Many people have the common misunderstanding about the MLM business. Understanding the myth and finding out the truth will help us in getting clearer about what we are getting into. This will also help us to be more successful in what we do.
Read this about is it possible to earn with no selling, no sharing and no investment
Lesson one learned from How to Win Friends and Influence People
Lesson one learned from How to Win Friends and Influence People
I got this book, How to Win Friends and Influence People from a senior recently and haven't got enough time to carefully read the book and make it useful. But as i read, i decided to write down the key ideas chapter by chapter, to share it to everyone also as a summary to myself to ensure my understanding on the topic. Perhaps it might help me using the techniques or skills when I interact with others in the future.
As to why do I decide to read the book, i believe that education and life long learning is an important part to my personal growth as well as financial growth. As some people say education is the best investment you can make to yourself. I would think that reading would someday help me, perhaps without noticing it, one's personality changes with reading and exposure to wider knowledge.
In the first chapter of the book, titled "If you want to gather honey, don't kick over the beehive"
Essentially it is about criticism. Do not criticise others while hoping them to be better. In the illustration, the author Dale Carnegie used an example of Lincoln. His general had an golden opportunity to win over the opponents but hesitation caused them to lose the enemies. Lincoln was almost sending out a letter to criticise the general. Doing so would definitely relief his anger but the consequences might be the general will have bad feelings, gets defensive and all. In the end he did not send out the letter and this story goes unknown to many.
Don't criticise, condemn, or complain.
This is the principle number 1 highlighted at the end of chapter one. Criticizing get others into defensive mode and create bad feelings. This chapter suggests that instead of complaining about bad actions, we should complement good actions. Psychologists suggests that complements of good behavior do better at encouraging that behavior. In the future, instead of criticizing bad behaviour, why not try complementing good behavior to encourage it and do the complements publicly to allow others see the good example and follow it.
I got this book, How to Win Friends and Influence People from a senior recently and haven't got enough time to carefully read the book and make it useful. But as i read, i decided to write down the key ideas chapter by chapter, to share it to everyone also as a summary to myself to ensure my understanding on the topic. Perhaps it might help me using the techniques or skills when I interact with others in the future.
As to why do I decide to read the book, i believe that education and life long learning is an important part to my personal growth as well as financial growth. As some people say education is the best investment you can make to yourself. I would think that reading would someday help me, perhaps without noticing it, one's personality changes with reading and exposure to wider knowledge.
In the first chapter of the book, titled "If you want to gather honey, don't kick over the beehive"
Essentially it is about criticism. Do not criticise others while hoping them to be better. In the illustration, the author Dale Carnegie used an example of Lincoln. His general had an golden opportunity to win over the opponents but hesitation caused them to lose the enemies. Lincoln was almost sending out a letter to criticise the general. Doing so would definitely relief his anger but the consequences might be the general will have bad feelings, gets defensive and all. In the end he did not send out the letter and this story goes unknown to many.
Don't criticise, condemn, or complain.
This is the principle number 1 highlighted at the end of chapter one. Criticizing get others into defensive mode and create bad feelings. This chapter suggests that instead of complaining about bad actions, we should complement good actions. Psychologists suggests that complements of good behavior do better at encouraging that behavior. In the future, instead of criticizing bad behaviour, why not try complementing good behavior to encourage it and do the complements publicly to allow others see the good example and follow it.
Top 8 ways of making passive income/investments
My Top 8 ways of making passive income/investments
Requires extremely low start up costs, almost nothing. I think this is a very good way to start off a business generating passive income. You don't have to put high targets into this kind of business, although the potential is almost unlimited. But with network marketing, i hope to create a short term passive income. Why do I say short term passive income? Because I do understand that unless the company is super extraordinary, it will not stay there forever! Once the company collapse, there gone all the hardwork and effort spent on building up your team. But of course, you can always say that with your team you can always join another company anytime and be equally if not more successful. That depends on person to person. But my hope is to get me my first source of income.
2. Blogs/internet marketing
Why blogs? Because this stream of revenue takes even longer time than network marketing to develop. Getting sufficient flow of traffic to your website takes time and years of effort. The same as above, it is for short/medium term source of passive income.
3. Unit Trusts
Unit trusts offered by different banks and financial institutions offer very high returns with certain risks involved. The ideal situation would be using the stream of passive income to finance my investment in unit trusts, this way, I would have a flow pipe of my money. From the impossible, going to risky, and then later move towards safer/more traditional kind of investment/savings. People often speculate that different unit trust offers different ROI from 5-20 even 30%
Insurance saving plans is one of the best way for savings. promises security at the same time insurance, keeping your mind at peace. The same as above, hopefully, I will use my own money to start the saving plans and soon enough able to use my passive income to fund the savings.
5. Shares/stocks
Shares and stocks involves reasonably high risk and requires alot of time in monitoring the market. Unless you are talking about investing in companies with high dividend rates and has a stable position. offers high returns upto 30% or more if sufficient time is put into studying and researching.
6. Properties
Properties i think can offer the highest return if invested correctly. Prices of property in major cities in China has grown several fold over the past few years. Prices in KL grows in range of 2-3 times in short frame of 5 years. While in Singapore, it could be a 10-20% increase a year. A good investment IF locations are chosen wisely.
7. Gold/Silver
Lots of news about gold and silver investment. People have been saying keep gold coins as savings. A version of the saying suggests that money's value depreciate so fast because countries are printing money non stop, and everyone is getting into financial crisis, therefore more money is printed to boost economy and such. BUT GOLD has its value remains, it will be forever expensive and grows over time. It is back to the basic that GOLD is the most valuable asset one can keep.
8. Start a traditional business
Of course, when I have the sufficient passive income, i would start investing in a business or start a business. Becoming a boss in the end is almost the most enjoyable thing to do.
But who knows, the list might change from time to time, with education, exposure, growth in knowledge and skills. Maybe someday i meet a person like you who changed my life.
Am I too old to start Online network marketing?
What? There are no such thing as too old for something. Online network marketing is an evolving business where it is a learn and earn process.
It is NEVER too late to start off your network marketing business and building your passive income for financial freedom, regardless of who you are and how much knowledge you have about the industry. The only thing you need to get started is YOU WANT TO GET STARTED.
Online marketing itself is a marketing strategy of this new age and network marketing is defined as the Business of the 21st century by famous author of Rich dad Poor dad. You dont have to believe me, but please believe the rich and famous. And when you combine internet marketing and network marketing, you get the evolution of the business model. Online network marketing!
In order to produce results through online network marketing, you no longer need to knock on others' door and sell! The trend has moved towards something we called attraction marketing. You attract your prospects and through some filtering/funnelling mechanism, you will be able to attract quality prospects who are trully interested in your product and from there on, you follow up and close the deal.
Imagine that you are doing it the traditional way, what you need to do is compile a super long list of ALL your friends and family, then call them up one by one and make an appointment, meet up with them and spend 1-2 hours talking to them about your business and products, end up getting 90+% rejection. How does it feel?
In the new business, what you need to do is spend some good effort in building and maintaining some online channels, and you can sleep, eat and do whatever you want at your preferred time, while the internet works for you. You receive emails telling you that 100 people have seen your website and 2 of them are interested and signed up. Then you follow up with these 2 person with a much higher success rate. And the best part? You no longer have to chase after your friends and family and annoy someone.
Besides, there are so many free tools available online to help you with the process! Ebooks and guides, online marketing tools, website tracker tools, keyword analyzer tools and such. All these to assist you to start off your business. As long as you have your fingers and are able to type something, you are never too old for anything!
How you can earn from Network marketing
Network marketing is probably
the easiest way to create passive wealth from nothing. The startup costs are extremely low, the system is already in place, and anyone can do it.
Robert Kiyosaki calls it The Perfect Business.
Donald Trump has stated that if he ever had to start over from not
hing, he would find a good network marketing company and run with it.
In Multiple Streams of Income, Robert Allen calls it “The Ultimate Money Making Machine.”
If you know anything about wealth gurus, when these guys speak,
you listen.
Network marketing as a business model has been around for a long time, but only recently has it started to gain traction as the marketing model of the future with powerful endorsements from Kiyosaki, Trump, and Allen, not to mention the thousands of major corporations that are using network marketing principles in their affiliate programs.
You may associate it with companies like Avon, Mary Kay, and Herb
aLife; but what you probably don’t know is that the business has evolved dramatically to eliminate the pitfalls of those businesses.
The days of carrying inventory, selling products, taking advantage of your friends, and going into debt are over. Now, even mainstream companies like Amazon.com, XM Radio, AT&T, and thousands more have adopted the strategies of network marketing.
What is It?
In a network marketing business, there’s no advertising budget. Instead, the company pays its customers to market its products. What a great idea, right? Why not give everyone a chance to make a buck instead of hoarding it all for the shareholders and executives?
While this concept has always been noble, it hasn’t been until recently that some companies have perfected the system to go along with the goal.
Are you Tough Enough?
Although it’s a very simple business, only the tough need apply. Successful people in network marketing tend to be successful people in life overall.
When I say “tough,” I mean mentally tough. Network marketing challenges you to face what is probably your biggest fear: rejection. The people who are making the big bucks had to face a lot of rejection along the way to get to where they are. If you aren’t willing to face your fears and grow as an individual, you might as well stop reading.
On the other hand, if you are an over-achiever, self-motivator, and natural leader; you could have what it takes to make a lot of money in this business.
One of the things that makes it difficult is that most people associate network marketing with companies like Amway, Goji Juice, or some pyramid scheme because they have been or know someone ho has been hurt by one of these companies in the past.
Unfortunately, since the business is based on trust, a few bad apples have bruised the reputation of the industry as a whole. That’s why it’s so important to choose your company wisely.
I’ve looked around quite a bit and discovered a few things that differentiate an honest network marketing company from a bad apple.
1. Value at Every Level
This is the most important factor that separates the good companies from the bad. Have you ever been asked to join a pyramid scheme? That’s where a group of people recruit a few more people, who recruit a few more people, who recruit a few more, and on and on… The idea is that everyone is supposed to send money to the people above them and find other people from which to receive money below.
A good salesperson can make it sound attractive, but the problem is it doesn’t take long until the pyramid runs out of people and everyone except the people on top are left empty handed.
You see, you don’t receive any value for joining a pyramid. You just receive a promise of future value. That’s why it’s a scam.
Multi-Level Marketing
Many multi-level marketing companies operate under the same principle, but they disguise it behind expensive products and training. They tell you to buy a bunch of overpriced merchandise with the promise that you will make your money back when you sell it to someone else. Once again, it’s passing the buck.
If you are paying more than you normally would for a product on the promise of making money in the future, you’re in a bad-apple company.
Levels
Now, just because a company has levels doesn’t make it a bad apple. That’s a mistake a lot of people make. It’s whether or not there’s value at every level that counts.
Think of Wal-Mart for example. The shareholders sit at the top level above the executives, who are above the regional managers, who are above the store managers, who are above the department managers, who are above the ground-level employees, who are above the customers.
Think what you may about Wal-Mart, but you can’t accuse them of overcharging customers.
Good Apples
A good apple company has products that are priced at or below market levels. This means that there is value at every level. If someone just wants to purchase products, but doesn’t want to recruit others, they are free to do so because they are getting value out of the products.
A good company actually provides more value than Wal-Mart because they share the profits with any consumer who wishes to refer their products to others. I’ll take profit sharing over minimum wage any day.
2. Reasonable Startup Costs
Very Important: Network marketing businesses don’t cost thousands of dollars to start, and don’t let anyone tell you otherwise. The business should be very inexpensive to start, and you should be getting something of value for every dollar you spend.
3. Free or Inexpensive Training
One tactic that some bad apples have taken in the past when they haven’t been able to sell enough of their expensive products is to sell expensive training to associates.
Training should be free or inexpensive because everyone in the organization benefits from increased production.
4. Honest Feel
You know how some used car dealerships feel? Kind of slimy, right? There’s sort of this feeling that you know they’re pulling one over on you, but there’s nothing you can do about it.
Some network marketing companies feel the same way. If the people in the organization seem dishonest, they probably are. If the company is so great, they shouldn’t have to over-sell it.
I was skeptical at first when someone introduced me to my company, but I was quickly amazed at how normal and honest everyone was. They had confidence in their company and didn’t have anything to hide. That’s a good sign.
Passive Income
If you can find the right company, and you are willing to learn, it really can be the perfect business. I recently heard a statistic that over 20,000 people in the U.S. are making over a million dollars a year in network marketing. The profit possibilities are really that big.
The passive component of network marketing is in the power of leveraging. As your business grows, the efforts of your work will be multiplied as more and more people help you to make money.
Starting out can be slow, but if you are persistent, your business will grow and grow like a snowball down a mountain. I have seen people achieve six figure incomes on only a few years.
It’s a Business
Even though the possibilities are endless, it’s still a business and you have to treat it that way to make money. Successful network marketers keep strict business hours dedicated to building their business.
Just like in any business, social skills are a must. If you are in a good apple company, you won’t have to sell anything, but you will have to sell yourself. People who are self-starters and natural leaders tend to excel in this business.
Fortunately, if you don’t have these skills already, the support system in network marketing companies is usually excellent. Since everyone benefits from your success, most people are more than willing to help you develop essential skills.
How to Find a Company
You may not realize it, but advertisements for network marketing companies are everywhere. Anywhere you see and ad with the keywords “work from home”, “home-based business”, and “financial independence,” you can bet it’s a network marketing company. Just check out the google ads on this page. I see them all the time.
What is Network marketing
Pros: low initial investment, huge potential
Cons: must overcome negative stigmas, many scams out there
Network marketing is an industry that allows individual entrepreneurs to team up with a company to market their products or services. The idea behind network marketing is for the company to eliminate the costs of marketing, advertising, sales, and distribution, allowing the consumer to take on these responsibilities if they choose.
Many highly respected companies such as AT&T, Direct TV, Gap, Amazon.com, Google, Apple Computer, Macy’s, Nordstrom, Travelocity, and tons more have started to borrow from the concepts of network marketing. These companies have realized that the impact of their multi-million dollar advertising budget pales in comparison to the power of word-of-mouth advertising. When I noticed this trend towards the network marketing method, I dropped my “no way” attitude and decided to investigate the traditional network marketing model.
Most people have very negative feelings about network marketing because there have been a lot of bad apples in the industry, especially early on. What these people don’t realize is how far the industry has evolved. A few of these companies have learned from past mistakes and rid themselves of many of the negative aspects of old-paradigm network marketing. If you can find the right network marketing company today, it is possible to build passive income without a lot of money and still keep your friends.
Have you ever recommended a great restaurant or movie to someone? Have you ever told someone where you found a really great buy? Did the restaurant, theatre, or store ever pay you for your referral? That is precisely what the new generation of network marketing companies is doing.
The good apples offer a wide variety of great products or services at a great price, meaning that you don’t have to refer people to make it worthwhile. Selling something that is expensive and unnecessary is hard, but recommending a product or service that is better and less expensive is easy.
The way to minimize your costs with network marketing is to find a company that has products that are already on your shopping list. Then, replace the products you are already buying and you have just started a business for nothing. You might even find a way to save money.
The new generation of companies handles all the inventory, paperwork, and sales for you; all you have to do is refer people and the company does the rest. It is truly amazing how simple the process really is. What’s that you say? You don’t want to bug all of your friends and family? Not a problem, smart networkers use the internet, or other forms of creative advertising to bring prospects to them.
The big money in network marketing is made when a referral decides to make a business out of it. Most companies pay referral fees not only on your referrals, but on secondary referrals and beyond. Your efforts will be multiplied by the efforts of those you refer. Your business will soon be leveraged into a money making machine when some of their referrals decide to do it as a business, and so on.
What does it mean to be a fresh graduate?
What does it mean to be a fresh graduate?
It means you are out of school. No longer have any semesters ahead of you. No more semester breaks and no more travelling.
For one, I was living a decent life when i was a university student. You know, not having any compulsory classes, I was able to choose and arrange all my classes to be in the afternoon.And skipping those in the morning. I had enough money from my parent and i took extra loans to make my life perfect. I had extra money at the end of the year to go for trips, with friends, overseas for conferences and activities. All without worrying too much about money.
As a fresh graduate, the first thing i had to do was to secure a room out of campus. As i was living within the campus for the complete years of my university life, I now have to look for a place to stay. So there were a few things to decide, to stay with friends or to stay with landlords. I was lucky that i got some friends together and we managed to agree to a same place to stay in. So we rented a place near the MRT and started the new life.
The next thing to worry about is the job. I almost never had a clear picture of what I want to do in the future. So i was looking around for a job. This part requires some thinking and reflection. Getting an interview was tough. For me it was like sending out 30 applications for one interview and after several interviews I landed myself a job. That happened 3 months after my graduation. Which is SCARY. When you start to think about how much time you have spent on your education and not being able to secure a job soon, you felt like you wasted all the time and effort in obtaining the certificate required.
After securing a job, it is almost done. I started to think about my loan repayment. You have to check with the banks for the updated interest rate and do some maths on how much you can afford to pay every month and how much to pay every month is wise. For me I started off paying half my salary into my study loan.
After awhile I started to realize that my life isnt going anywhere. Im spending most of my salary on loan repayment, i had no savings and will NOT have savings untill I'm done with the loan. I will THEN, suffer with house loan and other ridiculous loans.
I then came across online network marketing when i was searching about ways to make passive income. Thinking that it could be an interesting opportunity i jumped on to it. And here I am, started doing my own business and it will be a life long process, but it will bring me to financial freedom.
Why Vemma is called the world's perfect business!
See why BK Borekyo, Founder and CEO of Vemma call this the world’s perfect business!
Why Not Become A Brand Partner Today?
Joining the Vemma team is FREE, and we’ve made it as easy as possible for you to get started today!
For starters, as a Brand Partner for Vemma you get:
- A FREE marketing website utilizing social media that helps you tell your story like never before. I recently invested close to $200,000 to optimize the effectiveness of this site. Call me crazy, but it’s yours for free!
- The freedom and flexibility to be in control of your business, your time and your success. And the best news is even though you’re in business FOR yourself, WE’RE here to support you.
- A proven system of training and tools, field leadership, and support. It’s funny how most people go through life thinking experience is the best teacher. It’s NOT! Other people’s experience is the best teacher and you can learn from this upline support team starting from your very first day.
- A powerful and creative way to cash in on the Twitter and Facebook social media craze happening RIGHT NOW! You need to understand, these social media tools are not going to make you rich, but they will help to make you friends… and those friends can help you get rich!
- A stream of income from a product you never have to ship or exchange money for. It’s the coolest thing ever! No merchant accounts, shipping, refund processing, customer service or anything of the kind is needed!
The best part—we’re not asking you to join us to ‘sell Vemma’. We want Brand Partners. People that understand the power of networking and building a team of people wanting to make a difference in the lives of the people they care about. Sharing the product with people you encounter is like ‘planting seeds’ that can grow into great relationships and a perfect business that can reward your family like never before.
The Secret is Keeping It Simple
The better you keep everything super simple about this business model, the faster your team of brand partners will begin to grow.
Getting started has never been easier! Simply Click here and enter your name and information, and we’ll get you started TODAY!
Get started today with a stream of income from a product you never have to never ship or exchange money for. No merchant accounts or fees. No shipping or refund processing. And best of all there?s NO RISK to become a Brand partner today.
Vemma the product!
Introducing the Vemma Nutrition Program™
Vemma provides a powerful liquid formula that makes it easy to get the vitamins, minerals and antioxidants you need to form a solid nutritional foundation.* Each refreshing serving is bioavailable (body-ready), delicious and easy to drink!
It takes about...
55 eggs? 19 bananas? 61 cups of tomatoes? No thanks, I'll take a 2-oz serving of delicious Vemma!
- 2 oranges to equal the amount of Vitamin C
- 9 avocados to equal the amount of Vitamin E
- 3 stalks of broccoli to equal the amount of Iron
- 55 eggs to equal the amount of Vitamin D
- 1 cup of spinach to equal the amount of Vitamin A
- 3 cups of peas to equal the amount of Thiamin
- 19 medium bananas to equal the amount of Riboflavin
- 62 oz of cheddar cheese to equal the amount of Vitamin B-12
- 5 large potatoes to equal the amount of Niacin
- 61 cups of tomatoes to equal the amount of Folate
- 2 large watermelons to equal the amount of Vitamin B-6
- 17 oz of cherries to equal the ORAC Value
- 37 medium mushrooms to equal the amount of Pantothenic Acid
...in just one daily 2-oz serving of the Vemma formula!
Think of it as your added "wellness insurance" for filling nutritional gaps in your diet.
Why Vemma is the company to join?
I have been searching for ways to generate passive income online and bump into this opportunity with Vemma.
But Why Vemma?
Besides that it is possibly the most powerful liquid antioxidant in the world, it starts with a good intention. At the company's core it is the intention to is the mission to help others by enhancing the well-being, as well as offering an income stream to people who introduce others to the product.
Other than that is that it can be done completely online. No more chasing after friends and scare away your closes buddy. All you probably need to do is learn about internet marketing and start to enroll others through online platforms.
Of course I can find thousands other good reasons why Vemma is the company to join and the team can give you all the support and training you need. Instead of me talking to you a million good words about the system and how easy it is to start off with Vemma, why not you click the link below and join me in exploring the platform FOR FREE!
Generating passive income
Generating streams of passive income allows us to earn more by working less. If you have the time to read all the books available about generating passive income and reading online about articles on passive income, most of them require a large amount of money to start off with.
For example, some would suggest buying a property and start getting rentals. Some suggests investing in stocks or unit trusts or other forms of investment. While all these suggestions are absolutely valid, it requires a large amount of money to start off with. While for most people especially the case if you are like me, just got out of college to work, you would have almost no savings available for the investments.
For example, with my salary as a fresh graduate, about 20% goes to rental, 15% to food and beverages, 5-10% goes to transportation, 50% goes to loan repayment, remaining goes to my parent. Almost NOTHING is left for savings or investments. Until about 3-4 years later that I would have finished paying my study loan, I would have a majority amount of my salary gone.
While of course, for recent graduates, there are other ways to generate passive income streams with very low startup costs. We graduates are highly intelligent people. We are IT savvy and updated about the latest news and trends. Which makes internet related business a perfect opportunity for us.
1. Blogs
2. Ebay
3. Internet marketing
4. Creating interesting internet content
All of these activities have the opportunity to generate income and it reaches out to the whole world. While most of us would be extremely familiar with the use of computer and internet, learning the techniques and tricks to do well with these are not too difficult.
Another very often mentioned way of generating passive income/residual income is through networking marketing. Network marketing allow individuals to become partners of the company and help to market the company's product and earn commissions based on the activity.
Why do we want financial freedom?
Why financial freedom is such an important state to achieve?
Why do I want financial freedom in my life?
Simple. To have myself free of working hard to meet the financial situation of my life. Imagine if I have a burden financially, what i do everyday will be work hard to earn money. In the traditional economy, we would work hard to get money to spend. When we realize we do not have enough to spend, we would work harder to get more money to spend. We either use our labor, time, or intelligence in exchange for money.
But that is not a good situation. Imagine having to work extra hard to get extra money, I would have exchanged all my time for money. Some of my friends are working 7 days a week about 12 hours a day. They receive decent income for what they have done, but they are tired and has no time to really enjoy the happiness the money can bring. They have no time for family members. Parents. Children.
We don't really need so much money in our life. As long as it is enough to cover our expenses, I would rather spend the time with my family or people I care about and I love. That explains why generating streams of passive income is important. It allows us to be financially free and have the time to do things that really matter to us. Instead of dragging yourself to the office and doing things that matters to your boss or customer in order to exchange for the money, you spend time, quality time, wonderful enjoyable time doing what matters to you. Be it educating your child, talking to your family, taking care of your parent, doing your favourite hobby or even travel around the world.
What is financial freedom?
Financial freedom is an often mentioned word is today's society. Having it means that you are in control of your money and NOT your money controlling you, controlling your life.
In summary, to achieve financial freedom, it basically means earning more than what you spend. But in today's world, especially for recent graduates like me, we often spend more than what we earn. We ought to spend a significant sum of money on entertainments and privileged lifestyle. For me and my girlfriend, we used to go out for dinner, a decent meal in a restaurant could cost anything from 20dollars to 60dollars for 2 person. We would go for movies and for some others, club and drinks.
Under such situations, we spend more than what we earn, or maybe not more, but almost. Therefore we are in a situation of zero or very little savings. When life goes on, when we realize we need a house, need to get ready for a family, that is when the crisis kicks in. We start to take up housing loan, and all sorts of loans, and there goes the story. Work hard and earn more to pay off loans. Work harder to earn even more to get better lifestyle.
To be financially sustainable, it is simple. In theory, we just need to control our expenses, down to the level where it is lower than our income. With that controlled, we are in a positive net earnings monthly and we are on our way to financial sustainability. But frankly speaking, how many of us will be able to do that? I mean if you quit your job and go to the forest, start cutting wood and eating fruits or hunt animals for food, you would be financial sustainable.
But these days, the road to financial freedom is through generating passive income. With sufficient passive income streams generated, we would be able to be financially free and have time to do things we care about.
Insurance saving plans
I recently came across about these saving plans that insurance companies and some banks related assurance company introduced.
The basic idea is that you pay a certain amount every year, as small as 3000-4000 dollars consistently and you get back the returns after 20 years based on some guranteed rates and not guranteed rates.
The point is, these companies what they do is they will have your money, give you a basic insurance policy that covers your death and maybe some illnesses, use your money to invest with their "super intelligent staff" and get back a return high enough to cover your insurance policy, returns and some profits. Usually they give a return rates of higher than what the market is offering. They compare themselves with fixed deposits of banks and illustrates to you the case 20 years later.
For us recent graduates or fresh graduates, having a saving plan is important. But whether to save with them or not is another issue. Several concerns need to be considered here.
1. Do you have the investment skills and knowledge and LUCK to gain a higher returns than what they offer?
Of course, people always say investing in shares brings high returns, something to be considered is if you have the skills and time to research and how sure are you to gain the high returns. You could lose all your money and get -100% returns in some other investments.
2. What happens if somewhere down the road, you cant afford to pay the premiums required?
We fresh graduates like to change jobs every few years, what if there is an economy downturn or something that we get laid off? If we suddenly decides that we want to resign or change job for some reasons, what happens to the plan?
3. What happens when the company goes busted or doesnt even exist 20 years later ?
Some company has some back ups like the government which pays a minimum amount. Check this out.
4. What is the value of your return amount 20,30,40 years later?
Inflation is likely to kick in hard and your amount of money might not worth as much as you think it is now.
The plan introduced by an insurance agent friend is something like this. You pay about 3-4000 a year for 15-20 years, and you get back a large sum after 20 years. Likely to be around 2 times of what you have paid in. Then you continue to withraw a super small amount of money after the large sum upto you are extremely old.
My take is, this is not the best saving method, but no harm diversifying some of your savings into this kind of plan. After all, you should keep your money in different avenues to ensure you have a back up plan. And this, exactly will be my backup plan when i can afford it.
As of now, i have just started working and have my loan to pay off. Until i finish paying of my loan, i will start some saving plans. (note that the study loan charges higher interest rates than the returns, if the study loan you are in charges extremely low interest rate, it might be a good idea to have a saving while paying a minimum sum to the loan)
About me
I have a job. I like it. But its not bringing me anywhere nearer to my goals and dreams in life.
Just like many others, i am among the several hundred students who have just graduated from the university. After the tertiary education, i got a job. But life is falling into a cycle, often referred to as the rat race.
You go to work, giving your entire life(almost) to work. Some work 7days a week, some 6days, luckier ones get 5 days work week. You start to earn some reasonable income. Being a fresh graduate you cant expect too much of course. You start to spend it and the remaining amount are used to pay off study loan. Then you started calculating and wondering, I will work for another 3 years without much savings, then i will be able to get off my study loan. But i got a girlfriend. I would like to build our future together, as a family. I will start to save some money after 3 years, get married. But before that i need a house you thought. So i got to save another few years to buy a house. The downpayment would take me a few years to save.
You start to realize that your life doesnt get revive after you finish your study loan. Because then you will be working to pay for your house, pay for your kids, pay for your parents, pay for a car, and before you realize it, you will be 40 if not 50. So where goes your dream? where goes your goal?
The exact same set of thinking occurs in many people and that is how people have been talking about financial freedom, generating passive income. Once you have a decent amount of passive income, you are financially free. You no longer need to exchange your time for money. You can have your time for your kids, your parent, enjoy the house you bought and of course, do things that you really passionate and care about, not for the money, but for what you love.
This is exactly what i am looking forward to. To have more time, for my parent, my future wife, my future kids, and to do what i enjoy in my life.
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