20 Ways to Generate Passive Income....$$$

If you're interested in making money but don't want to take a second job, you should consider making passive income. It's basically money you earn consistently without doing much or even anything at all. Of course, you do have to put in a lot of work in the beginning, but once you set up the passive income revenue stream, you can just sit back and enjoy the fruits of your labor without lifting a finger. Here are some ideas:

·         Write a book. Writing a book means you can earn money off of the sales once you've published it. You can always go the ebook option and self publish, or try to find a publishing house that will take you on.

·         Create an app. Create a smartphone app and earn money every time someone downloads it. You never know what will go viral and how quickly you can make money if your app's a hit. In fact, the silly iFart app even generated $30,000 in just one day.

·         Start a static blog. Spend some time building a website in an area that interests you and other people. Focus on topics that won't ever get dated ("how to" articles are pretty evergreen) that you know people will be searching for. Host ads on your site. Once you have some good content on your site, you can quit writing and make money off your old content.

·         Write articles online. You can make money if you get approved to be a writer for About.com. You'll get paid to write the articles in the first two years. After that, you'll be paid according to page views. Once you've put in the initial effort to write the article, you can just make money off of the views in years to come.

·         Create a YouTube video. Shoot a video for YouTube, and if your video becomes popular, you can run ads on it to make money. The amount you earn varies, but many people, such as Justin Bieber, have launched careers out of it, and popular YouTubers are making over six figures.

Read on for more.

·         Take beautiful photos. If you've got an eye and passion for photography, sell your photos to sites like Shutterstock — a place where amateur photographers can sell their photos. You'll earn a commission that ranges anywhere from 25 cents to $75 or more for every image downloaded. There are other similar sites like iStockphoto and Shutterfly, so be sure to do your research and pick one that works best for you.

·         Draw and design graphics. The photo websites also accept illustrations and graphics. You will still earn money for each download.

·         Make a t-shirt. Design a t-shirt for Threadless, and if your design is popular among the site's community, the company will use your designs for the next Threadless shirts. If your design is picked, you'll get $2,000, a $500 threadless voucher (which you can redeem for $200 cash), and another $500 every time your t-shirt is reprinted. You can also design and sell t-shirts as well as other products on sites like Zazzle and Cafe Press.

·         Sell insurance. If you sell insurance, you will not only make money when you've closed a deal, but some companies will also give you an additional commission when your customer renews his insurance.

·         Stock dividends. One of the more common ways to earn passive income is investing in stocks that pay high dividends. Here's a list of some dividend-paying stocks with high rates.

Source - ThinkStock

What is a Ponzi Scheme ???

Picture - Charles Ponzi —  (SourceBoston Public Library, Print Department)

In a Ponzi scheme, potential investors are wooed with promises of unusually large returns, usually attributed to the investment manager’s savvy, skill or some other secret sauce. The returns are repaid, at least for a time, out of new investors’ principal, not from profits. 

This can continue as long as new investors line up with cash, and old investors don’t try to withdraw too much of their money at once.

Ponzi schemes are also known as pyramid schemes, from the shape of any chart that reflects their basic premise — that ever-growing layers of new recruits are needed to provide gains to the smaller, earlier cohorts. A gigantic pyramid scheme virtually bankrupted Albania after the fall of Communism.

Ponzi schemes are named after Charles Ponzi (pictured above), the flamboyant con man whose scam followed a particularly spectacular course. Mr. Ponzi began telling New York investors in December 1919 that investments in foreign postage coupons could yield 50 percent returns in 45 days. By redeeming coupons bought cheaply overseas for much higher amounts in the United States, he could double their money in three months, he claimed.

Mr. Ponzi was a fast-talking immigrant and college dropout, and his scheme — according to Mitchell Zuckoff, Mr. Ponzi’s biographer — rested on the eagerness of ordinary working people to benefit from the wealth they saw being generated around them as the economy recovered from World War I.

Mr. Ponzi was convicted of mail fraud in 1920 and served time in federal and state prisons before he was deported to Italy in 1934, never having become a citizen. He died penniless in Rio de Janeiro in 1949 and was buried in a pauper’s cemetery there.

The $65 billion fraud that Bernard L. Madoff perpetrated has been called the largest Ponzi scheme in history. Though the magnitude, scale and details are different, Mr. Ponzi’s scheme and Mr. Madoff’s fraud each reflect their respective, super-heated financial eras.

Source - nytimes.com

What is Claim Repudiation Ratio?

Insurers always play the game on Claim Settlement Ratio specially the King in the market boasts of having the undisputable claim settlement ratio.

Consumers are being convinced on this ratio by showing colorful numbers but the fact is one should buy an Insurance Policy based on the CLAIM REPUDIATION RATIO and not on CLAIM SETTLEMENT RATIO. Logic is as below.

Claim settlement ratio = No of Policy settled / No of Policies issued by the company 

AND

Claim Repudiation Ratio = No of Claims Rejected / No of Claims made

So as the insurance company grows automatically its Claim settlement ratio also improves.

But the fact remains that company has to be fair at the time of settleing the claim or it immensely affects its Claim Repudiation Ratio


Note – The information posted is issued in public interest and consumer awareness. Any individual or institution having any issues regarding the same can mail me at chintan.dedhia@live.com

Fuel price and interest rate hikes a Political Math....

On the one hand RBI is increasing the interest rates to make money costly which will tame demand and hence reduce inflation. And once the inflation tames Govt increases fuel prices.

The result of the two actions is as below

Interest Rate Hike By RBI to tame inflation	Fuel Price Hike by Govt in the name of deregulation
Results in increase in interest rates which leads to increased cost of borrowing, increased Home loan EMIs.	Results in shooting up of transportation costs making travelling by private vehicles dearer and increase in Rickshaw and Taxi fares as many of them still run on Petrol.
Result – 1.Reduced inflation, reduced cost of food and other daily necessities. 2. More outflow of salary per month to pay loans. Reduced food prices, but increased EMI amt.	Result – Costly Private and Public transport again draws a big hole in Common Man’s pocket, who even if does not have a private vehicle, has to suffer from increase in fuel rates due to increase in fares.

If the price of petrol stands at Rs 58.90, the break up of cost as calculated by the Indian Government is as follows - (Current break up is not available)

Basic Price: Rs 28.93

Education Tax: Rs 0.43

Dealer commission: Rs 1.05

Excise duty: Rs 14.35

VAT: Rs 5.5

Petrol Custom: Rs 1.54

Crude Oil Custom duty: Rs 1.1

Transportation Charge: Rs 6.00

Total price: Rs 58.90

Suggestion to government – I think govt should stop looting its citizens in the name of taming inflation. Instead of increasing the fuel and interest rates, govt can save a lot of money just by reducing electricity theft by 50% and reducing corruption by only 10% if possible and it is a simple logic which can be understood by a common man and we do not need any ECONOMIST to understand it!

- By Chintan Dedhia

Disclaimer - It is just a personal thought and the expression of the same by a mere analysis on the economic events It is not intended to hurt any person or institution .Any body having any queries please mail me at chintan.no1@gmail.com

Top 10 Most admired companies in India

Top 10 Most admired companies in India

1.     Infosys Technologies (Annual Sales of over $4 billion)

2.     Tata Consultancy Services  (largest Indian Outsourcer by Sales)

3.     Bharti Airtel 

4.     Larsen & Toubro (in deal to build nuclear reactors)

5.     Wipro (Global workforce of close to 100k)

6.     Tata Steel (Manufacturing units in 27 countries)

7.     Hindustan Lever (has more than 400 brands)

8.     HDFC Bank (Incorporated in 1994)

9.     State Bank of India (planning to add 1000 branches) 

10.  ITC (Wide-range Conglomerate)

Infosys Technologies is adjudged as the most admired company in India followed by TCS and Bharti Airtel in 2 and 3rd position respectively.

The ranking has broadly taken 5 different aspects into consideration.

§  Financial Reputation

§  Corporate Reputation

§  Quality

§  Innovation

§  Vision

Following are the individual ranking of various parameters:

Financial Reputation

With the biggest reserves and deposits than any other bank in India, SBI takes the numero Uno position when it comes to Financial Reputation. Reliance Industries, followed by HDFC bank complete the top 3 positions.

Corporate Reputation

Infosys Technologies known for its exemplary Governance and transparency in corporate dealing comes at top followed by 2 Tata companies, TCS and Tata Steel

Quality

Again with excellent quality of Software deliveries, Infosys takes the top position, followed by L&T and Bharti Airtel.

Innovation

Now this is a big surprise to me, TCS takes in the top position in Innovation. I always related TCS as a Volume player without much innovation, but I seem to be completely wrong here.

Infact, TCS is the most admired company for innovation, followed by Bharti Airtel and Infosys Technologies

Vision

With visionaries like Narayan Murthy and Nandan Nilekani at the helm, Infosys Technologies had to take the top position when it comes to vision. Tata Steel surprisingly  comes at 2nd followed by Reliance Industries.

UNCLE SAM HIT THE SUMO !!!!

Due to my academic schedules and my SEM III exams of MBA I could not write the blog. Please find below the continuation of the previous Blog( UNCLE SAM's CHINESE PROBLEM)

During the 1980s due to heavy Japanese exports especially that of automobiles flooded the US markets which led to the outflow of the USDs to Japan leading to surpluses with Japan and deficits with the US, thus US blamed JAPAN’s undervalued Yen for the US deficits.

The long running dispute between the United States and Japan throughout the 1980’s and early 1990’s over the value of the yen ended only when Japan’s economy entered its “lost decades,” which has made the Chinese determined not to repeat the experience.

But, based on Japan’s experience, the Chinese do seem to have good reasons to be wary of US pressure to revalue the renminbi. Indeed, the economists Ronald McKinnon and Kenichi Ohno have singled out US pressure for yen appreciation as a key source of the Japanese economy’s long-term deflation and stagnation – the so-called “lost decade” of economic malaise that is now well into its second.

Chinese officials agonize over the US pressure. If they yield to it, the Chinese economy, they argue, may fall into the same deflationary trap that ensnared Japan after the yen’s appreciation in the 1980’s – under US pressure – inflated a catastrophic asset-price bubble. But if they continue to resist, China may face hot trade disputes with the US, which could be even messier.

Like Japan in the 1980’s, China must defend itself from US claims that the renminbi’s weakness is the source of the imbalances between the two countries. Currency appreciation, Japan argued then and China argues now, is unlikely to result in a significant current-account adjustment, which requires addressing not only China’s high savings rate, but also low savings in the US.

What is the Lost Decade?

The economic miracle ended abruptly at the very start of the 1990s. In the late 1980s, abnormalities within the Japanese economic system had fuelled a massive wave of speculation by Japanese companies, banks and securities companies. Briefly, a combination of incredibly high land values and incredibly low interest rates led to a position in which credit was both easily available and extremely cheap. This led to massive borrowing, the proceeds of which were invested mostly in domestic and foreign stocks and securities.

Recognizing that this bubble was unsustainable (resting, as it did, on unrealizable land values - the loans were ultimately secured on land holdings), the Finance Ministry sharply raised interest rates. This popped the bubble in spectacular fashion, leading to a massive crash in the stock market. It also led to a debt crisis; a large proportion of the huge debts that had been run up turned bad, which in turn led to a crisis in the banking sector, with many banks having to be bailed out by the government.

Eventually, many become unsustainable, and a wave of consolidation took place (there are now only four national banks in Japan). Critically for the long-term economic situation, it meant many Japanese firms were lumbered with massive debts, affecting their ability for capital investment. It also meant credit became very difficult to obtain, due to the beleaguered situation of the banks; even now the official interest rate is at 0% and have been for several years, and despite this credit is still difficult to obtain.

Overall, this has led to the phenomenon known as the "lost decade"; economic expansion came to a total halt in Japan during the 1990s. The impact on everyday life has been rather muted, however. Unemployment runs reasonably high, but not at crisis levels (the official figure is a little under 5%, but this is a considerable underestimate - the real level is probably around twice that). This has combined with the traditional Japanese emphasis on frugality and saving (saving money is a cultural habit in Japan) to produce a quite limited impact on the average Japanese family, which continues much as it did in the period of the miracle.

UNCLE SAM’S CHINESE PROBLEM ! ! !

Today after the Subprime Crisis America is blaming CHINA for the high unemployment rate in the whole US.

US is forcing China to appreciate the YUAN as its depreciated value is leading to cheapest exports from China to 

US leading to huge deficits in the US economy as claimed by US

But do you think the depreciated value is the sole reason for the deficits in the US?

The answer is NO because the deficits in the US are structural deficits. The savings rate of US is hardly 1 % which is a major contributor to the deficit because, if the citizens don’t save the money in the domestic banks then it is spent on purchasing goods and services(Chinese) which leads to the outflow.

The cycle goes this way in the following manner

• US employees are highly paid – The basic Wages paid are anywhere between $ 4-8.
• Thus wages are a huge cost to the manufacturers and service providers, which leads to higher prices of Goods and Services.
• But on the macroeconomic level employees of any economy are the consumers also so in the end goods and services in the US become costly for their citizens itself.
• And then the citizens have no other option than to buy Chinese Goods and services which are available at Cheaper rates which leads to the outflow of the currency($) leading to deficits.
• And also the poor sales of the American firms then leads to layoffs which results in Unions putting pressure on politicians which in turn leads to put pressure on China to appreciate YUAN.

So do you think US should pressurize China to appreciate YUAN??? Or is there any other country on which US had put pressure to in the past to appreciate its currency???  

Find out in my next blog

- By Chintan Dedhia

What is Dodd-Frank Act?

(Click to enlarge)

President Barack Obama's policy architects say they will begin enforcement of a sweeping new set of financial regulations intended to govern risk-taking on Wall Street and offer greater protection to consumers. The goal is to help the U.S. economy return to prosperity even as troubling signs of a global downturn remain.

According to Wharton experts, the Dodd-Frank Wall Street Reform and Consumer Protection Act is a good start toward future financial stability, but they warn that significant concerns remain unaddressed, and stress that the details of implementation must be handled carefully to avoid creating new problems.

 HIGHLIGHTS OF DODD-FRANK ACT

1.    Consumer Protections with Authority and Independence: Creates a new independent watchdog, housed at the Federal Reserve, with the authority to ensure American consumers get the clear, accurate information they need to shop for mortgages, credit cards, and other financial products, and protect them from hidden fees, abusive terms, and deceptive practices.

2.    Ends Too Big to Fail Bailouts: Ends the possibility that taxpayers will be asked to write a check to bail out financial firms that threaten the economy by: creating a safe way to liquidate failed financial firms; imposing tough new capital and leverage requirements that make it undesirable to get too big; updating the Fed’s authority to allow system-wide support but no longer prop up individual firms; and establishing rigorous standards and supervision to protect the economy and American consumers, investors and businesses.

3.    Advance Warning System: Creates a council to identify and address systemic risks posed by large, complex companies, products, and activities before they threaten the stability of the economy.

4.    Transparency & Accountability for Exotic Instruments: Eliminates loopholes that allow risky and abusive practices to go on unnoticed and unregulated -- including loopholes for over-the-counter derivatives, asset-backed securities, hedge funds, mortgage brokers and payday lenders.

5.    Executive Compensation and Corporate Governance: Provides shareholders with a say on pay and corporate affairs with a non-binding vote on executive compensation and golden parachutes.

6.    Protects Investors: Provides tough new rules for transparency and accountability for credit rating agencies to protect investors and businesses.

7.    Enforces Regulations on the Books: Strengthens oversight and empowers regulators to aggressively pursue financial fraud, conflicts of interest and manipulation of the system that benefits special interests at the expense of American families and businesses.

What Is Crowd Funding?

Crowd funding describes the collective cooperation, attention and trust by people who network and pool their money together, usually via the Internet, in order to support efforts initiated by other people or organizations. Crowd funding occurs for any variety of purposes, from disaster relief to citizen journalism to artists seeking support from fans, to political campaigns and now in Venture Capitals for raising funds.

The crowd funding approach has long precedents in the sphere of charity. It is receiving renewed attention from both commercial and social entrepreneurs now that social media, online communities and micropayment technology make it straightforward to engage and secure donations from a group of potentially interested supporters at very low cost.

An entrepreneur seeking to use crowd funding typically makes use of online communities to solicit pledges of small amounts of money from individuals who are typically not professional financiers.