How to Make Money From Blogs & Websites?

How to Make Money through Blogs & Websites?

Recently a reader of “My Journey To Billionaire Club” has asked me the following query. Basically she wants to start her own Internet Business. She wants to know that how anyone can make money from Blogs and Websites?

helo asav
first of all i would like to congratulate u fr such a g8 blog.I jst loved it..
its my humble request ,if u can guide me in regard of making money through blogs and sites. Actually i m willing to make a site/blog,but not confident about this online business.Hope so u can help me....n regarding web hosting and domain too......
thnks
--
SURBHI GANDHI

First of all, I would like to thank you for appreciating my efforts behind this blog. Many people don’t know that how to make money from their Blogs and websites? But believe me, Web Properties (Blogs & Websites) are the great way to make residual income. Generating Income from web properties is the one time hard work. You have to put all the efforts and hard work at once only and after that, this Income will keep flowing in your bank accounts for ever without your any effort. Say for Example, suppose if today I stop working behind this Blog than this blog will just stop growing in it’s readership and web traffic but the Articles & Information rich content that I have already created on this Blog will still keep making money at the same rate for me for the rest of my life. Isn’t it amazing? And that’s why I advise people to start their own Internet Business rather than working hard at their job places for paychecks every month…!!!

First of all let us discuss about Domain names & Web Hosting. The first step for any Internet Business (Blog or Website) is to find out a good domain name. GoDaddy.com is the best place to buy a Domain Name of your choice.

First of all go to GoDaddy.com and search for your Domain Name. See the Snapshot above. Type your desired Domain Name and Click OK. Say for Example, when I started my search for the Domain Name, I searched for myjourneytobillionaireclub & click OK.

If Domain Name is available, you can simply create the account with GoDaddy and pay with Credit Cards. the charge is $ 10 per year which is very minimal.

Now, let me tell you my personal opinion. When I have started this Blog. This blog was on Blogger.com. I have started this Blog on Blogger.com. And later on after more than one and a half year of Blogging, I shifted this Blog to the private Domain. So you can also do the same. The only drawback of this method is that, it is quiet possible that, you may not find your desired domain name in future. So it is advisable to secure a Domain Name first today.

Here are my 2 Detailed Articles about the Technical Details of linking Blogger Blog with a Private Domain.

01) How to transfer your Blog from Blogspot to Private Domain Name?

02) How Can I Transfer my Blogspot Blog to Private Host?

Now, the second question is, which web host to select? I recommend HostGator.com. In the future, you will need to transfer your blog from blogger host to HostGator Blog once you start making money. Here are the 2 great posts by the Indian Technology Blogger Amit Agarwal from Agra.

01) Labnol: Move Your Blogs from Blogger to WordPress The Easy Way

02) Labnol: Making the Shift From Blogger to Wordpress

The above 4 Articles are the Wealth of Information about every technical details you want to set up your Website & a Host.

Now, let us discuss your main query. – How to Make Money through Websites & Blogs?

Well, There are 2 basic ways to make money from a Blog.

01) By Selling Advertisements

02) By Selling your own Stuff

03) By Selling Other People’s Stuff (Affiliate Marketing)

The best way to start making money from your blog/website is Google AdSense (Advertisement Selling). In fact, right now I am making money from this way only. You can see the Snapshot of my Google AdSense account here.

The Google AdSense account will look like this. It will show your Daily and Total Estimated earnings. You are watching the advertisements surrounding this article. These are the adds supplied by Google. When someone views or clicks these adds, I am getting paid anywhere between few cents to few dollars.

Affiliate Marketing (Selling other people’s products) comes later on once your Blog/website turn into the Authority Website. ClickBank.com is a great place to start the Affiliate Marketing.

Here are the 2 great Categories of this Blog where you will find more Information about Profitable Blogging & The Internet Businesses.

01) Blogging

02) The Internet Businesses & The Internet Entrepreneurship

I hope that, this much of Information will be useful to you. Anyways….

Best of Luck for your Online Business Success…!!!!

How to Turn your Blog into a Source of Income?

How to Turn your Blog into a Cash machine – A Regular Source of Residual Income?

hi, i recently found out ur blog.the information is really great and useful.i am also interested in using the internet business opportunity.i already do have a blog.
could u please tell me how can it turn into a source of income.
i would really be thankful for your help.
THANKING YOU
Vivek Anand.
DELHI

Recently a reader from a Blog has asked me the above query. In fact, I receive such kind of queries every week. People want to know that, How they can turn their blog into a source of Passive Income? They want to know that, How they can turn their Blog into a Cashmachine.

Well, First of all you need to understand the basics behind the successful Online Business and after that, I will give you the Technical steps of making your blog a Cash machine and a source of Residual Income every month.

Well, see. When it comes to online success, Everything is a Web Traffic. You only need to focus on one thing and that is web traffic if you want to succeed online. Remember the simple but very basic formula.

Web Traffic = Revenue (Income).

Thus, more the web traffic, more will be the revenue of your Blog. It’s just like the real world. In the real world, the more people will visit your store, the chances are likely that more people will buy from your store and thus more profit to you. The same is true on the Internet. In case of Internet, there is not a physical traffic. There is a web traffic.

Now, the more web traffic will be on your Blog, the chances are likely that more people will click on your adds or more people will buy the Affiliate Products you promote via your Blog and thus more Revenue from your Blog.

This, our basic Focus is – How to attract the web traffic towards your website/Blog?

If you can some how solve this puzzle than you can become the online success. Now, there are several ways to attract the web traffic towards your Blog/Web Property. One is the Direct method means you tell your friends, relatives, parents & colleagues that you have launched a Blog and request them to visit your Blog. This will generate few visits and page views on your Blog.

However, This is not a web traffic. A Web traffic means thousands of people are visiting on your Blog every month. Now, How to make this thing possible? Well, for that you have to go to some referral site which already has a huge web traffic and which can divert this web traffic on your Blog. Now, This website is Google, The World Famous Search Engine.

Today, Google is world’s Alexa No.1 Website. Google covers 44% of the Online Population. This means that 100 out of 44 people online use to search various things on Google. Thus, Google should be your prime focus to divert the thousands of web traffic towards your Blog or a Website.

Now, the question is that, How to divert web traffic from Google to your website? Well, it’s simple. You have to do keyword analysis. Keyword analysis means which search words the mass numbers of users have typed in Google search Box? If some how you know this than you can create a content on your Blog targeting those keywords and google will send tons of web traffic towards your website.

Google SK Tool is a great website to analyze the keywords. Write down unique & informative posts which are keyword targeted on your blog on regular basis. And just sit back and watch the web traffic of your Blog Grow.

Once the web traffic will come on your Blog. You don’t need to do anything. You just have to collect the cheques afterwards and add more keyword rich content on your Blog.

Google AdSense Earnings & Revenue

Google AdSense Earnings & Revenue

Hi Asav,
    First of all Awesome job for your website and information !
I know you have put in lot of stuff about improving traffic and stuff. I have seen your cool picture of Google adsense checks in Facebook too. Anyways, I have a small blog, I need just information on How much does your site get per day ?  This is just a benchmark amount that I can target down the lane and How many page views does it take to get a dollar amount ?   I know many people do not disclose this information. Because you have your Google checks posted,  Just asking a favor to tell me the benchmark amount per day you get and hits you get.

Hope you reply,

Regards,
Satheesh

Hello, Satheesh. Many people ask me this question. Actually, I can not disclose all the Information regarding my AdSense stats. This is against AdSense policy. But I will surely tell you and other readers of this Blog about my traffic stats and AdSense earnings about this Blog as much as possible.

Now, first of all readers who have not seen my pics with Google AdSense cheque can view my Pics in the following 2 Articles.

01) My First Google AdSense Cheque

02) My Journey To Billionaire Club: Google AdSense Cheque

Well, See. First of all average money that I make from Adsense per Day. Right now when I am writing this Article (January 2009), I am earning $ 3-5 per day from my AdSense account. I don’t own any other site or a blog other than this Blog. So my AdSense account earning comes 100% from this Blog. This makes anywhere between $ 90-150 earning every month. Depending on the web traffic of that month.

I can not disclose CTR & eCPM for my AdSense account here. Because it’s against the policy of Google. However, I am giving you a clue about my web traffic. I am sure that you will get the enough idea about my earnings after that.

See the following 2 Snapshots.

The above 2 are the Snapshots of my Sitemeter account. You can view the live stats of my web traffic from the sitemeter button on the lower most part of the right side bar of this Blog.

Just see that, over the Time How I have consistently grow the web traffic of this Blog exponentially. “My Journey To Billionaire Club” is a web’s one of the fastest growing web business.

Now I will tell you my monthly earnings of the past 12 months. Just compare those earnings with the above web traffic stats and I am sure that you will get the enough idea about How much I earn from how much web traffic.

Month	AdSense Revenue
Jan 2009	$ 7.28
Feb 2009	$ 8.15
March 2009	$ 14.34
April 2009	$ 23.13
May 2009	$ 15.40
June 2009	$ 24.29
July 2009	$ 32.48
August 2009	$ 26.59
September 2009	$ 63.73
October 2009	$ 52.44
November 2009	$ 87.05
December 2009	$ 102

You can see from the above Table that, I have made this Blog profitable in over past one year of period. It’s not like many other Internet Marketers claim to earn 4 figure Income from AdSense within a month or so. If I wanted to impress you than I would have artificially inflated the above earnings and traffic stats. But I don’t want to do this. Because This is against my own Policy for this Blog Business. I don’t want to spread wrong information in people about anything related to money and Finance.

Now, the Question is that How to Grow the web traffic consistently like the above? Well, There is not any secret about it. Be Honest with your readers. Tell them your own opinion weather it’s acceptable or not. Readers visit blogs not to know what someone else has told. But they visit the blog to know your opinion. They visit your Blog to know about what you feel about something.

If you follow the above simple principle than you can also turn your Blog into a Giant Authority Blog.

How to Invest in Mutual Funds?

How to Invest in Mutual Funds? – Friend’s Query

Hey dude,

I need some help ..

Well, I hv around 20,000 spare money every month so I would like to invest it in SIP based Mutual fund .. I hv already invested in tax saving LIC scheme so now I dont want anything which has a lock-in period ..

So plz guide me with the help of 20,000 amt, which mutual funds should I buy ?? ..

And if I buy Mutual funds today and if i want some cash then can I come out of it in a month time or imeediately ?? .. I hv no idea how mutual fund works ?? .. Is it like shares only ??

Plz guide me ..

Hey Soham,

Nice to hear fro you. Here is the solution of your Query.

Well, First of all let me tell you in simple words that What is Mutual Fund And How it Works? Most of the people consider mutual funds as a Stock. But well, Mutual Fund is not a Stock but it’s the professionally managed portfolio of Stocks. Here the Fund Manager & his team analyze the Stock market on behalf of you and invest in the Stock.

You have Rs.20,000 to invest in the stock market every month. Now, this is such a small amount that, you can not diversify such a small amount in the portfolio of Stocks. Because if you go to buy a Stock of Reliance or HDFC than 1 share will cost you around Rs.1000-2000. Thus, achieving Diversification with such a small amount is impossible.

Now, Here comes the Mutual Funds. Mutual Funds pull the small amount of money from literally millions of people like you and me. Say for Example, 100 Crores, 2000 Crores or even more and invest whole of this Corpus in a Common Portfolio of Stocks managed professionally by the Expert Fund Manager.

The main advantage here is that, with such a large amount of Capital, it becomes really easy for a fund manager to diversify your money across the different sectors of the economy such as Automobiles, Banking, FMCG, Banking, Technology, Metals, Energy, Consumer Goods and many other economic sector. With just few thousand rupees you can not diversify in all the sectors.

Another advantage of Mutual Funds for professionals like you and me is that, Time. We don’t have time to analyze and watch the stock market on daily basis. And that’s why it is good idea to divert this money onto a professionally expert fund manager whose job is to manage your money day and night.

Thus, Mutual Fund is not a Stock but it’s the Portfolio Management Service in simple words.

Now, the question is that How to Select a Good Mutual Fund?

After 1995, the India opened for Private companies to launch their mutual funds. So right now there are literally several hundred mutual funds in the market that,

Selecting a Good Mutual Fund itself is a Job.

And in countries like USA, today there are more number of mutual funds in the market than actual number of Stocks. And here the concept of “Mutual Fund Rating” came into exist.

Following are the Best Mutual Fund Rating Agencies of India.

01) Valueresearchonline.com &

02) MutualFundsIndia.com

I Personally prefer the Valueresearchonline. They rate any mutual fund in 5 ratings. According to me, you can invest in any 4-star or 5-star rated mutual funds of India. These companies give the star ratings of the mutual funds on the several criterias such as,

- Past record of Performance
- Fund Manager
- Peer (Competitor) Mutual Funds return
- Return against the underlying Index (Benchmark)
- Advanced Portfolio Statistics
- And totally more than 100 such criterias

So now, you don’t have to ask anyone about which mutual fund to buy. And once you start investing in some 5-star rated mutual fund and after a year or so if it’s rating goes down to 3-star or so than you can immediately think of changing the fund and shifting to some other fund.

Now, the Question is that How to Invest in Mutual Funds? Well see. This is an extremely large topic & I have already covered this topic on this Blog. There are 18 Lessons you should learn to become a successful Mutual Fund Investor. Here is that Short Course. You will find it extremely information rich and useful so save it.

Mastering Mutual Funds – Short Course

You will find possibly all of your query solution and Myths about Mutual Fund investing in this short course. Many Bloggers around the world have tried to copy this course and that’s why I had to pay money to copyright this course. Because this is a truly original course. Here is its Copyright Certificate.

Copyright Certificate

Now once you start investing in Mutual Funds, Build an artificial portfolio on Valuresearchonline and track them online. Here is the Link.

Valueresearch – Portfolio Manager

There are several small to large issues and queries to mutual fund investing. For that, I suggest you to go in the following Category of this Blog.

My Journey To Billionaire Club: Mutual Fund Investing

Now, let us discuss your another query. Well, yes. If you chose the open ended mutual funds than you can anytime exit from it even within a month. It will only attract 1.5% of Entry load.

My favourite Equity Diversified Mutual Funds are below. You can start SIP in any one or two of them

01) Reliance Growth

02) SBI Magnum Umbrella Contra

03) HDFC – Top 200

All of the above are 5-star rated funds having a proven past record of good performance and all of them are my favourite. However, you can invest in any 4-star or 5-star rated mutual funds.

Just go to my above “Mastering Mutual Funds – Short Course” and you will become master in mutual fund investing in just 48 hours…!!!

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

Investment 101: Investment Planning Advise

Hi Asav,
I am an avid reader of your blog "My Journey To Billionaire Club". I am really getting lots of financial knowledge by reading your blog. Please keep up the good work.

 
I have few queries regarding my Investment and your response will be much appreciated.
I am a salaried person with a total income of RS. 5 Lakh per annum.

Following are my investments:
LIC: Rs. 62 thousand per annum.

Mutual Funds(via SIP): Rs. 72 thousand per annum.

SBI MAGNUM SECTOR FUNDS UMBRELLA CONTRA -GROWTH (Rs. 2000)
RELIANCE GROWTH FUND - GROWTH PLAN - GROWTH OPTION (Rs. 1500)
HDFC TOP 200 FUND - GROWTH PLAN (Rs. 1500)
BIRLA SUN LIFE FRONTLINE EQUITY FUND - GROWTH (Rs. 1000)

At present I have no liability but I am planning to take a Home Loan of Rs. 15 Lakh and I am a married person.
Please let me know am I doing the right investments and your suggestion.

Well, You have really done nice investments according to your Income. I like your Mutual Fund portfolio. Contra, Top 200 & Frontline Equity are the Large cap oriented mutual funds while Reliance Growth is a Mid cap oriented fund which adds aggression to the portfolio.

And all of the above funds are 5 star rated funds according to Valueresearchonline.com. So you can stay Invested in all of them.

What I like about your MF Portfolio is that, It’s perfectly “Diversified”. What most of the people do is, they consider MF as a stock and collect around 30-100 MFs in their portfolios. I have seen several people who have collected over 100 NFOs, MFs and sector funds. People fail to realize the fact that 1 MF consist of a portfolio of anywhere between 30-100 Stocks. So collecting several MFs is not the Diversification. You can just have 3-4 MFs and you can achieve optimal diversification.

Later on you can add 1 ELSS Fund & 1 or MAX. 2 Debt fund in this Portfolio. That’s it. No need to do anything to this portfolio for the next 20,30, 50 years.

According to your Income, you can go for a home loan of Rs.15 Lakh.

What I advise you that, write down your Financial Goals on the piece of paper and write down a year. Say for Example, if you want to achieve the early retirement in 2025 than What I advise you is that, 2-3 years before reaching your any Financial goals, shift your wealth from Equity to Debt Mutual Fund. This is the very important step. Most of the people know when to enter and how long to stay invested in the market but unfortunately they don’t know that when to exit.

Thus, Over all your Investment Strategy is Best. Stick to it.

Best of Luck for your Financial Future…!!!!

What Happens if You Cancel the Booking of a Property?

What Happens if I Cancel the Booking of my property from the Builder?

Sometimes it is quite possible that you want to cancel your booking of your apartment or any other kind of property with the builder. In that case, you will be expected to pay a penalty, which varies widely from builder to builder.

Ideally, before you book your property, this should be mentioned in your contract. However, such terms and conditions are written in favour of the builder. Sometimes, you will get a refund as and when the developer obliges.

And that’s why you should carefully read such terms and conditions before booking a property with a builder.

How To Start a Business at age 13?

How to Start a Business at age 13?

Recently an avid reader of this blog has asked me a question,

I am 13 and I want to start a Business at age 13. Kindly let me know that Is there any legal age limit to start a Business and registering a company at the age of 13? How can I start my own Business at age 13?

Well, as far as I know you should be at least 18 before you register a legal entity for your Business. However, it doesn’t mean that you can not start your own business before 18. You can start your Business as Hobby even before the age of 18 also and once you reach 18, you can register a company and do all the legal formalities.

Say for Example – Blogging. If you want to start a Blog Business and you are below 18, than you can not register a company but it doesn’t mean that you can not start blogging as a Business. You can start blogging as a Hobby and later on you can register a company on your 18th Birthday.

If you ask me about which business to start at this much early age than I recommend you to start your own Internet Business. You can start anyone or more of the followings.

- Blog Business
- Websites
- Articles Directories
- Forums
- Facebook Applications
- iPhone Applications
- Online Gaming Business
- eBay Store
- Social Networks
- Online Applications
- Or anything else online….

There are wide varieties of Internet Businesses that you can start from scratch at the age of 13. I always encourage school going kids to start their own Business as early as possible in their lives because in the real world there is nothing like a “Job Security”. In fact, Not having your own Business & Investments is a risky thing.

So Start your own Business at the age of 13 and believe me, you will become more rich and financially free than everyone else in your age group…!!!

I Want to Start Affiliate Marketing Business

Hi
I have been receiving your newsletter on a regular basis and I really enjoy reading the content. It’s very interesting and full of very useful information.
Are you running a home based business too or do you have a job?

The reason why I ask you this question is because I currently work at major US investment bank and I intend to resign in 2 weeks (well I have been encouraged to do so otherwise they will fire me). I decided to have a internet home based business. I intend to start with affiliate marketing from my website but not sure it is the right strategy.
Looking forward to hearing from you.
Thanks and regards,
Reader

Recently a reader send me the above query.

Well, Let me tell you everything about me. I am not running any home based business nor I do any kind of Job. This is because I am only 26 and I am a Medical Student. I joined Medical School in the year 2000 and completed my MBBS in the year 2006 and right now I am doing my post graduation study in MS-Ophthalmology at D.Y. Patil Hospital & Research Institute, Kolhapur, Maharashtra, India.

I will finish my course by the June 2011. Till than I am a student.

“My Journey To Billionaire Club” born out of my Passion for learning Business, Investing, Personal Finance, Economy, Entrepreneurship, Money Making ideas, Getting Rich & Passion for Teaching.

When I started MJ2BC in March 2008, I did not know at that time that my this passion will turn into my Fortune. I have never taken it as an Internet Business when I first time started this blog. In fact, I am not a Techie. I don’t know anything about Web hosting, Search Engine tricks & Techniques and anything regarding high page rank in Google.

And Still I am receiving a great response from people. I write what I love to write and what I think will be helpful to the people.

Teaching is my passion and I love to teach people and that’s why my articles are Educational in nature and the writing of every articles is like somebody is teaching you.

It’s a great thing that you want to start your own Internet Business of Affiliate Marketing. Just Go For it….. Well, I Say you that, You Fire that Job and build your own Internet Empire. Believe me, You will remember me for the rest of your life for your this decision. There is no growth at all in doing a job.

Well, See. I have one great resource for you. And that is Tycoon Cashflow.

TycoonCashflow.com

Before starting your affiliate marketing business, learn from these 2 kids Derek & Adam that how they have made fortune in their teen age. Take Tycoon Cashflow seriously because these two are the people who are among the Top 1% Affiliates on the whole ClickBank.com So they know what they are doing.

No Other Affiliate marketing learning program has ever been more easy than Tycoon Cashflow.

Lastly, If you are going to start your own Blog or any other kind of Content website than try Google AdSense. This blog is a content website so Google AdSense works best on it.

Affiliate Marketing is a best way to make money online. But it does not work for everyone because people do it wrongly. Tycoon Cashflow will teach you that how you can perfectly imply it.

Anyway, I hope this much Information will be useful to you…!!!

Financial Planning for Child’s Future & Education

Financial Planning for Child’s Future & Education

Recently a reader of this blog asked me a question.

“I want to Invest for my child’s Education & Future. Are Child Insurance Plans good Investment Option to Save? Please Advise.”

Investment for Child’s Future and Education is a wise financial decision. There are several Child Insurance plans available in the market. And many Financial planners advise people to buy child insurance plans.

But well, if you ask me than I am not agree with this funda. According to me, Investment + Insurance = Worst Combination. Rather than that you should go for Term Life Insurance Policy + Equity Diversified Mutual Funds for your child’s future.

Equity Diversified Mutual Funds which are 4-star or 5-star rated can give you excellent returns in the long run. Child Insurance Plans are associated with high management fees and various other kinds of administrative charges.

While the management fees of Mutual funds is very low. So Why not invest in Mutual Funds rather than in Insurance Plans? So in my opinion, everybody should choose 4-star or 5-star rated Equity Diversified mutual funds from sites like Valueresearchonline.com and start investing as early as possible.

SIP is the best way to start. Just remember that, Don’t forget to shift your corpus to Debt Mutual Funds just before 2-3 years of your goal, i mean your child’s 18th birthday.

And yeah, it is advisable to open a separate account for your child. What you can do is, you open a separate minor account for your child and save money in that account and do SIP via that account. This is because if you have account in your child’s name than you will be emotionally more attached towards it and save regularly in that account.

Anyway, So What are you looking for? Start Investing for your Child’s Future Now…!!!

Trading in Unlisted Debt Instruments India

How To Trade in Unlisted Debt Instruments in India?

I need a small help, if it's possible for you. Do you know of an Indian portal which facilitates trading in unlisted debt instruments ? It would be something similar to Bondsonline.com .Please forward me a link if you have one.

Well, Recently I have received the above query.

As far as I know, as an Individual, The Indians can't invest in unlisted debt instruments. According to my knowledge, there is only one way to invest in Indian unlisted debt instruments and that is via mutual funds. But well, u can not chose here that which security you want to invest in.

The Bond Market in India is not for the Individuals. Of course, recently the interest rate futures has been started in India but as far as I know there is not a Market like this in India.

And that’s why I want to know from you readers that, Do you have any idea about such kind of thing? If something like this exists in India than please let me know because Honestly speaking, I don’t have any idea about it.

If you know such kind of trading in India than kindly let me know by commenting on this post or via sending me an e-mail. This will be helpful to me as well as the other readers of “My Journey To Billionaire Club” also.

Waiting for your Valuable Response…!!!

Mutual Funds: Growth Versus Dividend Option

Mutual Fund: Growth Versus Dividend Option

Hi,
I am an independent Financial Advisor based in Mumbai. I have one query. In any MF scheme, there are two options we have. One is Dividend and the other is Growth. The specific scheme has a fixed portfolio in which it has invested the AUM.  now my queries are -
1. How can you have two different values (NAV's of dividend and growth) for the same basket of stocks?
2. If dividend is declared and paid out, isn't it at the cost of the "growth option" holders?
I have not clearly understood how nav is calculated for growth and dividend. Pls forgive my ignorance. If you can spare the time please reply at your own convenience.
Regards.

Well, your query is very true. In fact, many people have confusion about the difference between the 2 options – Growth & Dividend.

Let us understand this by example.

Let us assume that you invest Rs.1,00,000 in NFO at NAV of Rs.10 per Unit. You invest Rs.1,00,000 in each of the 2 options – I mean 1 Lakh in Growth option and 1 Lakh in the Dividend Option of the same scheme. So You will be allotted 10,000 Units for both of your Investments right?

Now, we will consider Your Growth Option Investment as Investment G and the Dividend option Investment as Investment D….OK?

Now, What happens if your the mutual fund gives 20% return at the end of year? Well, In that case the NAV of both the G & D Investments will be Rs.12 per unit right? So Your 1 Lakh Invested in both the options will become Rs.1,20,000…. Right?

Thus, you have a capital gain of Rs.20,000 for each of your Investment. Now, the Fund house decide to give you Rs.10,000 as a Dividend pay out. This means that, your fund house declares Rs.1 per Unit of Dividend. So your Investment D NAV will fall by 1 rupee to Rs.11. So you will get Rs.10,000 as a bonus and thus your Investment D Value will become Rs.1,10,000.

Investment G has not declared anything so it’s NAV will remain Rs.12 per unit and the value will be Rs.1,20,000.

So Now, Your Investment G is Rs.1,20,000 (NAV Rs.12 per Unit) and our Investment D is Rs.1,10,000 (NAV Rs.11 per unit).

Here comes your next query. Well, see. The Dividend is not declared at the cost of Growth portfolio investment. The Dividend is declared by selling Rs.10,000 amount of security from the portfolio of Dividend Investors. Both the Dividend & Growth Portfolios are maintained separately. Their composition is the mirror image of each other.

And still the composition of both the Growth and Dividend portfolios will remain exactly the same. Means both will have Reliance shares of 9%, TCS shares of 4% and so on. Your Fund house will take care of everything.

Ok now, the next year if the portfolio of this mutual fund will give you 10% return than the NAV of Investment G will be Rs.13.2 (10% of the previous NAV. So Rs.12+1.2 = 13.2) and the NAV of Investment D will be Rs.12.1 (10% of the previous NAV. So Rs.11+1.1 = 12.1).

So Now, the value of your Investment G will be Rs. 1,32,000 (10,000 Units multiplied by Rs.13.2) and the value of your Investment D will be Rs. 1,21,000 (10,000 Units multiplied by Rs.12.1).

Now, again the Dividend Option decides to give you Rs.1.1 per unit dividend. So the NAV of Investment D will fall to Rs.11 and the Dividend payout will be Rs.11,000 (10,000 Units multiplied by Rs.1.1). And your Investment D worth will be Rs.1,10,000. (10,000 Units multiplied by Rs.11).

So Now the NAV of Investment G is Rs.13.2 per Unit and the NAV of Investment D is Rs.11 per Unit.

So every year, this goes like this. Remember, it is the fund’s decision that how much to give as a dividend pay outs. As long as the NAV is above 10, it can deliver your the dividend payouts.

Here I am mentioning you 2 useful Resources -

01) ValueResearchonline: Growth Vs Div Re-Investment – See the only difference between growth and Dividend options is Tax.

02) ValueResearchonline: Growth Vs Div Re-Investment – Read the basics of Growth & Dividend Re-Investment Option

Which Business I Can Start With 2 Lakh Rupees?

Which Business I Can Start With 2 Lakh Rupees?

Many people ask me the questions like, I have 2 Lakh Rupees? Which Business Can I Start? Well, there are lots of Businesses that you can start with this much amount of capital. You can start it small and later on grow to big businesses.

Which business you should start really depends on your own expertise, skills and passion. Say for Example, I have started this Finance Blog Business because Personal Finance is my Passion and I love to teach people about money and Finance.

If you don’t know that what is the interest rate in savings account than starting a Personal Finance blog Business will be a complete disaster for you. First of all you should find out your passion and expertise and after that you should develop a business around it.

What most of the people do is, they start their business in some hot industry about which they have no expertise at all and ultimately their start-up business fails. The key of successful start-up is Passion and persistence. If You are not passionate about what you do than you won’t be persist and thus your start-up business will suffer.

So first of all find out your passion and start that business small with 2 lakh of capital. Don’t try to find any hot industry to start your business. You will ultimately fail.

How to Grow Web Traffic of your Website?

Asav,
I do not know how I chanced upon this blog of yours.
You have a good basic idea on how to become wealthy in this Information Age.
What technical knowledge should one acquire to grow web traffic and advertising income from their website?

Recently I receive this query. Well, If you surf the Internet than you will find lots of techniques to grow the web traffic of your website business. But the sad truth is that, not the all of those methods are practically possible to imply.

So let me tell you here that, How I Focus on my Blog to grow it’s web traffic and advertisement revenue ? Here are the things that I Personally do to grow the web traffic & Advertising Income of this Blog.

Well, see. Search Engine Rankings & Link Popularity (Page Rank)are the 2 main things behind attracting more web traffic. Search Engine Ranking means on which page of the search results your website page is indexed. If your article is on the first page of the search engine rankings than it will bring more web traffic. It’s that much simple.

SEO (Search Engine Optimization) = Keyword Analysis + Link Popularity

01) Keyword Analysis

Google Keyword Tool External

This is the single most important tool behind the success of this blog. I work on this tool daily sometimes for several hours to find out the lists of keywords. Now, keywords are the words that people around the world have actually typed in the Google Search Box.

Well, see. The success of any business is, you provide the product, service or content that the customer (Readers) are really searching for and not the things that you feel that they are important for the people. And by analyzing keywords, you can easily get the idea that what the people around the world are looking in your Niche.

I have a personal notebook and every time when I found good keywords, I note them down in my notebook for future articles. Once you have a list of keywords, you have to do just 2 things.

One is, that keyword should be in the title of your article and the second thing they should be in articles body. Please avoid over crowding of the keywords.

This is the 90% work that anyone has to do if they want to become successful online. This really works. Now, there are several paid keyword tools that are available on the Internet but none of them is as effective as Google’s Free keyword tool external. So don’t spend money behind commercially available keyword tools. Use this best free keyword tool from google. After all, Google knows better about it’s own search engine than anyone else.

02) Link Popularity (Google Page Rank) -

Another important thing is the link popularity of your website. This will help in 2 ways. One is your pages will be ranked high in the search engines and the second is that, the higher the page rank, the higher quality your advertisers thus more money per every click.

Link popularity means how many other web pages on the Internet are linking to your website. This is very important because google considers every link that your website receives as 1 vote. And yeah… Google also counts the quality of each vote.

Isn’t it amazing? Don’t you think that we should apply this model for selecting our political leaders? I am talking about counting the quality of each vote…!!!!

You can increase the link popularity of your website by following things.

- Articles Submissions on reputed articles directory. I personally submit unique articles on Ezine Articles, Squidoo, HubPages, Knol (Google) & WetPaint. Each article you submit will have a link of your website. This will count by Google

- Comments on other blogs (Don’t do over spamming)

- Actively participating in the Forums

- Giving an Interview on other websites (This will contain your link)

- Posting Guest Articles on other websites

All of the above simple things will increase the link popularity of your website several folds over the time and thus the web traffic.

I Personally focus on all of the above things because they are simple and practical to do. However, the web is full of garbage. You can try anything out of that. But everything revolves around the above two basic things, Keyword Analysis & Link Popularity. And combinely this is known as SEO (Search Engine Optimization).

Compound Interest Products

Compound Interest Products

The Compound Interest is the greatest force in the Universe according to Albert Einstein. Compound interest is everywhere and it’s like a double edged sword. Means when it works in favour of you (When you Invest your Money), it can make you rich and ultra-rich but when it works against you (When you Borrow Money), it can make you poor or even bankrupt.

Many people ask me that, Which are the various Compound Interest Products available in the Financial Market?

Well, Let me tell you the fact about the compound interest. The Compound Interest is every where. In fact, The Simple Interest is a theoretical concept only. In the real life, only compound interest exists.

So No matter which Financial product you buy, The Compound Interest is everywhere in all kind of financial products so don’t worry and buy any of the financial product. The compound interest will work for you.

Compound Interest is in Stocks, Bonds, Gold, Real Estate, Mutual Funds, ULIPs Savings Accounts, Pension Plans, Businesses, Art, Rare Items, Coins, Stamps, Vintage Cars, Internet Businesses, Online Assets, Blogs, Forums, Websites, Credit Cards, Car Loans, Personal Loans, Mortgages, Intellectual Properties and anything else in the world which is Asset.

So whatever you chose, the compound interest is there. You can not separate the compound interest from any of the above products. It is the in build element in anything that is related to money. So from now onwards, don’t try to find compound interest products in the market because it is everywhere.

Just focus your mind and efforts in buying valuable assets. That’s it. And the compound interest will start working for you…!!!

25 Lakhs Investment Business

25 Lakhs Investment Business

I receive such kind of queries several times. Such as Business idea for 25 lakhs of Investments or What is my suggestion about starting a Business with 25 lakhs and many other kinds of queries like that.

Well, Honestly speaking I advise you to go for a Business about which you are Passionate about. I mean find out a thing that you like to do for the rest of your life even without you are getting paid and develop a business around it. This is because Persistence is very important behind success of any Business.

What Most of the people do is, they search for hot industries according to the current trends and start some hot Business in that industry. But they fail to realize that, they have started their Business because of making money only. They are not at all passionate about what they do and thus they will not remain persistent during the down time.

One of my friend wants to start his own restaurant. He decided to enter into food business not because he love this Business but only because he is seeing everyone else in this Industry making money.

And today 2 years have been passed but he has not implemented his plan of starting a restaurant business yet. This is because the main motivation force (Passion) behind starting a Business is lacking.

Bill Gates (Microsoft), Dhirubhai Ambani (Reliance), Larry Page (Google) have developed a successful Business because they find out their passion and developed a Business around their Passion. And that’s why they are successful Today.

The Stock Market Index – What it Indicates?

The Stock Market Index – What it Indicates?

Many people around the world still don’t know that What actually stock market indices indicate? And this is the reason they misinterpret the market every time. Here is a reader’s query.

Hi
thanks for response. i got your Blog through Google search. i have a small query
What the sensex or for that matter nifty indicates?
regards

Here is What is the Stock Market Index?

A stock market index is a method of measuring a section of the stock market. (Wikipedia)

So What does it means? Well, It means that from total number of listed companies in any countries, we select few Industry leaders from each and every Industry and make an Index of those companies. This is the gross estimate of calculating the over all general health of the stock market.

It’s like doing a Blood Sugar, ECG (Electrocardiogram), Cholesterol and Chest X-Ray and telling the patient that your over all general health is Good. But What if the Patient has Brain Cancer? The Doctor has not done CT-Scan to rule out anything wrong in the Brain and still he is telling you that You are Fit. The Stock Market Indices work on the same principle. They will just tell you the gross over all health of the stock market and nothing else.

Sensex is made up of 30 Large Cap Stocks in It. While Nifty is made up of 50 Large cap stocks in it.

Problem of Stock Market Index -

Well, The only problem of calculating the stock market health with this method is that, It is the statistical method so It only takes a small sample from the large number of companies listed on the stock exchange.

This method assumes that, Large Companies or Companies making large profits are good and thus considers themselves in the Index. Sensex is a Sample of 30 Companies while Nifty is a Sample of 50 Companies.

Now, What Happens with this method is that, whenever a Sensex is Up, people think that the over all condition of the stock market is good and when it is down, people think that condition of the stock market is good. Of course, Statistically speaking, Most of the time this is true. But Well, not the all the time.

Well, I am asking you that, What about the Companies which are not included in the Sensex and still posting a good growth and quarterly results? Will you invest in those companies when the Sensex is down or not?

Ideally, you should invest in those companies. But Most of the People won’t

Now, What about the Companies like Satyam? Satyam Computers was previously in the Sensex and Nifty as a Tech Giant. And people were blindly investing in them thinking that the fundamentals are good. This is because the stock indices only consider the large size of the Companies and nothing else.

I have checked all the reputed mutual fund schemes. None of them had ever invested in Satyam Computers in the past decade. ….Why?…Because the Fund Managers of those Companies knew since years that, There was some foul playing with the Financial Statements of the Company and they stay away from those Companies. (This is known as Forensic Accounting. But well, Here our discussion topic is different so let’s not discuss about Forensic Accounting here.)

Thus, the stock market Indices are the Media Hype. They are just to tell people the over all condition of the stock market and nothing else. Even if the stock indices are down, it doesn’t mean that there are no more companies remaining in the economy to invest.

Another problem with the Stock Market Indices is that, We Calculate these Indices with following method.

- Market-Value Weighed also known as Capitalization-Weighed Value.

This means the companies having larger market cap (Stock Market Price multiplied by total number of stocks). This means that, Companies having large market cap will have heavy influence on the Index. Thus, a small fraction of the price change will influence the Index.

Take the Example of Reliance Industries. The weightage of Reliance Industries in Sensex is 15-20%…. So it means that, every rupee change in the price of Reliance Industries stock will swing the Sensex by 6 Points….!!!!!

Now, That’s unbelievable…..

Suppose if the Reliance Stock falls Rs.100 than the Sensex will fall 600 points and vice versa. Companies having a medium to small size market cap than Reliance will influence the Sensex and Nifty less.

Thus, This is how the stock indices work…. And that’s why people should not consider only the stock market indices for their Investment Decisions.

I thought that, Readers of this Blog don’t want to know this fact about Indices. So I have never created a post like this. But I am very Thankful to you that You have raised this Question. Your Question will be helpful to gain the knowledge of several other readers of this Blog…

Thank you very much for interacting with this Blog….Keep Asking Questions….!!!!

Inflation & FD Interest Rates

Recently a reader has asked me the following query and that’s why I thought to answer this query.

Dear Sir,
Kindly inform us Why nowadays bank FD interest rates are decreasing? What is the reason? Some time FD interest rates are 8 to 9% and now 6% per year
Reader

Well, See. The FD Interest rate depends on the rate of Inflation. Usually Interest rate is adjusted 2% higher than the Inflations. Previously Inflation was around 6% and thus the interest was 8% that was fairly good. But in the year 2008, in India the Inflation was 12%. Now at that time the interest rate was only 9-10% that was 2% below the Inflation. That was a bad thing.

But now, in India the Inflation is just 1.5% when I am writing this article. Since last 3 months the Inflation was negative (Deflation). So to keep adjust with Inflation government and banks are reducing Interest rates on FDs to 6%.

NOTE: Today’s 6% Interest rate is much better than yesterday’s (Few month before) 8-9% Interest rate. Because Today’s Interest rate is +4.5% higher than the Inflation while previously The Inflation was was 10% and the Interest rate was 8-9% which was just 1-2% higher than the Inflation which is not a good thing for the Investors.

In Layman’s Explanation – Why Inflation rate is so important?

Well, see. The above was somewhat heavy explanation. Now, let me tell you this in layman’s (My Favourite) Language.

See. Inflation is the Silent money killer. Inflation will erode the purchasing power of your money over the time. The problem with inflation is that you and me can’t see it with our eyes. But we have to see it with our minds.

Say for Example, You have Rs.100 in your pocket today and the inflation rate is 10% per annum than after 1 year, you will have the same Rs.100 in your pocket. So with your eyes, you will see the same 100 rupees in your pocket. But because of the Inflation, the purchasing power of your Rs.100 after 1 year become today’s Rs.90 only.

So if inflation is 10% than it means that after a year you will be able to buy only 90 rupees of products and services in the economy as that of today.

Thus, the real return from any asset = Return – Inflation.

Suppose if the stocks give you 15% per annum return in the long run and the average inflation in the long run is 5% than your real return from the stocks is just 10%.

The same is true for FDs. If your FD is giving you 10% return and the inflation is 8% than your real return is just 2%. Today your real return on FDs is + 4.5% because inflation is just 1.5% and FDs are offering 6%.

One year back (2008), the scenario was more worst. FDs were giving you 10% return and inflation was 12% so your real return was –2%. Yes, You were actually loosing money from your FDs.

Anyway…I hope this much information is useful to you.

Well, I am right now working on to prepare a story for your daughter who is in first standard and still reading my blog. The story will help her to change her mindset about Money since childhood. I will publish it soon as soon as I will prepare it. (Probably 1 week or a two). Kindly send me your e-mail address to my e-mail ID. I will inform u as soon as I will publish the story….!!!!

Hindu Undivided Family (HUF) Definition

HUF (Hindu Undivided Family) Definition

What is HUF?

Well, HUF means Hindu Undivided Family.

Who can form HUF?

If you, your spouse and your children are undivided than you can form HUF. A HUF comes into existence by nature and no formal deed needs to be register for its creation.

How to Create/Wealthy in HUF?

The Capital/Wealth of of the HUF can be created by way of gift proceeds or through ancestral property. It is however, advisable to document the receipt of gift proceeds (money) received by the HUF.

Note: Please make sure that you have analyzed the tax implications of such transaction based upon facts of your case.

HUF is also known as Joint Family.

Six key aspects of Joint Family are:-

• all members live under one roof
• share the same kitche
• three generations living together (though often two or more brothers live together, or father and son live together or all the descendants of male live together)
• income and expenditure in a common pool- property held together.
• a common place of worship
• all decisions are made by the male head of the family- patrilineal, patriarchal.

How to Apply for Lost PAN Card?

How to Apply for Lost PAN Card?

PAN (Personal Account Number) Card is a MUST for every individual in India. Here is the reader’s query about the lost PAN Card.

“I have lost my PAN Card but I still have a photo copy of it. What is the procedure for applying a new PAN Card?”

- To apply for a duplicate PAN Card, you should fill in the specified application form with the PAN processing centre along with certain documents (proof of identification and residential proof) and payment of specified fee.

You can also download and print this form from Government of India, Income tax department website, fill it and submit to your nearest IT office.

Education Loan Benefits

“I have just cleared my graduation. For my post graduation, I am planning to go for MBA and intent to take a loan for this education. Will I get any income-tax on the loan? Also, can my father avail of the deduction, in case he takes the loan?”

Many students have the same query. They want to know that, if their parents take this education than still it will have tax benefits? Well, Yes. If your parents take an educational loan on behalf of you than also it is tax deductible.

As per Section 80E of the Income-Tax Act, 1961, a deduction can be claimed in respect of interest paid on loan taken for the education of own self or a specified relative (spouse and children of that individual or the student for whom individual is the legal guardian) from any financial institution or approved charitable organization for all field of studies (including vocational studies) after passing the senior secondary education or its equivalent from specified