www.wealthwisemag.com
WealthWise magazine Vol I/No. 4 FREE
South Africa May 2011
Access Finance For Your Business: Truth, Myth, Advice A Weaker Rand? Anger Management Inside the Consumer Protection Act Win 10 educational CDs worth over R2000! Details on page 53.
On the Cover
LifeWise
30 Access Finance For Your Business: Truth, Myth, Advice
19 Quick Read: Debt 9 Quick Read: The Four Natural Counseling SOS Powers 23 The Trouble with 14 Mindfulness is Banking Fees happiness 25 Tax-Free Property Transfers
20 A Weaker Rand? 10 Anger Management 34 Inside the Consumer Protection Act
MoneyWise
C O N T E N T S
Agenda
BusinessWise
CareerWise
29 Quick Read: Is your business the right one for you?
41 Quick Read: What 47 This month we inspire do employees want? you to...
38 Maria Garcia International - a story of entrepreneurship
42 Does your Management Team give 100%?
48 Destination: Whisky Wise 54 On the bookshelf
56 Events, Workshops and 46 The Role of Company Culture for Seminars its Employees
Regulars: 3 Contents, 4 Foreword, 5 Mailbox, 6 Contributors, 53 Competition, 58 Last Word, 59 In our next issue WealthWise 3
F O R E W O R D Finance is the central issue this May at WealthWise magazine. Having
attended various networking sessions, meetings and presentations on entrepreneurship and the choices we face as entrepreneurs to grow a sustainable, profitable business, it comes as no surprise that the rise of business incubators as a one-stop shop for entrepreneurs is worth to take a look at. We have also taken a closer look at the newly enforced Consumer Protection Act and the steps businesses need to take to ensure compliance with the Act, the country’s banking fees, the new regulations concerning the disposal of properties from companies or trusts tax-free and the estimated evolution of Rand against the main worldwide currencies in the coming months. You’ll also find inside a special feature dedicated to cultivating mindfulness and chasing away negativity as in the useful advice on anger management, whereas our career section deals with employees’ needs and performance and how important is a company culture in the first place. Last but not least, we bring you the incredible story of Maria Garcia, a woman whose sheer determination lead to a beauty empire, while providing hope for women in today’s business world. Our lifestyle section is as entertaining as ever with a different twist! This time, we explore the magical world of whisky, its potential as a viable investment (who knew?) and the whisky destinations well worth a visit. 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
4 WealthWise
Each month we showcase your best comments, feedback and suggestions for WealthWise magazine. This is your page! "Great material, it would have been nice to see a cost comparison, between the different forms of intellectual property. I am sure that is probably the first question a individual asks. But a very nice read" Deon Thomas, post comment on "A Guide to Intellectual Property"
"I really like this article.Yes it’s true that self-dicipline has a big impact in achieving one’s goal. I’ll try to put an effort to practice on the seven traits mentioned above.Thanks a lot" Comment post on "7 steps to build self-awareness"
M A I L B O X
"Nice writing style. I look forward to reading more in the future" - Tom Stanley, comment post on "Goal Settings made easy"
"Hi there, Excellent article.Explains the concept of Life Coaching very well. Kind Regards" - Salome Banks, comment post on "Life Coaching 101"
"It is truly amazing, that with our current youth. There is a greater realization that the old work for money approach is long outdated. This fact has been proven by several start-ups, such as Google, Groupon, Facebook etc. In my opinion, a person's passion often transpired into something great. So for every youngster who thinks of entrepreneurship, I would say, find you passion, the reward may not seem transparent at the time but often pays off later. We as human beings often want things in life, but we are not willing to go “through the process” of achievement our goals. Having passion for something makes it much easier to achieve your goal since you going thought the process, but having fun at the same time. KK is a classic of someone who merely followed his passion !" Deon Thomas, post comment on "Young Entrepreneurs"
Have your say! Write to us at editor@wealthwisemag.co.za! The best comments will be published in our next edition!
WealthWise 5
Shelton Kartun is a specialist in the
field of anger management and a counsellor in stress management. Having trained overseas and co-founded the British Association of Anger Management, he is the founder and director of The Anger & Stress Management Centre of SA, the only centre of its kind in South Africa. He has over 20 years of experience in anger management, conflict resolution and stress reduction. Although based in Cape Town, Shelton now has centres in Johannesburg, Pretoria and Durban. His vision is to have franchised branches all over South Africa and Africa supporting and empowering individuals to have better, calmer and happier lives. Read Shelton's article on anger management in our LifeWise section, page 10.
Paul Stewart is the managing director of Plexus Asset Management. Founded in 1995, the Plexus group of companies is an independent financial services provider that specialises in providing innovative, unique and holistic financial solutions for both corporate and individual clients. As of 2010, Plexus Holdings (South Africa) incorporates Plexus Wealth Management (financial planning) and Plexus Asset Management (investment management services and solutions). Read Paul's opinion about the evolution of the Rand in our MoneyWise section, page 20.
Patrick Leclezio is a whiskyphile,
writer and entrepreneur, who has spent the last 12 years working in the liquor industry in one capacity or another. He writes the blog Words on Whisky, www.wordsonwhisky.wordpress.com, and is involved in a new specialist whisky e-tailer called WHISKYdotcoza, www.whisky.co.za. He is passionate about the culture, business and enjoyment of whisky. Patrick wrote our Whisky Wise article on the wonders and the investment side of whisky in lifestyle section Agenda, page 48.
6 WealthWise
C O N T R I B U T O R S
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. Read about an opinion on management performance, courtesy of The HR Hub, in our CareerWise section, page 44.
Jason Holmes is a regular writer with
Debt Consolidation Care and is also a contributory writer with other financial sites. His expertise is woven around various aspects of the debt industry and with his e-books like‘Credit Score The Quintessential Therapy for a Happy Pocket’ he tries to impart to people the different situations and simple solutions to get out of difficult situations. Jason wrote a comparative article on banking fees for our MoneyWise section, page 23.
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 Shelton Kartun, Patrick Leclezio, Jason Holmes 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: The Four Natural Powers Strangely, in today’s world, people give up their power to lead, self-express
themselves and do greater things by thinking they do not have this power in the first place or that this power is beyond them. In his book “The Leader Who Had No Title”, leadership expert and best-selling author Robin Sharma acknowledges that every one of us has the power within to become a leader. His first leadership advice? You need no title to become a leader. Everybody can experience the power of leadership with the “Four Natural Powers” as written in his book and quoted below:
“Natural Power #1: Every one of us alive in this moment has the power to go to work each day and express the Absolute Best within us. And you need no title to do that. Natural Power #2: Every one of us alive today has the power to inspire, influence and elevate each person we meet by the gift of a great example. And you need no title to do that. Natural Power #3: Every one of us alive with life can passionately drive positive change in the face of negative conditions. And you need no title to do that. Natural Power #4: Every one of us alive to the truth about leadership can treat all stakeholders with respect, appreciation, and kindness – and in so doing raise the organization’s culture to best of breed. And you need no title to do that” - extract from “The Leader Who Had No Title” by Robin Sharma, pages 53-54.
The lessons to be learned here are: • You do not need a title to be able to express your leadership capabilities. • You do not need to be in middle or senior management to consider yourself a leader. • Anyone can be successful, but few choose to be. • Success is consciously created and doesn’t happen thanks to chances, lucky stars or your job/position. • You have to power to show leadership, irrespective of the position you hold in an organization, your age, your background, your place of residence. • No one is unimportant. Every people alive today and every job available today matters and all work can be made meaningful.
WealthWise 9
Anger Management by Shelton Kartun
Anger is one of our normal, natural human ‘core’ emotions and like all of our
emotions it is there to serve a purpose. The essence of our anger unfortunately can cause immense problems as the emotion of anger is either about changing a situation that we are not happy with or revenge. As humans play a game of tit for tat, it is all too easy to slip into revenge mode and teach someone a lesson, retaliate or punish and this can easily get out of control. We need to consider our intention as to whether we are planning to be constructive in the situation or destructive. Revenge is destructive – remember that two wrongs don’t make a right! Turning back to the point I have made, that anger is principally there to change something that we don’t like which has triggered us, again we need to be careful about what we say or do, and this is what anger management is all about. We have to stay in control, calm down and make sure we say and do the right things that result in a constructive outcome. Formally we can define anger management as being able to express our anger in an appropriate way so that no-one is hurt or abused physically, verbally or emotionally and also that no property is damaged either. More simply stated, we are striving to prevent damage and stay in control. Just think about it. When you cause damage, you usually have to do repairs and often there is a price to pay. This may be the cost of replacing a plate smashed or a cell phone thrown, but it can also mean the loss of a wife and children if she walks out on you. That kind of price cannot be quantified. Imagine being able to control yourself through the tools of anger management. As a result, you don’t cause any damage and there are no repairs that have to happen. As often said, prevention is better than cure. Therefore anger management equals damage prevention. Anger consumes a lot of energy and can be very damaging, plus repair can take up a lot of time and energy. By managing your anger you will save a lot of time and energy. Anger can be recognised by an intense feeling since once you have been triggered and feel angry, adrenalin will surge through your body producing a fight or flight response. Your body changes physiologically. You will sense what is going on when
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LifeWise
you clench your jaw, feel hot, go red, feel tense, your heart rate goes up, you want to attack and so on. Some of the common triggers for anger include not being listened to, injustices (blame, accusations and unfairness), mistrust, disrespect, loss of a personal goal, invasion of a personal space or boundary, dishonesty, incompetence and bad service. Not all triggers set all people off. It is very individual and what may trigger one may not trigger another. It may depend on your upbringing, expectations, value systems, insecurities or trust issues. Some anger may relate to the present when you react in the moment and soon get over what happened, whereas some anger may carry history that is unresolved. This tends to result in more extreme anger or rage and the outburst is out of proportion to what happened. A professional can help you clear this historic anger using emotional release processes.
‘behaviours It is our
when angry that are more problematic than the anger itself
’
Anger itself is not so much the problem but it is our behaviours when angry that are more the problem. We have freedom of choice as to how we behave and there are consequences for our actions. We have to stop blaming others and rather take responsibility for our choices. Our behaviours can be appropriate such as taking time out, ignoring, talking, negotiating, writing, speaking to a support person, letting things go, apologising or they can be inappropriate such as shouting, swearing, threatening, smashing things, throwing things, pushing or hitting. If you choose the latter, there will be negative consequences. Imagine you have choices and some belong in a good box and some in a bad box. Stop yourself in the moment from dipping into the bad box and force yourself to rather dip into the good box. This is anger management. Aggression and violence are the extreme behaviours of anger out of control (rage) and the intention there is to teach someone a lesson or to control them through fear and force them to comply with what you want. This is abusive and is in breach of the SA Domestic Violence Act of 1998. You could find yourself on the wrong side of the law, so take responsibility and get help before it is too late. Some of the basic rules of managing anger involve using your willpower to stop yourself immediately from saying or doing the wrong thing, to calm down and always put time in between the situation that triggered you, and your reaction to it. You will always have to use calming down strategies like taking time out, deep breathing, going for a walk, exercise,
WealthWise 11
LifeWise counting backwards from 50 to 1, listening to calming music and so on. You can also use the power of your mind and self-talk yourself to calm down, relax or let something go. Don’t sweat the small stuff as so many fights start over silly things. Don’t provoke unnecessarily and don’t bring up the past. Allow others their opinions and try not to take things personally.
Financial problems often trigger anger as usually there is a sense of a loss of control or irresponsibility and there is a desire now to control through anger. If there are issues such as over-spending, then it is best to talk things through and arrive at a compromise or solution. Explain what your concerns are and that you are not trying to control the person. Remember that there is usually stress associated with finances as well and this tends to predispose anger and shorten the fuse. The Act I mentioned above also includes financial abuse such as withholding money from another. Do be careful and reasonable so as not to cross the line.
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LifeWise In relationships, know what each other’s needs are so you can try and meet them. Accept there will be differences based on your different upbringings, values, beliefs and personality types. Practice tolerance and understanding. Communicate at all times, ideally in an assertive rather than an aggressive manner, stating your feelings and needs respectfully to the other. Try not to push each other’s buttons and most definitely use Time Out as a tool so that you avoid arguments or fights. If you don’t want something done to you, then don’t do it to the other person. Learn the art of letting go, resolving conflict, making up and doing loving things together again. Be aware if you have got into a negative mindset with your partner. Change it to be positive by appreciating your partner and think of the good things. If you have to deal with someone else who is angry, call time out to allow them to calm down, but if this is not possible, just realise they are probably having a bad day and are letting off steam. Don’t take it personally and when they have said all they needed to, you can say what you need to. Sometimes you may need to put something in writing or involve some other person eg HR, if this happens in the workplace. In conclusion, anger mis-used can cause a lot of problems. Practice the ideas suggested for good anger management and prevent damage. Anger will land up hurting you the most and is a notorious contributor to coronary heart disease and other health problems. Be relaxed. Be happy. For further information, private courses, workshops and talks, contact Shelton Kartun, Director and Founder of The Anger & Stress Management Centre of SA on (021) 554 3661 or email info@anger.co.za. Please state where you live as this helps us with your enquiry. Our website is www.anger.co.za.
Defuse your anger! Try the simple meditation breathing technique on page 17 to calm down when anger starts to kick in. Deep breathing is perhaps the most easiest way of controlling one's anger. Repeat the exercise until anger fades away.
WealthWise 13
Mindfulness is happiness by Denisa Oosthuizen
Professor of Clinical Psychology at the University
of Oxford and Director of the Oxford Mindfulness Centre in UK, Mark Williams co-developed the Mindfulness Based Cognitive Therapy (MBCT) and is the co-author of international best-seller “The Mindful Way Through Depression”. Here he talks about mindfulness as exposed in his latest book, “Mindfulness: a Practical Guide to Finding Peace in a Frantic World”. WealthWise magazine: Your latest book “Mindfulness” is based on mindfulness based cognitive therapy (MBCT). What is mindfulness and how is it applied in cognitive therapies to address mental health problems? Mark Williams: Mindfulness simply means being aware – seeing clearly what is happening in our minds and in the world, from moment to moment, bringing a sense of kindness to our experience rather than getting caught in judging it. The methods used to cultivate mindfulness were first recorded over two thousand years ago. It has long been central to wisdom traditions in Asia, particularly the Buddhist tradition, but the art of cultivating inner silence has been a central part of all religious traditions across the ages. Mindfulness meditation is a secular form of this tradition that anyone can learn. It trains us to pay deliberate attention to our experience, both external and internal. We learn to focus on what is happening from moment to moment with full intention and without judgement. Mindfulness is the awareness that emerges through such training, and the skill of developing and sustaining that awareness. Modern mindfulness-based approaches in healthcare began in the USA. From the late 1970s, Jon Kabat-Zinn’s pioneering research into Mindfulness-Based Stress Reduction (MBSR1) found remarkable effects on chronic pain and stress. With colleagues John Teasdale and Zindel Segal, we have reasoned that mindfulness training might have powerful effects in preventing future recurrence of depression, even if taught when people were well. To test this hypothesis, we have created the 8-week Mindfulness-Based Cognitive therapy programme. Six research trials have evaluated the power of MBCT to prevent depression. The results are striking. In the most seriously ill patients those with three or more previous episodes of depression, MBCT reduces the recurrence rate over 12 months by 40-50% compared with the usual care, and has
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LifeWise
proved to be as effective as maintenance antidepressants in preventing new episodes of depression. WealthWise magazine: How is MBCT progressing in becoming a preferred therapy of choice and what is the perception in South Africa? Mark Williams: In the UK, the NHS’s National Institute for Health and Clinical Excellence (NICE) has recommended MBCT as a costeffective treatment for preventing relapse in depression. Other research has found that MBCT reduces anxiety in people suffering from General Anxiety and Bipolar Disorders, can help enhance the quality of life and reduce the stress in those with a diagnosis of cancer. In South Africa, interest in the applications of mindfulness has grown rapidly since the launch of the Institute of Mindfulness, South Africa (IMiSA) – www.mindfulness.org.za.
‘Mindfulness is
“skills training” rather than traditional type of therapy, so anyone can try it
’
WealthWise magazine: Mindfulness was proven as an effective in addressing depression, stress, anxiety, unhappiness among others, by promoting joy and happiness and keeping the negative feeling at bay. Can mindfulness banish these feelings completely over time? Mark Williams: It would be dangerous to pretend that negative emotions could be banished from our lives altogether, but it is possible to ‘catch’ ourselves earlier, and stop things from getting out of hand. Research studies find that those who have learned mindfulness experience long-lasting physical and psychological stress reduction, discover positive changes in well-being, are less likely to get stuck in depression and exhaustion, and are better able to control addictive behaviour. The ability to see more clearly when we are getting ‘entangled’ in our emotions is of great benefit, and we now know that these effects are due to important changes in the patterns in the brain following mindfulness training. Neuroscientific studies find permanent changes in those areas of the brain associated with decisionmaking, attention and empathy in people who regularly practice mindfulness meditation. Other studies find that it increases the area of the brain linked to regulating emotion, and that it improves people’s attention, job performance, productivity and satisfaction. WealthWise magazine: What would you advise people who have been faced with depression and stress in the past? Mark Williams: If people find that they are still haunted by past episodes of
WealthWise 15
LifeWise depression and anxiety in ways that are destroying the quality of their lives even today, then they may find that a programme of mindfulness meditation may help, either by taking a class, or by working through the meditations in a book that includes a CD (as in Mindfulness: a practical guide for finding peace in a frantic world.) If they feel they need a greater focus on depression and longer meditation guidance, then The Mindful Way Through Depression (Guilford, 2007) might help. Mindfulness is “skills training” rather than traditional type of therapy, so anyone can try it without feeling that they have to go over old ground, or talk through their problems yet again. Those already in therapy report finding treatment easier if they are more able to be mindful, and to see their thoughts and feelings with greater distance and perspective.
WealthWise magazine: What would you advise people who have been faced with depression and stress in the past? Mark Williams: If people find that they are still haunted by past episodes of depression and anxiety in ways that are destroying the quality of their lives even today, then they may find that a programme of mindfulness meditation may help, either by taking a class, or by working through the meditations in a book that includes a CD (as in Mindfulness: a practical guide for finding peace in a frantic world.) If they feel they need a greater focus on depression and longer meditation guidance, then The Mindful Way Through Depression (Guilford, 2007) might help. Mindfulness is “skills training” rather than traditional type of therapy, so anyone can try it without feeling that they have to go over old ground, or talk through their problems yet again. Those already in therapy report finding treatment easier if they are more able to be mindful, and to see their thoughts and feelings with greater distance and perspective.
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LifeWise WealthWise magazine: Mindfulness also works for people who are not depressed. Is there a difference in the process itself (eg meditation techniques) in these different scenarios? Mark Williams: The remarkable thing about mindfulness training is that the very same practices that help to release us from negative emotions also enhance positive emotions and wellbeing. This is because mindfulness teaches us to be less ‘in our heads’ and more in our bodies and present to what is happening around us. We become more aware of sights, sounds, tastes that we normally take for granted, so there comes a sense of reconnecting with life, and reclaiming a way of living that expresses our deepest values, rather than postponing peace and happiness for another day. WealthWise magazine: Where can we practice mindfulness – can you recommend places or groups where this is practiced in South Africa (and internationally)?
Mindfulness-Based Cognitive Therapy (MBCT) revolves around mindfulness meditation which takes just a few minutes a day for the full benefits to be revealed.
Mark Williams: I would advise people to get in touch with the Institute of Mindfulness, South Africa – www.mindfulness.org.za. Anyone can access our own work in Oxford through www.oxfordmindfulness.org and through this, find links to mindfulness teachers throughout the world. Read more about MBCT in Mark Williams' book "Mindfulness - a practical For more information on Prof. Mark Williams and guide to Finding Peace in a his work on Mindfulness, visit Frantic World", reviewed www.mindfulness.org.za and on page 55. www.oxfordmindfulness.org.
Meditation 101 - Don't know where to start? Try deep breathing! First lesson in meditation: learning how to control your breathing! Various studies show that deep breathing does wonders for your mind and body, lowering your blood pressure and stress levels. Try this simple breathing exercises to kick-start your meditation: Step 1. Close your eyes and relax your body (especially neck and shoulders). Step 2: Inhale through your nose (and expand your abdomen) while counting to five. Step 3: Hold your breath for a couple of seconds. Step 4. Exhale through your mouth while counting to five. Step 5. Repeat!
WealthWise 17
M O N E Y WISE Quick Read: Debt Counseling SOS
We have uncovered the answers to questions regarding debt counseling! Do I qualify for debt counseling? Debt counseling assists over-indebted consumers who can no longer afford their monthly payments and are being threatened with imminent legal action. If you can, but choose not to pay (read: dodge or escape) your debts, debt counseling is not appropriate. I can’t pay my creditors. Should I go straight for debt counseling? No. Debt counseling provides assistance for over-indebted and helps renegotiating monthly payments and terms with the creditors, such as repaying debts over a longer period of time. To avoid unpleasant consequences though (see further below), try beforehand to negotiate directly with the creditors. As a matter of fact, negotiating with creditors is a debt counselor’s main focus. The only difference is that it provides a temporary protection for creditors, although this is a temporary protection of 60 days in order to give you enough time to renegotiate credit facilities. After this period, you are again exposed to legal action and repossession if the debt is not settled with the creditors. What would happen if I do not settle the debt? As previously stated, you could lose your possessions (home, car and so on) and face legal action. To avoid this, all debts must be settled. Failure to do so means losing the protection awarded under the National Credit Act while under debt counseling, resulting in legal action from the credit providers. Note that the creditors have the right to pursue legal action while under debt counseling! Debt counseling is not about permanent protection from creditors or absolving the applicants from all payments. Are there any drawbacks I should be aware of? Yes. There are consequences to debt counseling application and this is why it should only be considered as a last resort. Negotiate with your creditors firsthand and let them down you are experiencing difficulties with repayments – you might even avoid going to debt counseling in the first place. If you choose to go for debt counseling, you will be credit blacklisted for five years (you won’t be able to apply for more credit) and you won’t be able to incur further debt as your name will be flagged at the credit bureau. Also, you will have to pay the debt counselor and stick to the terms of repayment arranged and agreed by the debt counselor, otherwise you would risk legal action and repossession. This is not all, however. In certain cases, being credit blacklisted might hinder you to apply or get certain jobs, plus if you are married in community of property, your spouse will have to suffer the same consequences as you. Ouch!
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A Weaker RAND?
When will the Rand weaken - and against what? article by Plexus Asset Management
A currency’s value at any point in time is the equilibrium or market clearing price at which buyers or sellers of the currency will participate in the market. Ultimately the direction in which a currency trends is a function of aggregate demand and aggregate supply of the currency versus other currencies. So says Paul Stewart, managing director of Plexus Asset Management. “The demand for currencies is largely affected by exports, imports, service payments, portfolio investments, domestic fixed investment, foreign fixed investment and speculation on future expectations", says Stewart. Based on these factors, how is the SA rand likely to perform in the foreseeable future? “As a general observation, the SA rand is overwhelmingly viewed as overvalued at present and that a sharp devaluation is imminent", says Stewart. “In fact, many respected commentators have publicly stated their view that investors should currently accumulate foreign currency exposure, in anticipation of a great unwinding of the rand’s value". “South African investors typically think of the rand’s relative value to the US dollar, euro, British pound and perhaps the Japanese yen. They seldom consider the rand in relation to the Australian dollar, Canadian dollar, Brazilian real or Chinese yuan”, he adds. According to Stewart, the expectation for a devaluation of the rand relative to the USA, Eurozone and UK currencies may be misplaced.“The developed world is emerging from the global financial crisis and countries are currently debt-laden. Exceptionally high historic debt to GDP ratios, added to high unemployment rates, imply that robust growth will not return to these regions soon". “In fact, very accommodative monetary policy (low short-term interest rates) and aggressive fiscal policy (massive upscaling of the government balance sheet) have been the selected policy tools adopted by the authorities to engender growth and restore confidence in these economic powerhouses.” Also, Stewart belives that the unmarked footnote to these policies’ decisions is that massive stimulus and low interest rates have a cost – they will ultimately weaken their home currencies. “This is not something politicians will readily acknowledge in the mainstream policy announcements. A depreciating currency ultimately means the gradual erosion of the purchasing power of their citizens. But currency devaluation is a recognised and tolerable policy choice given the economic challenges that face these regions”, explains Stewart.
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“My conclusion is that given a secular period of poor developed market economic conditions, South Africa will look good on a relative basis to these economies for the foreseeable future. South Africa has its problems and they are well documented, but its debt levels are lower, its growth rates will be higher and its commodities will continue to command a premium price in the world of a weak US dollar”, adds the Plexus Asset Management representative. “My view is that the rand will continue to ‘surprise’ the market in how robust it is relative to the dollar, euro and British pound. Of course this does not preclude short, sharp periods of risk aversion when the rand may experience periodic jitters – such as during September 2008 and January 2011 – only to retrace its footsteps once
‘ The South African
Rand is overwhelmingly viewed as overvalued
calm returns. I would not be at all surprised to see the rand remain at these levels, or perhaps even trend stronger against these majors, in the next three years".
’
“Conversely, many emerging markets (BRICM) and commodity strong economies such as Australia and Canada do not have these extreme debt concerns coupled with slow growth. Emerging markets specifically have good population demographics, improving government finances, high levels of net foreign reserves and the added boost of sitting on either large commodity pools or extremely competitive labour forces – or both”, he says. “The fundamentals and outlook for such countries in terms of their currencies are actually very good. Expect these currencies to outperform in the future”. On a relative competitiveness basis, Stewart believes the South African rand could well see devaluation against this emerging market currency basket in the future as it has in the last few years (see the table on page 22). “Either way, the idea of currency diversification needs to be seriously reconsidered in this new world. Non-South African exposure for diversification reasons needs to much more carefully considered. A higher emerging market currency exposure, especially to the best quality emerging markets, should be a core part of one’s investment policy". Paul Stewart is the managing director of Plexus Asset Management. He can be contacted at 021 970 2400 or by email at pstewart@plexus.co.za. Founded in 1995, the Plexus group of companies is an independent financial services provider that specialises in providing innovative, unique and holistic financial solutions for both corporate and individual clients. As of 2010, Plexus Holdings (South Africa) incorporates Plexus Wealth Management (financial planning) and Plexus Asset Management (investment management services and solutions). For more information, visit www.plexus.co.za.
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MoneyWise
South African Rand (ZAR) depreciation against other major currencies to 31 March 2011 ZARUSD
ZAREUR
ZARGBP
ZARSGD
1 Month
3.1%
0.4%
4.4%
2.0%
3 Months
-2.0%
-7.7%
-4.9%
-3.9%
6 Months
3.0%
-1.1%
0.8%
-1.4%
1 Year
8.0%
2.7%
1.9%
-3.1%
2 Years p.a
19.1%
14.8%
12.4%
8.2%
3 Years p.a
6.2%
10.1%
13.9%
3.2%
5 Years p.a
-1.9%
-4.9%
-0.4%
-6.6%
10 Years p.a
1.7%
-3.0%
0.5%
-1.9%
ZARBRL
ZARCAD
ZARAUD
ZARCNY
1 Month
1.1%
2.7%
1.3%
-2.7%
3 Months
-3.9%
-5.0%
-3.2%
2.9%
6 Months
-1.1%
-3.3%
-4.4%
-0.8%
1 Year
-1.3%
2.7%
-4.6%
-3.4%
2 Years p.a
-0.1%
4.3%
-2.8%
-14.1%
3 Years p.a
3.9%
4.4%
2.1%
-3.6%
5 Years p.a
-7.5%
-5.3%
-8.8%
6.2%
10 Years p.a
-1.1%
-3.1%
-5.7%
0.6%
Note: *Green areas denote rand appreciation, red areas denote rand depreciation USD = American Dollar EUR = Euro GBP = British Pound SGD = Singapore Dollar
BRL = Brazil Real CAD = Canadian Dollar AUD = Australian Dollar CNY = Chinese Yen p.a = per annum
22 WealthWise
MoneyWise
The Trouble with Banking Fees Debt resulting from bank fees on opening a bank account or credit card by Jason Holmes
Most people are not aware of the fees that they will be required to pay if they go
for opening a bank account, may be checking or savings or getting a new credit card. There are in fact various kinds of fees like the processing fee, additional service fees, SMS banking fees, annual fees, communication fees, net banking fees and fees for withdrawals more than a certain amount and so on.
Fees in South African Banks The banks in South Africa charge fees and offer privileges for opening various accounts and they have various criteria for opening an account. Two of the biggest banks of South Africa are Amalgamated Banks of South Africa (ABSA) and Standard Bank of South Africa. The official currency of South Africa is the Rand (sign: R). If we take the case of ABSA, for the various types of savings accounts they offer, the monthly fees varies from R0.00 to R15.00 ( depending on the minimum amount you have in your account). For opening different types of cheque accounts, the criteria will be your minimum monthly income. Monthly internet banking subscription for both savings and cheque accounts will be around R21.95. On the other hand, opening a savings account in Standard Bank, monthly fee can vary from R0.00 to R15.00. For opening a cheque account, no criteria are applicable. The monthly internet banking subscription for savings and cheque accounts are R22.00 and R0.00 respectively. These are examples for just these two banks from South Africa. For others, the various fees and privileges are different. To reiterate, doing online research helps in a big way to avoid any additional and unwanted bank fees and manage your bank accounts in a proper fashion.
Fees of some of the biggest banks in America By comparison, let’s look at the major banks in America. The Americans are not at all thrilled with the way the banks are slapping fees onto them for opening such bank accounts, or credit cards. Most of the consumers look for other banks that offer free checking accounts and lesser fees for getting a new credit card. Many run up debts as a result of these fees and so if you have high debt amount as a result of this, you can send debt consolidation letters to the banks for lowering your debt amounts.
WealthWise 23
MoneyWise The fees charged by some of the biggest banks for the maintaining bank accounts like checking accounts are like Bank of America charges $6 to $25 on checking accounts on monthly fees. In case you do net banking, you will be charged $8.95. Again, you will be charged different fees for different kinds of accounts with different privileges. In case of Chase, you are required to pay a $6 monthly fee if you are not able to make five debit card purchases or at least one direct deposit of $500 at the least every month.
‘online Doing
research helps avoiding additional and unwanted banking fees
’
Wells Fargo and Citi too charges monthly maintenance fee. Thus, you need to be aware of all of these charges before you take out another credit card or open another account with any of these or other banks. In case you already have an account with any of the banks, and if you have run up huge debts, you can try to settle the debt in order to lower the outstanding debt amount. For that, you will have to send debt settlement letters to the creditors through certified mail requesting a return receipt. However, according to the president of Independent Community Bankers of America, "Right now, the majority if not all of the community banks are offering free checking". So, you can find out for your own benefit the bank that is offering a free checking account.
Avoiding the additional bank fees Some of the things that you can do in order to avoid the additional and the unwanted bank fees are: 1. Doing online research – You need to do some online researches in order to find out the different bank charges on different accounts. As discussed above, different banks charge different fees. 2. Switching accounts with banks – If you already have an account with a bank and if you find out that the bank is charging you higher fees than other banks, you can switch banks. 3. Setting up overdraft protection – If you think that overdrawing is almost unavoidable for you, then you can set up overdraft protection.
Jason Holmes is a regular writer with Debt Consolidation Care and is also a contributory writer with other financial sites. For more information, visit www.debtconsolidationcare.com.
24 WealthWise
Tax-free Property Transfers
out of companies, close corporations or trusts
In our previous March issue of WealthWise magazine, we have discussed the basic requirements of the Tax Voluntary Disclosure Programme, which allows taxpayers to regularize their tax affairs without having to incur penalties and interest for previous non-compliance.
There is a similar facility offered to homeowners who hold their residence in a close corporation, company or trusts and wish to take their private residence out of their company or trust without paying transfer duty fees or capital gains tax (CGT). In 2002, this opportunity was open to persons and special trusts only. February 2009 to September 2010 was another good chance for taxpayers to dispose of their residence from a company or trust, especially under then tax laws which made this move quite expensive. From November 2010, the Taxation Laws Amendment Act has imposed new condition for property transfers out of companies and trusts. According to Robert Jewell, co-owner of Accounting for Entrepreneurs (A4E) and Chartered Accountant with a special interest in tax, the following are applicable with regards to the present tax relief in the case of property disposals out of companies or trusts, which came into effect on the first of October 2010 and applies to all residences disposed of on the date or after: The closing date to apply for the property disposal our of a company or trust is 31 December 2011 If the home is in a CC, company or trust, one can transfer it out of the CC, company or trust tax free if certain conditions are met The property must be the owner’s home
Why hold a residence in a company or trust? Usually, taxpayers choose to hold a residence in a company (including close corporations) or a trust to obtain benefit on transfer and estate duties. The advantages for holding the property in a trust or company include the protection of the property from creditors if held in a trust. This protection is lost when the property is transferred in the owner’s own name.
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MoneyWise Why transfer the property into your own name? Advantages of transferring the property into your name include: Less Capital Gains Tax when an individual sells the property. The first R1.5 million of the capital gain is exempt from tax No accounting and audit fees
What are the requirements for the tax relief? The residence refers to any structure that is used as a place of residence by the owner, be it a household or a mobile home, such as caravans. Any other asset that is not used for residence (a car, for example) does not qualify for tax relief. Vacant land is not a residence in itself and does not qualify. The date of disposal must occur between 1 October 2010 and 31 December 2012. Note that the date of registration and application is different from the actual date of disposal! This inclusion will determine if the tax relief applies under the new regulations. If the disposal occurred between 11 February 2009 and 30 September 2010, it could qualify for the present tax relief under certain conditions that could have been only fulfilled after October 2010 (example: the sale was concluded before September 2010, but a mortgage loan, subject of the agreement, was secured only after October 2010). The residence disposed of must be mainly used for domestic purposes by persons who are in relations with the company or trusts, eg. as in shareholders of the company or beneficiaries of the trust. These persons must reside in the residence to qualify for the tax relief.
Non-domestic use of the residence may include using a residence for business purposes (home office) or renting it to another person. Note that more than half of the floor area of the residence must be used for domestic purposes to qualify. In the case of holiday homes, this can be exempt of tax only if the owner can prove to the South African Revenue Service (SARS) that the holiday home is used mainly for domestic purposes.
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MoneyWise The most important new regulation specifies that the company or trust must terminate its existence within six months of the disposal of the residence in order to qualify for the tax exemptions. This means that the company or trust must initiate the steps towards liquidation and deregistration within the six months provided and no necessarily be terminated in that specific period. There are no requirements regarding the disposal of the residence to a specific person to qualify for the tax relief. However, the aforementioned points stipulate that disposals to unrelated third parties do not qualify.
What relief do I get? • Transfer duty.The purchaser of the residence is not liable to pay transfer duty. • Capital gains tax (CGT). No capital gain or loss is due on disposal. This is valid for the disposal of the residence only; any other disposed assets prior to termination are subject to CGT. • Added value tax and donations tax. There are no specific reliefs, normal rules apply. • Secondary Tax on Companies (STC) - tax on dividends declared by companies that are resident in South Africa and imposed on companies or close corporations and not on shareholders (more info at www.sars.gov.za). Normal STC regulations apply if thwe residence is disposed of by the company and the profits resulted are distributed between shareholders as cash dividends. Any other assets disposed of until termination is subject to STC. If the residence is sold to a shareholder at less than the market value, normal STC regulations apply. For more information, ask your financial and tax advisor. •
Dividends tax. The procedures as similar as in with STC (not yet effective).
Need more information on the property transfers out of companies and trusts? Seeeking professional advice before making any decision? For further information, guidance or assistance, please call Robert Jewell, 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 May, please see our events list on pages 56-57.
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B U S I N E S S WISE Quick Read: Is your business the right one for you?
You have decided to become an entrepreneur - now what’s next? Deciding on the right business to start with is not a daunting task – that is, if you ask yourself these questions:
What is my passion? Identify your passions, hobbies and pleasurable things to do and look at how you can monetize them. What am I good at? Take a look at your previous work and accomplishments during your employee years. Could you incorporate a similar work and similar skills in a product or service to others, at a charge? If so, proceed to offer your services. What business model I would like to know more about? There’s no need to re-invent the wheel every time. If you are interested in a franchise or a business you have no knowledge about, learn from entrepreneurs and business owners with similar companies. Read as much as you can, learn from their actions and dare to follow the same path they have followed. Am I a problem-solver? If you are creative, innovative and love risks, you could start a business catering for a niche market with a product or service that solves or covers a need in the market. Make sure you understand the market before proceeding though. Can I provide a value-add service? People want products and services that add value to their lives, whether enhancing their customer experience, saving costs and money or make them successful. Think of ways of providing value-added services that would benefit people. Replace “sell” with “serve” in your long-term thinking. Do I have a target audience? Determine your target market and assess if this is the right audience for your business and if the business can be catered to address the needs of the particular audience. Is the business matching my desired lifestyle? Choose a business model you are happy with, whether it is a home-base business you are after or a national growing empire. Make sure you know what you want in the end.
WealthWise 29
There comes a time in the life of
an entrepreneur when the “finance” card comes into play. If the entrepreneur’s ultimate goal is to build and grow a profitable business and finance is the much needed boost, then why so many entrepreneurs find it so hard to access finance for their businesses?
Access Finance for Your Business:
Truth, Myth and Advice by Denisa Oosthuizen
At a recent business exposition organized by the National Small Business Chamber (NSBC) in Johannesburg, four experts representing business incubators, financial institutions and organizations whose mission is to support entrepreneurs answered the questions “Why so many entrepreneurs fail to access finance?” and “How can they prepare in order to secure a positive answer?”. Below you’ll find their surprising comments and advice.
Is finance what your business needs right now?
Generally speaking, financing a fledging business can either come in the form of equity finance o debt finance. While the first choice might seem to approach a commercial bank, today’s entrepreneurs have a variety of options to boost their businesses. Securing finance alone is not enough anymore – entrepreneurs seem to look out for wholesome guidance, help and support and learn from other entrepreneurs’ lessons. Belonging to an “entrepreneurship networking community” and benefiting from these array of services specifically catered to grow a business, holistically and profitably, is what business incubators do. Business incubators might require an equity stake in the business they incubate and support or a monthly fee. In some cases, they offer additional service such as office space, technical support and accounting and can even open doors to venture capital or angel investors. While business incubators are not the ideal place to ask for finance, their focus on business growth, long-term sustainability and profitability is not to be overlooked. The truth about business incubators is that they really work once the incubated business is already geared for growth. Rather than focusing on launching businesses, incubators provide assistance to entrepreneurs whose businesses have a track record, but need the “magic touch” to go forward – mentorship, training, support, including the “open doors” to investors. It is of utmost importance then that the entrepreneur should decide on what would benefit his/her business in the first place, be it a strategy, capital, the incubation – networking and support – or all of these combined. Know yourself first and only then an incubator can help you reach your wildest goals.
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BusinessWise Willie Nortier, Regional General Manager, Business Partners Ltd (www.businesspartners.co.za) Business Partners Limited is a specialist risk finance company for formal small and medium enterprises (SMEs) in South Africa and selected African countries, providing financing, specialist sector knowledge, mentorship and added-value services for viable small and medium businesses. • Don’t limit yourself to commercial banks when seeking finance for your business. There are business incubators and venture capitalists willing to support your business and enable it to grow • Entrepreneurs must realize that we don’t finance the business plan, we finance the entrepreneur behind the business • Entrepreneurs must show that they understand the risks involved in the business too and prepare worst case scenarios •
Most importantly, be realistic
• Emphasize your track record and show how this can work in your future for your business
Pavlo Phitidis, CEO Aurik (www.aurik.co.za) Aurik is a business incubator for SMEs, enabling business growth and acceleration by providing assistance and consulting for entrepreneurs, outsourced back-office services and various linkages programmes among members of its community of entrepreneurs. •
Treat the financiers as you would treat your customers
• Establish and know your underlying internal risks for your business and built proper systems in place • Most importantly, consider your business life cycle. Look at where you are now and match the business’ current life cycle with the right funding: Equity funding is ideal for start-ups Bank finance is more suitable in the growth phase of the business • Do a proper planning. Entrepreneurs should not overlook a sound business plan and you do not need tens of pages for that. Even five pages are enough, providing that they contain real insights into the business, cashflow spreadsheet and how the business will benefit from the finance (where the investment is going to).
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BusinessWise Thabo Ntseare , CRO (Risk Manager) Royal Fields Finance (www.royalfields.co.za) Royal Fields Finance (RFF) is a 100% Black owned company that was established to ease liquidity problems faced by black owned businesses in South Africa. RFF provides debt funding to Small and Medium Enterprises (SMEs) that are unable to access bank or Development Finance Institution (DFI) capital. •
Focus on cashflow: Is the business generating enough cashflow to pay back the loan? If something happens to the cashflow, will the financiers be covered? Do you have security? Collateral?
•
Think of new ideas to generate cashflow for your business
Fred Robertson, member of Masisizane Board, Old Mutual Masisizane (www.oldmutual.co.za) Old Mutual Masisizane a leading development finance institution in South, enabling sustainable development of a large number of SMMEs, encouraging entrepreneurship, facilitating job creation, increased financial and business skills that in turn translates into significant social benefits to communities in the form of wealth creation, sustainable home-building, access to education, and re-investment into the economy. • Prepare yourself. Consider training to gain knowledge and lay a solid foundation for your business •
Fine-tune your thinking
• Do some self-analysis. Look into yourself and find out the things you are passionate about. We do not have a shortage of money for entrepreneurs and SMEs in the country. The real challenge is unlocking the people’s passion. •
Pitch to the right people
• Build a track record – start small and grow your capabilities towards what you want to achieve • You might need to go back to the drawing board. Sometimes financiers will encourage you to go back and revise your business plan, projections etc. This might sound discouraging at first, however this does not mean a closing door – learn, grow and never give up your dream
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BusinessWise In need of a boost for your business? Raizcorp (www.raizcorp.com) is a business incubator for entrepreneurs with an eight-step selection, including interviews. The Partner model offers mentorship, courses, networking via its vibrant community of over 200 entrepreneurs, plus office space and the logistics that go with it. The business must be operational, but not necessarily profitable. Aurik (www.aurik.co.za) is a business incubator for entrepreneurs offering various programmes, networking, outsourced services and help with funding proposals. The business must be operational for minimum one year on a full-time entrepreneurship base. Branson Centre (www.bransoncentre.org/SouthAfrica) supports running businesses with a potential for growth, offering various services for its members, networking, weekly workshops, mentorship and help with potential financiers and investors. Every applicant is interviewed. Bandwidth Barn (www.bandwidthbarn.org) showcases five different programmes, funded by provincial government (Cape Town area) for entrepreneurs, based on their needs and stage of development. The incubator caters for start-ups and businesses in media, IT and design industries. A monthly rent needs to be paid. Step Strategic Venturing (www.step.co.za) offers networking, access to services and office space, mentorship and support for entrepreneurs. The business must be already operational and a monthly rent needs to be paid. TIP: The selection process is not based only on the business idea itself and the business plan. Personality, drive, commitment and affinity with the existing entrepreneurship community is more important.
‘We don’t finance
the business plan, we finance the entrepreneur behind the business
’
Photo credits: centurionet.co.za, aurik.co.za,
WealthWise 33
Inside the Consumer Protection Act by Denisa Oosthuizen
Over the past few months, the Consumer Protection Act, effective from 31 March 2011 (postponed until the end of May 2011) has been the hottest topic any business agenda. The attention the new Act receives in the business world has a good reason – companies that fail to comply in terms of the Act are liable for a penalty of R1 million or 10% of their annual turnover – whichever is greater.
There have been numerous workshops, seminars, meetings, presentations, articles in media surrounding the impact the new Act would have over businesses operating in the country. WealthWise magazine recaps the most important points and provides advice on how to get started in understanding, implementing and complying with the Act.
Step 1: Understand that customer protection is paramount The first step in complying with the Act is to understand the necessity and aims of a valid framework for consumer protection. The Consumer Protection Act (CPA) was introduced for the mainly following reasons: • Establish national standards and norms as the framework in order to address consumer protection • Promote responsible consumer behaviour, fair marketing and business practices • Promote a fair, accessible and sustainable marketplace • Improve standards in consumer information • Protect disadvantaged consumer in terms of their area of residence, literacy and income levels • Establish the National Consumer Commission, the organ of state responsible with issuing compliance orders, initiating systematic investigations over consumer protection compliance and examining consumer complaints The CPA covers every transaction occurring within the Republic, from promotion to marketing, labeling, displaying, delivering and selling goods and services to the consumer at large, herein referred as the beneficiary of services and users of the goods or services marketed to them.
Step 2: Determine if the provision of the Act applies to your business As stipulated in the National Consumer Commission’s guide, the Act is not applicable in respect of certain situations. We are mentioning some of these below, however we strongly recommend the Act consultation for a comprehensive approach:
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BusinessWise • Goods or services promoted or supplied to the state • Credit agreements in terms of the National Credit Act (but not goods or services) • Services under employment contracts The CPA has a direct impact in a variety of industries, from manufacturing to retailing and direct marketing/selling, therefore make sure you understand how it impact your business. Note that the Act does not cover the transaction between businesses where the business receiving the goods or services has a turnover of value in assets of R3 million. Therefore, small business are scrutinized, both as a supplier and a consumer.
Step 3: Determine which areas of the Act affect your business The Act requires businesses to come forward and be transparent about their practices. Knowing which areas of your business or which departments comply with the Act and which need to be adjusted to accommodate the Act is absolutely necessary. Companies across the supply chain – manufacturers, importers, distributors and retailers are all liable and there is no such thing anymore as passing the blame. The next step will help you better identify these areas.
Step 4. Conduct a business audit to determine the business’s compliance needs Look • • • • • • •
at the following guidelines for a thoroughly compliance audit: The Act requirements in the demarked areas The consumer rights – are these all covered by your business? The current compliance situation in the business Pitfalls and problems areas that need to be addressed Actions that need to be taken Responsibilities inside the organization around compliance Verification procedures and deadlines
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BusinessWise Businesses should conduct business according to the consumer rights covered by the Act: • Right to Equality and protection against discriminatory marketing consumers must be all treated equally; suppliers must not limit access to goods and services, prioritize a consumer group above other, vary the quality of products, charge unfair prices in a discriminatory manner • Right to Privacy – consumers have the right to protect their privacy and confidentiality, refusing unwanted text messages, telephone calls, letters, spam email or unsolicited correspondence; suppliers must cease to continue any unsolicited direct marketing (via email, post or SMS) if consumers have not opted for the correspondence, provide consumers with an un-subscribe option in the marketing correspondence • Right to Choose – consumers have the right to shop around, cancel or renew a fixed-term agreement upon expiry of the contract without penalty or charge within 20 days notice, request written cost estimates and quotations prior to services executions, cancel direct marketing agreements within a 5 day period without reason and any advance reservations, bookings or orders, examine and reject goods even after purchase, return unsafe or defective goods with full refund, return or retain unsolicited goods after a 20 days period; suppliers are not permitted to force consumers into entering additional agreements with suppliers (bundling offers) and charge consumers for quotations, must extend fixed-term agreements on a monthly basis only, are required to include a “cooling- off period” of five days in direct marketing, return payments received by unhappy customers within 15 business days of the cancelation, request a reasonable cancellation penalty or advance booking fee, charge consumer for loss and damage resulted from deliberate actions • Right to Disclosure of Information – consumers have the right to demand information in plain and understandable language, request the unit cost of goods and services to avoid hidden costs, demand the payment of the lower price if the goods display two different prices, demand the confirmation of purchases made (receipts or invoices), demand identification for deliverers, installers and others; suppliers must display the price of goods and services in full view, specify the duration of promotions in their correspondence, display labeling, trade conditions, country of origin and disclose any genetically modified ingredients • Right to Fair and Responsible Marketing – consumers have the right to protect themselves against bait marketing, negative option marketing, direct marketing, catalogue marketing, trade coupons and similar promotions; suppliers are not permitted to mislead consumers in terms of pricing, nature, properties, uses and benefits of goods and services advertised, automatically enter consumers into agreements for the supply of unsolicited goods, solicit payments for unsolicited goods, make promotional offers and not fulfill them. Suppliers must inform consumers of the rights of cancelling direct marketing agreements within 5 business days, honour agreements in respect with the availability of the goods (limited offers) and disclose details related to catalogue marketing products (where the consumer cannot inspect goods prior to delivery)
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BusinessWise • Right to Fair and Honest Dealings – consumers have the right protect themselves against unethical and improper conduct, false, misleading or deceptive representations, fraudulent scheme and offers, pyramid schemes, over-selling and over-booking. Suppliers are not permitted to harass, pressure, influence, coerce consumers when marketing and supplying goods and services, provide customers with false information, engage in fraudulent and unlawful financial transactions, promote fraudulent schemes and scams, accept payment for non-provident services or goods • Right to Fair, Just and Reasonable Terms and Conditions (Ts&Cs) – consumers have the right to protect against unfair, unreasonable, unjust Ts & Cs, to obtain notice for certain terms and conditions, to obtain free copies of agreements and contracts, to refuse prohibited transactions, to approach the Court to ensure fair conduct; suppliers are not permitted to market, supply and enter unfair and unreasonable agreements. Supplies must keep records of any transaction entered over telephone if agreements are not in writing • Right to Fair Value, Good Quality and Safety – consumers have the right to demand good quality service, receive timely and high quality services, imply warranty of quality for goods and services and on repaired goods, receive warnings on the facts and nature of risks, claim damages for injuries caused by unsafe and defective goods and return goods without penalties within 6 months after delivery if goods are found unsafe, defective or of inferior quality; suppliers must remedy any defects or refund the consumers within a 3 months period after repairs have been done, warrant that the goods comply with the requirements and standards of being safe, of good quality and durable, make consumers aware of any risks and hazards and provide clear instructions and warnings • Right to Accountability from Suppliers – consumers have the right to protection when entering lay-bye agreements and with regard to prepaid certificates, credits and vouchers; suppliers must supply equivalent or superior products if failed to deliver goods and services via lay-bye agreements and treat customer’s property with care if in possession of prepaid certificates, credits, vouchers, assuming liability for any losses suffered by consumers in this regard.
Need more info? Please contact the Department of Trade and Industry (dti) Consumer Help Line/Customer Contact Centre at 0861 843 384, thr dti Office of Consumer Protection (OCP) at 012 394 1436/1558/1076 or email contactus@thedti.gov.za. Visit www.thedti.gov.za for details.
Need to complain? Call the National Consumer Tribunal (NCT) at 012 663 5615, email registry@thenct.org.za or visit the website www.thenct.org.za.
WealthWise 37
Maria Garcia International
A story of entrepreneurship
Maria Garcia has no formal CV, no university
degrees, diplomas or school certificates; instead she tells a story, one that has set the benchmark for fellow aspiring entrepreneurs and people from all walks of life. This is her story, a story of unrelenting determination, strength and one of hope, justice and success. Maria Garcia inspires people to dream beyond the narrow ideas of what society dictates, to be tenacious, audacious and daring. The face, founder and intuition behind South Africa’s best kept secret, has been staging our nation for the last thirty seven years with pride on the global stage, daring to compete and yet successfully doing so, placing her foray of beauty products next to the leading industry multi-nationals, in the forefront of skincare technologies on the global stage. From humble beginnings, being born into poverty, Maria was often teased as being “The Portuguese Peasant”. This discrimination and her being exposed to poverty, as well as losing her mom at the tender age of seven, fuelled her with the inner strength that she would grow to understand only in her later years in life. Maria found solace and shelter at Nazareth House in Cape Town. Brought up by the nuns, she still felt lost without her mom. She would spend her youth playing in the fields. Rather than frolicking with dolls, Maria found comfort picking up flowers. This is when she felt closest to her late-mother, and although she did not realize it at the time, these were the days that were making Maria attuned to the essence of beauty. When Maria’s father brought together his children from the orphanage and moved them to Namibia, he would collect all the old fruit from the Portuguese fruit corner shops. When bringing them home, he would try and find the good pieces amongst the rotten and give the clean fruit to his children to eat. The fermented pieces were then placed in a large wooden barrel, which he would make fermented alcohol from. Maria would pinch some of his alcohol, as well as steal flowers from the neighbour’s gardens. She would mix the two together and the result was her very first fragrance which she called ‘Number 57’. Number 57 was the number of the house that her father had rented and today still features a prominent place in Maria’s bespoke fragrance library. She would sell her then homemade concoctions,
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BusinessWise packaged in purity bottles to friends and passersby. The income she received was given to her father to help contribute to the household. And so her journey which would see her become a leading entrepreneur in the world of beauty and fragrance began. Maria first became notorious in the beauty field, launching international brands and her first brand is now recognized as one of the top ten ‘Big Boys’ in the world today. The second skin care line she created, which catered to the needs of the darker skin tones was also sold to a different multi-national. Maria Garcia International™ was born in 1986. Maria set her sights on the world and today her quintessential line of skin care, grooming and bespoke fragrance libraries can be found in countries all over the globe, with offices as far as San Diego, USA. Her sink side luxurious range of guest amenities has checked into some of the most renowned hotels, resorts and lodges on the planet. Maria’s success has not come without pain, tears and lonely nights. Her road to success has been burdened with headaches, stress and let downs. For example, in 2009 Maria Garcia International™ had hit rock bottom in South Africa due to the negligence of her new acquired partners at the time who had created almost 5 Million Rands worth of debt in only a few months. Maria was told by the attorneys that she must liquidate since it was illegal to trade in an insolvent company. Once again, Maria single handedly picked up the pieces of the wreckage and brought the debt down to a commendable R500000.00 within only one year. Maria would not let her vision die. For her, it’s about honor and not giving up her dream of showcasing Maria Garcia to the world that South Africa HAS got what it takes. Today, Maria has not only restored confidence, value and profits into Maria Garcia International™, but she is also the visionary and creator behind another skin care brand Isabella Garcia™.
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BusinessWise “Looking back, I still hold with me the discrimination I experienced, being called a Portuguese Peasant, being told that I am mad and could never challenge the skincare giants. For example, after I came into some money I went to see one of the major buyers of a huge retail chain in South Africa to launch Maria Garcia™ into the stores and I shared with him that I would like to go global. I will never forget how he threw his hands in the air, told me I had lost my marbles and roared with laughter, informing me that I would need a minimum of US$ Four Hundred Million to compete.
‘I sometimes giggle
to myself, thinking how I have grown from being a Portuguese, uneducated peasant to jet-setting around the world on business trips
’
40 WealthWise
At that time, I did not know if he was right and he took away my confidence, but somehow I still kept my faith, and knew that I would succeed in my life, if not with cosmetics then by making a difference in people’s lives. Before I stood up to walk away I looked straight into his eyes and told him “You are right, and I may never make it, but at least when I reach the age of 70, I can proudly say South Africa, I have done my best”. After this meeting I made the conscious choice to become fearless, as it is fear that so eagerly blocks one’s destiny. Staying dormant just to protect a couple of pennies would take me to my grave; I had no choice but to go against the odds. I am so blessed to do what I love most in this world, and that is creating jobs and making a profound difference in this universe. I sometimes giggle to myself, thinking how I have grown from being a Portuguese, uneducated peasant to jetsetting around the world on business trips, learning from, meeting and greeting people of all walks of life, having dinner with the Queen of England and the President of our Country and to seeing the shop windows of international boutiques in foreign countries displaying Maria Garcia™ with lively panache and confidence next to the Armani’s, Lauder’s and the Dior’s of this world. And still, nothing has fulfilled me as much as when my clients write to me and thank me for making a difference to their skin and their lives. The one lesson that I will still hold true and close to my heart for the rest of my journey, is what our former president and father of our country, Nelson Mandela once told me, “Maria, you have to go through pain to get courage and strength”.
BusinessWise Today, as I am getting on in years, I am grooming my daughter Nerissa to carry the torch of my legacy, while I focus on my beauty road shows, reaching women from all walks of life, educating them, motivating and inspiring them to achieve their greatness as I continue to lovingly create all the products for Maria Garcia™ and Isabella Garcia™”.
To learn more about Maria Garcia International, visit www.mglabs.co.za, call +27(11) 262 2772 or email infoexpert@mglabs. co.za.
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C A R E E R WISE Quick Read: What do employees want?
Why some employees are loyal to an organization and others are not? We have pointed out below some of the facts you have to keep in mind if you are an employer and think about if you are an employee.
Be engaged in the company’s culture. Employees want to be an active part of a company and show pride in working for the company and its vision. Make a contribution and be acknowledged for it. Employees want to be valued for being part of something greater and making a difference. Be recognized verbally or written. Employees want to be shown respect and appreciation for their work. A simple “thank you”, whether verbal or written on a card, means a lot to them. Be themselves in the workplace. Employees want to have the possibility of showing their creativity, talent and abilities at work, without being offended. Also, they don’t want to be forced into putting other masks in order to strive at the workplace. Work in a professional, positive and creative work environment. Employees want decent work conditions, a positive environment with room for growth. Be challenged. Employees want a stimulant, challenging environment to show their best. Stalling at the workplace with no ambitious projects and promotion in sight calls for a job change. Have a contract of employment. This is an absolute must for an employee and should be always required upon starting a job. Be paid and be paid in time. This one is non-negotiable: employees want to receive a decent pay for their services (market-related) and received it as stipulated in the contract of employment. If the company experiences cashflow problems, the employer should advise beforehand to avoid unpleasant situations. Honesty. Employees should expect honesty and transparency from their employers and vice-versa.
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Does your Management Team give 100%? Article provided by The HR Hub
I recently came across a summary of a new book by Mark Murphy and the title
caught my eye – “Hundred Percenters�. Hundred Percenters are those employees who give 100% commitment, energy and motivation to their jobs. Hundred percenters make things happen, go the extra mile, have the best interests of the organisation and its clients at heart and they do not make excuses for poor performance.
How many Hundred Percenters are out there? I wondered, "How many hundred percenters there are out there? How do you know when you have a hundred percenter? Where and how can we go about recruiting hundred percenters? I wonder what the going rate for a hundred percenter is, because I am sure that if we are able to find them and bring them into our organisations, then surely we are set for success?" A while later I got to wondering how many hundred percenter leaders there are out there? People who are examples of commitment, dedication, passion and productivity to their team members and what is the relationship between hundred percenter leaders and hundred percenters? Most employees (over 72% surveyed) said that they do not give 100% at work. Murphy says in his book that in order to improve, these people need leaders who both challenge them and connect with them: "100% Leaders." If you do not have many hundred percenters in your team or organisation, is it a sign that you do not have 100% Leaders? Does the number of hundred perecenters increase as the number of 100% Leaders increases? After considering this for a week or two, I have decided that without 100% Leaders, we will never have enough hundred percenters to create and maintain a hundred percenter culture.
Creating a Culture of Hundred Percenters The way to create a culture of "Hundred Percenters," according to Murphy is to promote, praise and reward excellence. He suggests that 100% leaders should do the following: set "HARD - heartfelt, animated, required, difficult - goals" that push their people; invite their staff to partner with them to eliminate mistakes; avoid blaming and communicate openly and honestly without attacking or threatening their people; identify people's "tugs," or motivators, and their "shoves," the demotivators that might "shove them out the door"; and tell talented people with bad attitudes to fix their frame of mind or leave, even if they're great in every other way.
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CareerWise
’percenters Hundred
Until the last point, I was a little concerned that Murphy might be one of those leadership thinkers who is so busy focusing on the positive that they conveniently forget that there are any negative elements to be addressed. These leaders live in a world of building on strengths and moving people to where they are more comfortable etc without dealing with the difficult issues. But no, he does include dealing with people who threaten the creation of a hundred percent culture - Bravo!!!
Train Your Leaders to be 100% Leaders Of Murphy's 10 Lessons to Create a 100% Culture, I think that # 5 is key as it influences the other nine elements and that is # 5 "Train your leaders to be 100% Leaders" – Provide comprehensive training, continuing education and routine professional development."
do not make excuses for poor performance
‘
Excellent and effective leadership and management is learned, and anyone who sets their heart and mind on being a 100% Leader, can become one. But education, dedication, commitment and concern for others are not enough to enable the achievement of this challenging goal. 100% Leaders and managers need a broad range of self-management, one-to-one leadership and team and organisational leadership competencies in order to be effective managers and leaders. They need to develop their own emotional intelligence, enhance and improve their communication, interpersonal, leadership and performance management skills and effectiveness.
Become a 100% Leader So what should people and companies focus on to become 100% Leaders and create hundred percent cultures? We must select and implement relevant, practical learning programmes that are structured to enable our managers and leaders to develop and entrench the required leadership skills. 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 HR Hub’s leading L&D Service provider specialises in developing and implementing practical, customised management and leadership development solutions, enabling hundreds of South African managers to enhance their management effectiveness and success over the past twenty seven years.
For more information, call (011) 475 8915, email andrew@thehrhub.co.za or visit www.thehrhub.co.za.
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The Role of Company Culture for its Employees A company culture can make or break its relationship with employees.
Knowing your company’s culture will enable to attract the right top talent and foster better employee relationships. A company culture is defined by the employees’ perception of the place where they work and whether do they feel an important part of the organization. The good news is that a strong workplace culture can be built to attract top talent and enhance positive growth. Generally speaking, a company culture refers to the following: • • • • • • • • •
A clear definition of vision, mission and business values A positive work environment Fair compensation packages Attractive benefits packages for employees Recognition and acknowledgments from management Enhanced learned experiences through training and consultations Open communication A challenging, stimulating, motivational and creative environment A possibility for career development and growth within the organization
Employees must pursue the company culture as follows: • Understand the company values, mission and goals • Be able to talk about the company’s history, achievements and future plans (if disclosed) • Be willing to support the organization and work towards its vision • Be loyal to the company and its customers • Engage, commit and align with the company’s strategy • Provide feedback on the workplace conditions and practices • Have their opinions regularly surveyed by the company’s management to enhance the company culture experience If employees cannot identify with the company culture, they will choose to work elsewhere. Not every organization is the right fit for an employee and the culture of a company is a decisive factor in attracting, building and maintain good, reliable and talented workforce.
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A G E N D A This month we inspire you to... Support a greater cause Charitable causes have a positive impact on our wellbeing and give everyone of us the chance to work towards a greater cause. Get involved and find out what can you do to make a difference in others' life at www.greatergoodsa.co.za. The website lists South Africa's most popular non-profit organisations and charities.
Get a second opinion From medical aid to insurance and mortgage, www.justmoney.co.za is a handy guide to money management, offers various comparison tools to help you make the best decisions and the chance to ask questions and get them answered by experts in their own field. A good start if you're looking at changing your insurance policy or opening a savings account, for example.
Know your banking fees Banking costs, fees and product features are easily revealed with www.bankmonitor.co.za, South Africa's bankmonitor comparison calculator. Just choose among your products of interest and compare! All banking products are covered, from savings accounts and credit cards to loans and money market accounts. Well worth a read before going...shopping!
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Whisky Wise by Patrick Leclezio
We live in a fiercely competitive world. That’s how it is, for good or bad,
particularly in the liquor business. This gladiatorial arena is adjudicated on an annual basis by The Power 100, a survey that evaluates the world’s most powerful spirit and wine brands, with power in this case being defined as a brand’s ability to generate value for its owner. The 2010 issue had whisky firmly entrenched in the number one spot chalking up a total brand score of more than twice its nearest competitor. It is quite simply the indisputable king of spirits…but a cultured and benevolent king, with much to offer in return.
The history... Whisky, the golden nectar of the gods,came to us somewhat appropriately from Irish monks who had transported distillation techniques from Continental Europe. They called it “uisgebeatha”, the water of life in the Gaelic of that era. This Irish birth is believed to date back to the 5th century AD, but whisky’s early history is shrouded by time and the first official reference was only recorded a millennium later in 1494, when it was mentioned with little fanfare in the Exchequer Rolls in Scotland. From those obscure beginnings in what were then backwaters it has risen to become the world’s dominant spirit. Today whisky is made not only in Ireland and Scotland, but all over the world. Thriving industries exist in the US, Japan, Canada, and somewhat controversially, in India, where the bulk of “whisky” is made from molasses, and therefore is not considered to be whisky elsewhere.
The flavours... Whisky is generally defined as a distilled spirit made from cereals, yeast and water, so, with the exception of the Indian stuff, every whisky that you’ll encounter is made from some sort of grain, or mix of grains. Whilst wood is acknowledged to be the single most important contributor to flavour, because all whiskies are aged in wood to some extent, it is these grains which in simple terms define the difference between one style of whisky and another. Single malt, the heart of the Scotch whisky tradition, is made from malted barley, which is often peated. The influence of the peat can be identified in the smoky flavours characteristic of Scotch; whiskies such Ardbeg, Laphroaig (pronounced lafroyg) and Lagavullin (laga-voo-lin) are prominent examples thereof.
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Agenda: Destination The Irish counterpart to single malt is pure-pot still, made from a recipe of predominantly unmalted barley, giving its whiskeys spicy notes. The Midleton Distillery, producer of Jameson and Tullamore Dew, is a noted exponent of this style. American whiskeys, of which bourbon is the flagship, generally have softer, sweeter flavours, a product of the largely corn based recipes (with rye or wheat in the background), and also because ageing occurs entirely in virgin wood. Maker’s Mark, Jim Beam and Woodford Reserve are noteworthy examples. These are broad generalisations though. Each style, whilst having its own unique heritage, and its own particular charm, is by no means uniform, far from it. A floral Lowlander has little in common with a pungent Islayer. It is the extent of variety, both between styles and within styles, that has built the lore of whisky. As a result the enjoyment of whisky is a never-ending adventure of subtleties and nuances: there is always something new, something more, to taste, to learn, to explore, around every corner. One can never know all there is to know.
The investment... I have earlier mentioned the Power 100 2010 survey. A total of 27 whisky brands are featured in this elite group. Whisky is big business, certainly for the corporate owners of brands and distilleries, and for the retail trade, but also, increasingly, for the individual investor.People are realising that not only can you drink it, but you can also ride it…all the way to the bank. There are various avenues open to the average investor. Firstly, a variety of major distillers offer casks for sale. You would literally buy a cask’s worth of new make spirit, which can after a time be either bottled, sold, part exchanged or further matured.This is not a quick road to riches. I imagine it would provide at best a solid, but unspectacular return, and at worst, if the market collapses in the future, a lifetime’s supply of whisky. It’s best suited to a whisky lover – you typically get to visit your cask during milestone moments, taste from the cask, and have regular reports on its progress submitted to you by the master distiller. This is “investertainment” at its best.
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Agenda: Destination Secondly, you can readily buy and sell bottles of whisky for profit. Until recently this was done through established facilitators such as auction houses and specialist retailers. Auctioneers Bonhams grossed £430 000 at their Edinburgh auctions alone last year, primarily attracting collectors and investors, who to an extent are one and the same. Soaring demand intersecting with scarce supply, particularly of old, premium whiskies made at a time when production outputs were more conservative, has driven an exponentialgrowth in prices. There are stories that have become the stuff of legend. Martin Green, Whisky Specialist at Bonhams, recounted the history of the 1964 Black Bowmore, released in limited batches in 1993, 1994, and 1995, at less than £150 a bottle. The whisky was a novelty, black in Photo: Patrick Leclezio colour from the unusual Oloroso sherry casks in which it was aged, and became highly regarded. The bottles released were snapped up and soon thereafter started appearing under the hammer fetching on average £2000 a pop. The 1993 bottling now sells for over £4000 where and when available, circa 28x its original value. Thirdly, you can invest in a whisky portfolio run by whisky “fund managers”, a relatively recent innovation. Such has been the value explosion in whisky, and such is the potential, that a group of Dutch businessmen have established an organization called the World Whisky Index World Whisky Index allowing investors to buy and sell authenticated whisky in a structured trading environment. Minimum buy-in as advertised by their website is € 5000, although in recent correspondence they advised me that this is now € 25000, so not just fooling-around money. In practical terms, you buy a portfolio made up or bottles and/or casks with or without the guidance of the Whisky Talker (their version of the Horse Whisperer, I guess). This portfolio is then traded on the exchange, bids are received for individual whiskies, and their values fluctuate like shares on an exchange. In 2010 the average portfolio at the World Whisky Index increased in value by some 7.9%, or so they claim. By European standard that’s a healthy return. I take a measured view on all of this. Big wins are undoubtedly possible, like they are in the stock-picking game, but I’m an efficient market theorist at heart and I believe that all publicly available information has increasingly been accounted for in whisky pricing. The market is also changing and supply discrepancies will no longer be as acute in the future, as brand owners look to ramp up production and lay down increased stock.Will whisky continue to appreciate – probably. Will the strong growth of recent years continue – not sure. You pay your money and you take your chances. Whether your objective is to drink it, to collect it, to invest in it, or to just contemplate it from afar (I recommend the first one), whisky has stirred our collective consciousness. W.C. Fields, the American comedian, said: “Always
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Agenda: Destination carry a flagon of whiskey in case of snakebite and furthermore always carry a small snake”. He obviously didn’t live in mamba country, but you get the drift. On that happy note allow me to resort to the clichéd whisky writer’s sign-off – Sláinte!
Shopper’s guide This is tough. We live in a whisky world where we’re spoilt for choice, and where we’re not short of quality. Taste is also highly individual – what one person likes another might not. I simply can’t commit to any favourites, however if you travel these roads you’re unlikely to get lost. Scotch blend: Ballantine’s Premium Scotch blends: Johnnie Walker Black Label, Chivas Regal Affordable single malts: Aberlour 10yo, Glenmorangie 10yo, Macallan 12yo Sherry Wood, Glenfiddich 15yo Solera, Dalmore 12yo, Glenrothes Select Reserve, Benriach10yo Curiositas and Bunnahabhain 12yo. Irish blends: Jameson, Bushmills Original Bourbon: Maker’s Mark Rye: Sazerac 6yo
Shaken not stirred I’m often asked how whisky should be drunk, and I thought I knew all there was to know (always a mistake with whisky). Younger whiskeys, particularly of the American and Canadian styles, can be suited to mixing, or used a base for cocktails such as the Mint Julep, Manhattan, and Old Fashioned, if that’s your inclination. Older whiskies are best enjoyed with a splash of water - filtered or bottled (still) so that the chlorine does not contaminate the flavour - at room temperature. The Bascule Bar in Cape Town offers a choice of over 400 distinct whiskies
Photo: Patrick Leclezio
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Agenda: Destination Use a glass with an inward tapered rim if available, so that the vapours are concentrated, allowing you to optimally enjoy the aroma or nose of the whisky. I tend to stay away from neat whisky, apart from an initial sniff and sip if I’m doing a formal tasting, because I find that the undiluted alcohol can be a sensory anaesthetic, although some would disagree. That comes down to personal taste, as does ice – to use or not to use. It’s in this regard that I recently acquired some cool new knowledge. Cold can inhibit flavour, but room temperature varies from Dundee to Durban, so it may be justifiable for regulation. However ice melts, and quickly, especially where it’s needed most, and this introduces uncontrolled dilution into your drink. I don’t like my whisky tasting like the back-end of a slush puppy, so I had tended to avoid ice, even in high heat…but now I don’t have to. Enter the ice-ball: take the same volume as a block, get less surface area, and therefore less dilution. Experiment, enjoy, and may the dram be with you.
Wild about Whisky, a
small bar in Dullstroom, boasts a choice of over 800 whiskies, apparently the largest whisky menu in the Southern Hemisphere Photo: Patrick Leclezio
Die DopPaleise In case you haven’t noticed, South Africa is mad about whisky, Scotch in particular. We are the 5th largest export market worldwide, having shelled out £169 million to the Scots in 2010. However, the premium sector is still immature, and a tangle of red-tape makes it difficult to bring in new products. The upshot is that when we’re out dramming, we usually can’t pick and choose from the variety of top-end whiskies that is available in some developed countries. I say usually. Because there are a few exceptions, a few shining beacons of whisky civilization out here in deepest darkest where you can uncompromisingly slake your thirst. These are my four standouts: The Bascule Bar in Cape Town, which offers a choice of over 400 distinct whiskies, Katzy’s and Brown’s which are the epicentres of the Gauteng whisky scene, and Wild about Whisky, a small bar in Dullstroom (where else) boasting a choice of over 800 whiskies, apparently the largest whisky menu in the Southern Hemisphere. I should qualify that I’ve yet to find my way to the latter, but it lives large on reputation alone. I don’t think you’ll be disappointed. Read Patrick Leclezio's profile on page 6.
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Competition
WIN one of 10 educational CDs "Payroll with a Voice"! Learn about payroll at your own pace, anytime, anywhere!
Rekopane Payroll Services have developed South Africa’s first Payroll Audio Support Program called ‘Payroll With A Voice’, assisting entrepreneurs to ‘Demistify payroll for good’. ‘Payroll with a Voice’ programme is a comprehensive payroll workshop packaged in an audio and documents CD containing audio presentations of the different principles that affect payroll, customizable payroll plans, job descriptions and performance appraisals, plus payroll registration compliance. All you need is a CD\MP3 player to start enjoying and learning more about payroll. Learn at your own pace, anytime, anywhere. For more information on 'Payroll with a Voice", visit www.rekopanepayroll.co.za/payroll-with-avoice. To stand a chance to win one of these CDs, 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 May and ends 10 July. Winners will be notified in mid-July via phone/email.
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Agenda: Books
On the bookshelf...
WealthWise recommends
Dambisa Moyo, How the West Was Lost
Allen Lane, Penguin, R208.00 from Exclusive Books (www.exclus1ves.co.za) Oxford-educated economist and author of New York Times bestseller Dead Aid, Dambisa Moyo was listed in 2009 among Time Magazine world’s one-hundred most influential people. “How the West was Lost” is yet another provocative and articulate book on yet another hot topic: the failure of western countries and their increasingly flawed economic policies in the face of the rising emerging economies like China. Where have the most advanced countries in the world failed and how will the future look like? Moyo’s clever speech does not only analyze the severe consequences of the last fifty years of America’s economic decline. She outlines the stark choices that political leaders have to make to prevent a further catastrophic decline of power, by addressing the three essential ingredients for growth: capital, labour and technology. Covering America’s evolution from the Great depression of the 1930s to the recent 2008 global recession, the book depicts the whole picture on how everything started to go wrong and most importantly, why, explaining the reasoning behind the recession itself and the faulty policies America continues to rely on. This is probably the most interesting point of discussion and if you’ve ever wanted to understand this phenomenon, this is the book that explains it, clean and simple. On the other hand, the overview of the emerging nations is credible, as much as the possible policies America needs to embrace to get back in the race. Financial Times called it “a damning assessment of the failures of sixty years of western development”, we call it a hopeful turning point for the western economy and perhaps for the global economy. Let’s just hope that the message goes into the right ears. "For me, finding a sustainable solution to Africa's woes is a personal quest. Having been raised in one of the poorest countries in the world, I feel a strong desire to help families like my own, who continue to suffer the consequences of economic failure every day of their lives. (...) I have often wondered, while other emerging regions have ostensibly turned the corner towards economic prosperity, why my continent has failed". In her first book, "Dead Aid", economist Dambisa Moyo offers her perspective on ways of economic growth on the African continent. Controversial and passionate, the book carries an important message of change.
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Agenda: Books Mark Williams, Mindfulness - A Practical Guide to Finding Peace in a Frantic World Penguin, R187.00 from www.kalahari.net.
Mark Williams is a Professor of Clinical Psychology at the University of Oxford who co-developed Mindfulness-Based Cognitive Therapy (MBCT) and co-authored the international best-seller “The Mindful Way Through Depression”. In his most recent book, “Mindfulness – a Practical Guide to Finding Peace in a Frantic World”, Williams reveals simple, yet powerful daily practices and meditation that help breaking the cycle of unhappiness, stress, anxiety and mental exhaustion. Based on MBCT, the book promotes mindfulness meditation which takes just a few minutes a day for the full benefits to be revealed, whether you suffer from depression or not. Bonus: the book comes with a free CD containing mindfulness guided meditations!
Malcolm Gladwell, Blink - The Power of Thinking without Thinking Penguin Culture, R123.25 from www.kalahari.net
Author of the best-seller Tipping Point, Malcolm Gladwell delivers yet another thought-provoking and compelling book. This time, he goes deeper into the “blink” phenomenon, referring to those moments when we know something without actually knowing why – our snap judgement or intuition. Can a snap judgement be far more effective than a carefully analyzed decision? The answer might surprise you, yet this is the essence of “Blink” and its revolutionary theory that could radically transform our lives, from business to relationships. As in the “Tipping Point”, Gladwell uses real cases, interviews and psychological studies to prove that “less is more”. You'll never think about thinking in the same way again – trust our snap judgement!
Letter to South Africa, Poets Calling the State to Order Umuzi, R144.50 from www.kalahari.net
“South Africa, hey, I’m talking to you – it’s like praying, like mourning, like whimpering to” Various South African poets are cited in this frank, hard and honest anthology of South African poems. Written in English, Afrikaans, isiXhosa and Sepedi, with English translations included, the poems have nationwide appeal and address the Republic of South Africa, calling the state to order.
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Agenda: Events
Events, workshops and seminars The Franschhoek Literary Festival When: 13-15 May Where: Franschhoek
The annual Franschhoek Literary Festival in the spectacular Winelands region gathers local poets, authors, illustrators and editors to the likes of Zakes Mda and Janice Galloway and showcases book readings and talks to thousands in the audience. For more information visit www.flf.co.za.
The Good Food and Wine Show When: 26-29 May Where: CTICC, Cape Town
Decadent dishes created by the most talented chefs in South Africa, international celebrity chefs, food stands, workshops and delicious wines - expect no less at Cape Town's favourite food festival. The Lindt Chocolate Masterclass is a must for Indaba South Africa chocolate lovers! For more When: 7-10 May information go to www.goodfoodandwineshow.co.za Where: ICC, Durban Indaba is Souh Africa's biggest tourism expo, with local hotspots, holiday specials and international destinations on offer. To find out more, go to www.indabasouthafrica.co.za.
Standard Bank Fine Brandy Festival When: 25-27 May Where: Sandton Convention Centre, Johannesburg
Brandy lovers have more than one reason to tempt their taste buds - fine brandy, somptuous food and even fashion shows make up for a feast for all senses! To find out more, go to www.brandyfestival.co.za.
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Agenda: Events Marketing Indaba
When: 19-20 May Where: CTICC, Cape Town The Marketing Indaba includes a marketing conference plus five exhibitions AdExpo, Promo Expo, ICT Expo, PrintPack, and CRM Expo with the latest industry developments in advertising, marketing, communication, technology, promotions, customer relations, printing and packaging. For more info, visit www.marketingindaba.com.
Grand Designs Live
When: 20-22 May Where: Coca-Cola Dome, Johannesburg Get inspired by stylish design, amazing architectural pieces and decoration for your DIY home and office decor. Visit www.granddesignslive.co.za for details.
SciFest Africa
When: 4-10 May Where: Grahamstown Scifest Africa has been around for fifteen years, bringing a passion for science and innovation in South Africa and educating the youth with lectures, workshops and exhibitions. To find out more, visit www.scifest.org.za.
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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Finance for Growth by Denisa Oosthuizen
One of the lessons we have learned while compiling our May issue was
that finance should be geared for growth and the need to finance varies according to the different stages the company goes through. We have also acknowledged that in order to access finance, you need to be innovative and not always follow the traditional bank route. And, probably the most arguable of all, that you need a positive track record, whether in your capabilities or the ability to bring money in, to gain access to further finance and growth. I had the privilege to meet, a couple of weeks ago, Allon Raiz, the CEO of business incubators Raizcorp, at one of his presentations and networking sessions for entrepreneurs, most of them Raizcorp members. I was invited and introduced to this entrepreneurship community by a mutual friend and fellow entrepreneur who benefited from Raizcorp’s incubator in a number of ways. Firstly, his journey began a couple of years back, when the company had the potential for growth, without being necessarily profitable (Raizcorp does not require profitability to join its network, however a track record is highly desirable). As with business incubators, the major changes were in defining new revenue streams (the business model altogether), refining the business’ strategy, thus leading to an increase in the number of customers and finally, revenue. To be honest, this type of business “help” does not provide finance for your business in the way the traditional banks or investors will do. And the more I think about it, the more I realize that debt-financed money in your business account is not always the way to go. Plus, the debt financed money can be misused or inappropriately spent, resulting in more expenses at the end of the day. The support, networking opportunities, mentorship and guidance a business incubator provides is invaluable. And it still focuses on growth, which is enough to generate the revenue and positive cashflow your business needs, so you won’t have to go for major financing elsewhere. So next time when you need a finance boost, innovate, rethink and seek guidance from mentors and fellow entrepreneurs who went through the same thing as you do now. They might not handle you the cash, but guide you in the right direction to increase your sales, your profit margins and handle more clients. Who said anything about going to the bank?
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L A S T W O R D
IN OUR N E X Investing in volatile times T Evan Jones, Managing Director of Cadiz Investments, has something to say about investing in a volatile market and why asset allocation is so important.
How can Corporates work with the Government? Is interaction with Government important? How can a strenghtening partnership between Corporate South Africa and the country's government benefit its citizens? See what can be done and what some of the biggest corporates in SA have to say.
E D I T I O N
More than meets the eye Could the impact of the earthquake disaster in Japan on the global economy be far worse than the market initially expected? Dr Prieur du Plessis, chairman of Plexus Asset Management and author of the Investment Postcards blog, looks at the whole picture. .
Effective SMS marketing Is SMS a good marketing tool for your business? We show you why and how it can work for you and your business.
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