Money Making Business

How to Keep the Money Coming In When You're Starting a Business

2015-04-04T14:14:00.003-07:00

A 40's something woman was talking to me the other day about her growing sense of frustration over "working for someone else" and her longing to "do my own thing, drive my own wagon". But, she said with consternation, "I have family counting on me and a standard of living I don't want to sacrifice."

Everyone has to decide for themselves what level of sacrifice and risk they're willing to undertake

to stretch the dollar and the final three are ideas for getting started without stopping.

1. Continue to draw a (reduced) salary.

Leaving your current employment in order to develop your new business may look like the only option, based on an assumption that you won't get approval for reducing your hours. While this may prove to be the case, asking yourself why and how your company will profit from retaining your skills and experience for a transitional period can provide the basis for approaching your employer. Be sure to do your homework first, however, and be able to back up your request with a solid rationale.

Also

consider the issue of timing when starting a business. You want to weigh informing your employer of your wish to leave with being prepared to leave if the answer to your request is no.

2. Develop another income stream.

If you need to leave your present employment, is there a skill in your toolbag that you can resuscitate and put to work without a significant expenditure of time or energy? Is moonlighting or freelance work an option? E-lancing websites (such as Elance.com and Guru.com) may be worth looking into for short-term professional service opportunities.

For example, a community mental health worker transitioning to private practice used his conflict resolution experience to sell a training package to public schools. A woman transitioning out of an insurance brokerage created and sold seminars on long term care financing at local retirement centers.

3. Reduce expenses.

Another financing idea for starting a business is seeing what you can save. Apart from fixed expenses - mortgage, taxes, insurance, etc. - are discretionary expenses that make up the larger part of budgets. Doing a careful analysis of these expenses and choosing what you can forego for a while can often save thousands per year.

Carefully analyzing hidden expenses - credit card interest rates, bank charges, late fees, auto debits, phone plans - or "lost money" from low interest rates on savings may generate several thousand more per year.

4. Borrow.

It isn't necessary to wait to borrow for start-up costs until you have a well-documented idea to submit for a business loan. Refinancing a home or taking a line of credit are relatively low-cost ways of generating capital when starting a business. Depending on your credit rating, you can also get time-limited low-interest loans from credit card companies.

If you choose this financing idea for starting a business, applying for loans or refinancing packages while you're still employed is strongly advised. Your rating as a borrower declines quickly once the regular paychecks stop.

You don't have to wait! Get started on your new business idea while you're still employed. Several of the all-important first steps (below) can be started while standing in the grocery line or running on the treadmill. They involve asking yourself some questions and doing some informal research to get crystal clear about your idea. This can take weeks off your actual start-up time.

5. Identify your niche.

When starting a business, think about the services you're uniquely qualified to provide, as well as the ones you most enjoy providing. Be specific! Write them down! Then think about what group of people would get benefit from those services and have the ability to pay for them. Again, be specific: age, where they congregate, habits and values, how they define the problem your services are going to solve.

If you don't know, ask. Find someone who fits your "ideal client" profile and get permission to ask some questions. People generally love to be helpful.

6. Create your marketing plan.

While what you need from a marketing plan will get more sophisticated as your business develops, for now it simply means answering the question, "How is my business going to make money?"

What is the product or service you're going to sell? How will you describe it so people quickly recognize the value? How will you package it? (Fee for service? By the project? On retainer?) How will you price it? (What's being charged for comparable services?)

7. Manage fear!

For most people, anything involving money involves some level of fear. It's important to acknowledge to yourself and to others that you are taking a risk, and you've decided it's a risk you want to take. So consider the fear of starting a business natural, and find ways to manage it.

Getting support from people who believe in you and in what you're embarking on is number one in fear-management tactics. Don't assume that you'll get it from the people closest to you or that if you don't have it you shouldn't proceed. They're probably the ones most impacted by your decision and so may be least ready to offer support. Their consent - a willingness to go along with your plan -is helpful, but support may have to come later.

It's also helpful to set a goal (and a date for completion) that's key to your new venture - arrange financing by a particular date, or sign a lease - and announce it to at least one person. You'll find that making that commitment to that financial idea for starting a business, saying it out loud, and following through will in turn generate more confidence and more forward momentum.

To all of you who are tired of marching to someone else's drum and are eager to go solo, these financing ideas for starting a business should help you take prudent but positive steps toward realizing your goal. Good luck!

First-time investors with moderate risk profile should go for balanced funds

2015-04-04T13:54:00.001-07:00

In 2014, the Sensex rose 30%, surprising most. This attracted investors to equity mutual funds, which received a net inflow of over Rs 42,000 crore in January-November, the highest ever.

If stock markets are at high levels, as they are right now, investing can be risky. But does this mean you should stay away from equities and risk earning returns that are lower than inflation? Not necessarily, because there is a category of funds that give exposure to stocks while limiting risk by investing substantial money in debt securities as well. Balanced funds, say experts, are ideal for first-time equity investors as they invest in stocks while keeping the risk low. We tell why these funds, also called hybrid equity-oriented funds, are a good choice for those new to equities.

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Provide Cushion There was a time when these funds invested half the money in equities and half in debt. This changed after the 2006 Budget mandated that a fund has to invest at least 65% assets into stocks if it is to be treated as an equity fund. So, these funds now keep at least 65% money in equities. This is important as long-term gains (after one year) from equity funds are not taxed while long-term gains from debt (that too after three years) are taxed at 20%. Short-term gains from debt funds are added to the income and taxed according to the person's tax slab. Despite the high equity exposure, these funds have shielded investors better than pure equity funds when stock markets have been under pressure.

"By investing in both equity and debt, these funds keep risk under control, but their returns, too, are lower than that given by pure equity schemes," says Anil Rego, CEO & founder, Right Horizons. For instance, in 2008, balanced funds lost 42% value on an average, while equity diversified funds fell 53%. Again, in 2011, when equity markets tumbled, balanced funds lost 16% value, while the average fall registered by equity diversified funds was 23%. However, when markets rise, investors in balanced funds have to remain content with lower returns. So, in the rally of 2009 that followed the 2008 crash, balanced funds returned 60%, while equity diversified funds rose 82%. Last year, balanced funds rose 40%, while diversified funds returned 52% on an average.

However, over the long term, the gap is not much. Equity diversified funds returned 18% a year in the 10 years ended January 6; the figure for balanced funds is 15%. Even if we compare the best and worst funds in the two categories, the difference is similar. The best performing balanced fund, HDFC Prudence, delivered an annualised return of 21% over this period, while the best diversified equity fund, Sundaram Select Midcap, returned 24%. The worst performing balanced fund, UTI CCP Advantage, delivered 10%, while the worst performing equity fund, JM Basic, returned 6%. Balanced funds are less volatile than pure equity funds. As per data by ACE Mutual Fund, the average standard deviation of monthly returns of balanced funds over the past three years is 3.68 while that of diversified equity funds is 4.64. Standard deviation of a fund shows how much its returns deviate from the mean over a period. A higher figure indicates more volatility. So, balanced funds are definitely for you if you prefer good sleep over trailblazing returns.

Asset Allocation

'Some top balanced funds have substantial exposure to mid-caps & small-caps', says Rohit Shah, founder & CEO, gettingyourich.com

These funds provide a ready portfolio of two main asset classes, equity and debt, and obviate the need to buy separate equity and debt funds. Not only this, the all-important job of asset allocation is taken care of by the fund manager. Asset allocation involves maintaining the equity-debt ratio at a desired level. In this, you keep booking profit in asset that is doing better and investing that money in the other asset so that the ideal portfolio composition is not disturbed. In a balanced fund, the fund manager does the job for you.

Tax Efficiency

Balanced funds are tax efficient. Any fund that invests more than 65% money in stocks is treated as an equity fund for taxation. Even the debt portion is taxed like equity. In a debt fund, short-term capital gains are added to the income and taxed as per the person's tax slab, while long-term capital gains (after three years) are taxed at 20% with indexation. Indexation allows investors to be taxed on returns over and above theinflation rate by adjusting the purchase price of the securities for inflation. In equities, long-term capital gains (after one year) are not taxed. Short-term gains are taxed at 15%.

Differentiating Factors

Remember that investing in balanced funds is not without risk as their predominant focus is on equities. But a good balanced fund can make your experience of investing in equities less painful by reducing volatility in returns. Therefore, it is important to select the right fund. We discuss some issues with these funds that you must be aware about.

Capitalisation Break-up

Everybody is not comfortable with investing in mid-cap and small-cap stocks as they are risky. Different funds have different exposure to these stocks. UTI CCP Advantage Fund, for instance, has the highest allocation (among balanced funds) of 83.69% to large-cap stocks. Escorts Balanced Fund has invested 34.92% money in large-caps, the lowest in the category, as per the November 2014 data. The average allocation of balanced funds to large-caps is 61%. Go with funds whose investment preferences suit your risk profile.

Allocation to Equities

You must check how frequently the fund manager changes the equitydebt allocation. As per the November 2014 data, the average allocation of balanced funds to stocks is 72%. It currently ranges between 64% and 97%. Kotak Balance has the lowest allocation to equities while UTI CCP Advantage Fund has the highest. Some fund managers maintain equity allocation at a pre-decided level while some adjust according to the market conditions.

For instance, HDFC Prudence's equity allocation has ranged between 71% and 72% (lowest deviation in the category) in the past one year while in case of SBI Magnum Balanced it has been between 64% and 75%. Although the returns will depend on the stock selection, you can choose the fund whose strategy you are more comfortable with. Debt is Important

The kind of debt papers the fund invests in can be a big deciding factor for returns. You must check the credit quality and the average maturity of debt papers the fund invests in. You must also see how frequenstly the fund manager churns the portfolio. These factors decide the kind of returns the fund will deliver. Apt for New Investors

Despite being one of the best options for first-time investors, balanced funds haven't got a lot of attention from investors. Their assets account for just 2% of the industry's assets of Rs 8.87 lakh crore; equity funds account for 25% assets of the industry. "Investors don't understand mutual funds. And those who do may find balanced funds slightly costly. They may prefer to invest directly in equities. Also, some good balanced funds have substantial exposure to midcap & small-cap stocks and that may deter conservative investors," says Rohit Shah, founder & CEO, gettingyourich. com.

However, experts believe that these funds are good for first-time investors. "First-time investors who do not want to actively manage their portfolio and have low risk-taking capacity can go for balanced funds," says Ankur Kapur, director, Finqa, an investment advisory.

Rupali Avinsh

Age: 35 yrs

Occupation: Impact Manager/Social Sector

Q- Why did you opt for balanced funds?

A- I wanted to start investing in equities by taking less risk

Q- Which was your first mutual fund investment?

A- I started Rs 5,000 SIP in HDFC Balanced fund in August 2014

Q- What was the purpose of your investment?

A- I wanted to start with equity to increase returns

Q- What proportion of your portfolio is in balanced funds?

A- All my regular savings are in balanced funds. I plan to invest in balanced funds only

Juggling assets

2015-04-04T13:51:00.002-07:00

Kumar Aditya, an IT engineer based in Bangalore, invests without advice from a financial planner. In 2009, a friend suggested that he invest in equity mutual funds. But having heard of the 2008 market crash, he decided to stick with fixed deposits and missed the bus in 2009 when markets surged. "I didn't know when to invest," he says.

Many people find themselves in such a situation. The reason is that it is difficult to know which asset will do well in a given year. One way out of this problem is investing in asset allocation funds, which adjust the equity-debt allocationaccording to market conditions.

"Asset allocation funds are designed to adjust the equity-debt allocation on the basis of a formula or change in the fund manager's perception of the environment," says Nilesh Rokadia, a Mumbai-based financial advisor. He says these are similar to hybrid funds but more actively managed in terms of asset allocation.

Good, Bad and Ugly

"There are enough studies to suggest that more than 90% returns are determined by asset allocation and the rest by stock and bond picking skills," says Ajit Menon, executive vice president, DSP BlackRock (DSPBR) Mutual Fund.

However, in some situations, these funds can be tax inefficient. Lakshmi Iyer, chief investment officer (debt) and Head of Products, Kotak Mahindra Asset Management Company, says, "In the current market, they are classified as debt funds on the tax front. So, one has to remain invested for at least three years." This means that most of these funds hold less than 65% funds in equities at present.

Short-term gains from debt funds are added to the income and taxed as per the investor's tax slab. Long-term gains (after three years) are taxed at 20% with indexation (adjusting the purchase price for inflation). This lowers capital gains and, hence, the tax burden. Not everyone considers tax inefficiency as a problem. DSPBR's Menon says, "Investments in such products should be made for five years or more. The idea is that investors need not time the market but keep investing for goals."

"The problem with asset allocation funds is that there is too much variety. They have a short history and so judging them is difficult," says Rokadia.

Results Matter

"It is difficult to judge a product based on only one bull or bear cycle. Its robustness should be measured over at least two full cycles," says Menon of DSPBR. There are 10 asset allocation funds in the market.

Let's look at the performance of Franklin India Dynamic PE fund, which is among the older funds with a 10-year history, and compare it with the asset management company's, or AMC's, flagship equity and fixed-income funds (Franklin India Bluechip and Franklin India Short Term Income Plan, respectively, where it also invests). The comparison shows that though Franklin India Dynamic PE fund has not risen as much as the AMC's equity fund, it protected the portfolio during 2008 and 2011 slumps (See Performance Factsheet).

"Asset allocation decisions involve judgement calls," says Rohit Shah, founder & CEO, GettingYouRich.com. He says there are a number of factors such as risk profile, goals and market situation that are taken into account while deciding how much money should be invested in each asset. "Such unique aspects of an individual's requirement are not taken care of by just one asset allocation fund," he says.

Some Asset Allocation Funds

Birla Sun Life Asset Allocator Multi-Manager FoF Scheme: Invests in funds across AMCs, including those from Birla Sun Life AMC.

Strategy: Asset allocation and choice of funds are decided by the investment team on the basis of four factors: (1) Price/earnings (P/E) ratios (2) The relationship between earnings yield (P/E inverted) and 10-year bond yields relative to historical averages (3) Fund flows (from foreign and domestic institutions) into equities and (4) The Reserve Bank of India's policy stance and yield curve.

Principal Smart Equity Fund: The fund invest directly in stocks based on PE ratios Strategy: It decides allocation to equities on the basis of market PE ratios. Franklin India Dynamic PE

Ratio Fund of Funds: It's a fund-of-funds which primarily invests in schemes of Franklin Templeton based on specific PE bands.

Strategy: Invests in Franklin India Bluechip Fund (Equity) and Franklin India Short Term Income Plan (Debt). If the invested amount accounts for more than 20% of either of the two funds, it invests in Franklin India Prima Plus (Equity) and Franklin India Income Opportunities Fund (Debt).

HDFC Dynamic PE Ratio Fund of Funds: It is a fund of funds that HDFC inherited when it bought Morgan Stanley's India mutual fund business.

Strategy: It follows the fund-offunds structure but the band used to decide the equity-debt asset allocation is based on the one-year forward PE ratio. The scheme's investment in any scheme does not exceed 20% net assets of that scheme.

DSP BlackRock Dynamic Asset Allocation Fund: This is a fund of funds. Asset allocation is decided by comparing yield rates.

Strategy: The factor used to determine asset allocation is the yield gap ratio. It is the ratio of dividend yield of equities and yield of a long-term government bond. It shows whether equities are overpriced or underpriced compared to bonds.

20 ideas to make money online

2015-04-04T13:47:00.002-07:00

A cash cow for the enterprising, the Internet is littered with opportunities to make a fast buck. While it rarely qualifies as a solitary source of income, the Net can easily help you supplement it. However, the amount you earn depends on the time and effort invested. Go through these 20 options and find out which ones work for you.

Blogging
If you're a passionate closet writer who wants to be published but can't find a way to do so, make each keystroke your way to wealth by penning your own blog. Starting a blog doesn't require extensive technical skills but it's important that you have expertise in the field you are writing on. This will attract visitors to your site. Building a large following will enable you to earn profit by luring advertisers, writing paid reviews or getting commissions for promoting other people's products.

Paid Writing
If maintaining a blog is difficult for you but you still want to indulge your passion for writing, you can jot down articles for other blogs or sites such as Weblogs, Helium or PayPerPost. Writing an e-book can also be a good option. E-books are investment free, with no cost for printing and shipping. If you have a strong command over languages, you can become a copy editor, where Webmasters will pay you to read articles and correct grammatical errors, sentence fragments, etc.

e-tuitions/Webinars
The demand for tutors is high and growing. So, if you like helping others learn, e-teaching could be the earning ticket for you. All you need to become an online tutor is expertise in your subject and a few spare hours per week. TutorVista, e-tutor, SmartThinking and Tutor.com are some of the sites you can enroll with. If you gain a good reputation as a coach, you could even conduct Webinars-lectures or seminars transmitted over the Net. College and university students are willing to pay to gain entry to a well-respected Webinar.

Affilliate/Reseller
For those who have the knack of selling, one of the best ways to make money online is to become an affiliate/reseller. An affiliate is a person who gets a commission for selling every product that he promotes, whether on his Website or through any other avenue such as eBay. You don't have to own the product. You only need to sign up for an affiliate program with a company and start selling its products under your referral link. Firms such as Commission Junction or Click Bank have a large pool of products.

Buying/Selling domains
Buying and selling domain names is another way to make money from home and requires very little investment or time. You can buy domains at their registration prices or even cheaper and trade them at a profit. However, always research on sites such as sedo.co.uk, afternic.com, ebay.com or other domain auction sites to get an estimate of the hottest selling names. The best way to find good ones is to use terminated domain lists, which contain several expired names that are back in the pool.

Freelancing for Professionals
Freelancing is a great option for professionals who are experts in their respective trades and know how to ensure customer satisfaction. Various freelancing and project-oriented sites allow companies that need help to describe their projects. Freelancers and small businesses offer bids, ideas or proposals, from which the buyers can choose what they find most suitable. Websites such as Elance cover everything from programming and writing to data entry and design, while RentACoder focuses on software programming.

Advertising
You can sell space on your Website or blog for advertisements and you earn when these ads are clicked by visitors to your site. The sorting and placing of ads is free. The profitability of pay-per-click advertising depends on the traffic level of the Website and, most importantly, on the clickthrough rate and cost per click. Google AdSense is the most popular option, while others are BidVertiser, Text Link Ads and Blogads. Direct banner and RSS feed are some other forms of online advertising.

GPT Programme
GPT or Get-paid-to sites are becoming increasingly popular among teens. You get paid for signing up for free Websites, newsletters, playing games and filling out online surveys. These are suitable for people who don't have a skill set but want to earn extra money. Taking online surveys is simple- register with a few legitimate, paid survey sites and answer questions. The topics range from shopping to politics. This might not help you make a living, but you can earn good pocket money. Contests2win is one of the trusted GPT Websites.

Online Marketing
Once a Website is created and optimised for search engine (SEO), the SEM or Search Engine Marketing begins. A treasure trove lies hidden here. An SEO/SEM expert, who is responsible for marketing a Website, can promote it in various ways. These include article marketing, writing press releases, forum posting, blog posting, submitting your site to directories and search engines, social bookmarking, etc. Most companies don't do this in-house and pay you to conduct the SEM for them.

Making themes
As more and more people seek an online presence, the demand for Website templates and WordPress (Blog) themes will keep increasing. If you are good at Web designing and coding, you can earn a lot from designing Web themes. In this segment, there are mainstream Websites, such as TemplateMonster and ThemeForest, which act as a marketplace where you can sell your themes. Templates are sold and priced depending on the rights and features that are bundled with them.

Selling photos
If you enjoy photography and are good with a camera, you could be sitting on a huge reserve of revenue. There are people who will be interested in your collection of images. Nowadays, it's easy to take your photos to the public, providing a convenient way to build a secondary income stream. Many stock photo agencies, such as Fotolia, Dreamstime and Shutterstock, offer incentives for people to earn from their photos.

Support & service
Providing coding or fixing other Webmasters' issues is another great way to earn extra bucks. There are simple jobs ranging from adding a script to setting up sites, but knowledge of Web coding is essential. One can offer support for Web CMS (content management systems) like Drupal or Joomla. After you are comfortable with your own installation, you can help other people to set these up and configure them.

Stock/forex trading
Joining the stock/forex market may seem a bit risky. However, you can start small and continue researching till you gain experience in this area. Once you do, it will be easy to earn from exchanging foreign currencies and/or stocks. Their rates fluctuate depending on supply and demand, and economic and political influences in the world. The aim of any trader is to spot which currency/stock is likely to rise or fall in value against another. The more time you put in, the more you will earn.

Selling your own brand
If you have a flair for designing cool images, don't bother about creating your own inventory. As long as your design can be printed on a product, you can pocket some money. You can upload designs on various Websites such as CafePress, and if somebody orders these designs, the company will print them and distribute the products. It could be designs for T-shirts, hats, bags, books, posters, calendars, greeting cards, etc. You will receive a commission for each sale. Other such sites include Lulu and Zazzle.

Virtual Assistant
Small businesses always need help in running their processes, but may not be willing to hire a full-time employee. As a virtual assistant, you are expected to perform practically any administrative task that a traditional secretary or assistant would, such as make travel reservations, handle expense reimbursements or pay bills. You can do it from the comfort of your home, interacting with clients either online or by phone. Your expertise will decide how much moolah you rake in.

Inbound call centre
Many companies, who are facing space constraints, especially those in metro cities, prefer to hire workers outside their offices or outsource certain processes. You can set up an inbound call centre at home to handle such jobs. Research different companies that are outsourcing their work as they may have opportunities for inbound call centre agents. You can work for more than one company. This can be either a part-time or fulltime engagement, depending on your need.

You Tube
If there's a dramatic performer hidden inside you who craves applause and adulation, upload yourself on YouTube. You can be a filmmaker, musician or comedian who wants a wider audience. Your earnings will come from ads displayed on your video page. This process is similar to the pay-per-click advertising program common to other Websites and blogs. Sites such as Flixya and Mediaflix can be helpful in this regard.

Researching for others
Don't be morose if you can't write, design or code. Lack of talent cannot stop you from making money online. If you're willing to work hard for a few hours a week, you can take up simple research jobs for other people who don't have the time to do it themselves. You could search for opportunities in organisations that provide funding for research and offer to assist them through online investigation.

Building Applications
With smartphones gaining popularity, the demand for their applications, or apps as they are popularly known, has also shot up. There are over 3 million apps for the iPhone and over a million apps in Google's Android market. Most of these are selling like hot cakes. Developing and selling your own smartphone app is becoming a lucrative way to make money on the Internet. Apps cost virtually nothing to develop and entail no storage or shipping costs. So they enjoy the best profit margins.

Transcription
Medical transcription involves making written copies of oral material dictated by doctors or other medical experts. These may include history and physical reports, clinical notes, consultation notes, reports, letters, psychiatric evaluation and so on. The dictated material needs to be transcribed swiftly and accurately, which is the most challenging aspect of the job. To become a medical transcriptionist, you need to have a good knowledge of medical terminology and a high typing speed along with accuracy.

Distance Education at Harvard Extension

2015-04-04T13:41:00.003-07:00

They offer more than 300 Harvard classes in several formats online to deliver convenient Harvard lectures to your computer or mobile device. Most of our distance education courses are offered in our 15-week fall or spring semester.

Video courses

Most of our courses offered online feature videotaped lectures of courses held on campus, with accompanying course materials. Videos are posted to course websites weekly.

In online-only courses, there is no scheduled class time, so you can watch them at any time during the week. In on-campus courses with an online option, you can attend lectures in person, watch them online at your convenience, or both.

To find these courses, select “Online courses” in the course search.
And review our video course guidelines and demos.
Live web-conference courses
These courses are conducted live at a scheduled time each week. Instead of watching videos, you log in to a virtual classroom to participate. You can ask and answer questions in real time and interact live with your teacher and classmates.

You can search for web-conference courses using the course search. And read the web-conference course guidelines.

Hybrid courses

These courses combine an intensive weekend session on campus with live web conferences or video lectures throughout the semester. These courses count toward the on-campus requirement in certain degree programs.

To search for hybrid courses, use the course search. Note the dates and times for the weekend session in the course description.

The online experience

Learn what faculty and students think of Harvard distance education

Interested in a degree or certificate?

You can apply a combination of online and on-campus credits toward Harvard Extension degree. See the degree program that interests you for course offerings and degree requirements.

Many of our professional graduate certificates are offered completely online, while others have a number of online course options.