Are Tax Saving Infrastructure Bonds really a good deal?

Not really! Here's a simple calculation that shows how:

Here's what it does:

1. An investment of Rs. 20,000 will earn 8% compounded annually
2. The saving of Rs. 6000 of income tax, assuming highest tax bracket
3. Assuming that the tax saving is invested in an scheme that provided 25% compounded annual return. Note that 25% annual return are actually very difficult to obtain over 5 years, the lock-in period. Still let's go ahead
4. Effectively, after 5 years, investing in Infrastructure Bonds give Rs 47,697.11
5. Had the same Rs. 20,000 invested in a non tax saving scheme for 5 years, an annual return of 19% will give the same return of Rs. 47,697.11. If the tax saving is lesser than Rs. 6000, or the return on saved tax is lesser than 25%, then even a lesser return will fetch better returns.

In summary, its better to invest Rs. 20,000 in a well reputed open ended mutual fund, than in infrastructure bonds. You have the liquidity to withdraw the money at any time, and you get better returns. In fact the best thing to do would be to go via "Systematic Investment Plans". Just setup an auto-debit of Rs. 2000 from your bank account to any good mutual fund and after 5 years you'd make better returns than Infrastructure bonds :)

Wanna go back to school...but...

Here's a dilemma I'm in these days. I wanna take up some courses that've interested me for long, but neither can I afford to leave my job (even temporarily, there's so much work), nor do I want to, as I love the work I'm doing. Now I wish if I can continue education while at work, in some way...

Let me talk about what I want to study. The first one on the list is Finance & Economics. Investments, macro-economics and especially stock markets have fascinated me so much in the past couple of years. I'd say maybe recession is attributed for this taste to have developed. I don't mean to say that I wanna quit as an engineer and go learn fund management in a B-school, but I'd love to read more about this field - managing investments, what economics means, what's all about central banks controlling rates n all...wow, it's all so cool, definitely better than circuits (Yeah, I would have laughed at hearing myself saying this a few years back, but yes, it's no joke today).

Next comes History & Religion. Yeah, I've always loved this subject and discussions, they're my all time favorite. I remember while in 9th standard at school, I had a debate with almost my whole class over existence of God, and me and my friend Shreyashi were confronting the rest of the class. I want to delve deeper into the logical reasoning behind the upcoming of various religious beliefs and traditions. I wanna know what was the society before the religion, whom did the childhood friends of Lord Rama / Krishna pray? How did Christainity evolve? Of course my current knowledge about world religions is quite limited, and I'm very keen to expand that. I seriously wanna take up this study, but I feel it's gonna be a full fledged course in itself...

Finally, surprisingly, comes Modern Physics. Yes, of late I've being going away from pure sciences, into stuff such as society, economy, religion etc. But then, I've had a long science background, and something I got a very limited exposure to while even in college was Modern Physics. I was fascinated by alll those dangerous looking equations, but then, I feel it's the bridge between one of the biggest conflicts of all times - the science and religion. Both Modern Physics and Religion try to answer one basic question - the evolution of universe, and the history of time. I feel excited about this subject despite the abtruse mathematical nature, and I'd want to spend some time delving into it's intricacies. Especially, I love all the paradoxes that come up due to the gap between what quantum theories predict and what the common perception is.

Finally, the question remains, how and when to pursue this interest. I'm not sure if reading part time after job would work, maybe taking a couple of months break from jjob would do. I'm not sure, let's see what can I do about it...