Follow success to be Happy?

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 I believe to have a better life you must be happy but question is really how do you become happy? Is it through achieving things, doing things that bring fun (might not the reward along with it), or just living free without worrying about things which average Joey worried about.


Well many neuroscientists and philosophers have mentioned that “Success is not the key to happiness, happiness is the key to success” by Albert Schweitzer, but is it really true? Is it something which can be generalise ? What about people like me who are driven and like to achieve things because they bring smile, happiness and in someway set future goals.

 That's why to solve the puzzle of Better Life, I planned to start it with Financial freedom and the very first thing which I started with is Emergency Fund, and I set the definition of it as sum of money set aside which will be used only when my regular monthly income (salary) is lost. In other words, loss of job.
After finalising my definition, next questions to answer were:

  • How much money?
  • Where to save?
  • Which format (one big lump-sum)?
For how much, I wanted to be very conservative and decided to save 1 year of my expenses as emergency fund, because I believed that 12 months of financial buffer will be good enough to find next job and to settle down. 

For where, since I decided to use this money only if I lose job, then keeping it in saving account as cash wasn't the right option because interest rate are very small. After researching, I came across idea of having FD (Fixed Deposit) in foreign countries, where interest rate are higher then home country inflation, this way I could be assured that I wouldn't lose my capital. As I'm Indian I started FDs in India (NRE) with 8% annual return.
For format, like everyone I wanted my emergency fund to be flexible that means, I could liquidate anytime, but I also don't want to lose on the potential interest gained and hence I planned to 12 FDs (once a month), and upon maturity added fresh funds and renewed it, until each FD became 1 month expense.

 In Summary:

  • Emergency Fund: Money set aside which is equal to 12 Months of Expense
  • Purpose: Use only when regular income is lost
  • Investment Vehicle: Fixed Deposit, where interest rate is higher than inflation
  • Investment Style: 12 FDs, one per month

It took me about 3 years to reach my goal of having 12FDs each equal to my monthly expenses. Did this give me satisfaction .. Yeah, did it give me freedom and peace of mind ... yeah. I am more happier now, I do think so. 

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