Also Read: Young Teen Age Entrepreneurs

Young Entrepreneur Tyler Dikman made his first Million Dollar before the age of 17.

Well, Yes. This teen age young entrepreneur has made his first Million dollar before the age of 17 years. This Internet Entrepreneur is from Tampa, Florida.

This kid was a computer genius before others took having a home computer for granted. He set up a business helping people buy and use computers. Eventually he founded a computer company called CoolTronics.com which earned him over $1 million before the age of 17

In January 2000, Dikman started his Company CoolTronics.com at the age of 17 only.

Moral of the Story:

The old advises like – Go to School, Get good grades, find a safe and secure job, live paycheck to paycheck, save money, invest it in mutual funds for long term and diversify and retire at the age of 65 years when you are disabled are not the effective financial advises anymore.

It seems that these young entrepreneurs don’t want to follow such kind of advises. It seems that these kids want to retire in their twenties and early thirties and want to enjoy their lives.

After all, anything is possible in the Information Age. You just require an idea to start your own Business and the Internet connection. And you can make fortunes on the Internet. In the Information age, your Financial Success has nothing to do with your college degrees…!!!

Also Read: Young Teen Age Entrepreneurs

Young Entrepreneur John Magennis makes Millions every Year from his Web Designing Business

John started his Business of web designing when he was just 14 years old. His initial fees to design the Website templates was just US $ 15 but today he turned his business into the multi-million dollars empire. Today he charges as high as $ 30,000 to develop those website templates.
And he earns literally more than a million dollars from his Business.

He is still in his early twenties.

John started his business from his bed room only without the investment of any capital. This is how the smart entrepreneurs think.

Moral of the Story:

Who says that it requires money to make money anymore? It doesn’t require money to make money anymore. It just requires an idea to make money in the Information age. All it requires to start your business in the information age is the idea and the online web space and a domain name. And that’s it. You can start your own Business right now almost at zero cost.

The example of John is very inspirational for the teen agers. Yes, if you are a teen ager than also you can start your own business and earn millions of dollars from your Internet Business. So Start your own Business young. There is not any minimum age to start your own Business.

Also Read: Young Teen Age Entrepreneurs

Young Entrepreneurs James Murray Wells of GlassesDirect.co.uk

James Murray was still around 19 when he finished his high school and just entered in the first year of his collage in UK. He saw the great business opportunity in the online retail industry for selling glasses. He saw that there was not a single online Glasses company in UK and he click the idea to start the GlassesDirect.co.uk

He started his business from his College Loan money and after that never looked back. Within a year, he made US $ 1 Million and today his company is making 4 Million Sterling pounds a year….!!!

Moral of the Story:

This young entrepreneurs has used his college loan to start his own Business. And what generally we taught by our parents, School system and the financial planners?….Play it Safe, Fixed Deposits are the safest place to park your money, Invest in mutual funds and diversify and many more things right….?

This young entrepreneur has taken a risk from his college loan and still made a fortune. It means that Business is not risky but being un educated about the business is risky. It is the false mindset that our Schools impart in our minds since our childhood and that’s why when students enter into the real life they are afraid of taking risks. They are afraid of starting their own Business and doing Investments.

So my advise to you is that, Follow your own thoughts and ideas when it comes to start your own Business and believe me, you will never fail…!!!

Also Read: Young Teen Age Entrepreneurs

Fraser Doherty: The World’s Best Student Teen Entrepreneur

Fraser Doherty is from Scotland and he started his first venture when he was just 14 from the start-up capital of US $ 5 only. He took her grand mother’s jam recipe and started making jams from fruits and fruit juices in his kitchen with the help of his grand mother.

His initial goal was to make some jam and sell to local churches and near by areas so that he can earn some money. After that he keep re-investing his money in his business again and again and Today his Eat Super Ltd. is International profitable Jam Business with annual revenue of US $ 3 Million + and growing…!!!

Moral of the Story:

Don’t think that only Adults can start a multi-million dollar businesses. Teens and young entrepreneurs can also start their own business and take it to any heights. It’s a Myth that Business & Investing is Risky. The fact is that depending on the job security for the rest of your life is risky.

In the real life, not having a Business is risky and believe me, There is not any age bar to start a Business. Any one can start a Business at any age. If these teens can start their own business at the age of 14 and become millionaires before they leave the high school than anyone in this world from any age group can start their own Business and make fortunes.

There is never a right time to start your own Business.

Also Read: Young Teen Age Entrepreneurs

Catherine Cook of Myyearbook.com – The teen Young Millionaire Entrepreneur

Catherine is the founder of the Social Network site Myyearbook.com which she founded with David Cook in the year 2005. Today Myyearbook.com is the third largest social network in USA after Facebook and MySpace.

Catherine was just 16-17 years old when she founded Myyearbook.com. She raised the start-up cost of US $ 250,000 from her brother who is a successful Internet Entrepreneur. His brother had successfully sold his 2 Internet Businesses in the year 2002 for US $ 10 Millions – EssayEdge.com & ResumeEdge.com

Catherine and David hired the team of programmers from Mumbai, India to develop their website. When the website was launched, they started marketing in their school by wearing T-Shirts of MyYearbook.com. And there was a slogan on their T-Shirts.

"Are you the prettiest girl in your high school? How about the dumbest? Find out at Myyearbook.com"

The campaign worked….By the end of that year 950,000 teen agers from all around the America were the Myyearbook.com users.

Myyearbook.com has made US $ 10 Million in Advertisement revenues.

Moral of the Story:

Our School and parents teaches us that Doing a Business is Risky. But what about these Information Kids who have made their fortunes on their teen age? Now, don’t argue with me that but these are just the few exceptional cases….NOpe…!!!!

There is a whole generation of teen age Millionaire entrepreneurs in all around the world. So Start Your Business Young. Do you want to live paycheck to paycheck for the whole of your life or follow the principles of the Information age and get ahead of the time?

The choice is yours…!!!

Young Teen Age Millionaire Entrepreneurs

Well, This Article is about Young Entrepreneurs who have made their Fortune in the teen age. Well, yes between the age of 13-19 they had started their business venture and most of them were millionaires from their Internet Businesses before they left the College School.

These are just the few examples only. There is a whole generation of millionaire teens like this around the world…!!!!

Well, These Teens are not making 6 Figure Income in Dollars Online or from their Businesses. They are making 1 Million+ Dollars year after year from their Businesses…!!!

Than Why our Parents and School system teaches us that Business is Risky? While in the real life, not having a business is risky. This whole generation of Self-made Millionaire Teens can retire today only. It seems that our school system is only motivate us to become employees and self-employees only. It is not motivating us to become Entrepreneurs who really create jobs in the economy.

I think Education does not have anything to do with your Financial Success. After all This is the Information age and anyone from any age group can start making money by starting a Business on the Internet.

Well yes….These Teens have made their first Million from Lottery Winning Inheritance their Businesses.

Yup…None of them have won lottery or received huge inheritance. All of them have developed their successful businesses and made millions of dollars in their teen age. So read this article carefully and you may find your own Business Idea?…!!!

Read the story of each and every of the following young entrepreneur and give your Comments…!!!

01) Ashley Qualls of WhateverLife.com

Ashley Qualls is the founder of WhateverLife.com – A Website that gives free MySpace layouts and earns through displaying the advertises on the site.

Ashley started her Internet Business in the year 2004 at the age of 14 years only and with the start-up capital of US $ 8 (Rs.400) which she borrowed from her mother to buy a Domain name. Today (2010) her website receives 7 Million visits a months (Yes…That’s 70,00,000 visits a Month..!!!) and up to now, she has made US $ 1.5 Million from her website.

02) Cameron Johnson

Cameron Johnson is the founder of the websiteCameronJohnson.com.

Well, as of 2010 his Age is 24. But he started his first business when he was just 9. And today he is world’s one of the most successful Entrepreneur. Well, Yes. I am not exaggerating the things. World’s one of the most successful Entrepreneur is in his twenties.

03) Adam Hildreth of DubitLimited.com

Adam Hildreth was born on March 1985 and he setup his first business DubitLimited.com at the age of 14 years only. Well, Yes when the whole world teens where busy with playing games, partying with friends and studying hard – Adam was developing his own Business.

04) Catherine Cook of Myyearbook.com

Catherine is the founder of the Social Network siteMyyearbook.com which she founded with David Cook at the age of 16 in the year 2005. Today Myyearbook.com is the third largest social network in USA after Facebook and MySpace.

05) Fraser Doherty

Fraser Doherty is from Scotland and he started his first venture when he was just 14 from the start-up capital of US $ 5 only. He took her grand mother’s jam recipe and started making jams from fruits and fruit juices in his kitchen with the help of his grand mother.

06) James Murray Wells of GlassesDirect.co.uk

James Murray was still around 19 when he finished his high school and just entered in the first year of his collage in UK. He saw the great business opportunity in the online retail industry for selling glasses. He saw that there was not a single online Glasses company in UK and he click the idea to start the GlassesDirect.co.uk

He started his business from his College Loan money and after that never looked back. Within a year, he made US $ 1 Million and today his company is making 4 Million Sterling pounds a year….!!!

07) John Magennis

John started his Business of web designing when he was just 14 years old. His initial fees to design the Website templates was just US $ 15 but today he turned his business into the multi-million dollars empire. Today he charges as high as $ 30,000 to develop those website templates.
And he earns literally more than a million dollars from his Business.

08) Tyler Dikman of CoolTronics.com

This teen age young entrepreneur has made his first Million dollar before the age of 17 years. This Internet Entrepreneur is from Tampa, Florida.

This kid was a computer genius before others took having a home computer for granted. He set up a business helping people buy and use computers. Eventually he founded a computer company calledCoolTronics.com which earned him over $1 million before the age of 17

09) Farrah Gray

Well, When Farrah started his first venture he was not a teen. So honestly speaking he should not be in this category of Entrepreneurs. However, he made his first made his Million dollars between the age of 13-16 years and that’s why he is in this category.

Ohh….!!!! I forget to tell you that he started his first business when he was 10…!!!

Well, Yes. At the age of 10 years he and his friends started the business club and raised US $ 15,000 to finance a Lemonade Stand, an Internet Comic book and a traveling mini-mart.

10) Juliette Brindak

Juliette has founded the website MissoFriends.com when she was just 10. Well, Yes. She started her own Web Business when she was just 10 years old and that’s why we can not say that she is a Teen Entrepreneur. She is basically a Kid Entrepreneur.

At the age of 19 (February 2009), She was already worth of US $ 19 Million. And well…well…but at the age of 19 she was in her own business since almost a decade…!!!!

11) Michael Furdyk

When Michael Furdyk was just 13, he started his website business with his partners. And when he became 17, he sold his profitable website business for whooping US $ 1 Million….!!!!

Well, yes. Before leaving his high school, Michael had US $ 1 Million in his Bank Accounts.

12) Matt Wegryzn

Matt has made over US $ 1 Million at the age of 17 from Domain Flipping only. Well, yes. He made his first million when he has still not completed his high school. And many of the domain names he wold where worth of US $ 50,000+.

Matt is originally from Poland but now live in NYC.

13) Paul Bourque

Paul started affiliate marketing business at the age of 18 and in less than 1 year, he started making literally US $ 300,000 every month from AzoogleAds – A Performance based online marketing platform.

14) Limerick Brothers – John and Patrick Collison

The above photograph is of two brothers – John & Patrick Collison.

They started their first venture when they were 17 and 19 years of age. They founded the software Company Auctomatic.com – A Software Company which provides software for heavy eBay users. This Software company was acquired by Canadian Company Live Current Media for more than 3 Million Sterling Pounds in the year 2008.…..Well yes and that is whooping Rs. 24 Crores at the age of 20.

15) Abbey Fleck of Makin Bacon

This Girl actually doesn’t fall in our list of teen age millionaire entrepreneurs because she started her business at the age of 8 years. Well, Yes. just 8 years. She invented a product called Makin’Bacon at the tender age of 8. The product cooks bacon in such a way as to reduce the fat content of the food without taking away its flavor. The product was such a success that she now earns over $1 million annually in royalties from the Makin’Bacon business. Here is her story…

16) Richie Stachowski

Well, yes. Again this entrepreneur does not belong to the teen age millionaire entrepreneur category. But he is belong to the Kid Millionaire Entrepreneur category. At the age of 12 years this boy has invented “Water Talkie” which is a device to communicate clearly under water.

17) Mike McDonald

Who says that you can only become a millionaire in your teen age by doing a Business only? Take the example of Mike McDonald. Mike is a professional poker player. And he first time became a millionaire at the age of 18 by playing a poker tournament at European Poker.

18) Carl Churchill

Carl is the UK based British Designer also known as the British Bill Gates. He started his Internet Business at the age of 12 years and when he was 19, he was already making more than 1 Million pounds from his Internet Business.

And according to the projections, by the end of 2020, his profits will touch more than 100 Million pounds every year from his Internet Business.

19) Brett Klasko

Brett Klasko first time became the executive and CEO of a Multi-million dollar Dot Com Company – Phinaz Media Group at the age of 14 years. Current age is 25 years (As of 2009). He is one of the Best CEOs under the age of 25 in the world.

20) Anand Lal Shimpi

Anand lal Shimpi has founded his website Business AnandTech.comat the age of 15 years. It is the Technology website having the annual ad revenue of more than US $ 1.5 Million.

21) Jayson Meyer of Meyer Tech

At  17, Jayson and his company has been revenue over 1.5 million.  He is currently the president of Meyer Tech builds customized computers, which Mr. Meyer and his team make from hardware parts they buy. His employees also write a variety of software programs, including customized accounting and billing programs, and design and maintain communications systems for business clients.

22) Ephren Taylor

Ephren W. Taylor II is the youngest African-American CEO of any publicly traded company ever—City Capital Corporation (OTCBB:CTCC).

Achievements:

Made first million by 16

Youngest Black CEO of a Publicly Traded Company

Oversees over 250 Million in Assets

Starting Investment Clubs at schools across the nation

Developing national business plan competition for university students

Started business ventures at the age of 12

Works with superstar entertainers such as Snoop Dogg and Fat Joe

Diverse client list ranges from Stock Market Day Traders to Hip Hop Icons

23) Sean Belnick of BizChair.com

This Kid started his Business at the age of 14 years. He spent 3 full days to develop his business plan and ultimately came up with the idea of BizChair.com – a Business that sells office furniture and other supplies.

Well, yes…And the Start-up Capital for the Business was just US $ 500….!!!

In less than 5 years, his business started making Literally US $ 50 Million per year…!!!

24) William Felix – The Millionaire owner of Loan Mower Company

William Felix became Millionaire from his Lawn Mower Company at Age 17

How successful can a lawnmower company be? It can be a million-dollar business if you’re good at which was proven by the success of this seventeen-year-old.

Hello Friends,


Change is the only constant of life – Heraclitus of Ephesus, (Greek Philosopher)

Taking inspiration from this thought chose this topic.

Yesterday I was reading one motivating book, written in very simple language, on real life stories, on Entrepreneurship, as well as the intricacies of Entrepreneurship.

Through it I came across something, which I immediately felt like sharing with you all.

Here is one example on how great the spirit is on Entrepreneurs’, and the desire to create an Enterprise.

The chapter that I read was on the the honourable Mr.Ammenbal Subba Rao Pai, Born at Mulky, near Mangalore on 19th November, 1852. He graduated from Presidency College, and then completed education in law from Madras Law College, and became a successful lawyer.

Mr Pai was the visionary behind creating “The Canara Hindu permanent fund limited”, his vision behind this was to pool together, monetary resources of the society for its own self help.

And for creating this in reality, he went door to door, and collected handfuls of rice from each house, and then after sold this rice, and with the receipts of selling this rice created the capital for the bank.

Mr. Pai is also acknowledged and respected for his work in creating the Canara Girls High school in 1894, especially when attitudes were conservative at that time on women’s education.

It requires courage, to think and more importantly to act like this, and most importantly what is needed the purity of ones mind, and the genuine desire to help others, and as I believe in always, money is always a by product.

Such are the lengths entrepreneurs’ go to bring their vision into reality, and hats off that enterprising spirit, which is ultimately the human spirit to progress and benefit human civilization and if one does that, money will always come to you, as a by-product !

More on Entrepreneurs’ later keep reading MJ2BC.

Cheers,
Nikhil, Pune,
9552563251
nikhil0904@gmail.com

Hello Friends,


My Personal Thought : Interest doesn’t attract our interest unless we get paid interest or are made to pay interest.

Yes, one thing for sure, sometimes we get paid interest since we are sometimes lenders, and sometimes borrowers.

In technical language, Interest is the additional amount, over the principal borrowed, charged by the lender from the borrower for the privilege of using the lenders money.

The rate of interest may be fixed or changing (floating) depending upon the terms of the loan.

There are different types of Interest rates as below,

1) The rates that bank charge to their borrowers (Corporate as well as Retail).
2) The rates that bank offer to their depositors (Corporate as well as Retail).
3) The rates at which government borrows, from the public by means of Bonds, Government Securities.
4) The rates offered to the investors in small saving schemes like NSC, PPF.
5) The rates at which companies issue fixed deposits.
6) The rates at which one financial institution, borrows from other financial institution.

Now, following are the factors determining the interest rates, the factors being related to economy, which are termed as macroeconomic factors.

a) Demand for money.
b) Supply of money.
c) Level of government borrowings.
d) Inflation rate.
e) Policies of RBI and government in together.

Keep reading MJ2BC, and also share about it with your friends.

Enjoy and Take care.

Cheers,
Nikhil, Pune,
9552563251
nikhil0904@gmail.com

Monthly Income Schemes in India Post Office

Many readers ask me that Which are the Monthly Income schemes with the Indian Post Office? Well, there is only one Monthly Income scheme with the post office in India and that is,

Post Office Monthly Income Scheme (POMIS)

Read the above article and learn the key features of this scheme in detail. This scheme is basically aim to provide the regular monthly income at the rate of 8% per annum and that’s why this scheme is more suitable for retired persons who want to generate regular income from their money.

However, the only limitation of this scheme is that, You can invest maximum Rs.3 Lakh as a single account holder and Rs.6 Lakh as a joint account holder in this scheme. And that’s why if you have a large corpus to invest than POMIS won’t be sufficient for you. You will have to find other options to generate regular income along with POMIS.

And yes, another fact is that NRIs can not open POMIS or any other Post office savings account. You MUST be the Indian citizen who live in India only to take the advantage of this scheme.

Also read my Article,

How to Generate Monthly Income for Retired People in India?

In the above article, I have explained in great detail that which financial products in India are best to generate regular monthly income in India and which financial products you should avoid strictly? So read the above article and increase your financial knowledge about the various products to generate regular monthly income in India after retirement.

How to Generate Monthly Income for Retired People in India?

Are you in your fifties and about to retire in the next few years but don’t know how to generate steady monthly income after retirement? Than this article is for you. I will explain you in this article the various ways to generate monthly income.

Well, after retirement, your prime goal is the safety of your principal and the regular monthly income. You don’t afford to risk your money in the stock market or risky investments once you retire. What you can do is, you can split your retirement corpus among different financial products which offer safety of principal and guaranteed returns.

I will recommend you the following investments.

01) Bank Fixed Deposits – This is the standard way to generate monthly income after retirement. Split your amount between 3-4 Banks so that the risk will be diversified as well as you won’t have to pay TDS.

02) Post Office Monthly Income Scheme (POMIS) – This is another safe and regular income generating instrument. However, there is an upper limit of around 4-6 lakhs (I don’t remember exactly) to invest in this scheme.

03) Monthly Income Schemes by Mutual Funds (MIS) – These are basically the hybrid mutual funds having 70:30 – Equity: Debt allocation. These are also the one of the best way to generate monthly regular income after retirement.

04) Post Office Senior Citizens Scheme – If your age is above 65 years than you can go for this scheme.

Now, let me tell you that Which are the Financial products that you should strictly avoid?

01) ULIPs (Unit Linked Insurance Plans)

02) Pension Plans

03) Retirement Plans

04) Endowment Policies

05) Money Back Policies

06) Any other Insurance cum Investment product

Never ever invest in any of the above financial products if you want a peaceful retirement. They are so much complex financial products that you will never understand that where your money gone. They are nothing but the opaque mutual funds which will siphon out your invested money on regular basis and erode your long term wealth in a very bad manner.

Sp Stay way from them.

I hope this much information will be useful to you to generate steady monthly income after your retirement…!!! If you have any further queries than comment on this post or e-mail me on asav4u@gmail.com . I will be happy to answer your queries…!!!

Money Making Ideas on Internet India

India is world’s second largest country population wise. The Indian Population is well above 1.2 Billion (more than 100 Crore) and that’s why there is a big opportunity for Internet Businesses in India in the future.

Government of India wants to connect all the towns and villages of India with the Internet by the end of 2014. And that’s why we will see whole the India (Or most of the parts of India) online in the next decade. And this means a great business and money making opportunity for me.

By the end of 2020, Indian web traffic will dwarf the web traffic of any other countries of this world. And it means that a great business opportunity for entrepreneurs in every Niche. And this is the reason I motivate young generation to start their own Online Business from today only. So that when whole India becomes Online, you will have a great money making opportunity.

There are several ways to make money online in India. The best thing about this technology is that you can also earn money from your home also. You just need the Computer and the internet connection to start making money online.

If you want to do some job than go to Elance.com, Freelancer.com or GetACoder.com and you will find some work online. and you can earn money by taking various projects according to your skills on the above websites.

If you want to start your own Business than sky is the limit. You can start a Blogging Business (Say for Example This Blog), Website Business, eBay Shop, Facebook Applications, Discussion Forums or anything else online.

You can also start the Affiliate Marketing online and earn money by selling other people’s products online. You can also make fortune by developing a successful web business from scratch and later on selling it for huge profits on the sites like Flippa.com.

Many Entrepreneurs around the world have make their fortunes by developing their own Internet Business out of scratch and later on selling their businesses for literally millions of dollars and taken retirement in their twenties and early thirties.

Money Habits of the Middle Class

The above is a typical line diagram of the financial statement of the Middle class. I will explain the above diagram in detail and you will understand the middle class mentality and spending habits. After that we will discuss the financial statement of the rich.

Middle class do a Job to earn a paycheck. He works hard at his job place to earn money. The more hard work he does, the more income he will generate. Now, the problem with middle class mindset is that, as higher their salary goes, they start thinking that they are smart. Whenever their salary goes high, they start thinking that they are now rich. But in fact, they are not rich. In fact, nobody is rich unless he/she owns lots of Assets.

See the above diagram. As the Income increases, Expenses also increases, Assets will also increase and liabilities will also increase. The problem is with those increasing liabilities such as Car loan, Credit cards, Club memberships, Personal loans, Home loans and many other kind of liabilities. As the liability column grows, it will throw money out of your financial statement by doing expenses.

This is the Cashflow pattern of a Typical Middle Class. As the salary rises, he buys more and more liabilities to look cool  and rich. A Typical middle class spends whole of his life behind accumulating liabilities only.

Now, see. the above line diagram. It is the line diagram of the financial statement of the Rich or a person who is going to become rich. Rich also do the job during the initial period of their life. But what they do is, they start accumulating assets out of their money. So initially they don’t look cool and rich.

But over a period of time, their assets grow in such a size that their assets start throwing passive income for them (See the above diagram). One day comes when their Passive Income from Assets become much more than their job income. And from that day they stop working for the others.

This is because from that day onwards, their Assets will take care of all of their expenses. So just tell me that what do you want to buy from your Money? – Assets or Liabilities….?

The Choice is yours…!!!

Millionaires Don’t Live in Expensive Homes

There are total 3.1 Million Millionaire households in the USA. But you will be surprised by the various surveys done on these millionaire households. According to one such survey, more than two thirds of millionaire households don’t even live in expensive homes and high status locality.

And probably this is the reason they have accumulated tremendous amount of wealth. These millionaire households are very frugal. Most of us have a false belief that millionaires live in expensive homes and drive expensive cars. But well, this is not the truth.

To afford expensive cars, clothes and cars you have to realize more income and to do that, you will have to pay more taxes. But millionaires are smart. They don’t realize their income. They earn most of the time in the Capital gains only so that they don’t have to pay any taxes on that profit.

The typically buy an Asset and hold that asset for years probably for decades and that’s why over the time that asset appreciates so much in price that they grow richer and richer. Now, you will think that than who are those people who live in expensive homes and drive expensive cars?

Well, most of them are the upper middle class people. These are the High Income earning people. They earn a lot only to pay taxes to the government and pay their debt bills. They just look like millionaires but they are not.

Whenever they get a salary raise at their job place, they take more debt and buy a new car or home and spend rest of their lives to repay that debt. So be a true millionaire in your life. Live frugal and accumulate wealth.

Millionaire Business Ideas for Teens

Very recently a teen age reader of this blog asked me that, She wants to start her own Business and she is in 12th Standard and there is a huge generation gap between her and her parents mindset. So How can she start her own Business?

Well, of course it is good if you can convince your parents by giving them some good motivational book or by telling them to read MJ2BC.

However, who says that it requires a huge capital to start your own Business in the Information Age? Well, Guys…This is the Information age and the potential of Internet is amazing. Even a school going kid can put his/her side business by side on the internet from his/her home, garage or even school library and compete the fortune 500 companies worldwide.

If you can not start the traditional business because of Start-up capital limitations and the generation gap between you and your parents than start it Online. You can start virtually anything online. In fact, many teens around the world are running their million dollar business empires online. And they have started it from Scratch or just as low as $ 10…!!!!

Well, Don’t believe me?… Than read the following three most inspirational stories of the Millionaire teenagers who have made their business empire online and literally made millions of dollars.

01) Teen Age Millionaire Ashley Qualls of WhateverLife.com

02) Teen Age Millionaire Cameron Johnson

03) The Internet Millionaire Adam Hildreth of DubitLimited.com

Take the Inspirations from them. And start your Business as early as possible. This is because the earlier you start, the more successful you will become over a period of time. It is better to start small early rather than starting a huge at the later stage of your life with lots of capital at risk..!!!

The Internet Millionaire Adam Hildreth of DubitLimited.com

Adam Hildreth was born on March 1985 and he setup his first business DubitLimited.com at the age of 14 years only. Well, Yes when the whole world teens where busy with playing games, partying with friends and studying hard – Adam was developing his own Business.

Dubit Limited went onto become one of the biggest teenage websites in the UK and now markets itself as a 'Youth Marketing Agency', advising major brands on how to market their products to young people.

Well, yes. Today Dubit advises major brands to understand the youth lifestyle, demand and behaviour so that they can target this population very well and reach to them in a proper way.

These people do the primary research of any market targeting the youth. And give the detailed report to the major brands so that the major brands can decide their marketing strategies very well.

As of 2010, his estimated net worth was 2 Million Sterling Pounds and that is Rs.16 Crores at the age of 25 years only….Not bad for the start-up investment of just US $ 10…!!!!

Moral of the Story:

Let your children think differently. You don’t know the potential of the young generation. Kids who born after 1990 have seen the world with the eye of the Internet. And they are now developing their Businesses on the Internet and doing investments also on the internet.

Rather than forcing them to follow the age old advise to go to school, get good grades, find good job, work hard at the work place and live paycheck to paycheck for the rest of the life, Motivate them to start their own Business. You will never know that when they will become successful Entrepreneurs…!!!

Teen Age Millionaire Kid Cameron Johnson

Cameron Johnson is the founder of the website CameronJohnson.com.

Well, as of 2010 his Age is 24. But he started his first business when he was just 9. And today he is world’s one of the most successful Entrepreneur. Well, Yes. I am not exaggerating the things. World’s one of the most successful Entrepreneur is in his twenties.

Let me tell you that how intelligent this young entrepreneur is? At the age of 12 years he took his sister’s Beanie Babies Collection and sold it for whooping US $ 50,000 through his website business. Can you imagine this?…. A 12 years old kid used his brain to sell his sister’s collection for $ 50K????…

But well, This is 100% True story. This is the power of the Internet and the Information Age.

Still Want to more proof of his Intelligent Entrepreneurial mind? Well, Read ahead…!!!

By the Time he was 15…..His Internet Business was making US $ 15,000 per Year Day….!!!! (Yes, That was his per day income. I have confirmed it with various authorities on the Internet). And that is Rs.7.5 Lakhs every day after day at the age of 15 years….!!!!

Moral of the Story:

Show this story to your parents. And convince them that what is the potential of young generation? Going to school to get good grades, getting higher college degrees and working hard at some private company or as the Government Employee up to the age of 65 years, Investing in Pension Plans, PPF and mutual funds and holding it for decades to become financially free is not what the Information Kids want.

The above is the age old financial advise for the information kids. This is because they have seen the world through the eye of the Internet. And they will also make their fortunes on the Internet.

So Motivate Your Children to become Entrepreneurs so that they can create jobs (Employment) in the economy.

Teen Age Millionaire Ashley Qualls of WhateverLife.com

Ashley Qualls is the founder of WhateverLife.com – A Website that gives free MySpace layouts and earns through displaying the advertises on the site.

Ashley started her Internet Business in the year 2004 at the age of 14 years only and with the start-up capital of US $ 8 (Rs.400) which she borrowed from her mother to buy a Domain name. Today (2010) her website receives 7 Million visits a months (Yes…That’s 70,00,000 visits a Month..!!!) and up to now, she has made US $ 1.5 Million from her website.

According to CBS Interview, her Internet Business income is over a million dollar a year according to her. She bought a house for her family and paid cash for this deal….No Loans….

I think this is not a bad for the initial investment of US $ 8…!!!!

Moral of the Story:

Everything is possible in this world. You will just have to use your mind and do the hard work. As Einstein once said that once the human mind thinks something big, it doesn't fit back into the normal skull. So Start your Internet Business like Ashley and make a fortune in your teen age or in twenties.

After all, This is the Information age and it doesn’t require money anymore to make money. It just requires an idea to make money. Even a primary school going kid can put his side business on the internet and earn more than his/her parents in the Information Age…!!!

Micro Spending Online

The Micro spending online is increasing day by day and it’s the huge industry with great market potential. The commonest examples are Google AdWords and Social Media spendings.

Every year literally billions of dollars are spend for Google AdWords campaign. If you are the AdSense publisher than you might think that how will I make a fortune from just 10 cents a click? But well, this small amount of spending by the advertisers become a huge income over a period of time.

Another example is Social Media Spending. Facebook is the commonest. In the year 2009, people have spend literally $ 700 millions to buy virtual goods in Facebook applications and games. The price of virtual goods can be few cents to few dollars. But combinely they make a huge income for the owners of such applications.

Recently, PayPal has started micro payment option by which you can pay just few cents online to buy micro goods or even virtual goods easily. This shows that Online Micro spending is a huge huge market. And you should target this market if you want to to start your own business.

When my friends ask me that What’s so exciting in earning few cents a click from Google AdSense adds displaying on your Blog? But they don’t know that this small earnings transform into a huge earning at the end of every month.

We don’t care much about the small spendings and earnings. But they transform into huge one over a period of time.

VintageGx.com – The Online Marketplace for Vintage Guitars

VintageGx.com is the online marketplace for the Vintage Guitars. Recently I Stumbled upon this amazing website. It is the online marketplace for Vintage Guitars. You will find lots of vintage guitar deals on this online market place for the vintage guitars.

If you are the guitar collector or just started investing in the Vintage Guitars than have a look at this website. Many of you may not know that Vintage Guitars are the Asset class just like any other asset class such as stocks, bonds, gold and real estate.

And Investors and Guitar lovers invest in it for the huge capital gains. The famous Martin D-45 Guitar is one of the rarest and costliest guitar in the market and collectors are crazy about it.

It is not that you can only invest in the Stocks, bonds, gold and real estates only. You can also invest in this Asset class and earn good capital gains.

So Have a look at this market place and you may find your next investment…!!!

LIC Jeevan Anand and Jeevan Saral are Bad Investments

Should You Continue your LIC Jeevan Anand and Jeevan Saral Policies?

It will be very kind of you, if you help me in arranging my personal finance as I stay in interior town, we don’t have any certified financial planners here.
I do have LIC term plan, Jeevan Anand of 2 lacs and Jeevan Saral Policy of 5 lacs ( as retirement corpus), which guarantees around 50 lakhs at end of 35 yrs provided you dont take money out during whole of tenure.I have 5 lakh in PPF and I plan to put regular investment in PPF to make 50 lakhs of another retirement corpus.
I have UTI-ULIP since 2 yrs.
Dont have any MF investment. But have 6 lakhs of direct stock investment which is around 7 lakhs now.
Since 3 months started monthly SIP in GoldETF, monthly only 1 unit.
Is my thinking on right rack or you have any suggestions?

Well, Let us analyze all of your investments one by one.

As an overview, it seems that you love to invest in Insurance cum Investment products. This is because your portfolio is full of ULIPs, Endowment Plans and Whole Life Policies. And I am personally worried about that.

I am personally worried about the following 3 investment in your portfolio.

01) LIC Jeevan Anand

02) LIC Jeevan Saral

03) UTI ULIP

In my opinion, get out of all of the above 3 policies as early as possible means now. Simply go for surrender or stop paying more premiums in the above 3 policies. I know that it will be painful initially but this is the only wise financial decision. And I have logical explanations about what I suggest to you. Read my following 2 articles and you will realize how worst the UTI ULIP and LIC Jeevan Saral policies are.

LIC Jeevan Saral Review

Why ULIPs are Bad? – A Case Study of UTI ULIP

Now, Let is talk about LIC Jeevan Anand. It is the combination of Whole Life Policy + Endowment Plan. This Financial product is so much complex looking that how much expenses it will charge from you is not clear nor they have mentioned it on the LIC website.

As a Rule of Thumb,

Never Combine Insurance with Investment. Rather than go for Term Insurance + Equity Mutual Funds or Term Insurance + PPF + Mutual Funds Combo.

Insurance with Investment is the worst combination. And the following financial products come under this heading and should be avoided.

01) ULIPs (Unit Linked Insurance Plans)
02) Endowment Policy
03) Retirement and Pension Plans

So avoid all of the above financial products for the whole of your life. Never look at them. Believe me, you will realize the importance of this advise after 10 years from tomorrow. If you want to buy a Life Insurance cover than go for Term Insurance Plan. No need to go for any one of the above 3.

You told that you have 7 lakh of investments in Stocks. Well, stay invested in it.

PPF is the best financial product in India and continue with PPF.

Gold ETFs are also a best way to invest in gold. Continue it.

If you want to start SIP in some good mutual funds than visit Valueresearchonline.com and find 2-3 4-star or 5-star rated equity diversified mutual funds and start SIP in them for long term. And monitor your portfolio and star ratings every 6 months.

So over all your Investment strategy is good. Just get out of that garbage (ULIPs, Pension Plans, Endowment Policies) and you will be on the path of financial freedom…!!!

Best of Luck…!!!

How To Get Targeted Website Traffic for your Online Business?

In my Previous article, I showed you the importance of the targeted web traffic. You can read the post,

Importance of Targeted Website Traffic for Online Success

So now, in this article, I will show you that How you can divert a targeted web traffic towards your website and generate sales. Well, there are basically two ways to divert a web traffic towards your website business.

01) Buy a Web Traffic

02) Free Traffic Building Strategies (usually Organic Search Engine traffic) / SEO -

If you are starting your business with enough budget than buying a targeted web traffic is the easiest and simple way to divert a targeted web traffic towards your website and generate sales.

Google AdWords is the best way to buy a web traffic. Just check it. Well, of course if you are not expertise in building and running the AdWords Campaign than the best way is to hire a professional service.

Go to Elance.com or a Freelancer.com and you will find lots of professional services and freelancers to do the same for you. However, many of them are costly so negotiate your price first.

Now, what if you don’t have enough capital to buy a web traffic for your web business? Well, in that case still you can become successful online. But you will have to do little bit of hard work from your side. There are several strategies to divert a free web traffic.

The Commonest and age old strategy is – Articles Marketing.

This you can do by several ways.

- You can launch a simultaneous blog on your website and create a “Buyers Keywords” rich content for your blog. This Content will divert a targeted web traffic on your website (Provided that the content is unique and not copy and pasted from anywhere)

In your case the keywords to divert a targeted web traffic will be,

- Buy Handicrafts
- Buy Handicrafts Online
- How to Buy Handicrafts Online?
- Where to Buy Handicrafts?
- Best Handicrafts
- Handicrafts of India…etc…

Google AdWords Keywords Tool is the best way to analyze all the such kind of keywords to attract the targeted web traffic towards your website.

You can find “N” number of keywords in your target Niche from the above tool. Just take a time, buy a separate notebook and do a keyword research for you.

Once you have a list of keywords on your hand. Now, its time to create a unique and quality content for these keywords and post it everywhere on the web.

Well, Yes. Post this unique content everywhere on the web such as your own Blog and mainly Articles directories like Ezine Articles, Squidoo, HubPages, Wet Paint, Knol and many other kind of articles directories on the internet.

There are thousands of article directories on the web where you can post your unique content. And yes, don’t forget to put a link of your website at the end of the article so that the readers of your articles can visit your website.

You can also create some Videos about Handicrafts and post it on YouTube. This is my favourite method to generate lots of targeted web traffic.

Over the time, google and other search engines will index your content and send the web traffic towards your website. Just think that How did you first time visit “My Journey To Billionaire Club”?

Well, because you MUST had type something in the Google search box and in its search results one of the article of this blog was indexed and you first time came on this blog right? Now, What if I had never write a content for that keyword which you typed in the Google Search Box? Well, than you had never came into contact with MJ2BC right?

Remember, the more targeted keyword rich content you will create, the more quality and It targeted web traffic will divert towards your website and the more sales your website will generate. It is that simple. Now, you will ask me that What if someone is not a writer like you?

Well, you can hire writers also from Elance.com or Freelancer.com and you can also hire freelancers from these websites who will submit your content on literally 250-1000 article directories on the web on behalf of you. So you won’t have to do all this hard work if you hire a freelancer for your business.

I hope that this much of information will be helpful to you.

Hello Friends,


My Personal Views: Believe it or not, nothing in this world is risk free, and also believe it or not if any thing is totally risk free, then it’s not worth pursuing.

Ok, today I am going to put before you some risks associated, in investment in Mutual Funds, just like the way some days back I wrote enthusiastically on the advantages of investing in mutual funds.

Like any other form of Investment, mutual funds do not provide, assured returns. As we know, Mutual funds invest across in investment avenues like equities, debts, bonds, etc depending on the type of fund; all these investments do involve some element of risk, with them. Also factors like changing government regulations for various industry sectors. Unpredictable economic factors, which can lead to sudden downfall of an industrial sector.

Here are some of the risks to which, mutual funds are exposed to:

1) Market Risk: One need to remember the fact that if the performance of the stock or bond market varies in a positive or negative way, logically this impact has to be seen in the value of stock or bond holdings in the mutual fund portfolio, and consequently the fund performance.

2) Non-market Risk: Any bad news, about an individual company, or companies, as a result of continuously changing business scenarios, can automatically reduce its share price, which consequently can affect the mutual fund performance.

3) Interest Rate Risk: There is a inverse relation between bond prices and interest rates, and consequently this movement of interest rates in upward direction, can decline bond prices, and consequently affect the underlying securities negatively.

4) Credit Risk: We need to remember that bonds and debts are obligations. When mutual funds invest in corporate bonds, they automatically carry the risk of default of payment of interest as well as principal, and when this happens, the bond value falls causing the NAV of the fund to fall.

Whatever little bit, I have read in life, I will put one thought, that I like “Accept Change, rather than fighting change” in other words, “Adapt yourselves to Change”. This is also one guidepost to be followed in wealth creation.

I will say good bye to you, by sharing one very humorous as well as painful (*for me) thought on money that I came across “Before you say some crap that money is not everything in life, make sure that you have amassed a lot of it”.

Cheers,
Nikhil, Pune,
9552563251
nikhil0904@gmail.com

Hello Friends,


The power of wealth getting compounded by interest is immense, and this takes us to the fact that sooner we start investing, profitable it is.

There are 3 golden rules for investing as suggested by experts, and they are:

1) Start investing early, the earlier the better.
2) Once started, invest consistently.
3) Focus on long term.

Following are important steps that can be followed, when we plan to undertake investment, by using some vehicle of investment:

a) Acquire the relevant documents that will explain the Investment.
b) Spend time, to read and understand these documents.
c) Verify the legitimacy of the investment.
d) Analyse cost versus benefit of the investments.
e) Study Risk versus Returns.
f) Understand the liquidity aspects of the Investment also its safety.
g) Analyse if the chosen investment vehicle is in line with the financial goals we plan to achieve financially through it.
h) Upon deciding a particular investment compare this chosen investment avenue with other opportunities available.
i) While choosing an intermediary, like a broker, always verify whether he is authorized.
j) Ask for clarifications, on anything and everything you want to know about the investment option chosen.
g) Seek professional advice, from people like Certified Financial Planners, in case the Investments are very big in value, spending some money is worth in such cases.

Keep reading MJ2BC and yes share about MJ2BC with your friends too is all I request for.

Cheers,
Nikhil, Pune,
9552563251
nikhil0904@gmail.com

Importance of Targeted Website Traffic for Online Business

Many Internet startups fail because their founders don’t understand the importance of targeted web traffic. If you want to become successful online than you MUST understand the basics of targeted web traffic. This Article is all about the basics and importance of targeted web traffic.

This Article is the continuation of the Article,

How to Start Online Handicrafts and Garment Business?

So of you have not read the above article than first of all read the above article. Now, in this article I will teach you that how to attract lots of targeted web traffic on your web sites to generate sales and thus money. But before that first of all let us revise the basics of web traffic.

See. You need two things to make money online from your blog or website.

01) A Product (Or a Service) &

02) Highly Targeted Web Traffic

If you put a product in front of a flow of targeted web traffic than it will generate sales and thus money for you.

For the sake of this article, we will assume that you have a product to offer to the world. And you have a website (Or a Blog) setup. Now, you need to put your product in front of thousands, hundreds of thousands and even millions of eye balls. The more eyeballs you will attract towards your product, the more sales your website will generate and you will make more money. It’s that much simple.

So now, you will have to attract the targeted web traffic on your website to generate sales. Now, what it means by TARGETED Web traffic and what’s the difference between targeted web traffic and the general web traffic?

well, the web traffic on Orkut and Facebook is general web traffic means you don’t know what that traffic needs. While a targeted web traffic means the traffic which is looking for the specific things in your Niche. In our example, your targeted web traffic is a traffic which is looking for the information about the Handicrafts and garments on the internet.

Now, What it means by Highly Targeted web traffic? Well, the Highly targeted web traffic is actually searching the web to buy that particular product in your Niche. Ok. Let me explain you in the simple words.

Targeted Web Traffic:

Suppose if I am selling Term Life Insurance Plans of various companies online than what my target web traffic will search the web for? I mean what my target web traffic will type in the Google (Yahoo or Bing) Search box? Well, they will probably type,

- Term Insurance Plans in India
- Best Term Insurance Plans
- Term Insurance Plans for Age above 30 years…etc..

Highly Targeted Web Traffic (Also known as “Buyers Web Traffic”):

The Highly targeted web traffic is the traffic which is actually surfing the web to buy that product. So This web traffic will type the following keywords in the search boxes.

- Buy Term Insurance Plans
- Compare Term Insurance Plans
- Review of Term Insurance Plans in India
- Cheap Term Insurance Plans…etc..

Now, This is highly targeted web traffic or Buyers web traffic. We can say this because of the words Buy, Compare, Review, Cheap..etc.. in the whole keyword phrase. Now, this traffic will highly likely to convert into the customers. Because this web traffic will buy a term insurance plan from my site.

Conclusion:

Thus, you need at least targeted web traffic on your website to generate sales. And if you can attract Highly Targeted web traffic towards your website than it’s BEST. However, it will take a time to develop highly targeted web traffic on your website.

I think this much information will be helpful to you to understand the importance of Targeted Web traffic. Well, if I am selling a Term Life Insurance on my website than there is no meaning of attracting the web traffic which is surfing the web for Mutual Funds or Credit Cards…Understand my Point?

Ok . So now you understand the meaning of Targeted web traffic. So Focus your time, money and energy to attract the targeted web traffic on your website from the First day. And believe me, you will never fail in your online Business.

Term Insurance Plans for NRIs - FAQs

Hello Mr. Asav,

Thank you very much for your valuable advice through you blog apart from your studies.

I need one suggestion from you regarding Term Insurance.

I am 32 years old. Working outside of India as an engineer since beginning of my career and it has been 10 years now. I have two daughters and my family stays with me.

Through several financial books & journals, I have realized that I need to have adequate term insurance for me. I also realized that term insurance is the original insurance which gives exact live coverage. Previously I invested on Mutual Funds, ULIPs, LIC, , KVP, FDs, Endowment Plan, etc. When I contacted local agent for term insurance (LIC - Anmol Jeevan / Amulya Jeevan), they literally discouraged me to do this. I don't know why. Anyway, I am now very much serious to do this.

Hello Mr.Das,

Thank you very much for appreciating my blogging efforts. It really motivates me to write more when I receive positive feedbacks from the readers like you. Well, Your concern is of everyone today. Agents are discouraging people to buy Term Insurance Plans. This is because they don’t get much Commissions on selling Term Insurance plans.

While ULIPs, Endowment Policies and Pension Plans will charge you anywhere between 20-50% from your first premium and more than 10% from the subsequent premiums and that’s why for selling these Investment cum insurance products, the agents will get huge commissions. And this is the primary reason why agents discourage you to buy Term Insurance Plans.

But the reality is that, none of the ULIPs, Endowment Plans and Pension Plans will give you much life insurance cover. Your age is 32 and if you pay Rs.1 Lakh of annual premium in these products than you will get just Rs.5 Lakh of Insurance which is not the enough in any way.

Rather than that if you buy a Term Insurance Plan than you can buy Rs.50-75 Lakh of Insurance cover at your age for just Rs.5000-15000 per annum of annual premium which is really cheap in comparison to the amount of life cover these term plans offer.

So in my Opinion – Term Insurance + Equity Mutual Funds or Term Insurance + PPF + Equity Mutual Funds is the best combination.

You should never mix Insurance with Investment. It is the worst combination according to me.

But I need some guidance from you.

1. As an NRI, can I avail this term Insurance?

Well, yes. As an NRI, you can buy Term Insurance in India during your visit to India. However, if you have applied for greencard or citizenship of other country than you are not eligible to buy term insurance plan in India.

So in my opinion, you should first of all check the rules and guidelines with the companies from which you want to buy Term Insurance Plan.

2. As per your blog you suggested to have 2 or 3 term insurance instead of just 1. You also suggested that AEGON Religare is the cheapest. Can I rely on this?

Yup. 100%. There are 14 Insurance companies in India. And I have personally check the Insurance premiums of all the Insurance company term plans. And the AEGON Religare is the cheapest of all. But well, remember here that it doesn’t come with any riders. It’s a pure term insurance plan.

Which other are most reliable? In case of LIC, their customer service is not good (like Govt offices), but we can rely on them. Beside LIC which one do you suggest.

HDFC & Birla Sun Life. However, Go for any company because all of them are regulated by IRDA (Insurance Regulation and Development Authority of India).

Is there any simplest way to do this insurance ( Less paper work/ fast response) ? Is it possible to do online?

Well, Yes. You can buy Online. Go to Policybazaar.com or InsurancePundit.com or any other online portal. However, I am not sure about NRIs. Weather as an NRI, you will have to visit India or not that I am not sure.

3. Using premium calculator, I realized that the insurance coverage required for me based on my age/current expenses/liability/salary, it is coming 1.5 Cr. But Premium is high for me. I want to do 2 or 3 insurance and I want it around 1 Cr. ( lets say around 30L each). I want lowest premium. Please suggest your idea.

Read my Article,

What is the Cheapest Term Life Insurance in India?

If premium is too high than go for 1 crore of insurance cover and divide it into 3-4 plans. See the above article.

4. Is it helpful to have riders like Critical illness / accidental death. In such case, is it available for NRIs?

If you will buy 2-3 Term Insurance Plans than many of them will come with 1 or 2 in built riders (Except iTerm by Religare which doesn’t come with any rider).

5. This may sound very funny for you as Medical student, but it's serious for me. I really hate medical test/exam for blood test. So, my question, is it really mandatory to have medical test for term insurance? I saw on Religare site, that in some cases Medical test is not required. I don't know which cases. I received form from LIC for Anmol Jeevan.  They sent me hell of form for medical test. Actually it is the main reason for delaying this insurance for more than a year. But now I must do it. Please I need you suggestion on this.

LOL…!!!!

You will have to go through it. Well, it’s nothing. They won’t suck half a liter blood from your body.  They will just take 3-5 ml of blood from you. Do the ECG and That’s it. Your Blood will sent for Routine Investigations, Blood Sugar and Serum Cholesterol.

There is also a Physical examination also. Juts Go For it. It’s nothing.

Don’t afraid of it. It’s just a single prick of needle. And believe me you won’t feel much pain.

Looking forward to hear valuable advice from you soon.

Also, if you define the term "Equity" and " Debt" and differences between them, it would be helpful for me.

Read my Articles,

What is Stock?

What is Equity & What is Debt?

What is the Difference between Equity and Debt?

Equity Finance Versus Debt Finance

Thanking you,

M.Das

Aviva Sachin Century Plan Review

Hello Again Asav.

I hope I am not wrong in interpreting your comment approval as an acknowledgment.
I have been reading your blog, and it strikes me that you do not speak about any LIC products, not even in term insurance. Any specific reason for that ?

Hello Mr.Jain, Well it is not so. I have review several LIC Products on this Blog. You can simply search this blog through the search box given at the top of this blog to find out what I have written about the various LIC Products.

Would it be possible for you to analyze these policies the way you did for the UTI policy ?
Of course you are under no obligation and if you can, analyze them only when there's free time.
I am a regular reader of your blog and will continue to be so.
Thank You and All the Best.
Jain.

Of course, I will be happy to analyze all of the following.

My query starts now.

1. My father aged 50, has this Aviva ULIP. Details :
Sachin Century Plan, 100 % growth fund
Sum assured - 4,50,000
Premium amount - 2500 PM
Policy term 15 years
Premium payment term 15 years
Commenced Jan 2009.

I am totally against ULIPs. This is because they are nothing but the opaque mutual funds. Here your father pays Rs.30,000 every year (2500 PM) to buy the Insurance cover of Rs.4.5 Lakhs. In my opinion, this policy is too much costly and it can never beat the Term Insurance + Equity Diversified Mutual Funds.

So in my opinion, he should exit from this ULIP and invest that money in some good Equity Diversified Mutual Funds having a past record of proven performance of more than 5 years. Well, see. ULIPs are associated with several high cost charges such as Premium Allocation charges, Mortality charges, Administrative charges and many other variety of charges. And that’s why as high as 20-50% of your annual premium will go towards paying various charges to buy just Rs.4.5 Lakh of Insurance cover and rest money will go towards investing.

Now, in case of Aviva – Sachin Century Plan they say that there is no Premium allocation charge. And everything you invest will go towards various funds right? So at a first look you will think that it’s a good plan. But where is the trap? Well, here are the traps.

Policy Administration Charges: According to the above table your father will fall into 3rd column means 0.17% per month which is 2.04% per year and that is Rs.612 every year from Rs.30000 of premium.

Fund Management Charge: 1.50% per Annum

Mortality Charges: See the above table. It shows that How much Aviva-Sachin Century Plan charges you the mortality charges. But they are very unclear. They have not mentioned anywhere in their brochure that How they will count this charge?

Well, for every Rs.1000 of sum covered, they will charge that much rupees per 1000 of sum insured. So in your case your dad’s age is 50 and the sum assured is 4.5 lakh so the mortality charges will be 450000*3.22500 / 1000 = Rs.1450 every year…!!!!

Rider Charges: They have not mentioned that how much they will charge Rider Charge? But they have mentioned clearly that they will cancel few units every month from your balance. Now, this is really ridiculous. They should tell you exactly that how much they are going to charge from you.

So ULIPs are simply wastage of your time and wealth.

But in case of Mutual Funds, there is no entry load (Entry load is 0%) so whatever you invest in the mutual funds will go towards investing without cutting anything. And yes, you can buy Term Insurance separately.

Remember the basic Formula – Insurance + Investments (ULIPs, Pension Plans, Endowment Policies) = Bad Combination

Related Articles -

01) Aviva LifeBond5 Review

02) LIC Jeevan Saral Review

Aviva LifeBond5 Review

Also Read: Aviva Sachin Century Plan Review

2. He has another Aviva product, which I do not know if its a ULIP.
Details :
LifeBond5 , 100 % growth fund.
Assured - 1,25,000
Premium - 25,000 annually
Policy term - 10 years
Premium payment term 3 years
Commenced Jan 2009.

Aviva Life Bond5 is a Unit Linked Endowment Plan with limited annual premiums. Again this plan should also be avoided. Here the insurance companies trap the customers by telling them that they will only have to pay premiums for 3 years only.

 

See the key details of the Plan. Again it’s a kind of opaque mutual fund which will siphon out your money on regular basis and affect the long term wealth building. You can see that they charge the initial management charge of 5% per annum + Administration charge of Rs.50 per month + Regular management charge of 1.25% per annum and that is Rs. 312.15

So from your Rs.25,000 of premium, Rs.1250 (5%) + Rs.600 (Rs.50 p.m.) + Rs.312 = Rs.2162 will be deducted as the Entry load. And you will be given the Insurance cover of just Rs. 1.25 Lakhs. Now, instead of that if you buy a Term Insurance Plan which will give you much more cover than this and invest rest of the money in Mutual Funds than it will be a better option in my opinion.

There is no meaning of giving so high charges to buy a small life insurance cover.

And the other thing is that you don’t know that which is the Investment strategy of LifeBond5 Fund. While in case of mutual funds everything is transparent so you will better know the investment strategy of your mutual fund and exit anytime if you think that it’s not good.

But in ULIPs and Endowment Plans if you want to exit from it before the policy tenure, you will have to pay surrender fees. While in case of mutual funds after 6 months, Exit load is 0%.

LIC Jeevan Saral Review

Also Read: Aviva Sachin Century Plan Review

3. I have a LIC Endowment Assurance plan.
Details:
Plan 165 (Jeevan Saral)
Policy and Premium paying term : 35 years
Sum assured : 25 Lacs
Annual Premium : 1,26,300.
Commenced Jan 2008

Jeevan Saral is nothing but an endowment assurance plan where the policyholder simply has to choose the amount and mode of premium payment. The plan provides protection against death throughout the plan term to the extent of 250 times of the monthly premium. For example, anyone opting to pay a monthly premium of Rs 1000 will get a risk cover of Rs 2,50,000 during the policy period.

The policy term varies according to the age of the policyholder. The death benefit includes the total risk cover and loyalty bonus, if any. LIC also promises return of premiums, excluding first-year premiums and extra/rider premiums.

Well, they claim that it is better than Bank Recurrent Deposits (RD), Post office RDs and PPF. But How can anyone believe it? I have not find anywhere on their website that which kind of charges they take from Rs.1.26 Lakh of your annual premium.

Everything is totally opaque. They have made whole the policy so much complex that I couldn;t find out anything about the policy. See the following tables.

 

My Concerns –>

01) My first concern is that they have nowhere written that how much they will charge as Premium allocation charges, mortality charges or any other kind of charges to cover that Rs.25 Lakh if Insurance?

I mean they should write at least somewhere on their website that from Rs.1.26 lakh of annual premium how much money will go towards buying the Insurance Cover?

02) My second concern is that – They have started comparing the plan with RD, Post office RD and PPF. But they have nowhere mentioned that which kind of fund is this? Is it a Debt Fund, Equity Fund or Hybrid Fund? I mean where will the Investors’ money go? Weather it will go to buy equities or debt or both?

03) See the above table No.3 –> In the returns, Jeevan Saral gives you 4.16-8.05% of annual return while RDs give you 5.94% return while PPF will give you 8.00% return. Now How can anyone generate guaranteed return in India more than PPF? Jeevan Saral can generate 8.05% return in the optimal conditions while PPF can generate only 8%. So this means that these people are investing your money in both equities and debt probably 80:20 Allocation.

04) And even if we consider for a while that it will outperform PPF and RDs than also it will have 35 years of Lock-in Period. I mean you will have to lock-in your money for full 35 years to generate this much return.

And the basic rule of Investment is that if you are going to invest your money for more than 10 years of time horizon than go for Equity and not the Debt. This is because Equity has given highest returns than any other Asset class in the long run.

Hello Friends,


Some days back, I had written one article on that why savings are not enough, and as to why investment is as equally important as saving.

Basically, there are 3 main reasons as why to invest:

1) As try not to keep our resources idle with us, since inflation can corrode its value in the future, but to earn return on those resources.
2) Plan for the uncertainty that exists in life, which may require monetary back-up.
3) Achieve ones financial goals in life.

One of the most important reason, which we should always keep in the top of our mind at all times, is “The purchasing power of our money in the future will not be the same as its e purchasing power today”.

The above wisdom should be remembered at least once in a day, so that it will always keep us in the right track of savings, that will eventually lead to investments, and that will eventually lead to high returns in time to come, at least higher enough to beat the inflation value at that moment (This is called Real Rate of Return of an Investment).

We will find not too many people around us on Investments Real Rate of Return, this generally happens, because it’s so obvious to be missed out.

The purchasing power of the money decreases due to inflation, and inflation is the rate at which the cost of living increases. As a practical example if a thing costs today Rs 100, and at 6 % inflation rate the same thing is going to cost us, Rs 321 after 20 years {This is arrived at 1.06 to the power 20 and the answer multiplied by 100}.This calculation is too easy to do, since I have assumed Inflation rate to be moreover constant for 20 years, which is actually not precise & the actual value will be more than Rs 321.

Also to make you know that, for 2009, the Year-On-Year, inflation growth rate was 11.49 %, so one can think of its implications in the future.

We cannot at our personal level control Inflation, but yes what we can do is to invest intelligently, that will give returns more than the inflation rate, prevailing at the time.

As I myself believe in and learnt by hard ways, life is all about understanding basics, and then taking conscious efforts to apply those basics.

Keep reading MJ2BC.

Cheers,
Nikhil, Pune,
9552563251
nikhil0904@gmail.com

Hello Friends,


Today we live in a world flooded with information, flooded is a word of lesser intensity though, inundated is better !

As I had conveyed to you my friends, when I joined MJ2BC that I love to browse, and recently I was just browsing and was analysing the search results on various topics that an search engine was giving me.

I got results, (just to demonstrate, as an example) as below:

“Best Ways”
“10 Best Ways”
“101 Best Winning Ways”
“Sure shot Success Ways”

A thought came my mind, this list will never end perhaps and I started smiling, unfortunately because of the fact that, my expectations in those search results was of the word was SIMPLE, even by random or by coincidence , which didnt happen. Also the fact that theres so much information, on anything out there, but the key is to find the simplest information, wherever possible.

I beileve in and respect simplicity a lot !

Following are some very very simple yet very powerful commandments for creating wealth that I wanted to share with you,

1) Some dream of creating wealth, some plan of creating wealth and some implement plans for creating wealth, and only implementers’ win.


2) The more one earns, the more one should attempt to save, that leads to proportionate wealth creation, as compared to income.

3) Spending Habits (Money Persona) will be a factor of high weight age amongst other factors that play a role in creating wealth.

4) Earn, save and then spend the remaining, otherwise wealth creation will always remain a distant dream.


5) The early one starts investing; the more wealth will be created, as compared to somebody with similar set of conditions, who starts late. Believe in the power of compounding which, Albert Einstein had mentioned as the Worlds eighth wonder.

6) Saving creates wealth, the first step is saving, and rest all comes later.

Enjoy and Take Care.

Cheers,
Nikhil, Pune,
9552563251
nikhil0904@gmail.com