivineCaroline. DivineCaroline a place where people come together to learn from experts in the fields of health, spending, and parenting. Come discover, read, learn, laugh, and connect at DivineCaroline.com.