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Jagoinvestor Wealth Club Starts today- India’s first online wealth club

Posted on by Jagoinvestor

Would you like to be a part of committed investors community to create more wealth? Would you like to be a part of structure that helps you live a good financial life? Why not join us to help you provide a structure that makes you a better Investor. For good health we go to health club. similarly to live a good financial life we have created  Wealth Club. We get numerous mails from people asking, ”Hey what is this Wealth club all about? ”. The wait is finally over, as the coolest club is now OPEN to SERVE you as an investor.

The whole Idea behind creating this Jagoinvestor Wealth Club

We strongly feel that every investor is blessed to live a good financial life. This club is for committed investors. It will help investors to add different dimensions to their financial life.  We see wealth club as a movement that will inspire people in living a good financial life. The wealth club is designed to  provide you with an environment that supports investors in their financial life. After all the blogging, financial planning, writing and coaching hundreds of people, we see personal finance as an ongoing journey and every investor somewhere needs a structure or an environment where he feels safe, enjoys learning about personal finance and gets constant empowerment to STAY in action.

The BIG idea behind creating this wealth club is to help you build muscle to  live a good financial life. Some time back , we ran a survey trying to find out how people feel about their financial life and here are some findings !

  • 90% people need some safe space or structure where they can learn, study and think about their financial future
  • 91% people would like to have access to online library, where they can get quality audio/video’s on personal finance
  • 90% people would like to be part of a committed investors community
  • 87% would like to get in control of their financial life with or without financial plan
  • 92% people feel that if they get personal finance calculators/tools/templates, they will become a better investor
  • 81% people are afraid of misselling
  • 78% people say they dont understand complex financial products
  • 83% people are not able to trust people easily for making investment.
  • 72% peopel feel they read a lot on personal finance BUT unable to implement
  • 64% people feel paying a high fees every year to some advisor is constraint for them

With these points in mind, we have designed wealth club which will provide  a safe environment where investors learn, grow and enjoy the process of wealth creation. You can get a feel about this Wealth club by seeing following video

Here are some of the testimonials from the few set of people who have been using it from last 2-3 weeks. May be you can get a better understanding from their testimonials.

Testimonial from Aparna 

Jagoinvestor Wealth club is an eye opener. The wealth club is easy to access. The courses available on the club are very informative and thought provoking. After listening to each coaching conversation, there are a couple of action items that I make note of and take actions. The conversation is not just about the financial life. The conversations actually enhance our way of living and financial life is just one part of it. There are a couple of calculators which are very easy to use and very useful. For example: the goal planning calculator. This calculator can be used throughout our life to keep track of our financial life, since financial planning is not a one-time activity.

There are a couple of ebooks also. These teaches and reinforces the financial concepts. And moreover, if we plan to invest our money via mutual funds, there is a ready reckoner list which helps us to make informed investment decisions. I did not have to scratch my head to find out the best mutual fund for my requirements. In one of the audio course, Nandish says “Personal finance is about getting things done”. What a powerful statement!!! This website provokes us to take action and be on our toes always…  Thanks Nandish for such a wonderful club

Testimonial from Lavanya

We find it a very useful single place for all information related to personal finance more importantly in a very good structure. I find all the categories useful, especially engrossed now in the courses and conversations. Having gone through some of the conversations with Nandish in past, We find it very useful to refresh memory and there are new topics too. Of course now getting used to this, I want more detailed conversations on some of the topics. The courses too are a very useful feature and done in a very simple easy to understand format. I am certainly using it and expecting the content and categories to increase in breadth and depth. Great start and keep giving us more. 

Testimonial from Jassi/Priya

I think this is one of the most innovative ideas a financial institution like yours can have. A club exclusively for members can go a long way in keeping an individual connected with his/her financial life. The most important aspect of being wealthy is to be consistent and disciplined. Individuals can have excellent plans but they can succeed only if there is regular drive and actions. This club is a brilliant way to always stay connected and be motivated to taking actions, learning and getting closer to goals. Since, it is a club of like minded individuals; it could be a good platform to learn from other’s experiences and always stay in touch with the core principles of financial success. This surely is a very good chance to create many wealthier satisfied individuals in the future to come. Content-wise, We are very pleased to see good coaching courses and teachings of finances. Looking forward to much more content in the wealth club.

Testimonial from Arvind

I was promised 1 yr membership to Jagoinvestor Wealth Club as part of financial planning service in past. From that day I was waiting for this Jagoinvestor Wealth Club and finally I registered and listened all the audio clips (Conversations) and seen Video Clips (Courses).  I found that these are much more powerful than that of Jagoinvestor blogs. The difference in Jagoinvestor blogs and Jagoinvestor Wealth Club is something in the way that, In Jagoinvestor articles you have to realize, you have to read, it is time consuming and in Jagoinvestor Wealth Club you can view videos, you can listen various conversations, so I found it is more powerful. And the content is totally different and well structured. I wish all the best to Jagoinvestor team for the success of Jagoinvestor Wealth Club.
Are you ready to Join the Club and be Part of it

We really invite each one of you to be a part of our initiative. Let’s learn and grow together and get committed to producing a lot of wealth in life. This is an inner circle where we will serve you with our full energy and efforts. We promise to deliver our best creations to you each month and help you grow and design your financial life.

Please share in comments section, what do you feel about this initiative .

RGESS Tax Saving Scheme – Too Complicated !

Posted on by Jagoinvestor

RGESS or Rajiv Gandhi Equity Saving Scheme is the new tax saving scheme, for saving taxes. This is mainly  for first time equity investors in securities market. The whole idea for introducing the RGESS scheme is to promote an ‘equity culture’ in India as well as widen the  retail investor base in the Indian securities markets. Look at the below video where a discussion is going on RGESS.

Lets us look at some major points which defines RGESS

1. Maximum Investment Limit and Tax Saving

RGESS scheme is available only to those investors whose taxable limit is less than 10 lacs per year; and the maximum limit of investment is Rs 50,000 per year. The tax advantage will be available on only 50% of the amount invested –  which means that tax saving can be done only on upto Rs 25,000. Which means, if you invest Rs 50,000 and belong to 20% tax slab , you will be able to save 20% money on 25,000 (50% of 50,000) – a Rs 5,000/- tax saving.

2. Applies to new Investors Only

The RGESS Scheme is available only for “new investors”; defined as those whose PAN numbers don’t have equity transactions, which means either a person has not opened a demat account ever, or has opened a demat account, but have never invested in equity before the scheme came into effect. The investment can be done throughout the year, and not restricted to a one time investment, so investing Rs 50,000 in one shot or investing Rs 10,000 in 5 shots , both are eligible. But the big confusion is for those investors who already have equity investments through mutual funds, but do not have demat account ?

3. Lock In period of 3 years

This rule is a little messy. There will be 3 year lock in period for this investment. However if an investor wants to, he can collect “profit” part after a year of investment.  So for the entire first year, you cant sell your shares! And after the first year of investment, he can take out the profits if he so chooses. He can sell all his shares if he wants, but he will have to bring back the same amount through some other stock.  After first year, 2 more years of lock in will apply, and in this period, you have to maintain your balance at the end of first year, which should be minimum of the amount on which you claimed income tax or the balance at the end of the 1st year .

So if a person invests Rs 50,00 , and in next one year

Case 1 : His worth is Rs 55,000 , then he can take out 5,000 and after that he has to keep his balance minimum 50,000 (the amount on which tax exemption is claimed), if a person wants, he can sell off his shares totally, but then again has to come back with 50,000 investment in some other or same stock. He can take out the profits part (above 50,000) if he wants in these next 2 yrs

Case 2 : His worth is Rs 25,000 , then in this case, he has to maintain this 25,000 balance in next 2 years. If you are still unclear, Deepak Shenoy has done a better job in explaining this lock in part, in his article on RGESS.

4. Where can you invest for RGESS Scheme?

You can invest in stocks which belong to

  • CNX 100
  • BSE 100
  • IPOs of PSUs whose annual turnover is not less than Rs. 4000 Crore for each of the immediate past three years
  • Large Listed PSU’s
  • And any ETF , Mutual fund which are listed and traded in stock exchange and whose portfolio includes stocks which are eligible under RGESS

Should you invest in RGESS ?

Personally, I feel that RGESS has too many terms and conditions to follow, and is not that easy to understand for a common man. Especially a new investor who is anyways afraid of markets and his money being lost. The restriction of “can’t not sell at all in first year” is kind of scary, especially for those who are too risk averse.

Another bad point about RGESS is that it’s a once in a life time investment scheme. Once you become eligible for this scheme, for next year you will not be a “new investor” and hence wont be eligible, so its only for the fresh batch of new investors each year. The only positive point is that for those who were anyways going to take plunge in stock markets will get extra benefit of some tax saving and might instill some compulsory discipline of investing (lock in period).

Let us know what do you think about this RGESS Scheme (Rajiv Gandhi Equity Saving Scheme) , and if it interests you. Will it be a hit tax saving scheme or a flop one? What do you think?

How is interest on saving bank account is calculated ?

Posted on by Jagoinvestor

A lot of people do not know interest is calculated on their savings bank account.In this article I will explain all the aspects of interest on a savings bank account. Earlier all the banks had the same interest on their saving bank accounts, which was 4% , so a person had no choice in terms of interest rate, you would have got the same return with any bank. But, RBI has recently de-regulated interest on saving bank account and now banks can decide the interest they want to pay on saving bank. This has had a positive impact for customers, because now due to competition, banks like Kotak Bank and Yes Bank have started offering higher interest rates like 6% or 7% and using that parameter to attract lot of customers.

How is interest on saving bank is Calculated ?

Coming to the main question, the procedure to calculate saving bank interest, we will first see how it was done earlier and then we will see how its done now.

Old Method

Earlier, Banks used to pay 3.5% interest on the minimum balance between 10th and last day of the month. This was not a very customer friendly method because if you kept Rs 5,00,000 in your saving account for the whole month and on 26th, & let’s say you take out 4,90,000. You would have got interest only on Rs 10,000 @3.5% , which is just Rs 28.

New Method

Now a new method is used to calculate the interest on saving bank account which is very fair.  From April 1, 2010 , as per the RBI circular on new guidelines on saving bank interest calculation; this is the rule for interest calculation.

“The interest has to be calculated on daily basis for the closing day balance” – It’s that simple. So let’s say the interest rate is 4% , then you will get interest @4% on daily basis for your closing balance and it will get accumulated , but it will be paid back to your account only after 3 or 6 months. While RBI wants all the banks to pay the interest every quarter, each bank has its own criteria , like ICICI Bank pays it twice a year right now in Sept and March.

So now, if you see the same example we discussed above, with the new method of interest calculation, the interest will be 4% on 5 lacs (Rs 1,369) for 25 days (from start of month to 25th) and on 10,000 for next 5 days (Rs 5) (26th – 30th) . So the interest would be total Rs 1,374 . In the old method it was just Rs 28 . Can you see the gigantic difference?

Saving Bank Interest Calculation

High Interest on Saving bank from some banks

You must have seen some banks are now offering 6-7% of interest rate and they have dual interest rates, like 5.5% below 1 lac and 6% above 6% (in case of Kotak Bank) , which means that you will be getting 5.5% on the amount below 1 lac and only on the difference amount above 1 lac, you will get 6% interest . So if you have a balance of Rs 1,50,000 in your bank (lets say kotak bank) , you will get 5.5% on 1,00,000 and 6% on 50,000 .

You should be more interested in interest below 1 lac

If you see the average amount kept in saving bank account , it should not cross 1 lac for most of the people . While there are people who park their money in saving bank account for some time, but it does not happening with most people. So if some bank is giving higher interest for amounts above 1 lac, that’s a secondary benefit for you, not the basis of selection of bank. Because if you are anyways ready to keep a balance of more than 1 lac, why not just create a short term deposit online,which can be broken anyways or just activate your sweep in account option, so that an amount above a target amount automatically gets converted to FD and earn more money.

Do you now understand how interest on saving bank account is calculated? Will it help you manage your bank money in a better way?

Planning for Unexpected Expenses – Why it makes sense !

Posted on by Jagoinvestor

Have you ever heard someone say something like – “I had planned to buy a car from last 2 yrs and I was saving for it regularly with discipline, but I think I will have to delay my decision because some thing urgent and unexpected cropped up in between! . It happens all the time.”

Here are some more examples of “unexpected expenses”

  • My Car Servicing had to be done urgently. I didn’t expect it to break this month
  • My brother asked me Rs 1,000 more this month, I had to send that extra money this time which I didn’t plan for.
  • My daughter had to see a doctor last week, and now suddenly this month budget’s gone for a toss!
  • I was planning to buy Manish’s Book next month, but those awesome reviews forced me to grab my copy from flipkart today itself, I never planned to buy it ! .

95% people don’t plan anything. They just go with the flow. And for the rest 5%, who do any kind of planning; even their planning fails at some point of time because of a very simple and over looked factor in financial life, which is “unexpected expenses” . If you write down all your monthly expenses on a paper, do the total, and keep exactly that much money in your pocket… You can be very sure that you will have a really tight month!  And that must be happening already !

Unexpected Expenses in Life

These “unpredictable” expenses are very predictable

It’s because when we make any assumption, our conscious mind can only think about the bigger picture and we never deal with smaller details and mostly never count the uncertainties of life . We never consider that you might have to shell out Rs 2,000 on something which suddenly comes up (it can be anything). Suddenly there can be some trip, some eating out, some medical expense, some expenses related to the kids school etc. By now you must have realized that these unpredictable expenses are very predictable 🙂

I mean, you can always expect the unexpected. See each month, without fail, some thing or the other always crops up out of nowhere, your planning never fits the target , you are always short of what you were thinking earlier! , Sound familiar? Life is so unpredictable, that it’s a great idea to factor that “unexpectedness” into your planning. When you do your monthly budgeting, have a “Unexpected Event” category too, and allocate some money for that anyways, because it will happen 🙂

But its anyways taken care , so why Plan for it ?

If these unexpected events happen a lot in your life, you will agree that the money you need to shell out is not the big issue, rather the real issue is the psychological nonacceptance and your irritation every-time it happens. You have not mentally prepared yourself for those expenses and every time they happen, its like a pinch on your face! You didn’t think about it and now it’s in your life, staring you in the face. To overcome this issue, you need to create that unexpected expenses buffer. Once you’ve done that, you are mentally ready to expect something unexpected and when you need to spend money for it, you know it will come from your “unexpected event” account.

If nothing happens, you can always use up that buffer for your other expenses, its like a  bonus for you. On the similar lines, Ramit Sethi of iwillteachyoutoberich.com talks about the Stupid Mistakes Account, which is for the same concept of planning for unexpected expenses.

 (Direct Link for Video)

Keep buffer even in your investments

The same thing applies to your investments also . If you are planning for a goal which is going to come after 6 yrs, better plan for just 5 yrs and keep 1 yrs as buffer. If you are assuming a 12% return , better plan assuming 11% only , and keep 1% as buffer , if your SIP amount needed for a goal is Rs 5,000 , better invest Rs 6,000 instead of Rs 5,000 . This way , the chances of the final outcome fitting into your expectations is much higher!

What do you think about it?

IMPS – Online Money transfer in 30 seconds from your Mobile Phone

Posted on by Jagoinvestor

IMPS or Interbank Mobile Payment Service is a technology which offers an instant electronic fund transfer service through mobile phones between two banks in India. There are other two money transfer systems called NEFT and RTGS already in India, but they are not a mobile payment system like IMPS and they’ll  take some time to get settled. IMPS is a real time system of money payment.  The service has been developed by National Payments Corporation of India (NPCI), a section 25 company formed by Reserve Bank of India (RBI) and Indian Bankers Association (IBA). Here’s a testimonial from Harsh, who transferred money using IMPS…

Recently I issued a cheque from one of my account and did a NEFT transfer to build balance but NEFT failed to do the job in 48 hours, in the middle of night i started searching for how to do a instant transfer and then I got to know of IMPS. Registration happened instantly in matter of minutes and shockingly money transfer happened in micro seconds even faster than a google search – (via)

The transfer limit through IMPS is defined by RBI in the Mobile Payment Guidelines issued to banks. The customer can transact on IMPS subject to a daily cap of Rs. 50,000/- per customer overall for transactions through mobile for the funds transfer.

How to do Money Transfer using IMPS

All you need to make a transfer through IMPS system is your mobile number and MMID number . MMID number is a 7 digit random number which you get by registering for IMPS facility with your Bank. But make sure your mobile phone is activated before you register for MMID. Note that both sender and receiver should have their phone and MMID number from their respective banks. Once you have that you can transfer the money using sms or internet banking . A lot of banks also provide a mobile application which you can download from bank website and install on your phone. Note that before sending the money to the receiver, you should register them once as you do for any bank account.  The image below gives you good idea on what needs to be done for carrying out an IMPS transfer.

Steps to transfer money through Mobile using IMPS

What happens with your do a IMPS Transfer through Mobile ?

When you make a IMPS transfer, your sender mobile first sends this information to the sender bank , which checks the data; whether your MMID is correct or not and if it matches with what it has in its system. If it’s all correct, it debits the money from your bank account and transfers this to the NCPI server, which then transfers it back to the receiver’s bank. The receiver bank goes about checking everything again and then sends the status of the whole transaction to NCPI, which passes it back to Sender’s bank. Both Receiver and Sender are then updated about the transaction through SMS. All this normally takes just about  15-30 seconds for everything to happen and the money gets transferred near instantaneously. How does IMPS work

5 Advantages of IMPS over NEFT and RTGS

Let me enumerate 5 major reasons why you want to register with your bank for IMPS and generate your MMID as soon as possible. IMPS offers some major advantages over NEFT or RTGS money transfer and here they are

1. Instant Transfer of Money

When you do an IMPS transfer, it happens instantly within few seconds, so it’s practically real time money transfer, unlike NEFT or RTGS which works in batches and takes time in money transfer. Which means in case of emergencies, you can use IMPS and it will act like a fast money transfer mechanism

2. Transfer without Internet Connection You dont need a internet connection or a computer for IMPS transfer, you can just do the transfer using your mobile phone through SMS or using the mobile application, hence you can do the money transfer even when you are travelling, all you need a mobile connection 3. Money transfer even on Holidays and outside working Hours

You can transfer the money anytime, 24X 7. With NEFT or RTGS , you can’t do money transfer on holidays or even Sundays. You can’t do it outside the working hours defined by the banks. But with IMPS you can literally make transfers in early morning, midnight or whatever time you want.

4. No Need to disclose Bank account number and other details

All you need for making the transfer is mobile number and MMID , so you don’t need to disclose your actual account number or even the bank name.

5. Easy, Simple and Secure

Making a IMPS money transfer is so easy.  All you need is the MMID, Phone number and the amount. The money gets transferred easily so fast. It makes easy for those who fear technology and do not want to deal with it . You can teach this to your parents or some one who is not that technologically advanced.

IMPS Charges

The charges depends from banks to banks . While exact charges details you can find from your respective bank, it seems the charges are extremely low and are on per transaction basis, not on the limit of money. It seems to be Rs 5 per transaction (not confirmed) yet. Apart from the charges from banks for using the service, if you are doing the money transfer using SMS , you will have to pay standard sms charges . However if you use internet or the mobile application, there will be no charges apart from the service charges.

Money Transfer Limit under IMPS

The limit is defined by RBI in the Mobile Payment Guidelines issued to banks. The customer can transact on IMPS subject to a daily cap of Rs. 50,000/- per customer overall for transactions through mobile for the funds transfer. Transactions up to Rs. 1000/- can be facilitated by banks without end-to-end encryption.

Which Banks are part of IMPS Facility

As of now 52 banks are the members of IMPS facility. Some of them have started the IMPS service and some will start it very soon. Those are

  • ICICI Bank
  • Axis Bank
  • State Bank of India
  • Indian Bank
  • Kotak Mahindra Bank
  • Oriental Bank of Commerce
  • Union Bank of India
  • Andhra Bank
  • Canara Bank
  • HDFC Bank
  • Lakshmi Vilas Bank
  • Bank of Baroda
  • Indian Overseas Bank
  • Bank of India
  • Punjab National Bank
  • South Indian Bank
  • Vijaya Bank
  • IndusInd Bank
  • UCO Bank
  • Federal Bank
  • State Bank of Hyderabad
  • Citibank
  • State Bank of Bikaner and Jaipur
  • Punjab and Maharashtra Co-operative Bank
  • The Thane Janata Sahakari Bank
  • Development Credit Bank
  • Dombivli Nagari Sahakari Bank
  • State Bank of Travancore
  • Catholic Syrian Bank
  • Syndicate Bank
  • Yes Bank
  • State Bank of Patiala
  • Allahabad Bank
  • Karur Vysya Bank
  • The Greater Bombay Co-operative Bank LTD
  • Corporation Bank
  • IDBI Bank
  • Tamilnad Mercantile Bank
  • United Bank of India
  • Standard Chartered Bank
  • Bank of Maharashtra
  • Central Bank of India
  • Dena Bank
  • Dhanlaxmi Bank
  • ING Vysya Bank
  • Janata Sahakari Bank, Pune
  • Karnataka Bank
  • State Bank of Mysore
  • The A P Mahesh Urban Co-operative Urban Bank
  • HSBC Bank

you can look at the latest list of all the banks and their details here  What do you think about this technology ? Will it help in your financial life ? Are you going to use IMPS facility to money transfer through your mobile ?

Misselling or Misbuying – What’s your case ?

Posted on by Jagoinvestor

Misselling is a very common word used these days by everyone. It’s been projected in such a way for the last few years that people have started feeling all agents and companies are engaged in looting the public. But maybe there’s another angle to this and maybe we need think a bit & answer a big question – Is it misselling or misbuying?

  • “I was mis-sold a financial product”
  • “Agent made me buy this crap and now he is not agreeing to it”
  • “My trusted friend mis-sold me idiotic policy promising high returns”

What is Misbuying ?

The first question we need to ask is – How can some one sell you something if you do not want to buy it? Can anyone come to you and put a gun on your head and make you buy? If that happens, I think anyone is bound to agree that it was mis-selling. However, when someone buys a financial product without proper research; or without understanding what they are buying, I would say its more of “mis-buying”. By no means do I want to say that agents and companies are not at fault. If you have not understood the product and bought it, just because some one said some thing verbally or showed you some fancy chart, you need to question it first, inquire about it before buying it and understand the whole dynamics which govern the financial product.

Misselling – What about Investor’s trust ?

While its true that a customer has to do his own research and study, we cant say that companies and the product sellers are not at fault . What about “trust” from the customers who feel that companies will take care of trust part being into business, but most of the times, companies don’t accept the fault on their side by stressing on “Buyer’s Beware” points.

Misselling vs Misbuying

Seth Godin has a very crisp point to make on that.

“Buyer beware”

Really? Is that really the attitude you want your audience to take? That they should be wary of what you say and what you offer and what you promise?

How about “buyer trust”?

How do you deal with customer disappointment or buyer remorse? It’s the difference between “tough luck, you should have read the fine print” and “oh no! How can we help?” If people know you will always make it right, they will beware less and trust more. What do you have to do to create trust? How much would it cost and how often can you produce it?

Dr Kishan has made a very beautiful comment on this topic .

Dear Manish,

What I concluded after my and others’ experiences is that thieves dont come in the dark always. They are not always dressed in masks and armed with lock breakers etc. We can encounter thieves even in broad daylight dressed in finest of clothes with most charming smiles on their faces, so much so that even most intelligent people can fall prey to them.

We all lock our houses when we go out daily, because we dont know when the thieves may come. We all lock our cars when we park them, so as to protect from theft. These “locks” can be bought in the market for some price and applied on the doors.

But there are some other “locks” which can only be acquired by getting knowledge. This cannot be bought from market for some money. And getting this lock is a life long process which entails a lot of effort. This “LOCK” is required for protecting our hard earned money. Or else the charming and well dressed “thieves” shall rob us in broad daylight. This is KALYUG. And thus everyone will rob us if we are not cautious. We can very well say we were ignorant but it is our fault. Not locking a house and expecting there shall be no thieves is not the order of the day in today’s world.

Why dont we educate ourselves against this robbery

Reasons are many- lack of time, lack of access to knowledge, lack of knack of understanding the concepts of money, lack of interest etc. But I think spending some time and taking some effort to save our hard earned money is really required or else money will just slip like sand slips out of our hand.

What I feel strongly

There is no mis-selling, there is only MIS-BUYING. After all its ME who had put the signature on the application form I can blame nobody absolutely nobody for that signature.

Sorry if I sounded too harsh

Time Spent before and after making the decision

Nandish some makes an interesting comment on this, he says – “People spend too much energy and time after buying the product , and not at the time of buying it” .

If you see your past behavior – You might have spent very less time in buying a product and maximum time worrying and cribbing about the product later . However all you need to do is spend some more time at the time of buying and nothing later. All their life Indian investors take decisions on the basis of trust and relationships. They ignore their financial lives and how they deal with it, but at some point in time, we need to understand that world is changing, our country is changing and the whole dynamics of personal finance are changing. We now, need to take responsibility of what we are doing and make our own decisions.

What do you think about this concept of misbuying or misselling ? How much is it a fault of the buyer and how much of seller ?

Can your assets support your for next 30 yrs ? Download this Calculator and Find Out !

Posted on by Jagoinvestor

If you have Rs 50 lacs with you and you want to generate some consistent income for next many years, how many years you can generate income? Think about it! Put some very high level calculations in your mind and try to come up with some numbers! . Will it be able to generate a lac of monthly income for next 10 years or not? Will it be able to generate Rs 30,000 of inflation adjusted income every year for next 30 years or not? Will it be able to generate Rs 30,000 of income increasing at 5% each year for next 100 years or not?

Still wondering ? 

Lets discuss a very basic problem which many people face in financial life. A lot of people at times have a big lump sum amount like 20 lacs, 50 lacs or say a crore! Now they want to know how much income can be generated using that big amount which can be used by their family. This can happen in many situations like following

1. When a person wants to make sure that he wants some kind of passive income out of a big chunk of money

2. A person might have got retired and now he wants to create a pension for himself using the big amount of money he/she has saved

3.  A person wants to leave his job and because of uncertain future , he wants to utilize a big sum to generate a certain cash flow in future

4. You might want to find out how much of life insurance you should take so that your family can start getting monthly income by making a fixed deposit out of the money.

So lets take case of Rs 50 lacs ?

Coming back to our example – Let’s talk about Rs 50 lacs. How much monthly income can it generate? And for how many years? This will depend on three things.

  • How much inflation you are considering
  • How much return on the investment you are considering
  • How much monthly income your want to generate per month

Here are some of the permutations and combinations assuming different values for Inflation , Return on investment and monthly expenses needed and a corpus of Rs 50 lacs in hand.

How long the money will last

How to Calculate this ?

You can calculate this in many ways , but one of the ways you can do is by calculating it in excel sheet. We have this calculator on our upcoming Jagoinvestor Wealth Club product (our paid product) . You can download this calculator and play with different numbers and plan out for yourself.  The calculator shows the answer along with the graph of the wealth and how it grows or shrinks over the years.

Download the Calculator Now

Was the calculator helpful for you? What other kind of tools you would like to have and to what level ? You can start using this calculator and see what is your net worth and how much monthly income can you generate at this moment if you leave your job and in case you are not able to bring money to home due to some issue.

Worst 5 yr period in Stock markets – Are you happy with your Investments ?

Posted on by Jagoinvestor

Most of the people are worried about their Mutual funds, ULIPs and direct stocks returns. In the last 5 yrs, Stock Markets have been so bad that literally no mutual fund has given a good return in last 3-5 yrs , except few. I recently saw a reader asking this question

I have been going through SIP returns for last 5 years of some best recommended mutual funds and found that the returns were less than the Bank FD rates or at par… What is the use of investing in risky mutual funds if they cannot deliver returns better than Bank FDs in long run… I suppose they are high risk low return investments… please enlighten..

Your investment return is function of underlying Asset Class

A very simple, but not an easy thing is to digest that it’s not the investment product, which is doing bad, but the underlying asset class. Take the same example of mutual funds, ULIP or Index Funds. Its not the “fund”, but the stocks which they are invested in, that are doing badly. Stock markets in India have seen one of their worst 5 year periods (2007 – 2012). In my book “Jagoinvestor”, there’s one chapter on equity and debt, where I take last 30 yrs of history and show how in the long term, equity has given good returns and as the tenure increases, the returns get stabler and better .

So because stock markets have given bad results in the near term, its natural that the investment product which uses those stocks will also give similarly bad returns. So your fund might have just done its job of picking stocks as per their mandate, but the underlying stocks have done so badly that the mutual funds really can’t do anything here. What really you need to look at, is if the mutual funds have beaten its benchmark or not . If not, that’s when the issue is with the fund.

When did you exactly buy matters?

Yes, the last 5 years returns have been really bad!. No investor would be happy with these returns. However, did you notice that your opinion will be strongly biased, based on the tenure you have been holding the stocks or mutual funds? Some one who had bought near the peak of 2007, will surely say – “Stock market is the worst investments, never believe someone who says they are good.”  A person who had bought stocks in 2002 and had sold in 2007 , would say – “Stock markets are great” and someone who bought in 2002 and is still holding would also say – “Overall they are good. Ups and downs are always there.”

Let me show you some numbers. I took past 10 years of monthly NIFTY data starting from Sept 2002 to Sept 2012. Then I divided it into two halves, so there is  the first 5 years (Sept 2002 – Sept 2007) and the next 5 years (Sept 2007 – Sept 2012) . Here are the results of the returns based on the Index values.

Nifty Returns from 2002 - 2012

First 5 yrs

You will see that the first 5 yrs  were a really golden period, which gave close to 35-40% for lump sum as well as SIP investments. Someone who had been invested in this period would know how amazing the returns were.

Next 5 yrs

If you have been lying in this group, you must be complaining and surely your investments have not done well. You are disappointed and you have lost your wealth. But sadly it’s only because you are in this group.

Total 10 yrs

If you see the returns in this period ,you will see that the lump sum returns are 19% and even SIP return have been around 13% , which is a respectable rate of return. Most of the returns were eaten up due to the last 5 years, but even with those 5 years counted, the returns are good enough. At least better than PPF or FD returns and that too tax free .

Nifty Returns from 2002 - 2012

Stock Markets vs your Investments Return

“Equity gives good returns in long term” is a statement which is nothing but a probability linked statement , It means “most likely, equity will give good returns in long term”  It’s purely a function of time and your consistency in investing. While 5 years can be seen as a long term tenure, there can still be 5 years tenures where the returns are not that good and you might get bad or negative returns. Also note that it’s not your investment product, but the underlying asset is behaving wrong. So rather than complain about the fund, better complain about the stock markets .

What was your biggest take away from this article ?

Health Insurance Inflation in India – Have you planned for next 30 yrs ?

Posted on by Jagoinvestor

Lets talk about Health Insurance Inflation today ! . When you decide upon buying a health insurance policy, one of the pertinent questions that crops in your mind is the coverage amount – how much health insurance to buy? One of our readers Saket made an interesting comment on health care inflation, and how a decent cover today might look so small in distant future and raised the issue of “renewal” of policies by companies.

The Health Insuranec companies, eargerly selling policies to younger age group (mostly), are actually giving them a false sense of security about their twilight years. No doubt, the current policy will be good for next 5 years, but not later than that because of the health insurance inflation. So this sense of security has a shelf life of max 5 years. After that my fate will lie in the hands of insurer-whether it finds my policy upgrade worthy or not. Considering a most conservative healthcare inflation rate of 15% , a humble 3L coverage requirement as on date for a 38 yr old would translate into a whopping Rs 130 Lakhs ‘Final Amount’ at the age of 65 , the calculation is fairly simple – 3,00,000*(1+.15)**27 =130 lacs

Health Care Inflation In India
Coming to the question, we can now clearly see that decision of taking health insurance in current moment depends on two points. which are

a) Health insurance is a super looooonnng term investment, which you would need most in your old age, beyond say 60 years of age.

b) It’s common knowledge that Hospital costs are increasingly rising, gradually becoming unaffordable, to the common man.

How much is enough to financially support your family’s healthcare needs, ensuring you have a peaceful retirement life. Let us take this up, step-by-step.

Costs of common surgeries & Hospital Costs In India

The cost of some major surgeries in hospitals across India has gone up in recent years. Going by these numbers, assuming only one surgery is required during a year, per member; a sum insured of Rs. 3-4 Lakhs should be good enough for the year 2012. Major supply deficit with respect to healthcare infrastructure – hospital beds, doctors and nurses, increase in cost of medical equipment’s, land has resulted in an increasing trend of health insurance inflation. Here are the 2012 costs for surgeries, compared with costs in 2007.

 

Sr. No Treatment 2012 Cost 2007 Cost Increase
1 Cataract 24,000 16,000 50%
2 Angiography 22,000 14,000 57%
3 Coronary Artery By pass Graft (CAGB) 2,35,000 1,65,000 42%
4 Appendectomy 42,000 28,000 50%
5 Heamorrhoidectomy (Piles) 35,000 21,000 60%
6 Cholecystectomy (Gall Bladder removal) 52,000 32,000 63%
7 TURP (Prostate Surgery) 62,000 37,000 68%
8 Angioplasty (PTCA) with 2 stents 2,45,000 1,55,000 58%

 

The costs of common surgeries have increased by 50-60% in 5 years! This means healthcare costs have increased by 9-10% year-on-year, since the last 5 years. We spoke to Sudhir Sarnobat, CEO at Medimanage. Here’s what he had to say

“The average annual health insurance inflation would be at 5%, if you look at 30 years duration. The hospitals do not increase their tariffs every year. Generally, they increase it by around 15-20% every 2-3 years. This would effectively come to 5% CAGR.” “India is currently having Supply Deficit when it comes to Hospital Beds. But we are seeing a good amount of capacity increase in beds in last 7-10 years which should continue to grow. On the other hand, our population is stabilizing. In 15 years, the equations should change & ease pressure on prices.

India is a developing economy and from credible reports, will continue to be on growth path for next 10 years. After that once the wealth distribution is even, we would see stabilization of inflation (world over that’s been the phenomenon, look at US Medical Inflation for last 5-7 years, it is 4%)” Sudhir added.

Some reports on Hospital infrastructure talk of a major crisis in the making in the Healthcare Industry, due to overflowing demand, coupled with very slow growth in the poor hospital bed to patient and doctor to patient ratio in India, primarily due to deprived participation from the Govt. A Tower Watson Report pegs healthcare inflation in India at 13% for the year 2012.

In my opinion, while costs are bound to rise due to the slow growth in the ratios, on a 30 year horizon they have to plateau somewhere. Looking at this, I suggest, let’s take the inflation year-on-year for the next 10 years at 12%, and then average 5% for the remaining 20 years.

Health Insurance Inflation and Future Costs

Factoring healthcare inflation on Rs. 4 Lakhs of costs expected today, in 10 years, @ 12% inflation, the sum insured requirement would increase to Rs. 12 Lakhs, per member. In 20 years @ 5% inflation, to Rs. 20 Lakhs, and in 30 years to 33 Lakhs. For calculation of floater coverage, take 50% ad hoc for every adult member and 10% for every child, and here’s the kind of cover you will need, for some of the family combinations.

Health Insurance Inflation for Family Floater Policies

So a family of 2 – Self and Spouse will need a cover of Rs. 50 Lakhs year-on-year every year, from the age of 60. This is a huge sum, and looks unaffordable to most of us. So, what does one do? A middle class guy would either have to “afford”, “plan” or “pray” be able to afford such astronomical expenses. Let’s see how we can plan to pay such healthcare expenses.

Solution to the problem

Look at the Present Value of Rs. 50 Lakhs at 10% inflation on 30 years, it calculates to just Rs. 3 Lakhs. So though the problem looks big, it definitely can be resolved by the power of financial planning. Here are the steps we recommend you to create a fool proof plan for your healthcare expenses.

a) Commit yourself to healthy living: Yes, it’s very awkward for a Health Insurance services company, asking you to commit to health, but then we believe that Healthy living is the best form of Health Insurance. Healthy living would of course mean Regular Exercise, Healthy nutrition and No ill-habits. Such lifestyle will simply help avoid huge hospitals bills. Read an excellent article on Health SIP by Nandish.

(b) Given point (a) is a way of life for you, you now need to create a Long term and Short term financial plan, for the unavoidable healthcare expenses, like hereditary ailments (Diabetes, Thyroid), age related (like knee replacement), or infectious diseases (like Malaria), or even diseases like Cancer (which still have many unknown causes. Perfectly healthy people have got cancer, in spite of no ill habits).

Note, if you cannot commit to point (a), your needs for long term and short term funds increases multi-fold, to cover healthcare expenses.

How do you create such fund?

Here’s what I recommend should be your step-by-step health insurance investment plan.

  • Buy Health Insurance, preferably one which covers you for lifetime, and provides a no claim bonus, for the sum insured of Rs. 5 Lakhs individual or Rs. 7-8 Lakhs Floater. If you are buying plans, with Restore options, then the sum insured could be lower at around Rs. 5 Lakhs.
  • Take a good top-up plan, which takes your cover to a floater of Rs. 10-15 Lakhs for the entire family.
  • Invest in a Rs. 5-10 Lakhs critical Illness plan, which covers maximum no. of ailments, especially for the earning members of the family. This will help you get lump sum payment for critical ailments, and compensate for any loss of earnings. You can also explore the option of a more comprehensive benefit plan with your health insurance advisor, with products like Tata AIG Wellsurance, Aegon Religare iHealth, which provide lump sum benefits for large no. of surgeries, in addition to the Critical Illness benefit.
  • Plan a Healthcare Contingency fund, for Rs. 15 Lakhs for individual, and Rs. 25 Lakhs for a family of 4, maturing at age 60. A contribution of Rs. 15000 per annum at 10% return will accumulate Rs. 25 Lakhs in 30 years.

So what’s the total investment for your healthcare financial plan?

Here is the approximate outgo you would incur.

 

Type of Plan Sum Insured Tenure Costs
Health Insurance Rs 5 lacs 30 yrs Premium Rs 6,000
Top up Plan 5 Deductible/15 SI 30 yrs Premium Rs 5,000
Critical Illness Plan Rs. 5 Lakhs/20 Illness 30 yrs Premium Rs 3,000
Healthcare Contingency Rs 25 lacs 30 yrs Investment Rs. 15000

The plan above is indicative and would have to be customized depending on some of the following factors

  • No. of members you want to cover
  • Their age
  • Their health condition
  • Family history of critical ailments like
  • The city where claims are expected
  • The type of hospitals, rooms you prefer.
  • Your lifestyle.

What do you think about health insurance inflation and your thoughts on renewal decision by the companies. Do you think creating your own health care corpus is a better idea rather than depending on health insurance policies?

8 things I learned by quitting my full time job

Posted on by Jagoinvestor

Haven’t we all faced this at one time or the other? The pain of staying in your job getting worse than the pain of leaving your job ? If the answer is yes, this article is for you.

I am writing this article after Sunil asked a related question on leaving a job and starting a business on his own in our questions and answers forum. He wanted to discuss few things before he can start a business by quitting his day job.

Hello Guys,

Looking at the market conditions in Indian IT Market, it is obvious that anything can happen at any given point of time… I have interest from starting to set up a business (small scale) and have a cushion to my career…. I need few ideas from learned people like you in starting up a business (with at least 3-4 lacs).

I would really appreciate your feedback and comments.

In this article, we will discuss a few things about leaving a regular job and starting on your own,  developing  business idea which you’ve had from long time.

Why this topic on a personal finance blog ?

Truly speaking, this is related to your financial life. A lot of people have extra ordinary aspirations and desires in life. They want to travel around the world, they want to own millions and want to have an ability to spend whatever amount they want on anything in life, but deep down they know, that it would not be easy to achieve everything they want from a regular 9-5 job.

A lot of people get into a job which they feel would be suitable for them, only to realize it later only after few years, that they have made such a big mistake in their life. But we have so much to accomplish , children education , their future, the desire and pressure to give them the best in life, parents , spouse , their dreams and their wants in life.

People who are not happy at their job, they just bury themselves under responsibilities and for entire life, keep on dragging in their current profession and job. However this not a story of everyone, a lot of people love their jobs and are really content and satisfied with what they are doing.

I had recently done a survey on how people are frustrated in their current work and some more information. Here are the full results. please go through it and look how do you fit in there.

 

What about those who are not satisfied in their jobs and career? I had earlier written that your financial life is directly related to your career . If you are not doing great in your career, it will impact your earnings, and hence directly impact your financial goals and the wealth you will generate in life.

So you need to decide if you want to move on and do something on your own as soon as possible, be it  for emotional satisfaction or more monitory satisfaction. Unless you are happy in your work, you cant focus on wealth creation.

My Story of leaving a job and starting on my own

Some people get shock of their life, when they hear that I was a software guy once in my life.

Let me share with you, how I was once a very good student in Computer Science and then became a dull/boring/worthless/unproductive software guy and finally took charge of my career and went on to change my domain to Personal Finance and even wrote a Personal Finance Book (Read 65+ amazing review on flipkart)

 

My Story

I was working in Yahoo at Bangalore in a nice software job, I was considered a good student at my post graduation days but only I know what I was really capable of (like you do) .

I was good at many things like Algorithms, data structures and problem solving skills, but really sucked at others;  Networks, Operating Systems and System related things. Somehow I managed to muddled through, but I still don’t understand them even today 🙂

Yahoo hired me (thanks to them) for the job which demanded exactly all those things out of me, which in my wildest dreams I never wanted to work on. I was devastated and saw my end in the first month of my job. But I had to continue the job, because of my financial commitments.

Each day the expectations in my job grew way beyond my performance, and it made sure my guilt and dissatisfaction increase at a compounded rate. I could see clearly that I am working for money only, I was not able to see myself anywhere in next 3-5 yrs, The frustration of going office without any motive and passion was really killing from inside. I was very sure and clear at that point of time, that my affair with software field has come to an end.

I had to take some extreme step.

How Jagoinvestor came into existence

I had always learned things in my life by teaching others. I was good at personal finance from start of my life and always believed it to be such a easy thing and wondered why people complicate it without any reason. This passion of personal finance and love for teaching gave birth to Jagoinvestor.

I was spending my 80% time at office towards Jagoinvestor (10% time went for lunch). Things moved at a really good speed and I was really passionate about what I was doing and loved it. I suddenly realized that this is my passion, this is something I am passionate about, this was something which was not making any money for me at that point of time, but I could have paid to do it myself.

This was something I woke for each day, Jagoinvestor was something I lived for, It was something which negated my stress and frustration as Software engineer. For next 1-2 yrs, It got bigger and bigger and I was known as an expert 🙂

I was a trusted person on personal finance which was not my field by education, but I was not even considered for something related to software field even though my education and career was based on that. I never cared.

Leaving Job

I and Nandish met in between and we could see how we both could take it to next level. By the end of 3.5 yrs at Yahoo, we were generating some money from Jagoinvestor, but it was not consistent. I knew it can never be consistent flow of money in business, at least in starting years.

I gathered my courage and the belief that we will succeed. I owe so much to Nandish who motivated me and coached me on this aspect, which helped in decision making of quitting my job.

It was not easy ! I had spent so much time and (little) effort in computer science, My parents had put lot of struggle and money on it, and after all I had spent 3 yrs on Computer Science, how could it go for a waste ? How could I leave a well paying job which everybody dreams of and become a blogger ? What will my relatives think , What will my own family think ? What will my future-in-law’s think (SE vs Blogger) .

There was pressure – but I was sure I was not a pressure cooker, I knew I could not risk my entire life. There was not a perfect moment to “quit my job” and I knew there will never be, on the last day of 2010, just few months before my marriage, I left my job and took the next bus to Pune from Bangalore to start the new year and new journey in life, without thinking much what’s ahead.

There were thoughts like “Am I making a right decision ?” , “Will it really be the way I am thinking?” etc , but I also knew deep down that, if I don’t do it now, it would never happen.

Now, after a year and a half  of leaving my job, I can say not even a single day have I remembered or missed my job (except the unlimited sweets and the rasam-rice), though I loved the company. Each day has been a wait to open my laptop and enjoy writing articles and help people in their queries. My Work life is now 100 times better than what it was before leaving the job.

That’s my short story 🙂

So whats next ?

You don’t always have to build  a multi-million dollar start up or create an empire! If you are not happy in your current job, then you just need to move to some other sector or start some business.

Nandish always says that people are so much attached to their current job that they believe that’s their destiny and life now. They don’t even get a thought that their purpose of life might be something else, if they are good at their current job, there might be something where you are awesome .

Just because you didn’t accidentally got into some profession or some company does not mean it owns you or your entire career. You can still move . If you were asked that you will never be able to work in the same sector/profession again because “god” has ordered it , what would be the next thing you will fit in ? What will interest you and you might want to give it a try (share with us)

 

 

8 things I learned by quitting my full time job

Based on my little experience and whatever I had learnt from others, here are some of the sharing for someone who is considering to leave a job and start on his own. These tips are not extra ordinary tips, they are more of a reminder to you rather than teaching something.

If you consider all these points in your planning, then the chances of getting successful would increase. Neither of the below points are perfect, nor it will be applicable to every one. These are just some observations from my side.

1. Start the background work now

Most of the people wait for the last moment till things get ugly and each day is a nightmare at job. If you are very clear that you want to head out on your own someday, start the background work right now in this moment.

Whatever you want to do, learn the game of that while you are in job, start understanding dynamics of the business you want to get into, now. The job to business transition is really a tough thing to do. It takes time, it takes effort, it takes dedication.

2. See if you can do something parallelly

It’s not always possible, but if there is any way you can run your business or start something on the side, it would really increase your confidence.

The chances of this happening is higher, if you can find a right business partner. For most of the people who work in big companies, the best thing could be to talk about it with few friends in the office group itself, who also share same kind of vision and passion. 

Here is a sharing from a jagoinvestor reader on how he worked with his colleague’s after office hours and successfully started his own company soon despite having a home loan and kids to feed

Me and my friend developers who have high passion on starting up a company, we both are married and both have kids of less than 1 yr. We worked after office hours to make the setup and finally we started our company this new year officially quitting.

We made a huge savings to run for next whole year in the same life style and to pay home loans. If we have not taken home loan we would have jumped a little earlier, how ever I see it in a positive way, it keeps us pushing like a fire under belly, we have to do that little extra and that deadline of payments are always there and a huge sum I have taken two house loans including one in joint .

3. Create the buffer

One of the biggest deterrent for starting on your own is “what if things go wrong” kind of questions. This happens mostly if you are weak on your buffer amount. The buffer is nothing, but your emergency fund, in-case things don’t work out for initial few months or 1-2 yrs . It should pay for your basic expenses at-least, if not luxuries.

The larger a buffer you can create, the better it is and it will happen only if you start now at this moment, otherwise not. I would say a 3 yrs buffer is a good number, but most of the people are ok with 1 yr buffer too. If your current expenses are 40,000 per month, you would need 5 lacs per year (40,000 X 12) is what you need for 1 yr and 15 lacs as your 3 yrs buffer.

See how you can generate 5 lacs as first milestone and then 15 lacs. Note that your buffer is inversely proportional to your confidence and how ready you are for your new venture, and a direct function of how ready you are overall.

4. Double income will help

Software guys have this advantage like no one else, a lot of them are DINKS (double income no kids), husband and wife both are earning good money. This situation is ideal for those who want to give it a try. While one person can earn and make sure things are on track, the other person can give his/her shot on entrepreneurship.

If things go wrong, you still have something to fall back upon. I see this situation as “one is earning the money and the other is burning the money”, but at the end it’s more easy than a single earner case. So now if you are about to get married and want to leave a job and start on your own in next few years, you know you will have to give more preference to someone who is earning money. That’s a choice you need to make.

5. Get rid of liabilities

If you already have some kind of liability, like a home loan, it really becomes a pain to even think about leaving a job. You might have to postpone your decision, but don’t bury it . Yes, you have a liability, but once you complete that liability you will have your own home, & that would be a great support mentally. You know in the worst case you have something to fall back on.

Also another advantage would be that once you complete your home loan, you will have one expense less (rent) to pay in life and as you still have many years left to take the jump, its an ideal situation to plan. When you know there are many years in job, you can give your maximum time in planning, getting ready and if possible “increase” the size of your buffer!

6. Imagine the worst case and find ways to deal with it 

This is the biggest reason why most people do not budge from their jobs and keep dragging. The worst case scenario really scares them to death. In the book  How to stop worrying and Start living, the author Dale Carnegie says that one can reduce the worry by mentally accepting the whole worst case scenario, and really write it down and then see what will be his actions at that point of time.

Imagine you are a software guy. What is the worst case which can happen if you take a calculated risk of leaving the job and starting something on your own after lot of planning? 

This is what I can think of – You will blow all your buffer you have created, your venture will not work out and you will lose some months or years – what next?  Worst case, you will have to get back to a job. It will be tough, you will face difficulty to get back to the same level of salary. In worst case, you will start lower than what you earn today, but that’s what is the cost you will have to pay for the desire of starting on your own.

7.  Don’t quit the job !

Just because you are reading this article does not mean you start feeling that you also want to leave your job and start your own venture. No ! .. We are just talking about those, who are “dragging” , they are unsatisfied with their jobs and want to do something else in life.

Its perfectly fine if you are just in your job and move on with the same thing for life. A quite lot of people really excel at their work and earn really big bucks, its all about your love for the work and how far you can go with it, you can always move to next job, go abroad and earn more money.

So not quitting a job is also an option. You need to think about it, evaluate the pain and pleasure attached to both the options and choose what you want to do. There is nothing right or wrong decision, its only “your decision”.

8. Make it as a project

When we get on call – Me and Nandish sometimes talk about the concept of Dreams vs Project. You complete your office work because its a Project, you complete your college practicals and exams because it’s a project, and you also prepare and present a presentation at work because its kind of a “project.”

You fail at getting up early in morning and exercise because its a Dream, not a project, you are not able to save enough to pay down-payment of house as planned, because its a Dream, not a project.

In much the same way, most people do not achieve the transition of leaving the job and starting their venture because its a dream, not a project. If you want to understand more about the difference between Dream vs Project, listen to this 12 min’s audio

Idea’s for starting a new venture

A big challenge in leaving the job and starting on your own is “what will be the next venture?” It leaves an open question in many minds and people are not able to take the decision. We can all collectively share some idea’s on what kind of small or big business can be done with small and big capital .

You must have one good idea to share , Please share it will all and I will publish the list of all idea’s on this same article once they start floating.

Real Life Sharing’s about how they feel at current job ?

Experience 1

Following the herd culture ,i.e, after 12th doing engineering and then software job irrespective of one’s branch and now life looks like to be more of a mechanical where everyday you do mundane things and on top of it some crap , foolish and utterly junk lowly intellectual managers govern your appraisal and hike.

I want to get rid of this junk industry where human emotions get dissolved in thin air and people are moving towards making themselves machine oriented trying to achieve efficiency of typical machine with elusive numbers.

Experience 2

I am working with a pvt limited Bank.Though the Bank is employee friendly and has a great future but I feel my vertical is very boring and stagnant.My supervisors are very rude and insult me in front of everyone.My job has no challenge and stagnant.Though my knowledge is better than other colleagues but I am given job of a doc executive.

With no knowledge involve in it.I wanna go 2 other dept.but my supervisors are not allowing me for that.It makes me helpless.My productivity is getting decreases but I ve not lost hope may be in future I ll get a better work related 2 my knowledge.

Experience 3

Not much to share. Not just enjoying my job. Its not satisfying. Its not what I wanted to do in my life. i’m a bank Manager now, but don’t really feel so, being in one of the largest pvt sector banks. There is a lot of gap between what is written in offer letter and what is being offered us to do daily in office.

The number of hours we give to office, is just too much. Usually more than 11 hours a day, all through the year. What I and most of the colleagues believe that, if we give this much dedication and passion to some venture of our own, then we can reach pinnacle of success on our own.

Why should we give so much to another company? Will it give us a justified share of its profit if we give so much to the company. NEVER.

Experience 4

Basically, i am a drummer and interested in the Music domain. By chance or by mistake i have come to this bloody Software Industry, which is full of diplomacy and politics, which is never suited to my type! So planning to be back with my musical nature and rocking mode.

Experience 5

I am a post graduate degree holder in Mechanical Engineering (Research) from IIT Madras . I was chosen by one of the biggest software companies from campus for my employment. I am being employed in the IT outsourcing division. Company recruits were bragging at the time of placement.

I am doing some type of maintenance and enhancement work of some client’s mainframe software which up to a certain extent is challenging due to the analytical and logical skills involved. My current job does not leverage my scientific and mathematical knowledge acquired during my studies and that feeling keeps me dissatisfied in my current job.

I did not take a honest and serious effort in moving out from the situation as I got very much comfortable with the current position and also due to other family commitments. A 2-3 year onsite work opportunity is looming and I am hoping of saving a corpus and proceed for a career change.

Can you relate to the above cases ? Is your story very much on same lines ?

How did you find this article ? Do you think it was valuable for you ? Are you in that situation where you want to leave the job and start something on your own ? Share your experience or views with all of us .