Tuesday, May 09, 2006

Perception of risk

I've recently gone from being a PAYG taxpayer (pay tax quarterly, generally get an interest free loan from the tax office for six months for your tax, but in charge of making sure you pay the right amount of tax) to being a PAYE taxpayer (tax is deducted from my pay before I ever see it.

I've been very relieved to go in that direction.

Even though I have lost an interest free loan from the tax department, I have significantly gained in certainty about the amount I owe, and to me, that's worth more. I wouldn't have expected to feel this way when I first got the chance, five years ago, to go PAYG - the chance of an interest free loan is surely worth a lot? But to me, certainty is worth more.

I've always been a bit superior (only privately, of course), when I watch people investing in cash when they should be investing in a long term equity style investment. But watching myself behave fairly irrationally over my tax uncertainty has given me a whole new appreciation of perceptions of risk.


Post a Comment

Links to this post:

Create a Link

<< Home