WealthWise April 2011

www.wealthwisemag.com

WealthWise magazine Vol I/No. 3 FREE

South Africa April 2011

The Power of Collective Leadership How a Trust Works A Guide to Intellectual Property Feel Good Lessons from international author Patrick Holford Win stylish laptop bags worth over R1000!

Details on page 53.

On the Cover

LifeWise

30 The Power of 9 Quick Read: Collective Leadership Uncover Your Life's Potential 23 How a Trust Works 16 Goal Setting Made Easy 35 A Guide to Intellectual Property 10 Interview: Patrick Holford

BusinessWise

CareerWise

41 Quick Read: How 29 Quick Read: Manage and Improve to Get the Go-Ahead your Cashflow 42 Proposed 38 The Basics of the Amendments to the New Companies Act Labour Legislation 46 Wealth Management: a rewarding career?

MoneyWise 19 Quick Read: Determine your financial position

C O N T E N T S

20 Pandora's Box 25 Last Chance to Come Clean with the Taxman

Agenda 47 This month we inspire you to...

48 Destination: Surreal Eco Boutique Hotel and Spa 54 On the bookshelf 56 Events, Workshops and Seminars

Regulars: 3 Contents, 4 Foreword, 5 Mailbox, 52-53 Competition, 58 Last Word 59 In our next issue WealthWise 3

F O R E W O R D The April issue of WealthWise magazine is one of our best editions so far. This time, we have begun experiencing with more informative, practical and hands-on advice, which is what WealthWise magazine is really about: your guide to wealth creation and wealth management, in your language, easy to grasp, easy to follow and best of all, free.

This month we are talking about goal setting, financial planning, trusts, intellectual property, tax and labour legislations and the new awaited Companies Act, effective from the 1st of April 2011.

Last but not least, we are extremely proud of having met and interviewed Stephen Langton, the head of Deloitte Centre for Collective Leadership in the UK and Patrick Holford, UK’s leading expert on nutrition and mental health, both of them having recently visited South Africa.

From our cover story on collective leadership as explained by Stephen to Patrick’s feel good lessons to improve your mood, you are bound to find your source of inspiration and knowledge in our magazine.

We want to bring you a totally exciting experience, so let us know what you want to find in our magazine at editor@wealthwisemag.co.za! As you would probably notice from this issue, we have a new Mailbox page where we value your suggestions and feedback, so keep posting!

We hope that our publication will inspire you to make every day, long-lasting changes to a wealthier future.

All the best,

Denisa Oosthuizen

Managing Editor WealthWise magazine

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Each month we showcase your best comments, feedback and suggestions for WealthWise magazine.

This is your page!

"So glad to have found you! This is a refreshing publication – quality information and well-written articles. This is local, it’s good and it’s free!! You deserve great success with this product. I will definitely be a regular reader of your articles on finance and entrepreneurship, as well as your book reviews. Best wishes" Colleen Lewis, www.bizstartsa.co.za, comment post "Moky is passionate about unearthing great African stories, and this book and her latest offering – South Africa’s Greatest Entrepreneurs are truly inspirational for wealth creators. The break through point for any aspiring entrepreneur is to start somewhere, sound crazy but it’s true. Someone once said ‘ideas are funny things; they don’t work if you don’t’. Thanks for the great initiative, may you inspire us to work and for those who have already begun the walk, to keep the entrepreneurial passion alive!"

M A I L B O X

Arthur Sithole, blog comment on article "From busines under apartheid to today's black entrepreneurs" "I went onto your website and I am impressed" Chrys Haitas, Business Development Manager, City Chamber Business Chamber, www.ccbc.co.za "Incredibly excellent article that is a bookmark worth. I will vist your blog site regularly now" Wahrsager, blog comment on "Wealth and altruism" "I have just completed reading the above story. I am a massive fan of investing in gold and buying gold stocks to diversify my portfolio and I always am on the lookout for new systems or ways that can increase my profits. It can be reasonably complicated to boost the profits and decrease the risks. When you search google, there are a lot of methods that can assist with the hard part without you losing control" Investingoldblog.info, comment post on "Leveraging global stock markets" article

Have your say! Write to us at editor@wealthwisemag.co.za!

The best comments will be published in our next edition!

WealthWise 5

Lezinda Ackerman is a member of

the Financial Planning Institute and a registered certified financial planner, with a B.Com Economics and a Post Graduate Diploma in Financial Planning. She started at Citadel Investment Services, being involved in portfolio management and wealth preservation for high networth individuals for five years, before joining Consolidated Financial Planning (previosly known as Precedent Financial Planning) as a Retainer Advisor. She spends most of her weekends at her husband's, restaurant, helping and socialising with the regulars. Read Lezinda's article on the basics of financial planning in our MoneyWise section, page 20.

Felicity Johnson is a financial

consultant who practices as an Independent Wealth Manager at Johnson & Asocciates in Honeydew, Johannesburg.

Johnson and Associates is an Independent Investment House which offers financial planning, portfolio management inter alia, with a client base consisting of mostly high net worth individuals and business owners.

C O N T R I B U T O R S

Read Felicity's advice on careers in wealth management in our CareerWise section, page 46.

Robert CA Jewell is a Chartered Accountant

(SAICA member number 00170991), a Registered Accountant and Auditor (IRBA practice number 935379) and has a Masters Degree in Business Administration from Wits University.

He has served entrepreneurs since 1989 and is the co-owner of Accounting for Entrepreneurs, or a4e, an accounting, auditing and consulting organization which focuses on the support, training, growth and development of entrepreneurs and their businesses. His company was nominated as a finalist in the 2010 Capital City Business Chamber Business of the Year competition. Read Robert's article on how a trust works in our MoneyWise section, page 23.

6 WealthWise

WealthWise

magazine

Publisher REO Media Solutions

The HR Hub is a unique on-line HR

Services company where clients can obtain a number of “best of breed� HR products and services under one roof.

The company's mission is to provide clients with specific tailored HR requirements, ranging from fully compliant HR and payroll software to recruitment and consulting services and BEE verifications and consulting services. The company also offers outsourced HR services, executive training, coaching and mentorship, team building, assesment centres and evaluations.

Read about some practical implication on the proposed amendaments to labour legislation, courtesy of The HR Hub, in our CareerWise section, page 41.

Want to appear in WealthWise magazine?

Would you like to contribute for WealthWise magazine? We are looking for fresh, witty and compelling content for our magazine's sections.

If you are interested in one of this topics: life skills, money management, business advice, career development and wellness (travel, lifestyle, healthy living etc), please send your article accompanied by a short profile of yourself and your work and a high resolution photo (maximum 2MB) to editor@wealthwisemag.co.za and you might just see your profile article in our publication!

Managing Editor Denisa Oosthuizen denisa@wealthwisemag.co.za editor@wealthwisemag.co.za Contributors Lezinda Ackerman, Robert CA Jewell, Felicity Johnson Sales and Marketing denisa@wealthwisemag.co.za Graphic Design REO Media Solutions Distribution www.wealthwisemag.co.za www.wealthwisemag.com Copyright All content and information within WealthWise publication is property of the Publisher and should not be reproduced, copied or entirely quoted without the prior approval of the Publisher, being protected under copyright laws.

Should you wish to make use of any of the content displayed please contact us at denisa@wealthwisemag.co.za or editor@wealthwisemag.co.za.

WealthWise 7

L I F EW I S E Quick Read: Uncover Your Life’s Potential Whether you’re stuck in a rut, don’t know what lies ahead of you or have simple

lost your “joie de vivre”, think again and review your life map with a few answers to these questions. Be honest and your life path will get suddenly clearer.

Are you living your life or someone else’s?

Are you on your right path to success?

What do you believe in?

Do you currently value things you don’t believe in yourself?

What are the things you would never compromise on?

What are the top three things that make you really happy?

What are the top three things that could ruin your day?

What would you want to do in your life, if lack of money or failure weren’t an option?

What is your desired income comfort level?

What would you do today if you suddenly reached your desired income?

What would you do if you suddenly had more time to yourself?

What people do you most admire and why?

How can you achieve a similar success?

What is holding you back from achieving the same success?

How would you describe the way you want to live (your dream life)?

WealthWise 9

Feel Good Lessons from Patrick Holford

by Denisa Oosthuizen

Patrick Holford is one of UK’s leading nutrition

experts and best-selling author of over 30 books on nutrition and mental health. Founder of the Institute of Optimum Nutrition (ION), Europe’s leading provider of nutrition therapy education and director of Food for the Brain Foundation and its Brain Bio Centre in Richmond, London, Patrick is one of the pioneers in nutrition medicine and mental health.

In an exclusive interview with WealthWise magazine, Patrick shares his secrets behind feeling good naturally, improving mood and motivation and resolving psychological issues – all these without resorting to prescription drugs or antidepressants.

WealthWise magazine: What is the message of your latest book, “The Feel Good Factor”?

Patrick Holford: The book is very specifically about improving peoples’ mood and motivation. There is a massive problem of depression - at the extreme ends, for example, 2,3 million people in South Africa express depression on a daily basis.

Prior to writing the book, we did a survey of 55000 people and the results indicated that approximately two thirds talked about having mood dips and about half admitted to suffer from depression. “Feel Good Factor” comes to specifically address these problems.

We are treating thousands of people from mental health problems at our clinic in London, the Brain Bio Center. Based on our experience with patients, it usually comes down to a number of factors that seem to be the keys in determining what causes the mood shifts. “Feel Good Factor” makes available these facts to the public.

It is shocking to see how many people, in South Africa and abroad, are prescribed antidepressants and medication. I have met people in their 20s and 30s who were given this kind of drugs and were told to follow this medication for life. Often, when you pull these drugs, you are not told how hard it is to get off and many patients experience withdrawal effects. It is in fact the consequence of an addiction.

WealthWise magazine: You mention ten underlying factors that could radically improve people’ moods and transform their lives for better. In most cases, do you find that there is a main underlying cause for their moody behaviour or a correlation of factors?

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LifeWise

Patrick Holford: We are all different and what we found out is that most people will have three possible contributory factors to their low mood and depression. I think one of the main fundamental problems is that most people feel tired and as a consequence, they choose sugar, caffeine and carbohydrates to keep going. Coffee and sugar intake is on an alarming increase.

Other trouble is that often people become more anxious and stressed and they show difficulty to switch off in the evenings. As a result, some will rely on alcohol to reduce their stress levels before heading to sleep. When this cycle of lows and highs goes worse, medication like antidepressants and sleeping pills is prescribed.

‘Theisbrain

the most dependent organ on nutrients

’

But actually is all to do with the brain’s chemistry.

WealthWise magazine: Would you briefly describe these factors that make a substantial difference in mood and motivation levels?

Patrick Holford: In most people, what makes a phenomenal difference both in energy and mood levels is eating a low GL (glycaemic load) diet – think jungle oats, oatcakes, snacking on fruits and seeds, always having protein with carbohydrates.

This is one of the factors, but doesn’t apply to everybody.

If you have a stable blood sugar, you feel less stressed. That is why the GL diet is important, but what it has been discovered is that some people respond very well to the mineral called chromium if they present symptoms of an atypical depression: feeling constantly sleepy or sleeping too much, craving carbohydrates, gaining weight, having mood dips (not always low moods), being very sensitive to criticism. Chromium has been proven to work very well in this situation and very fast, normally within three days. In one study, seven out of ten people given chromium versus placebo have experienced a complete relief of their low mood.

Other factor is to increase serotonin levels in the body, which are responsible for a balanced mood. Prolonged stress makes the brain’s serotonin level go down and consequently melatonin levels are depleted. Melatonin is made from serotonin and allows the body to enter a relaxing state and sleep.

Both serotonin and melatonin are made from tryptophan, which is the food aminoacid. A study at the Oxford University analyzed a group of fifteen women being given a tryptophan deficient diet (food containing no tryptophan). Within eight hours, ten out of the fifteen women showed signs of low mood. Without tryptophan, serotonin cannot be made and this leads to a low mood. The most powerful form of tryptophan is 5-HTP. There are over 27 studies showing that 5-HTP works in drastically improving one’s mood and motivation levels.

Furthermore, sunlight stimulates the production of more serotonin and vitamin D in the body. Also, certain B vitamins are needed to transform tryptophan into serotonin, especially B6 and folic acid.

WealthWise 11

LifeWise Another factor that counts is the intake of fish and omega 3 and 6 oils. There is a very convincing study in the Lancet Medical Journal that claims it can predict the country’s rate of depression simply by measuring the population’s intake of seafood. Group studies indicate that omega 3 and fish oil supplements given to subjects who are depress show an improvement in the subjects’ mood.

Also, switching off in the evenings requires no adrenalin levels. What deactivates adrenalin is an amino-acid in our brains called GABA, which is fast released to counter adrenalin and relax the body. The best results seen on people struggling with sleep took place after administrating GABA supplements and 5-HTP. In one study, people with an average length of sleep of five hours went to an average of seven hours after taking GABA and fell asleep faster.

Magnesium is very calming and helps with muscle relaxation. The classic sign of magnesium deficiency is muscle cramps. Once again, if one has trouble sleeping, GABA, magnesium and 5-HTP levels need to be increased.

All these I have been talking about, vitamin D, chromium, vitamin B, fish oils, magnesium, GABA and so on can be taken as supplements, alongside a recommended GL diet. Normally, most people will respond and start to feel better in about ten days. Also, you don’t need all these forever, as I explain in the book.

WealthWise magazine: What do you recommend in fighting day-to-day stress and fatigue?

Patrick Holford: One of the things we have been busy learning is how to switch off stress and the importance of being heart-centered. There is a brilliant research from the Heart Math Institute which shows how so many of us get addicted into reacting in a stressful way, by measuring the heart rate variability and what happens between heartbeats. This correlates with the level of cortisol in our bodies.

In other words, it’s not related with the pulse itself, but with the variation between the pulse beats. The heart affects the brain function – when people begin to express joy and gratitude rather than anger and frustration, this actually lowers the stress hormones. Particularly in women, an often state of stress depresses serotonin. Studies show that there are three times as many women as men who experience depression. In a sense, the purpose of my work is to help people learning the skill of having a good mood, good motivation and to move away from the state of stress and anxiety.

WealthWise magazine: How would you describe the link between nutrition and mental health?

12 WealthWise

LifeWise Patrick Holford: It’s absolutely vital. The brain is the organ that consumes and is the most dependent on nutrients. The very first symptom of sub-optimal nutrition is a mental health symptom such as poor concentration, poor mood, feeling sad.

WealthWise magazine: What are the key principles behind boosting mood and motivation and how can we identify the right one in each case?

Patrick Holford: It’s all the factors I have mentioned. We have developed questionnaires that determine which factors are most likely to benefit your case.

For example, if you don’t normally eat fish and you have dry skin, get irritated quite easily and have a high level of cholesterol, these are all signs that you are lacking in essential fats. There are questionnaires in the book to help readers identify which factors are important to each of them.

WealthWise magazine: Are general practitioners, doctors and psychiatrists willing to use this nutritional approach in addressing mental health problems?

Patrick Holford: Generally, the nutritional approach is not taught in medical schools, so most doctors are not that aware. In the UK, doctors have started to prescribe more omega 3 and fish oils to their patients, however the big problem is that the gross of money lies in the pharmaceutical industry and the antidepressant market is massive. This is because pharmaceutical drugs can be patented, being man-made in the first place, whereas nutrients that occur in nature cannot be patented. The truth is that these drugs are actually not that effective and they do have terrible side-effects.

WealthWise magazine: How are antidepressants and similar drugs interfering with our productivity and efficiency at the workplace?

Patrick Holford: There are studies showing that the benefits of antidepressants compared to a placebo are minimal for those with mild or moderate symptoms of depression. The real problem with antidepressants is that they really flatten out your mood, leading to numbness. You might not feel as low as before, but you also might not feel anything at all. I wouldn’t want this to go in the way of enthusiasm – for example, I wouldn’t want to have sales people taking antidepressants. Depression has a major effect on productivity and is a big known cause of a day’s sick leave.

There is a saying which goes like this: “Depression is anger without enthusiasm”. When going through a depressive emotional state, one expresses anger on the outside. A strong emotional reaction is linked to the perception that one can’t think straight anymore, thus becoming less intelligent. When you lose your temper, you don’t make the right choices.

In the case of anger, the emotional brain – the amygdala – takes over and the brain goes into an immediate survival mode. This puts a strain on the neocortex, which is the frontal part of the

‘The biggest secret to

a healthier life is to take some time to learn how your body works

’

WealthWise 13

LifeWise brain responsible with complex logical thinking.

It was discovered that 70% of the neuroconnections between heart and brain go from the heart to the brain and not vice-versa, actually changing your breathing. Simple breathing techniques and an attitude of gratitude, which is a positive emotion, immediately switches off the amygdala. We often try to think our way out of feeling depressed, but in fact exercise and activity can turn off the hijacked emotional brain.

WealthWise magazine: Could you give some examples of simple things that one can do to instantly feel better?

Patrick Holford: It can be something as easy as eating protein with carbohydrates, for example eggs which are high in phospholipids - essential in improving memory, plus oily fish such as salmon or an omega 3 supplement. In terms of immediate things, a good healthy breakfast and a high intense exercising (preferably outdoors) three times a week is much more effective than taking antidepressants. Supplements work fast too.

WealthWise magazine: Do you always recommend supplements or eating a healthy diet is enough?

Patrick Holford: I believe this is myth we are often told. If you want to thrive in the 21st century and not just survive, it is worth having an optimal intake of nutrients and the easiest way to achieve this is both to eat well and supplement.

In the Victorian age, people had a much higher vitamin intake for two reasons: all food had to be fresh as there were no refrigerators, plus the absence of cars meant that people were walking longer distances. As a consequence, they needed to eat more to burn calories – nowadays though we don’t need to eat so much as we don’t walk as much as our ancestors did. In the old days, people were eating ten servings of fruits and vegetables – today five is the norm. The only way we could get the vitamin and mineral content equivalent with what ancestors used to eat is to supplement our diets. I recommend taking supplements twice a day.

WealthWise magazine: How can a healthy diet address lack of confidence and negativity?

Patrick Holford: Sensitivity to criticism and rejection is common in the case of atypical depression. This can be treated very well with chromium. I have included a special section in the book addressing the psychological effect of negative selfthoughts. Different techniques such as cognitive behavioural therapy are highly recommended – there’s nothing better than having a healthy diet plus a good therapist to help you through.

Most psychotherapists are still unaware though of the nutritional approach in treating mental health problems, tackling psychological issues without understanding the brain chemistry. Sometimes it has all to do with a low level of energy, which leads to tiredness, apathy and lack of confidence.

14 WealthWise

LifeWise WealthWise magazine: How can one overcome antidepressant addiction?

Patrick Holford: When a person tries to come off antidepressants, most of the withdrawal effects they experience are the results of being depleted of serotonin.

In our clinic we slowly reduce the patient’s antidepressant dosage, encouraging the intake of 5-HTP, the amino-acid that helps building serotonin. It’s important not to take both antidepressants and a higher dose of 5-HTP, since antidepressants stop breaking down serotonin, as opposed to the 5-HTP. The intake of 5-HTP makes a huge difference in a person’s mood. It’s also very crucial not to try coming off antidepressants without proper professional support. The process should be done slowly, over a couple of weeks, if not months, to see results.

WealthWise magazine: In your opinion, what are the secrets to a longer, healthier, happier life?

Patrick Holford: I believe that once we understand that everything is enjoyed through the body and its senses, and that the body itself is sustained by food, then spending more time in learning how to nourish our body and minds will pay off with huge rewards like no sickness.

The biggest secret to a healthier life is to take some time to learn how your body works. We should be taught this in school, but we are not. My best-seller “The Optimal Nutrition Bible” explains this in details.

I also think the biggest challenge people face is the high sugar intake. If we could learn how to eat to keep our blood sugar levels even, we would have greater chances to improve our mood, increase our energy levels, improve concentration and prevent weight gain, the later being of high concern for most people. If sugar levels are balanced, one has more energy. Most people avoid exercising because they feel too tired. If energy levels increase, so does the desire to exercise, have sex and be active.

If you look at animals, a cat for example, you will realize it does not exercise until it gets hungry, which triggers hunting mode. We are motivated to eat, but are we motivated to exercise? By comparison, I can say that, biologically, we are motivated to exercise in order to get food. Nowadays we don’t have to hunt food; food hunts us. We don’t have to exercise in order to gather food. So, as a result, we don’t feel motivated to exercise. I think, in today’s society, that the motivation to eat is stronger than the motivation to exercise. It’s only people that are brought up with exercising that are feeling good if they exercise and this reward becomes a reinforced habit.

For more information, visit www.patrickholford.com.

Read our review of "The Feel Good Factor" in our book reviews section at page 54.

We will be giving a copy of Patrick's book to one lucky WealthWise Club member! For details on our April competitions, see pages 52-53.

WealthWise 15

Goal Setting Made Easy

by Denisa Oosthuizen

Personal goal setting is frequently the subject of self-help books, but despite the hype surrounding it, the truth is that less than 2-3% of people actually take the time to write down their goals – and even less to fine-tune it in order to achieve them. Here is a basic guide to setting goals.

Step 1. Identify your goals – what you want to achieve in each of the following situation: Finances, Education, Career, Business – if owning a business, Health and Fitness, Family and Relationships, Spiritual growth.

Step 2.

Write down your goals! This gives your goals more direction and focus and is a constant reminder of your commitment to achieving them. Write them as they come into your mind, don’t over-analyze or fine-tune them yet.

Example: I want to start my own business.

Step 3. Be specific. Look at your written goals in each situation as seen in Step 1 and make them more specific. Note that the more specific the goals, the more likely you will achieve them.

Example: I want to start my own restaurant business.

Step 4: Assign a deadline to each specific goal in each situation as

seen in Step 1. This not only creates a sense of urgency, it determines you to act on your goals in the first place to meet the deadlines.

Example: I want to start my own restaurant business by 1 November 2011 (you can even indicate the specific cuisine of the restaurant: Italian, for example).

Step 5. Identify possible barriers in your goal achievement. These are

obstacles you believe you might encounter. Write them down and think of ways of overcoming each of them.

Example: Substantial investment needed – not enough funds. Possible solutions: look into a restaurant franchise with minimum initial investment

Step 6: Create action steps for each of your goal in every situation mentioned above. Be careful to include and address every of the obstacles from Step 5 in your action plan. Set mini-deadlines to each action step.

Example: Goal: I want to start my own restaurant business by 1 November 2011.

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LifeWise Action 1: Do a market research and decide on the restaurant specific and best location by 20 May 2011.

Obstacle: Tight budget allocated for market research; Solution: Read online reports, ask a friend to help with sending questionnaires, speak with restaurant managers in the area Action 2: Write down the estimated expenses by 25 May 2011.

Action 3: Prepare a business plan (draft) including strategy and operational costs by 10 June 2011.

Action 4: Write a marketing plan and include it in the business plan by 25 June 2011. And so on…

Step 7. Follow your goal steps and review them regularly. Decide how often you need to review your progress and stick to it.

How to set SMARTER Goals S = Specific - evident, clear goals, not vague or too general (see above).

Other variations: strategic, sincere, significant.

M= Measurable – quantified goals. Other variations: manageable,

maintainable, meaningful, motivated. Example: I want to serve 50 people in one week in my restaurant.

A = Attainable – achievable goals matching your attitude, skills,

competences. Other variations: achievable, actionable, ambitious, aspirational, accountable, adjustable. Example: serving an average of 50 people a day in my restaurant is an attainable goal

R= Realistic – very probable goal, was achieved in the past by someone else, it can be done. Other variations: Results Orientated, Relevant, Rewarding, Recorded, Reviewable. Example: serving an average of 50 people a day in my restaurant is a realistic goal – serving 1000 per day: not probable.

T= Tangible – not just a dream. Other variation: time-bound (deadlines),

trackable,traceable, timed/ timely. Example: you can actually smell and feel the taste of the food you will be serving in the restaurant Most literature will showcase the SMART goal setting. There is however a SMARTER technique of achieving goals, in addition to the ones presented above:

E = Ethical – goals that are ethical and do not have a negative impact on

others. Also think about ecological, environmental-friendly goals. Other variation: empowering, exciting, engaging, enjoyable, encompassing

R= Reviewed, recorded, rewarding, relevant, resourced, research-based There are a couple of variations like C-SMART or C-SMARTER, where C stands for Challenging. Similar to this, the S in SMART-S stands for sustainable. Other variations are SMAART, where the two A stand for Attainable and Actionorientated, and SMARTIE, where I and E stand for Inspiring and Enthusiasm.

The use of these variations depends on context and the objectives themselves – the simple rule of SMART goals is however generally applicable.

WealthWise 17

M O N E Y WISE Quick Read: Determine Your Financial Position

Determine your current financial position now by asking yourself these simple, honest questions.

•

Am I spending more than I earn?

• How much of my monthly income goes towards credit payments? Is it more than 20%?

• How much debt to I have to repay monthly as opposed to my monthly income? (debt to income ratio) • How much are my fixed monthly expenses, including house payments, as opposed to my monthly income? How much are my flexible (variable) expenses, as opposed to my monthly income?

•

How much are, on average, my daily expenses?

•

How much can I save monthly now, with the above listed expenses?

• How much could I save monthly, providing I reduce my expenses with a further 10%, 20%?

• Do I have a savings fund to cover at least three months of living expenses, in case of a financial emergency/unwanted situation like losing a job?

•

Do I have personal insurance and a retirement plan already?

• Do I have disability, accident, funeral or trauma cover? Do I have medical aid?

•

Do I have or plan any investments in the near future?

•

Do I have more than one source of revenue?

• Am I aware of all the possible risks involved that could affect my income?

WealthWise 19

Pandora's Box

by Lezinda Ackerman

Fresh out of Varsity, on my way to my first interview I can already imagine what I am going to spend my first pay-cheque on. Saving was the furthest thing from my mind. During the first few years as a financial advisor I was not practicing what I preached! Some of my best friends were Jenny Button, Diesel and Levy.

Spending became my favourite sport and soon enough my pay cheque didn’t cut it anymore! The next logical step was to get a credit card and so it began… I started spending more than I earned. The only solution to my detriment was to close Pandora’s Box! As the months went by I paid off most of my debt, and slowly but surely I caught up on lost beauty sleep.

I would like to share with you a few important lessons I have learned.

Every woman needs a tailored made financial plan that suites her unique lifestyle and reaches her goals and dreams consistently during her lifetime.The first step in the right direction is to obtain the services of an accredited financial planner who is registered with the FPI. A professional financial planner will guide you in formulating your own unique financial plan that is built around your financial goals and objectives. I will set out two basic areas of financial planning and the products that you need in each area.

Risk Planning A professional financial planner will assess your risk needs. Risk needs vary from client to client, the basic risk needs are: • Life cover in the event of death. This cover is needed to pay your outstanding debt and supply capital to your dependents in the event of death.

• Disability cover in the event of becoming disabled. Should you become disabled and not be able to work, you would need income replacement to maintain your current standard of living.

Once your risk needs have been assessed, the financial planner should obtain comparing quotations from most of the insurance companies in South Africa. He will then discuss the comparing benefits of each company and the premium that you will pay for the benefits. When the process is completed you will fully understand your risk needs and the benefits you will receive for the most competitive premium.

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MoneyWise

Investment Planning The first level of investment planning is to identify the most appropriate investment vehicle for your needs. Investment vehicles can be divided into preretirement savings vehicles and post-retirement savings vehicles.

Pre-retirement savings vehicles are used to save towards your retirement and they consist of the following: Endowment An endowment is a 5 year savings plan where you have to be invested for a period of 5 years. The reason for this is that the income earned and growth obtained within this vehicle is taxed at 30%.

‘Ensure that

the targeted return achieves your objectives

’

This product is therefore more suited for a client that does not need liquidity for five years and whose marginal tax rate is higher than 30%. There is no need for a 10 year or 15 year endowment as you only need to be invested for 5 years to receive the tax benefit.

Unit Trust Investment A unit trust investment is a liquid savings vehicle where the funds are accessible between 5 and 7 working days. The income earned and growth within a unit trust is taxed at your marginal tax rate. The unit trust vehicle is therefore more suited for clients whose marginal tax rate is below 30%.

Retirement Annuity A retirement annuity is a pre-retirement savings vehicle which has the following benefits: • The monthly contributions are tax deductible.

• At retirement you are entitled to a maximum of R300 000 tax free lump sum portion.

You can take the one third portion of the investment amount in cash and the remaining two-thirds will be invested in a living or life annuity that will provide a monthly income at retirement.

Post-retirement vehicles are pension vehicles where your retirement savings are transferred to at retirement and where you will receive your pension income from.

Living Annuity The living annuity is a vehicle through which the two-thirds portion of your retirement funds is invested. Within this vehicle all interest earned and rental income received on the investments are tax-free.

A pension income will be paid to you by the living annuity. This income will be paid monthly, quarterly or annually in advance. The annual income paid can be set at between 2,5% and 17,5% of the capital value of the annuity. The level of income can be amended annually on the annuities anniversary date. The income you receive from this investment will be taxed as income in your hands.

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MoneyWise Finally you will need to nominate beneficiaries to whom the annuity will pass in the event of your death.

Compulsory Annuity / Life Annuity A compulsory annuity can be purchased with the two-thirds portion of your retirement annuity. You have the choice between a single life annuity and a guaranteed term annuity. The single life annuity pays you a monthly income throughout your retired life and ceases when you pass away.

The guaranteed term annuity ensures that, if you pass away during the period you had guaranteed, your dependants will be paid the proceeds from the rest of the guarantee period.

The next level of the financial plan is to ensure that your funds within the abovementioned vehicles are invested in the correct portfolios or strategies. A strategy consists of the different asset classes (shares, property, bonds and cash) that provide the growth within the portfolios.

It is important to ensure that when selecting a strategy, the targeted return achieves your objectives and that you are comfortable with the likely range of returns the strategy will achieve and the probability of a negative return occurring.

Financial planning is a highly specialised and complex field, it is therefore clear that the biggest financial decision you will make is the decision to get expert advice.

Go ahead, start making wise decisions today!

Lezinda Ackerman is a Financial Planner

CFP速 with BCom (Economics) at Consolidated Financial Planning.

Contact Lezinda at +27 12 460 5241 or email lezinda.ackerman@consolidated.co.za.

Consolidated is a national financial planning practice with offices in Western Cape, Johannesburg, Tshwane, Eastern Cape and KwaZulu-Natal. Lezinda Ackerman is based in Pretoria.

For more information please visit: www.consolidated.co.za or contact Denise De Souza, Marketing Manager at Consolidated Financial Planning, at +27(0)11 886 0702 or denise.desouza@consolidated.co.za.

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MoneyWise

How a Trust Works

by Robert CA Jewell

This document explains in non-technical terms some of the workings of a trust.

1. A trust can receive income (e.g. interest, rent, business income) and capital

(e.g. donations, sale of fixed assets and investments, capital assets which become more valuable, such as shares).

2. The income and capital of a trust is managed by the trustees for the benefit of

the beneficiaries. A person can be a trustee, a beneficiary or both. Unless a trustee is also a beneficiary, a trustee may not benefit from the trust. The trust deed and any changes made to the trust deed, set out the rules of the trust. The trust deed will record who the income and capital beneficiaries are. A beneficiary may be an income beneficiary, a capital beneficiary, or both.

3. If the trust is a discretionary trust, there is no formula stating when and in

what proportion the income or capital is distributed to each beneficiary. The trustees then have the power to make these decisions. Most trusts are discretionary trusts. If for example the trust deed stated that beneficiary A shares in 40% of the income and 20% of the trust capital, and beneficiary B shares in 60% of the income and 80% of the trust capital, it is a non-discretionary trust. If the trust deed stated only that beneficiaries A and B are the beneficiaries and that the allocation of income and capital to the beneficiaries is to be determined by the trustees, it is a discretionary trust.

4. If the income of a trust in a financial year (interest received, rent received,

dividends received, etc) is more than the expenses (interest paid, bank charges, insurance, salaries, rates and taxes, etc), the resulting surplus is available for distribution to the income beneficiaries. The trustees can decide to distribute some or the entire surplus to the income beneficiaries. Any amount not distributed during the financial year is no longer income. It becomes capital and is added to the capital of the trust.

5.The capital of a trust is its assets (what the trust owns: property, bank

balances, loans made by the trust, etc) less the liabilities of the trust (what the trust owes to others: bonds, bank overdrafts, creditors, tax, loans made to the trust, etc). The trust deed usually empowers the trustees to distribute some of the assets to capital beneficiaries at any time before the trust ends. The trust will end on the date specified in the trust deed. The trust deed can also empower the trustees to decide when the trust will end. When the trust ends, all of the assets at that date, less the liabilities, are distributed to the capital beneficiaries.

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MoneyWise

6. The beneficiaries can be individually named or defined in more general terms such as the children of a beneficiary. The trustees can only appoint further beneficiaries if the trust deed permits this. Some trust deeds allow one or more persons to nominate further beneficiaries in their wills.

7.The trust deed will stipulate the quorum for meetings of trustees and the

process by which decisions of the trustees are made (e.g. 2 trustees form a quorum and a simple majority is required for a decision to be passed). Some trust deeds allow one or more persons to nominate further trustees in their wills. All decisions made by trustees and/or beneficiaries must be recorded. The minutes of meetings must be inserted in the trust minute book. It is recommended that every trust must have an independent trustee.

8. A testamentary trust is a trust which is formed in terms of the will of a

deceased person. An inter vivos trust is a trust whereby the founder or donor and the trustees enter into an agreement to form a trust for the benefit of the beneficiaries.

9. Trusts must keep proper accounting records and prepare financial statements

every year. Depending on the trust deed, the financial statements may have to be audited. The trust must also register for income tax, and may need to register for other taxes such as vat and employees tax. The tax rates applicable to trusts, other than special trusts, are generally higher than the rates applicable to individuals, companies and close corporations.

However, income and capital gains can be awarded to beneficiaries and can result in lower tax rates. If a trust incurs a loss, it cannot distribute the loss to the beneficiaries. The loss is carried forward in the trust to the next year. Special trusts are trusts created solely for the benefit of a person affected by a mental illness or physical disability, or testamentary trusts created for the benefit of minor children who are relatives of the deceased. Special trusts are taxed at the tax rates applicable to individuals.

10. Trusts can be used to acquire low risk assets and investments and to

conduct a business. They should not be used in isolation but should be considered in a properly structured financial and estate plan. In your will you can award assets to the trust. Assets can also be donated to a trust but may be subject to donations tax.

You are advised to obtain professional advice before making any decision.

For further information, guidance or assistance, please call Robert, Partner at Accounting For Entrepreneurs (A4E) and CEO Jewell & Co Registered Accountants and Auditors at 0861 000 a4e (243) if you're in South Africa and +27 12 460 1032 if you're abroad, or email at robert@a4e.bz.

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MoneyWise

Last Chance to Come Clean with the Taxman!

The South African Tax Voluntary Disclosure Program (VDP) allows individual and

business taxpayers to come forward and regularize their tax affairs without having to incur penalties and interest for previous non-compliance and without the threat of criminal prosecution.

WealthWise magazine attended an informative business session and networking event on the VDP, which runs until 31 October 2011, to find out more about the new system for disclosure of tax irregularities. The briefing was organized by nonprofit organization Capital City Business Chamber (CCBC) in conjunction with accounting services providers Accounting for Entrepreneurs (A4E).

What is a Voluntary Disclosure Programme (VDP)? “The Tax Voluntary Disclosure Programme (VDP) allows taxpayers to come clean with the taxman without incurring penalties, interest and criminal prosecution. The South African Revenue Services (SARS) wants you to come clean and be a good customer�, explains Robert Jewell CA(SA), partner in Accounting for Entrepreneurs (A4E) and speaker at the business session and networking event.

The Tax VDP refers to all taxes administrated by SARS such as income tax, VAT, employees tax (PAYE), SDL, UIF, donations tax, estate duty, customs duties, excise duties and levies, transfer duty, stamp duty and security transfer tax, secondary transfer tax (Dividends) and turnover tax.

To qualify for the Tax VDP which ends on 31 October 2011, the tax irregularities must relate to the period before 17 February 2010.

Administrative penalties for late submission of tax returns and taxes, penalties and interest already raised remain as they are and are not included in the Tax VDP.

Do I qualify for a VDP? The Tax VDP is open to all individuals, companies, sole proprietors, partnerships, close corporations (CC) and South African trusts who have either submitted inaccurate or complete information to SARS, failed to submit their tax revenues to SARS or filed a different position about their tax liability.

The VDP thus gives the taxpayers a second chance to address these faults which often result in incorrect tax assessment, the correct tax not being to SARS and even incorrect refunds by SARS.

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MoneyWise

‘ SARS wants you to come clean and be a good customer

’

What are the requirements to apply for the VDP? A Tax VDP encourages taxpayers to file and regularize their tax affairs without the state’s intervention (a voluntary action). This means that if you are already under investigation or audit by SARS, then you do not qualify for the VDP unless SARS would not have detected the default during their audit or investigation.

SARS must not be aware of your irregularities. Under these circumstances special permission is required to apply for the VDP and only 50% of the interest will be waived.

Furthermore the VDP must not result in a refund from SARS and the there must be a penalty or additional tax had SARS discovered the default. Under the Tax VDP a full and complete disclosure must be made by the taxpayer. You must tell all!

Failure to do so can result in a denial or withdrawal of the benefits of the VDP.

I need this. What do I have to do?

Taxpayers need to complete an application form and submit it to SARS before the closing date of 31 October 2011. “Rather apply early. If you are not certain if you qualify, make an anonymous application”, advises Robert.

How does it work?

Generally, SARS will not go back more than five years to calculate the tax outstanding in terms of the Tax VDP. The exception occurs when the default involves extraordinary income or transactions that occurred more than five years back.

How will I benefit from the VDP? The Tax VDP translates into no penalties, no additional tax, no interest if there is no SARS audit in progress or a 50% reduction in the interest if there is an audit in progress. Administrative penalties have to be paid and are not discounted. Most important of all, the Tax VDP allows taxpayers to avoid criminal prosecution.

The Exchange Control VDP Similarly, the Exchange Control VDP process allows South African residents with unauthorized foreign assets to come clean with the South African Reserve Bank (SARB) and applies to all individuals and businesses who have contravened the Exchange Control Regulations before 28 February 2010.

This includes all South African individuals or businesses who have failed to declared illegal offshore assets. The Exchange Control VDP does not include proceeds from criminal actions like money laundering.

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MoneyWise To qualify, asset owners must reveal all about their foreign assets and/or structures.

Failure to do so could result in the benefits of the VDP being denied. Also, the Reserve Bank must not be already undergoing an investigation.

Again, an application form must be submitted before the 31 October 2011.

Unlike with the Tax VDP, anonymous applications are not possible; however anonymous enquiries can be made prior to the final application.

By applying for an Exchange Control VDP, your illegal foreign assets will become legal.

A levy of 10% on the foreign assets (or 12% if payment is made with the local funds) is payable within three months from application. For individuals, the foreign assets are reduced by a R4 million foreign capital allowance to calculate the levy.

Photo: Robert CA Jewell, partner Accounting for Entrepreneurs (A4E) and guest speaker at the event, showing how taxes can make you sick if not addressed properly

Oops! Tax defaults you may be aware of:

“A global effort is made to end bank secrecy, resulting in greater access to information by SARS, so there is no point in hiding. The VDP Programmes could be your last chance to come clean and avoid criminal Non business or private prosecution, financial costs or your assets expenses claimed as business being forfeited�, concludes Robert. expenses Need more information on the Voluntary Disclosure Programme?

Seeeking professional advice before making any decision?

For further information, guidance or assistance, please call Robert, Partner at Accounting For Entrepreneurs (A4E) and CEO Jewell & Co Registered Accountants and Auditors at 0861 000 a4e (243) if you're in South Africa and +27 12 460 1032 if you're abroad, or email at robert@a4e.bz.

For Robert's upcoming tax presentation in April, please see our events list on pages 56-57.

Income not declared or under declared Vat not declared or under declared Employees tax, UIF, SDL not deducted from salaries or under declared Personal service company incorrectly taxed Small business corporation incorrectly taxed Fringe benefits not declared or under declared Failure to register for Vat, employees tax and so on

WealthWise 27

B U S I N E S S WISE Quick Read: Manage and Improve your Cashflow

Managing your cashflow properly is the biggest favour you can do your SME. Here are some steps to up your cashflow game:

•

Keep your records up to date in an accounting or bookkeeping system

•

Use the information to analyze both current and future cash projections

• Look out for potential future cash problems to avoid an unwanted cash crisis •

Develop a follow-up plan to speed up order and delivery processes

•

State payment deadlines on your invoices

•

Ask for a deposit up-front

• Implement a list with all debtors and their outstanding amounts – followup regularly • Know your monthly overheads and determine the sales you need to cover these •

Know the amount of sales you need to break-even and make a profit

• Know your working capital – the cash you need to run the business. If you must, finance it further through an overdraft facility. Don’t wait for your cashflow crisis to get really worse – banks are reticent to offer overdraft facilities in this situation • Don’t use your working capital to purchase assets, machinery, equipment – set separate funds for asset and capital purchases •

Consider VAT or income taxes when you’re doing your cash projections

WealthWise 29

The Power of Collective Leadership

by Denisa Oosthuizen

Head of the Deloitte Centre of Collective

Leadership (DCCL), Stephen Langton was in March in South Africa to promote the New York Times best-seller “As One” by authors Mehrdad Baghai and James Quigley.

Deloitte’s biggest global project up to date in studying effective collaborations, “As One” is based on the knowledge behind collaborative efforts and collective leadership rather than the leader’s often “command-and-control” approach.

In this exclusive interview with WealthWise magazine, Stephen, who has specialized in the field of collective leadership for the past fifteen years, consulting various CEOs, Chairmen, global leaders, Fortune 500 and Global 1000 organizations, talks about the new archetypes of collective leadership and how leaders can succeed in today’s global economy.

WealthWise magazine: What is “As One” collective leadership? How is it different to the traditional leadership taught in business schools?

Stephen Langton: For the next three months we have been invited to be the key speakers at Stanford Business School, Harvard Business School, London Business School among others because of the perception of “As One” collective leadership as being not the traditional leadership, but the new direction in leadership. For us, collective leadership is as much as the opposite ends of the old leadership coin: both the leadership implication which refers to telling people what to do and the collective mindset, which is people saying what they want to do themselves.

We have always associated that with the political meaning of capitalism and communism; we’ve been trained to think that there is leadership and there is followership. And yet, that cannot be the case, one cannot exist without the other.

The new term of “collective leadership” is deliberately bringing together the opposite ends of the coin, but the concept itself is not new at all. You can find it superbly written in the writing of Lao Tzu 3000 years ago in which he said: “Of our best leaders, their people say we do it ourselves”.

If you look at the leaders who most succeeded, they haven’t been doing all the work; they just set up an inspiring, safe environment where people are clear and capable to want to work for themselves; and that’s where we are going back now.

WealthWise magazine: So what would be the role of the leader?

Stephen Langton: That would be the most important question to ask. For far too many times we have been told that leaders are the conditions of success. They are paid to be the condition of this success. Success is credited to them, failure is blamed on them. And yet, a leader is just one human being, fragile, with moods and

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changes in its vision. In collective leadership, what we want to enforce is that the leader will be celebrated for creating the conditions for others to succeed. There is a difference between telling people what to do and teaching people; it looks so easy, yet we haven’t been doing it.

Let me give an example based on my work in the past four years. I have been called to assist companies where the management was failing. A large number of organizations’ failures are linked to the failure of its leaders. One of the first questions I ask the leaders is “When was the last time you have asked your people for advice?”. One of the leadership weapons we haven’t been using is the ability to ask questions. Leaders must have the humility to say “I don’t know the answer, but as a team we will find it out”.

At Deloitte, what we are doing is to deliberately give

‘Inleadership, collective

the leader will be celebrated for creating the conditions for others to succeed

’

the management and the CEOs the tools and methodology so they can create and ensure that these conditions are met.

WealthWise magazine: Is this the purpose of the Centre for Collective Leadership?

Stephen Langton: It is the first time we had such a Centre that serves every country, because counties are in fact an expression of collective leadership. Our purpose will be to invest in understanding and advancing the knowledge of collective leadership – that’s our primary goal. We will also be communicating through books, publications, websites, the media in general as it is a collective voice. We are moving into a phase which is developing a leadership programme for management and CEOs that actually shows them how to create these conditions.

WealthWise magazine: The new eight archetypes of collective leadership defined through the self-organizing map (SOM) model are defined by power dispersion and creativity – what are the other characteristics that were accounted for this classification?

Stephen Langton: We are proud to be the “scientists” in this field. It was the extraordinary forensic accounting software that found patterns when other variables exist, much like a detective software that scouts anomalies within a financial crisis. The patterns it found explain the conditions for people to choose to cooperate. There are organizations where people don’t need to cooperate, networks with unique tasks and functions. There are many variables involved, but the clearest that define the patterns were fitting on these two drivers: where did your task get manufactured or where does it come from (you or your boss)? and when you have got the task, how much freedom do you get to interpret and deliver it?

The eight archetypes explain this better than anything: for instance, in the Conductor and Orchestra archetype, there is a boss (the conductor) and not much

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BusinessWise variance of changing how the piece of music will sound. One cannot interpret tasks in any other way than just based on the skills they have (the orchestra). In the Architect and Builders, the architect has the blueprint, but the engineers have to make the decisions every day in exactly how it’s going to be achieved.

In total we have identified eight themes where we are watching cooperation happen deliberately and organizations that have blends of these themes, which we call “split archetypes”. Deloitte is an example of this – we have all eight archetypes in any of our firms. This is normal – the people on the media side of the firm all about creativity, in the audit side, you cannot stray from the regulations.

The question here is not “How do we get everybody in the same culture?”, but “How do we accurately see and structure chaos?”. We have developed this benchmark system to determine and choose the appropriate “chaos”.

WealthWise magazine: How important is the structure of the organization itself (formal or informal) in fostering a collective leadership?

Stephen Langton: I have started my career in designing structures for organizations and I understand the importance of an organization’s structure. However I don’t believe it will be important in this case. You can have a very flat structure, which is purely a command and control archetype. But let’s look closer at startup entrepreneurs.

How many entrepreneurs are themselves the conditions for their start-up succeeding? They are working with their people, but since the beginnings it’s their show and as much as they want to be popular, they are the dominant star and the model will best be described as the Conductor and Orchestra: “It’s my vision, I have a specific way I want us to grow, you are great at what you are doing, but you need to help me with my plan”. Most entrepreneurial start-ups are classically very flat; there is no luxury of multiple levels. As they get successful, the old model cannot continue to work for the optimum level to be achieved and the question that needs to be answered is “What are the conditions of success here?”.

WealthWise magazine: How can an organization identify its collective leadership archetype?

Stephen Langton: We have this impressive software tool that surveys an organization. The root of it is simply asking questions, but the brilliance of the tool is how it is able to diagnose the data. It will ask, for example, how you are lead now and how would you like being led to succeed. There isn’t a specific formula that shows you will succeed with a specific archetype.

The best to explain this is to look at Cirque du Soleil. The way they are designing their wonderful performances is very collective: everybody has a voice. But imagine that in all their performance the lights go black and the fire alarm goes off: in that moment, how do they need leading? They won’t need a leader who brainstorms with each on how to exit the building. In that moment they want someone to scream “Everybody listen to my voice, follow me out of this room” and so on.

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BusinessWise It’s a brutal command and control because that task needs it.The reason we put together the three: the archetype, the identity and the task is because without the task, the others are not helpful. Profiling people to understand what the task is gives them the context to source the leadership and choose how they want to be lead.

Other example is the integration and restructuring of distressed banks in a downfall economy. Thousands of people are forced to work together as a result of a merger.

The generation of leaders that has been leading the bank for the last twenty years was doing to these people what he thought they needed, by leaving them alone.

The surveys of these banks showed that people were screaming for command and control: “Tell us what is going to happen. Command me”. We can’t say, for example, that command and control is bad for an organization. The right leadership style is the one that is right for the group of people that has to fulfill a specific task.

‘ofOne the

WealthWise magazine: How can leaders share the As One behaviour (working As One) understanding with their teams?

leadership weapons we haven’t been using is the ability to ask questions

’

Stephen Langton: There are basically three ways we recommend. We have clients who are willing to do an online survey that shows them the outcome.

Another option is for leaders to give their people the book “As One” and find the outcome they need through reading and answering the questions inside.

The third way we have failed on doing it so far is a simply discussion between leaders and their teams. It can be as simple as a discussion in a coffee shop.

The revolution is here about the leader saying not “Here is what I want you to do”, but asking “What are the conditions that would help you succeed?” and listening. To myself, whom I dedicated years of my career to understanding leadership, that is the revolution we never had.

Often we are called in situations when the boardroom of a company would say “Our CEO is failing” and “Our management team is failing”.

We call this “impostor’s syndrome” where people in the leadership roles are under challenge and they have to say “I don’t know what I’m doing and I don’t want other people to find out” and hence the leader itself can become aggressive or passive. The aggressive leader’s mindset will be something like this: “I will make all the decisions now, you follow me”, which doesn’t work. The passive leader would say: “I’m not making any more decisions until the situation changes”. And they are not doing anything.

Both of them create distraction. The reason why we haven’t got this simple outcome is everything to do with leaders’ feelings. This should have been primarily a technique of recovering in a downturn because it’s a generous technique for leaders to ask their people when do they need leading and how do they want it. In a boom, it looks inappropriate in an organization.

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BusinessWise WealthWise magazine: In terms of a crisis, is it important for leaders to review the archetype model?

Stephen Langton: Whenever there’s a change, it becomes easier to get it right.

When an organization goes from a long-term success into a crisis, at that moment everybody is looking to be led. The challenge though is where we no longer have a crisis and we are letting people lead themselves. We’re coming out of a crisis which was about survival. We are going in a crisis which is about sustaining performance.

WealthWise magazine: How do you see the world in the next five to ten years in terms of leadership?

Stephen Langton: A lot of this is geared towards the generation who is going to inherit. The way things are now, I don’t think we see too much change. But certainly, there is a generation coming through which is far more informed, far more aware of this topic, with a greater instinct to be selfless. The difference this time is the access to technology, the access to be able to communicate together.

You can’t hide leadership anymore. An active leadership now is not governed by how people experience it, but by witnesses (think Twitter for example). The new generation will perceive collective leadership as common sense, not revolution.

WealthWise magazine: How would you describe collective leadership in the African region, based on the study and the work of The Deloitte Center for Collective Leadership?)

Stephen Langton: South Africa, for example, has been an inspiration for us worldwide. The country itself won’t trumpet and push it, but we do. If you look at innovation, South Africa has put over 40% growth into investing in education in the past three years. To an extent so often in the international press, South Africa has always had the power of unions since the middle of the 19th century, which is a collective voice of employees. The collective power displayed there is simply amazing.

WealthWise magazine: Going forward, what kind of leadership do you see in Africa?

Stephen Langton: We cannot specify, but we can look at the country’s current economy. In a booming economy, it is far more common to have a leadership style which is geared towards growth, aspiration. If a nation has a strong growth aspiration and a strong economy, high levels of employment, it would likely lead to a model which is considering the authority and power of the employees.

In a struggling nation, you would probably most identify a command and control structure because that is what people want. I think we see a transition in South Africa. What we see now happening in Egypt and in Libya resembles, for example, Poland’s revolutionary act in 1989 and creates a different leadership, a leadership people need and can identify with it based on how they want to be led.

Stephen Langton heads Deloite's Centre for Collective Leadership in the UK. He can be contacted at slangton@deloitte.co.uk. For more information about As One project, visit www.asone.org. Read our review of "As One" in our book reviews section, page 54.

34 WealthWise

A Guide to Intellectual Property

by Denisa Oosthuizen

Intellectual property is defined as a collective of products of human creativity

holding a commercial value. These products are original, creative, distinctive and it is in the interest of the owner – whether business or individual – to protect them from imitations, forgery and so on. At the center of intellectual property is protecting an innovative idea or concept. An idea can resume to anything from name, brand, logo to invention, product design, music track or a written piece.

These can be protected, registered and managed under law.

The law recognizes the following intellectual property rights: Patents, Trademarks and also trade and domain names, Copyright, Registered designs, Know-how, trade secrets and confidential information and other categories such as a plant breeders’ rights. Some of the most common types of intellectual property are patents, trademarks and copyright. We will refer to these in particular.

Patents A patent is used to protect an invention and prevents the invention to be imitated, used or claimed by others. An invention can be a device, a method, a process and anything that meets the following requirements: novelty (not seen or heard before worldwide), originality (no variations on existing technology are allowed) and applicability (must be useful in trade, industry or agriculture). An exception to this is an abstract idea.

Patents do have restrictions though. Any patent is limited to the countries in which is registered because a patent cannot be registered worldwide. Furthermore, a patent can only be filed for a period of 20 years and annual fees must be paid in this regard. If a patent is registered in a country, the patent’s owner has the sole rights over the patent and is allowed to pursue commercial activities related to the invention, be it actively using it or sell, license or lease it.

To apply for a patent, the inventor must disclose the invention’s details and features, namely the patent specification, to a Patent Office, which is responsible for issuing the patent. The patent specification is a document which contains the specific features of the invention that should be protected. These features are contained by statements aka patent claims. This is a very important aspect of the patent itself, as any other idea that has the invention’s features will become susceptible of patent infringement.

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BusinessWise Does any invention need a patent? Protection of a patent is not a mandatory route to follow. An invention can be also protected by remaining confidential, a preferred case if the invention itself is not as obvious as the product or process commercially used, but not appropriate if the invention is later desired to become licensed or sold. Confidential information is harder to trade than a patent. It is therefore best advisable to patent an invention prior to commercialization.

The invention has to be confidential though before filing for a patent application. If the invention is disclosed before patenting, this represents a serious threat to the patent application, since disclosure cancels the legitimacy of the patent in the first place.

The patent application can be provisional or complete, also known as final. The provisional patent application is easier to follow, has fewer formalities, is much cheaper than the complete one and still allows for any further developments after the filing to be included in a later complete filing. Adding additional developments and features to the invention is more difficult to be patented in case of an initial complete application, but can still be done.

The provisional application is only valid for a year. Therefore, in order to secure the patent rights, inventors must finally apply for a complete patent application.

Inventors can file their own provisional patent application. It is though best advisable to make use of a patent attorney, especially if filing for a final patent application. In South Africa, a patent attorney is a must for filing a complete application. Steps to follow in order to file a patent application include: • Discussing the invention’s features with the patent attorney • Compiling the invention’s description and stating any differences or improvements over existing technology if available • Searching prior inventions (referred as to prior art) to determine if the respective invention is new • If patentable (negative search results), filing the application – either provisional or final

Trade marks Distinguishing brands, products or services from the competitors’ is very important.

You wouldn’t like any other company to capitalize on your own distinctive brand, would you? This is why trade marks are so significant. Words, logos and marks can all be protected from competitors who might want to reproduce or use them unlawfully. According to the Trade Marks Act, any graphical sign can become a trademark. This includes names, letters, words, digits, shapes, colours, various patterns. For example, a corporate logo, an invented word and an image can all be registered as a trade mark.

This, however, doesn’t mean than any trade mark can qualify for registration. The trade mark must be, firstly, distinguishable. This is easier when the trade mark itself is an invented word or logo and impossible when common terms or words as used.

In other words, one must choose carefully a mark that can be registered.

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BusinessWise Is it necessary to register a trade mark? In some cases, a registered trade mark is highly recommended, the reason behind this being to protect it from other similar or same goods or services that might create confusion if trade marked. Simply put, the owner of the registered trade mark can stop any other trade mark that shows similarity for being registered. Also, the owner of a trade mark can object to an unauthorized use of the trade mark if the brand is already well known in the respective country.

Trade marks can be unregistered and registered, with unregistered trade marks having limited rights in South Africa. It is highly desirable for a trade mark to be registered to enjoy full protection from the competitors, without having to prove extra evidence like in the case of an unregistered trade mark. Once registered, a trade mark will be viable for ten years and renewed every ten years for as long as the owner claims the trade mark. Note that the trade mark must be used in order to remain in the register and avoid being challenged by others. If a trade mark is not used for a period of five years, another party has the right to claim the same trade mark. Also, inappropriate use of the trade mark itself might lead to losing the rights on the trade mark.

A trade mark must be registered by a trade mark attorney. A registered trade mark is indicated by the words “Registered Trade Mark” or the symbol ®. If a trade mark is not registered yet, the abbreviation ™ is used. Steps to follow in order to register a trade mark: • Discussing the specifications of the goods with the attorney • Conducting a trade mark research to determine if the trade mark is available for registration and there is no infringement of other registered mark • Filing the trade mark application, which has to be examined by the Trade Marks Registry

Copyright Copyright is one of the most common forms of intellectual property which prevents other parties from copying or misusing a work without the authorization of the copyright owner. The works must be covered in terms of the Copyright Act. Copyright doesn’t need registration. In South Africa, only cinema films must be registered. The Copyright Act covers the following types of works that are subject to copyright: literary works (novels, poems and so on), artistic works (photos, painting and so on), musical works (a record for example), cinema films, broadcasts (radio or TV), computer software and others.

For a copyright to be considered, the work must be original and not copied from other sources. The work must be in a material form, written down or captured and not merely an idea. A copyright’s duration is of 50 years from the moment of the work’s availability or publication. Literary, musical and artistic works enjoy copyright fifty years after the owner’s death. Although the ownership of copyright is held by its creator, the right can be transferred via a written document. Exceptions to copyright ownership include work creation during the course of employment (the employer owns the rights) and when the work was commissioned by other person (the person who commissioned the work owns the rights).

For more information on intellectual property, visit www.spoor.com.

WealthWise 37

The Basics of the New Companies Act The new Companies Act and Regulations will come into force April 1, 2011. This

means that no new Close Corporations (CCs) can be incorporated after the due date and existing CCs will need to comply with the new reporting and filing requirements. How will the New Companies Act impact on the small and medium enterprises (SMEs) and why has the Government chosen to enforce new regulations?

In South Africa, SMEs are the backbone of the private sector and contribute to 80% of the total employment. Furthermore, SMEs account for 42% of employment in the formal economy. Besides the formal sector, close to 2 million informal businesses operate in the country. According to a survey in Gauteng province, conducted by USAID Financial Sector Program (FSP), who provided assistance to the Government in crafting the new Companies Act and Regulations, small business owners have limited knowledge of the benefits of the new regulations and formalities surrounding the new Companies Act. Gerald Meyerman, former manager in the World Bank, with experience in providing policy advice to governments and corporations in developing emerging markets, says that the new Companies Act, on which he was intimately involved as Policy Advisor with the USAID Financial Sector Program (FSP) since 2009, was a necessary step for Government to promote the growth of SMEs in the country.

“SMEs should have the same credibility as larger corporations and contribute to formal employment creation in terms of labour standards”, says Meyerman.

The enforcement of the new Companies Act, as early as 1 April 2011, has two major significances: • Unlimited growth and potential for SMEs • The amending of the former Close Corporation Act (1984), who stipulates the CC’s full-cycle regulations from formation to liquidation The Corporation Act will be amended by the Companies Act as of 1 April 2011 with the following consequences: • No new CCs will be incorporated after 1 April • The consolidated version of the amended Close Corporation Act as of 1 April 2011 will still remain available and in force “indefinitely”. See www.fsp.org.za/blog for details.

• The amended act is, however, expected to be phased out and fully integrated in the Companies Act within ten years

38 WealthWise

BusinessWise What would this mean for existing CCs? Close Corporation (CC) is today still the preferred incorporation of a small business, according to FSP’s survey. According to the companies and intellectual property database of South Africa, CCs account for 78% of the total registered entities, with an annual growth of 20%.

However, the enforcement of the new Act does not stipulate an immediate effect of “upgrading” from a CC to a Company or a disintegration of existing CCs. It enforces, however, that no new CCs will be registered as of 1 April 2011. The new Act encourages CCs to consider the fully integration into the Companies Act (this will be done as part of a long-term process anyway). Therefore: • All existing CCs validly registered with CIPRO before 1 April 2011 will continue to exist • No new CCs will be registered after 1 April 2011 • Amendments and administration of continuing CCs will be done by CIPC (see further below)

What are the benefits of a Company compared to a Closed Corporation?

• Permits unlimited potential, growth and employment creation as opposed to staying “under the radar” • Expands the “public oversight” deemed to be less present in a CC • Laws, administrative processes and fee structures are fully “scaled” and based on the “public interest” in the company

What are the changes brought by the new Act? The impact of the new Companies Act on the SMEs will be seen in the following sections:

‘should SMEs

have the same credibility as large corporations

• Categories of companies • The Companies Intellectual Properties Commission (CIPC) • Formation • Dissolution • Corporate Governance and Accountability Company Categories. The most applicable company category will be the non-listed for profit company – Private and Personal Liability company.

’

Companies will be structured as follows: • For Profit: state-owned, private (not listed), personal liability company (not publicly listed), Public Company • Not for Profit (formerly section 21) The Companies Act has therefore new approaches to the incorporation of businesses, based on the public interest scale and scalability.

WealthWise 39

BusinessWise What is the Companies Intellectual Property Commission (CIPC)?

The new CIPC is a merger of CIPRO (Companies and Intellectual Property Registration Office) and OCIPE (Office of Companies and Intellectual Property Enforcement) and will come into effect as of 1 April 2011. Its mission is to educate potential and current SMEs owners on the new Companies Act, advise on the structures most relevant for their businesses and provide the necessary conversions from personal liability company to private company and then public company if necessary and desirable.

Formation of new SMEs. The most common formation of SMEs will be under “Private Company”. The process of registration will entail: • Simplified and expedient name reservation • Greater transparency • Electronic filing of registration documents • Fees and name reservations prescribed by regulations less or no more than current CC fees • New company formation documents – Memorandum of Incorporation (MoI) will replace the Articles of Association Company Rescue and Dissolution. The existing provisions mentioned in the Close Corporations Act will continue. Chapter 6 “Business Rescue” of the new Act will provide standard formats for informal rescue discussions with creditors. The chapter applies to SMEs, however the procedure might be deemed as too expensive. The new Act seizes the differences between winding up solvent and insolvent companies. As an example, solvent companies might be wound up and liquidated voluntarily through court orders or special resolutions, while insolvent companies winding up will be court administrated according to the Department of Justice Insolvency and Business Rescue Bill. The Bill will be scrutinized for SMEs impact to minimize judicial administrative costs.

Corporate Governance and Accountability. Finally, the most important shift in the Companies Act is the governance procedures enforcement consisting of: • Further protection of shareholders, investors and the public • Regulation thresholds determined by the annual turnover, size of workforce and the nature of companies activities • Granted exemptions if not public interested is served for personal liability companies or where directors are also the shareholders of the company • The accurate keeping and maintenance of accounting records, annual financial statements • Required audit or independent reviews determined by the company category and thresholds – “minimum standards” set in this regard • Disclosure of director’s duties to minimize fraud • Insights into fronting and fraudulent practices For more information, email info@fsp.org.za. The above article is based on the lecture “From Close Corporation to Company – How will the New Companies Act impact SMEs?” by Gerald Meyerman, Policy Advisor with the USAID Financial Sector Program, at My Business Expo Seminars, an initiative of the National Small Business Chamber (NSBC). Contact NSBC at www.nsbc.org.za.

40 WealthWise

C A R E E R WISE Quick Read: How to Get the Go-Ahead

Brilliant idea?

Give it a go and share your thoughts with the management team.

Here is some pertinent advice on how to make sure your idea doesn’t get unnoticed, however crazy it might sound (to them)!

Have informal chats. Mention your idea to your colleagues, friends and

family and notice their reactions. Don’t be straight-forward though; start with small chat and a few hints for example. Use their feedback to improve your proposition.

Get support. Before going to the stakeholders, form alliances with colleagues in various departments and explain the benefits of your idea, especially if it involves or affects more people (example: a new marketing strategy). Their support will be invaluable once the idea gets presented to the decision makers.

Plan well. Set your goal, know the company rules and fine-tune every aspect of your proposed plan to match your audience. If you deliver a presentation, make sure you structure it first accordingly (introduction, content, conclusion).

List the benefits. When creating your proposal, make sure you include both benefits for the company and your benefits to enhance productivity.

Practice your speech/presentation. If you want to fight your fears and

make sure you can handle the situation in a formal environment, discuss your idea with an informal audience first (your friends). Rehearse as many times you need to.

Avoid the “no” answer. Deal with all the “what ifs” you can think of and anticipate the management’ intrusive and often dismissive questions. Prepare convincing responses.

Suggest a trial phase. If the management is not convinced yet, dare to ask for a trial phase or an experiment.

Be confident. Believe in your proposed plan and show confidence. Having a positive mindset is the key to get your idea off the ground.

WealthWise 41

Proposed Amendments to the Labour Legislation - some practical implications...

Article provided by The HR Hub

In the past few months, there has been much hype over the proposed

amendments to various pieces of the labour legislation in South Africa. In particular, the media has highlighted Government and Unions desire to put a stop to labour brokers in what they describe as their efforts at reinforcing the Government’s current objectives of “more jobs, decent work and sustainable livelihoods”.

In considering some of the proposed amendments, we will leave it up to you to assess for yourselves whether these proposed amendments will, in any manner, shape or form, further the Government’s objectives.The proposed amendments are many in number, so we have selected some of the more interesting ones.

There is a move to introduce the Employment Services Act (currently in a Bill form), whose main aim is to address Employments agencies and Employment services in the form of labour brokers and recruitment agents; the Legislators then also seek to amend the Labour Relations Act by making substantial changes to the jurisdiction of the Commission for Conciliation, Mediation and Arbitration and Labour Courts insofar as different types of disputes are concerned, and to amend the Basic Conditions of Employment Act by making the Act far more onerous on the employer, and granting excessive powers to the inspectors of the Department of Labour in taking immediate criminal action against any employer who fails to comply with any provision of the Act. In terms of proposed amendments to the Employment Equity Act, the Legislators have focused on such areas as psychometric testing, income differential and generally placing far more onerous provisions on the employer, including increasing penalties for non compliance. So, let’s consider some of the practical implications that these amendments will bring into the employment arena if they are promulgated in the form they currently enjoy.

Labour brokers At first glance, the Employment Services Bill, in defining the new term for labour brokers, namely private employment agencies, does not seem to change the function of existing labour brokers within this country. Your private employment agencies will be permitted to provide the following services: a. matching work seekers b. referring workers to employers c. providing career information which provides for vocational counseling, assessment of work seekers to determine suitability and offering other related life skills to secure employment.

42 WealthWise

CareerWise

However, before a private employment agency may commence operation (or in certain cases, continue operating), the Bill seeks to enforce the provision that no such private employment agency may operate without being registered and licensed through the Department of Labour. In this regard, the Bill states that “the Minister (of Labour) may prescribe the criteria for the registration and licensing of private employment agencies.”

’Employment The Public

Services will provide the services currently provided by labour brokers and recruitment agents

The concerning part of this Bill is not so much that these agencies are required to be registered and licensed, but the fact that at this time, we are not aware of what criteria might be placed on these private employment agencies before they may be registered or licensed to operate or, as the case might be, continue to operate. Without being duly registered and licensed to operate, the Bill clearly states that no person is permitted to operate a private employment agency. And so it seems we must wait to establish what criteria are going to be prescribed by the Minister for the registration and licensing of such private employment agencies.

Having apparently introduced the first of the many restrictions on the labour brokers of old, the Employment Services Bill provides for the establishment of a Public Employment Services operation, established by the Department of Labour, which Public Employment Services operations will operate free of charge in a manner that is open and accessible to members of the public. This Public Employment Service will provide the following services:

‘

a. match work seekers with available work opportunities b. register work seekers c. register job vacancies and other placement opportunities d. facilitate the placement of work seekers with employers or in other placement opportunities e. advise workers on access to social security benefits f. provide specialised services to assist specific categories of work seekers, including new entrants into the labour market, disabled persons and members of rural communities g. facilitate the exchange of information among labour market participants including employers, workers and work seekers, private employment agencies, sector education and training authorities and training providers; and h. generally perform any other function in terms of employment law or prescribed in terms of this Bill.

WealthWise 43

CareerWise In simple terms, the Public Employment Services is to be created, and in terms of the Bill, all employers with vacancies are required to register these vacancies with the Public Employment Services within 14 days of this vacancy becoming available, and the Public Employment Services may, having created a data base of unemployed individuals, provide the employer with suitable work seekers for assessment.

In addition to the abovementioned function, the Public Employment Services may also provide: i. vocational and career counseling ii. assessment of work seekers to determine suitability; and iii. other related life skills to secure employment In simple terms, the Public Employment Services will effectively provide the services currently provided by labour brokers and recruitment agents, and this service is to be funded by public funds and will thus be free of charge.

Typically, the labour brokers have provided work seekers (employees) to employers and this arrangement is usually for a fixed period of time. As a result, the employees services provided to employers through a labour broker are frequently in terms of a fixed term contract.

In April 2010, we addressed the issue of fixed term contracts and the pitfalls of these contracts. To add to the dilemma of what will become known as private employment agencies, the fixed term contract is now effectively being banned, except for certain exceptional circumstances.

The Basic Conditions of Employment Act seeks to close the gap that has been used by employers previously who tend to employ individuals on a fixed term contract, in some cases as an alternative to a probation period.

No fixed term contracts will be permitted unless they can be rationalised for legitimate reasons, as might be the case in situations of replacement staff where permanent staff members are on maternity leave, or in the case of seasonal work, such as in the agricultural industry or where an employer requires additional staff on a specific project which is set for a fixed term.

The practical implication of this situation to employers, particularly employers who make use of the services of labour brokers, will be that they will not be permitted to employ the services of employees on a fixed term contract simply because they have gone through a labour broking service.

And whilst on the subject of the Basic Conditions of Employment Act, the proposed amendments seek to empower the inspectors of the Department of Labour to pay a visit at the premises of an employer, without notice of warning, duly accompanied by interpreters and, in some instances, the South African Police Services, for the purposes of establishing whether an employer is in full compliance with the Basic Conditions of Employment Act.

44 WealthWise

CareerWise In the event that the inspector should find that there are certain areas in respect of which an employer is not compliant, no longer will the inspector issue a compliance order, which usually allows the employer a certain period of time to rectify the non compliance, or at least address the Department of Labour for the reason for such non compliance. Instead, the employer will simply face criminal prosecution without being given the opportunity to either explain the non compliance or to rectify the non compliance.

Let’s consider a typical situation which may apply here: We might have a situation where an employee has exceeded their sick leave entitlement, and instead of not paying the employee for the excessive time off due to ill health, the employer will set off annual leave against what should effectively be sick leave.

Should the employer do this, usually out of the kindness of their hearts to ensure that the employee still gets paid whilst off ill, and this comes to the attention of the Department of Labour, the employer will face prosecution and in terms of the offences and penalties which the amendments seek to impose, an employer may face anything from a minimum applicable fine of R10 000.00 for the infringement or a minimum term of imprisonment of twelve months. The term of imprisonment to the maximum can be up to six years.

Another interesting proposed amendment to the labour legislation, relating to the Labour Relations Act, is to seek to address the jurisdiction of the Commission for Conciliation, Mediation and Arbitration and the Labour Court. In this regard, it seems that the CCMA will be given jurisdiction to address issues of employment, including non compliance with the Basic Conditions of Employment Act such as, for example, non-payment of notice pay or leave pay, at the same time as addressing a claim of unfair dismissal.

However, what the proposed amendments to the Labour Relations Act seeks to redress is the fact that in future, the CCMA will only deal with those matters in respect of those employees who receive a gross annual salary of less than R149 736.00 per annum, whereas all employees who receive a gross annual salary in excess of this amount, will be required to refer their disputes to the Labour Court.

In addition, the Act seeks to empower the Magistrates Court to deal with a number of labour related disputes which heretofore, were dealt with by the CCMA or the Labour Court.

These are just some of the more interesting and significant proposed amendments to the labour legislation.

The HR Hub is a unique on-line HR Services company where clients can obtain a number of “best of breed” HR products and services under one roof! For more information, call (011) 475 8915, email andrew@thehrhub.co.za or visit www.thehrhub.co.za.

WealthWise 45

CareerWise

Wealth Management: a rewarding career?

by Felicity Johnson

A career in Wealth Management can be rewarding. Since the FAIS (Financial

Advisory Intermediary Services) Act came into effect in 2004 a lot has changed as far as the minimum qualifications required and professionalising the financial industry. Wealth Managers can be an independent Certified Financial Planner (CFP), a Chartered Financial Analyst (CFA), MBA or a credentialed professional money manager who works to enhance growth and income tax efficiently of long-term investors.

Together with the qualification it is also required of the Wealth Manager to have a certain level of experience as well as complying with the Fit and Proper requirements as laid down by the Act. Further is it important to adhere to the principles of integrity, objectivity, competence, fairness, confidentiality, professionalism and diligence when dealing with clients.

Wealth Managers like Johnson and Associates is an Independent Investment House which offers financial planning, portfolio management inter alia. Our client base consists of High Net Worth Individuals, small business owners and families who desire the assistance of a credentialed financial advisory specialist. As Wealth Managers, Johnson and Associates coordinate retail banking, estate planning, tax professionals, legal resources and investment management to offer sophisticated investment management and financial planning solutions, tailor made to the affluent.

For further information, please contact Felicity at +27 82 377 8649 or email info@jassoc.za.net

Note: A Wealth Manager is a financial advisor or financial planner for large amounts of money and assets. A Wealth Manager usually has responsibility for managing all banking, investments, estate planning, asset management and more.

Sometimes very wealthy individuals or corporations and institutions hire Wealth Managers to manage different investment aspects.

The term "Wealth Manager" is a recently coined label which came out of high level, high income, high wealth Broker Dealers, Bankers and Insurance Companies.

Persons employed in Wealth Management positions are often Certified Public Accountants, Chartered Financial Analysts, or Chartered Wealth Managers with securities designations. Source: www.qandas.com.

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A G E N D A This month we inspire you to...

Make small changes with big results Start saving money in your everyday life with easy tips from www.moneysavingtips.co.za.

You will be amazed on how even the smallest changes in your household can save you up substantial money. The website covers financial, insurance and investment advice.

Travel green Indulge your senses and respect the environment altogether when travelling to South Africa's best kept secret eco destinations. We have uncovered one of them in the midle of Johannesburg - see more Celebrate Easter in your city eco destnations at There are plenty of ways to celebrate this www.ecotravel.co.za and get Easter. If you're still stuck in the city during ready for a green adventure! that time, look out for festivals like the Joburg Easter Festival 2011, held at Johannesburg Expo Centre from 21 April to 2 May. Expect a wide-ranging programme of events and exhibitions, arts, crafts, film festivals, concerts and fun activities for all family. In Cape Town, the Oyster and Champagne Festival 2011 at Bloemendal Wine Estate, Durbanville is a two-day annual event over the Easter Weekend with livebands, entertainments, food stalls, celebrity chefs, thousands of delicious oysters and French champagne. Look for community events in your area - a sure way to have fun.

Happy Easter!

WealthWise 47

A Surreal green experience

by Denisa Oosthuizen

It’s impossible not to love the serenity and earthiness of Surreal Eco Boutique Hotel & Spa in one of the trendiest and busiest suburb of Johannesburg, Bryanston. It might be hard to believe, yet some mere minutes from bustling Sandton CBD’s skyline, behind closed doors, stands the new hip boutique hotel – just launched in November 2010 – with a world on its own.

City hotels and lodges are not my first choice to unwind, yet I was consciously drawn to Surreal’s world by its 100% green credentials, a claim worth of further investigation. The exclusive, personalized experience of Surreal is expected upon entering the “by appointment only” premises. The tranquil universe spills out from the first steps inside, through the signature Koi pond with water walkways and Thaistyled columns. I had the word “sensual” in my mind as I walked through the grand entrance towards the reception area. The peacefulness of the surroundings was only interrupted – I should perhaps say completed – by the sound of the near-by waterfall in the hotel’s outside courtyard.

With an over sixteen years experience in the hospitality industry, including five of its ventures, Bgorn Scott is now managing Surreal Eco Boutique Hotel & Spa. The eco hotel, owned by two directors, opened its doors just half year ago. “The name was carefully chosen by the two directors to reflect another world and the Thai theme adds to this feeling. Basically what you see here is not just a hotel, it’s a showroom where you can see what is possible and buy”, explains Bgorn.

The high quality eco-friendly decorations, anything from furniture to finishes and objet d’art are sourced and imported from overseas by Classique Afrique, the company who completed the “eco project” that is Surreal. From this point of view, Surreal Eco Boutique Hotel & Spa is a first in Africa and stands as a showroom for Classique Afrique, which has its offices on the premises.The company is an environmental friendly supplier of turnkey solutions for the hospitality industry and renewable energy solutions for residential projects, known as the Go Green Programme. A global company, Classique Africa has put Indian Ocean Islands, such as Mauritius and Seychelles, on the green map and now it’s South Africa’s turn to

48 WealthWise

Agenda: Destination

join the holistic eco movement. It’s not surprising then that every item in the hotel is an exponent of the latest trends in hotel design and renewable energy. And this is exactly what makes Surreal so unique.The green energy credentials are beautifully integrated in the luxurious, on-trend design made to please both the leisure and the corporate traveler. Nearby shopping, cultural and sporting attractions are on easy reach. But why would somebody dare to leave the tranquility and oh-so-perfect holiday atmosphere at Surreal?

Each room at Surreal has an unique décor inspired by global design trends (this is part of a showroom, after all). The six individually designed rooms offer supreme comfort, from the king-size extra length beds with European fine linen to high-tech pleasures at your fingertips (Apple TV movie options and pre-loaded iPods are just a few) and complimentary wireless internet access. For the business guest, the professional conference facilities for meetings, offering services ranging from courier to secretarial, is a handy add-on. The hotel caters for maximum six single guests or twelve guests sharing.

Nothing is spared for the luxury-lover guest, and the choice of Deluxe Rooms, Garden Deluxe Rooms and Executive Suite guarantees an over-the-top experience.

But what is most enthralling is the hotel’s green philosophy, which combines solar and wind energy and claims its presence in the luxurious rooms through intelligent lighting using energy management systems which saves up to 60% energy and carbon neutral labeling.

WealthWise 49

Agenda: Destination “Sustainability” and “eco-chic” go hand in hand at Surreal. Energy conservation is as paramount as the ultra-chic, contemporary Thai-inspired look that makes Surreal so special. Self-described as “South Africa’s first genuinely green hotel”, Surreal’s green credentials are reflected in the actual building, the rooms, the spa treatments at the “Spa at Surreal”, the Thai fusion meals at restaurant Kai Lan and the beliefs of all those involved in the project.

It is interesting to find out how the water heating systems in the hotel are solar-powered using photovoltaic technology and the same technology is used for outdoor lighting, garden pumps and computers. All rooms have an underfloor heating and cooling system (underfloor piping that circulates hot and cold water), which draws its renewable energy from the sun.

And if you think that this is as green as it gets, add an impressive Vertical Axis Wind Turbine who powers the spa and the restaurant and carbon neutral beds that lower the gas emissions for a greener night’s sleep. A part of the hotel’s sales go towards various NGOs keen on conservation, while your stay is awarded with a Greener Future microcertificate. That’s certainly something different worth mentioning.

But let’s go back to the glamour-esque Surreal. The silent courtyard – my visit was during lunchtime and I had the hotel to myself – invites to complete relaxation around the heated outdoor pool or the Jacuzzi surrounded by lush vegetation and the large sun patio. I couldn’t help noticing the earthy, beige and browns colours, whether on the sun deck or inside the Kan Lan restaurant.

Savouring a delicious creamy cappuccino while chatting with Bgorn on the restaurant’s terrace overlooking the sun deck area and next to the bar, I tried to picture an intimate dining in the restaurant or a scrumptious breakfast on the terrace (opened to hotel guests only) in the early mornings. It doesn’t get better and quieter than this (unless a party is going on, which can be easily arranged with the staff).

50 WealthWise

Agenda: Destination Kai Lan serves delicious Asian fusion style food carefully prepared by executive chef Barry Farnan, who spent 26 years in various top kitchens of America and Europe.

Although I didn’t have the chance to try one of Barry’s food creations, I was hooked on the seasonal menu and the “made-to-order” dishes that incorporate Asian, Oriental, French and Italian cuisines. Furthermore, the restaurant works on gas.

Barry is also a master herbalist and plans to grow a vegetable garden here at Surreal. He sources organic ingredients, from meat to coffee, for the restaurant and herbs from his own garden at home. Some of the popular dishes include ostrich fillet in chocolate sauce with steamed fresh vegetables and Thai-fusion style prawns and wasabi. The restaurant is opened to public for lunch and dinner by appointment only. The restaurant and terrace can easily accommodate forty people.

The Spa at Surreal is synonym with a holistic eco pampering and Thai influences, as in the Bamboo Massage, make for a wonderful experience. Also worth a try are the steam and rasul treatments, the rain shower and the Vitaliser Oxygen Therapy, a novelty in South Africa. The best way to experience the Spa is to book a treatment in the open-air massage cabana. Here, surrounded by the calming sound of the water and the leafy garden, you can drift off to a surreal place, much as the Spa itself. Needles to say, the products used by therapists at the Spa are in line with the eco philosophy: Guinot, Olos and Beaucience, the latter a South African eco brand.

Going the extra mile to be green pays off. Since opening in November last year, the hotel has seen its early adepts flocking in to experience the green luxury. On average, the monthly occupancy rate tops 60-70% and it’s not surprising that Surreal continues to amaze. “We are loking forward to franchise this concept and open up a new green hotel, most probably in Cape Town. It would be nice to have another Surreal”. We’re also looking forward to more surreal green experiences!

For more information and bookings, phone +27 (11) 463 2488 or +27 (11) 463 2523 or email info@surrealhotel.co.za. Surreal Eco Boutique Hotel & Spa is located at 18 Old Kilcullen Road, Bryanston, Sandton. Visit www.surrealhotel.co.za for details.

WealthWise 51

Competition

WIN with WealthWise magazine!

Want to claim back your feel good mojo?

We are giving away a copy of Patrick Holford's latest book, "The Feel Good Factor" to one of our luckiest WealthWise Club members, courtesy of Penguin Books!

To stand a chance to win Patrick's book, join our WealthWise Club absolutely free by subscribing at www.wealthwisemag.com/wealthwise/subscribe or by clicking the Subscribe button on the website's menu bar.

The Feel Good Factor will help you

transform the way you feel and renew your enthusiasm for life.

Discover inside: • The key factors that promote low mood and depression • The truth about antidepresants and what works better • Refreshing insights into psychological issues • A supplement programme proven to boost mood and motivation • A mood-boosting diet that's easy to follow • Inspiring case studies • Simple things you can do today to feel better tomorrow For more information, visit www.patrickholford.com .

52 WealthWise

WIN stylish CHOC CHIP laptop bags!

Choc Chip is a free-spirited brand, which gives you the opportunity to create a one-of-a-kind bag to fit your own personal style! The fabrics are constantly updated, giving you fresh alternatives every season.

The brand specializes in laptop bags for fashion-conscious career men and women and has added various ranges of gorgeous bags for most ocassions, following its amazing response from the public.

We have two stylish Choc Chip bags worth over R500 each - for her and for him - to give away to our luckiest WealthWise Club members!

To stand a chance to win one of these amazing laptop bags, join our WealthWise Club absolutely free by subscribing at www.wealthwisemag.com/wealthwise/subscribe or by clicking the Subscribe button on the website's menu bar.

Competition starts 10 April and ends 10 May. Winners will be notified in mid-May via phone/email.

WealthWise 53

Agenda: Books

On the bookshelf...

WealthWise recommends

Mehrdad Baghai and James Quigley, As One

Penguin Books - Business, R291 from Exclusive Books (www.exclus1ves.co.za) In “As One”, Deloitte, the world’s largest consulting and financial services firm, shares their secrets to leading teams that achieve the goals, as part of a major global initiative aimed at studying effective collaborations and the collective “As One” behaviour.

The project defines eight archetypes of leadership: Landlords and Tenants, Community Organizer and Volunteers, Conductor and Orchestra, Producer and Creative Team, General and Soldiers, Architect and Builders, Captain and Sports Team and Senator and Citizens. It further describes their characteristics and how one can apply them in their organisation.

The book illustrates over 60 cases of successful collective behaviour from a wide range of situations, showing how individuals can collaborate to achieve extraordinary results together. Arguably the most innovative and inspiring business read in the recent months, the New York Times best-seller “As One” is poised to become a classic on its own. If you are looking for the ultimate leadership advice, this is the book!

Malcolm Gladwell, The Tipping Point Alpha, R123 from www.kalahari.net

New Yorker journalist and best-selling author Malcolm Gladwell is best known for his original, sensational book “The Tipping Point”, a classic read that uncovers the social dynamics that cause rapid and monumental changes. The tipping point is the magic moment when ideas, trends and social behaviour cross a specific threshold, spreading like wildfire, viruses or epidemics.

Malcolm explains the phenomenon of social dynamics as similar to a an epidemic , based on the contagiousness characteristic, the fact that little causes have big effects and that these changes happen not gradually, but at one dramatic moment, causing an exponential break.

From teenage delinquency to traffic jams, from revolutionary acts to advertising campaigns, the book explores the problems we face as epidemics that are capable of sudden and dramatic change due to their inherent volatility. The author explores this phenomena behind the scenes. Brilliantly documented, the book explores the factors that lead to ‘social epidemics’ and why some products, ideas and ways of behaving “tip” or take off, while many others fail. Fascinating, though-provoking and definitely a must-read – arguably the best non-fiction work of the past decade.

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Agenda: Books Patrick Holford, The Feel Good Factor Piatkus, R183 from Exclusive Books (www.exclus1ves.co.za)

UK’s leading expert on the link between nutrition and mental health, Patrick Holford delivers another scientifically-researched and groundbreaking book, “The Feel Good Factor”. The book offers practical advice and effective natural ways of boosting your mood and motivation without resorting to prescription drugs or antidepressant.

Patrick is the founder of the Institute for Optimum Nutrition (ION), Europe’s leading provider of nutritional therapy education and the author of more than 30 books on nutrition, healthy diets, mental diseases and psychological issues.

The book is structured in three parts, covering the key factors that promote low mood and the truth about antidepressants; Patrick’s top ten mood-boosting secrets and practical ways of finding out your own; and an action plan, consisting of a supplement program and a mood-boosting diet that is easy to follow. Complete with inspiring case studies, practical recommendations and questionnaires, this book has the potential to change your life for the better.

Rough Guides - 1000 Ultimate Travel Experiences: Make The Most of Your Time on Earth, Rough Guides/Penguin, R230 from www.kalahari.net

Rough Guides’ travel recommendations are always a pleasure to read. This time the authors indulge readers in 1000 must-have lifetime experiences, as rich and diverse as the planet itself, driven by Rough Guides writers’ personal experiences, from Europe to Americas, Africa to the polar regions. No continent is left untouched: from the extraordinary landscapes, thrilling adventures, amazing wildlife to spectacular festivals, cool places to stay and even ethical experiences, there’s something for everyone to enjoy.

Experiencing the northern lights in Sweden, surfing on Australia’s Gold Coast, exploring the temples of Angkor in Cambodia, soaking up the sun on Thailand’s sandy beaches, trekking in the Himalayas, travelling from Beijing to Moscow on the Trans-Siberian train, walking on the Great Wall in China, visiting a Buddhist temple, dancing the night away at Brazil’s infamous Rio Carnival, drifting down the Amazon, witnessing the splendour of America’s Grand Canyon and the iconic Wild West in Arizona, following Dracula’s trail in Transylvania, Romania, attending the Venice carnival, hopping the Greek islands, cheering at the Monaco Grand Prix, touring rural France, cycling in the Dutch countryside, dining in Parisian style, clubbing in London or watching the Notting Hill Carnival are just some of the amazing legendary travel experiences Rough Guides’ authors swear by. Make your dream list and focus on creating wealth so you can too experience as many of these wonderful places yourself!

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Agenda: Events

Events, workshops and seminars

Plan your summer holidays (already)!

The World Holiday and Travel Fair

When: 15-17 April Where: The Coca-Cola Dome, Northgate Expect the best deals on hotels, flights, faraway destinations and local hot spots! For more info visit www.worldtravelfair.co.za. Can't wait for the summer? Look out for the 28th Pick n Pay Knysna Oyster Festival, from 1 -10 July 2011 in the picturesque Garden Route town of Knysna. More details soon!

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Agenda: Events

Interactive Networking Session

When: 14th April,17h30 for 18h00 Where: Sanlam Office Plaza A networking session organized by Capital City Business Chamber. Info on systems available to determine how efficient your business is, payroll functionality at no cost and an overview on word economy. Fee: Members - Free of charge; Nonmembers - R 50. For more information please contact Anneline on 087 802 1021. For more events, visit www.ccbc.co.za.

Taxpayers Workshop

When: 19th April, 08h00 Where: Mongolian Grill (The Boardwalk Office Park, Lynwood, Pretoria)

A short information session to inform taxpayers about the new Tax Voluntary Disclosure Programme. The session is organized by Capital City Business Chamber.

Fee: Members - R 50; Non-members - R 70.

For more information please contact Leandre on 087 802 1021.

Do you have an event, workshop or seminar you would like to promote in WealthWise magazine? Send your suggestions to editor@wealthwisemag.co.za and we will publish your event in these pages!

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Collective Leadership: a New Era?

by Denisa Oosthuizen

One of the most interesting readings I had in the past months was

L A S T W O R D

Deloitte’s “As One” book. I was expecting a “manual” on leadership, possibly slightly different than the thousands of book published annually on leadership. Instead I have found refreshing, inspirational stories of collective behaviour and the individuals behind these case studies.

“As One” describes, as portrayed in its introductory chapter, “how individuals can collaborate to achieve great results”. Although the idea of effective collaboration is not new, the approach used, psychologically speaking, opens new doors on how we see and think of leadership. Firstly, there isn’t a sole recipe for leadership. The eight archetypes investigated by Deloitte are easy to grasp and based on who gives the orders and the degree freedom followers have to execute. What is worth of considering is the variety of leadership styles and the fact that leaders are not invincible or capable of showing and imposing the way forward alone – the people must get involved, and the book strongly focuses on the degree of involvement followers have.

Last but not least, the whole picture of leader and followers as separate entities is blurred. They co-exist in a perfect harmony, even under the pressure of rules and regulations. The command and control leadership model doesn’t look so scary anymore – in fact, it is a necessity according to the situation. Imagine a case of emergency when people need guidance and strict rules to overcome it. But again, we often find organization and companies in today’s world when collaboration is not as effectively implemented – if any – as it should be, where people are working without knowing the purpose or the company’s goals and directions for the year to come, where people are not encouraged to voice their opinions or just denied these rights, where people are expected to work as robots, complete tasks, receive their paycheck and do it all over again for months, years, even decades. Are companies really interested in what they think? Do they think that their input might bring any value? Do they want to hear solutions from their workers?

I think the problem we have today in some of the companies we are talking about is the “I know everything” syndrome. Leaders, managers, CEOs, they are all too scared of admitting their mistakes, too afraid of asking for guidance, too egocentric. They don’t want to be blamed or accused of mismanagement and this is understandable. So many companies fail on ego alone. If we could open ourselves to the world, to our workers/followers, ask and listen, the whole concept of effective collaboration will then become so seamlessly and natural. We would then understand why we have shied away from this in the first place, and most importantly, realize how humans work together and how can they improve their work through collective leadership. Because, first and foremost, companies are about people. People that want to reach their potential and be part of a greater thing.

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IN OUR N E X What it takes to access T finance for your business Four finance gurus discuss access to finance and why so many entrepreneurs fail in securing finance for their businesses.

What you need to know about banking fees

E D I T I O N

We uncover the truth behind banking fees: what we pay, why we pay and how to save up money on choosing the right banking

The Consumer Protection Act Effective from the 1st of April 2011, the Consumer Protection Act will affect the way businesses are dealing with their customers.

Find out more about it in our May issue!

Property transfers out of companies and trusts tax free Read more about how you can transfer your home out of a company or trust without paying tax.

WealthWise 59

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