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WealthWise magazine
Vol I/No. 8
FREE
South Africa/Africa region October/November 2011
Dr. John Demartini
talks about the world crisis human behaviour values and wealth his amazing life story
Your bi-monthly guide to wealth! Click to read more!
Foreword Bigger Better Bolder It is with great pleasure that we introduce to our readers a new
expanded bi-monthly format of WealthWise magazine. The new keyword, minimalism – which translates into the new layout and design of the magazine – was inspired by a return to simplicity which currently preoccupies my mind, not to mention the recent death of Apple’s co-founder Steve Jobs, an exponent of minimalism culture (read our tribute on page 72). Less is more and simplicity shouldn’t be seen as a “less money” proposition. WealthWise magazine sees wealth as both having the time and money to achieve the financial freedom – FREEDOM – we all want to pursue the best in our lives, the way we want to. Our October/November edition brings you more information and an exciting CoverStory and interview with human behavioural specialist Dr. John Demartini (read on page 11). We have a wider section on money and investments, explaining the basics of economic concepts (read on page 28) among others. Other interesting reads discuss the management challenges faced in a downturn economy (read on page 44) and the business of book publishing (read on page 49). We hope that our publication will inspire you to make every day, long-lasting changes to a wealthier future. Wishing you all the best,
Denisa Oosthuizen Managing Editor WealthWise magazine
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Get In Touch
WealthWise
magazine
Publisher REO Media Solutions Managing Editor Denisa Oosthuizen denisa@wealthwisemag.co.za editor@wealthwisemag.co.za Sales and Marketing denisa@wealthwisemag.co.za
Have your say! You can leave a message on our website www.wealthwisemag.com or email us your comments, feedback and suggestions to our editor at editor@wealthwisemag.co.za. Do you have a great story or want to recommend what would you like to read in our next issues? Send us your articles or suggestions to editor@wealthwisemag.co.za. Do you have a business and want to advertise in our publication? Contact Denisa at denisa@wealthwisemag.co.za for our advertising rate card and a free quotation.
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WealthWise 5
In this edition CoverStory 11
Dr. John Demartini:
"Your destiny is based on your values"
LifeWise 19 20 23
Accept yourself The Illusion of control Improve your luck
MoneyWise 27 28 31
The driving force
35 37
Ask Shaun: Family trusts
Seeing the stock for the flow
Is human behaviour a catalyst for global markets?
Tactical asset allocation can make a considerable difference to portfolios
40
Where is the value: Domestic industrials or global industrials on the JSE?
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Oct/Nov 2011 BusinessWise 43 44
Business Success
How to overcome management challenges during a downturn
47
The SME sector's role in implementing the National Growth Plan
49
Book publishing - Trial, Error, Success
CareerWise 55 56
Career Impact
Organisational wellness versus employee wellness
Agenda 60
Destination:Twelve Apostles Hotel and Spa
66 70
Books Events
Regulars: 4 Foreword
5 Get in touch 6 In this edition 8 Contributors
59 Competitions 72 Last Word 73 In next edition WealthWise 7
Contributors Gavin Wood is Chief Investment Officer
and an executive director at Kagiso Asset Management. He previously worked for Old Mutual and Coronation Fund Managers. In 2001, Gavin founded Kagiso Asset Management and was the Chief Executive Officer. In 2010 he was appointed as Chairman of Kagiso Collective Investments Limited. Read Gavin's insight in the "stock" and "flow" economic variables in the MoneyWise section, page 28.
Andrew Dittberner is Senior Investment Manager at Cannon Asset Managers and portfolio manager of the Cannon Flexible Fund. Andrew joined Cannon Asset Managers in January 2007 after an 18-month stint as an Associate Lecturer at Wits University. He also holds a BEconSci (Hons) and is a member of the Investment Analysts Society. Read Andrew's article about the SA’s exciting new tactical asset allocator unit trust in the MoneyWise section, page 37.
Andrew
Newell
is Head of Business Development at Cannon Asset Managers. He was previosly involved with Investec Asset Management, as a direct client investment consultant and advisor. In 2004 he joined Cannon Asset Managers in Johannesburg as head of group new business. He is involved in the development of relationships with high net worth clients, brokers and institutions. Read Andrew's article (with Adrian Saville) about the sectors that offer value on the JSE in the MoneyWise section, page 40.
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Contributors
Shaun Latter is the Director and Wealth
Manager of Quaestor Wealth Management, where he specialises in Estate Planning and Investment Advice. He is a Certified Financial Planner® and life coach. He will be regularly answering your most burning questions on wealth in our new monthly column "Ask Shaun" in the MoneyWise section, page 35.
Adrian Saville is CIO of Cannon Asset
Managers. He holds a Visiting Professorship in Economics and Finance at the Gordon Institute of Business Science. Visit Adrian’s blog at www.adriansaville.com or follow him on Twitter @AdrianEconomics. Read Adrian's article (with Andrew Newell) about the sectors that offer value on the JSE in the MoneyWise section, page 40.
Georgina
Hatch
is an award winning journalist and Publishing Consultant for Quickfox Publishing, a custom publishing company that offers professional book production, printing and publishing services for authors and companies who wish to publish their own books. She has held several senior positions in the publishing and communications industry, including Publishing Director of Struik Publishers, the country’s largest publisher of illustrated books. Georgina wrote a practical guide about book publishing for business professionals and authors in the BusinessWise section, page 49.
WealthWise 9
Contributors
Michael Lombard has 21 years experience in
SME financing with 36 years in management. His technical experience ranges between marketing, training, coaching and analysing of businesses. His expertise is rooted in financing and analysing the SME sector. He is a business consultant for Optima. Michael wrote an opinion about the SME sector’s role in implementing the national growth plan in our BusinessWise section, page 47.
Agnes
Hove Chiweshe is currently the Managing Member at Sequor Consulting, based in Johannesburg. She has over 12 years experience in senior management and leadership roles within various leading organisations across South Africa. She sits on various Boards and is a member of Toastmasters International. Read her article about organisational and employee wellness in the CareerWise section, page 56.
Carla Rossouw is a Professional Conference
Organiser based in South Africa. She writes reviews on Venues, Hotels and Restaurants as well as International Destinations. She regularly writes for our Agenda section reviews of fabulous places. Visit her website www.carlarossouw.com and read her review on page 60.
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CoverStory Dr. John Demartini: "Your destiny is based on your values" by Denisa Oosthuizen
Can
the recent global recession be explained from the perspective of human behaviour and universal laws? Why do some people seem to achieve wealth so effortlessly and others don’t? What is that motivates us to live our lives in a certain way? Recently present in South Africa for a week of inspiring talks and seminars, world renowned human behavioural specialist, teacher and author Dr. John Demartini shared his views on the current economic crisis, life fulfillment, wealth achievement and conquering our pasts. WealthWise magazine: How does human behaviour relate to the world’s current crisis and the turbulent economic times we are living in? Dr. John Demartini: Every individual has a set of priorities, a set of values, which dictate the things that are important or least important in their lives. Whenever a perception seems to support these values, they feel up, elated and excited. Whenever a value is challenged, they feel down and depressed. We all have our ups and downs, better known as mood swings.
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While we are in the elated or infatuated mode, we tend to be blinded by the downside and vice-versa. Extremes of emotion and perception create volatility in our own moods. When you have a collective of individuals, a social dynamic, the same thing occurs. For example, feelings of infatuation are sometimes perceived as greed in the economic markets. On the collective scale, the sentiment of the economic markets show the same volatility, because the values of the market are being challenged when there is a bear market or supported when there is a bull market. (Read more about this topic in the article “Is human behaviour a catalyst for the global markets?” on page 31) WealthWise magazine: How important are values in our life? How do we find our purpose in life?
‘values Our
dictate how we see the world
’
12 WealthWise
Dr. John Demartini: The study of axiology, meaning the study of values, is the most important knowledge we can have about human behaviour and economic behaviour. Every decision people make is based on values. Values are not just related to ethics and morality as some think; values are what is most valuable to everyone of us. This is the most important underlining component of wealth building that I know of. Values dictate every decision we make and every action we take. Your financial destiny is based on your hierarchy of values. To give an example, let’s take a family where the wife values her children the most, her children’s education, socializing, shopping and so on, while the husband has a high value on business, finance, wealth building and everything of this nature. If both received R10000, she will most probably spend it on children, he will spend it on wealth building. Therefore your values dictate how you spend your money and what you decide to do with money. If a person doesn’t have a high value on building wealth, it’s not going to occur. People spend their money according to their values.
CoverStory
As Robert Kiyosaki says, the wealthy are the ones who put their money in the things that appreciate in value, while the poor spend their money on things that depreciate in value. It is a very simple truth. WealthWise magazine: determine our values?
How
do
we
Dr. John Demartini: We have built a value-determining process, comprised of a series of questions, which is available on the website www.drdemartini.com. Part of my work is helping people finding out what their values are by asking how they spend their time, their energy, their money, what areas of their life are they most organized in, what is disappointing to them, what they think about and it comes true in their lives, what inspires them. We find these determinants and we look at the priorities on their lists. That is a good indicator of what people’s values are. Your values are determined by what your life demonstrates. If you have no money, you will have a value on not having money. A value of having money is a fantasy. Most people are delusional and live in this fantasy, thinking they will achieve wealth one day without the values that will lead them there. As long as they have values that are driving them to spend more money than save and buy consumables expecting instant gratification, instead looking at long-term investments, they will never have money. WealthWise magazine: What is your personal view on wealth? How do you define success in life? Dr. John Demartini: Wealth goes back to well-being, whole being, and integrated being. True wealth or genuine wealth is
living according to what is the most meaningful, purposeful and fulfilling in your life. Financial wealth means to have liquidity in material possessions. They are two different things. A person can have genuine wealth, but not necessarily cashflow. He might have wholeness, be fulfilled, but not the economic return. In order to have financial wealth, you need to place a higher value on building assets in some form, either with stocks, real estate, commodities such as gold and others, generally assets that can be converted into cash. WealthWise magazine: Is it possible to strike a balance between financial and nonfinancial values or have different values placed on the same level? Dr. John Demartini: There’s always a hierarchy of your values. Our left brains are made so to prioritize this set of information. There are people who have wealth building as their top value, followed by social and family. Others have wealth and social highly prioritized: they want prestige, fame, money. Others have relationships and wealth as a priority. Others value relationships the most, but not wealth. These values dictate how they see the world. Unless you have a value on wealth in your top three of your highest values, you will never achieve wealth. Most people live with the ABCDs of negativity – anger and aggression, blame and betrayal, criticism and challenge, despair and depression – as a result of their unfounded expectation of somehow becoming wealthy, without the support of having wealth values.
WealthWise 13
CoverStory
WealthWise magazine: How do hypothetically speaking, the collective making would be an values differ according to countries, decision expression of their actions and an for example? expression of the culture. Since this Dr. John Demartini: If we look at values doesn’t occur, the majority of the in different countries, for example France people don’t get represented in the will have a high value on social (wining governments. The representation of and dining); America will place a strong two thirds (wealthy class), one third focus on business; Japan values honour (middle class) and almost none for the and social etiquette the most; Australia poor class is very frequent in and political values a fun and playful lifestyle. In South economies Africa, people value family and there is a representations. strong entrepreneurial spirit as well. My purpose here, through the Demartini Institute, is to find the There are different cultures and different sets of values, but overall, there are primary needs or voids and the values seven areas of life that people want to of the people of South Africa and fulfill fulfill: spiritual quest, education or these needs. If there is a need for intellectual, career, wealth, family, social education, we are trying our best to influence and physical well-being. These help with the education processes. To seven values are present everywhere in give an example, in Mexico we had the opportunity to speak with 3500 young the world, in different ratios. women on prevalent issues in the teenage pregnancies, Whatever the collective society tends to country: poverty, drugs, looking for ways to repress in its value, a handful of people have this concentrated in their value assist in this society and improve lives. system. When the majority of people In South Africa, we see issues with the don’t have a value on building wealth, a police departments, education and among others. handful of people will be super wealthy. municipality Everywhere we find that we can This is often valid in African countries, but towards, we develop in South Africa, for example, we are contribute sponsor projects in seeing a strong emerging of middle class. programs, underdeveloped areas. We do this on a WealthWise magazine: What is your global level, in every country we have mission, globally, and what is your the opportunity to assist. involvement in South Africa, and especially in underdeveloped, poorer In South Africa, reaching the poorer areas is a challenge. We did training areas? programs in townships like Khayelitsha, developed programs for Dr. John Demartini: Firstly, let me say that wherever your highest value is, that schools and young adults and we had is where your mission lies, the thing that evening functions. There are some inspires you. A person’s purpose is always limits to what we can do, however we an expression of their highest value. In a are attempting to train people that are collective society, if there was an ideal actually able to reach those people and continue the process. democracy where everybody voted,
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We are also very involved in media. Last year we did a series for 28 days on SABC1 to help students get on and finish school without worrying about their teachers who were striking at that time. We did a program for the Good Hope radio to inspire children not to pursue a life of drugs. We do evening events constantly. We use radio, TV, print and online as much as we can, to reach a wider audience. If you don’t empower people, government will become super-powered and will create a polarity. In my opinion, South Africa needs a balanced, not bi-polar power system of the people. We are not interested in politics; our aim is to empower people so politics can be brought into equilibrium, for greater stability and growth of a country. I am interested in that. WealthWise magazine: Your life story is truly inspirational. What influence has your past in your life and what we all should learn from past experiences? Dr. John Demartini: I don’t believe in forgetting the past. I think everybody should relook at their past and see that everything in their past served them for a purpose. To avoid it and pretend it wasn’t there is foolish. Every part of your past is something to be grateful for. I was born with a hand and leg deformity and had to wear braces as a young boy. When I got rid of the braces, all I wanted was to run. I believe that was what made me to want to be free and travel the world today. So I say “thank you” for starting that way because I don’t think I would have the mindset and values to be able to do what I do I if it wasn’t for the desire to be free. I travel the world; I don’t live anywhere per se. I think that had a great impact. I had a learning disability. So when I was in the first grade, I was told I would never read, write or communicate properly or amount to anything in life. When I eventually discovered that it wasn’t necessarily true and started to believe that I could learn, this drove me to become a scholar, study
‘ A person's
purpose is always an expression of their highest value
’
WealthWise 15
CoverStory
everything I could get my hands on and study the law of the universe. I look back and thank the teacher who said I could not do it, because that was the void I needed. Anything you can’t look back into and say “thank you” for is baggage. You don’t forget the past, you bag and relook at the past in such a way that you are thankful for it. View the past as under way and not in our way. There is nothing in my life that I am not aware of and won’t publicly say that I am grateful for it. There is nothing I could hide or wish I could have done, there is no shame or guilt.
Dr. John Demartini: Any crisis is a perception – a person who has a balanced orientation will immediately see the blessing in the crisis, the step forwards in the setbacks and the positive within the negative. Every event is like a magnet with two poles: positive and negative and if you only see the drawbacks, you are not seeing the whole truth.
Find both sides of things. If you see only the negative, you will build hurt and resentment; if you see only the positive, you will feel the pleasure, but not the pain. If you see both, you will see neither WealthWise magazine: Do we all and you will be able to focus. I teach need a void in our life to build our people to ask questions that will liberate them from the emotional bondage of one values? side. I don’t believe in crisis, I believe in Dr. John Demartini: Our values are blessings. determined by our voids. What we perceive as missing is most important The entrepreneur who is smart will look to us. The word “important” means in society and see where the problems values we want to import into our are and know that there is a solution. awareness and whatever is missing in There is no crisis, no problem without our awareness is what we want to opportunity. A wise persons looks for import. The hierarchy of our voids problems that can be solved and inspires determines the hierarchy of our values, them instead of trying to avoid problems and the hierarchy of our values and attract other problems they do not determines our destiny. Looking back at want. my life, everything on the way was a magazine: In the great catalyst; those were the gifts I WealthWise needed. Everything that happens in following days you will deliver public your life is on the way, and if you don’t talks in South Africa about leading a see it, you’re holding it in the way balanced life, building and growing a business and your because of your perspective. It’s never successful signature programme, The about what happens to you, it’s your perspective of it and your decision on Breakthrough Experience (two-day how to respond to it. I teach people seminar). What is the purpose of The how to respond in a way that they are Breakthrough Experience? grateful for what happened in their past. Dr. John Demartini: The Breakthrough WealthWise magazine: How do we Experience is a programme we have overcome crisis in our life, career been doing for the past 23 years, in many countries across the world, with and business? tens of thousands of people actively
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participating. The program aims to breakthrough whatever is holding a person back from living a fulfilled life. In this program we introduced the Demartini Method, which I developed in order to reduce conflict, grieve, loss, frustration, phobias, fears and to dissolve any emotional block that stops people from becoming whatever they want to be. It addresses uncertainty and shows clarity. It helps people to dissolve their emotional baggage and use it to their advantage. All seven areas of a person’s life are enhanced by this experience. You can’t walk out of it without learning from the experience and saying “thank you”. WealthWise magazine: Any future books or project you are looking to launch? Dr. John Demartini: We are working on various projects. The book we are preparing now is called “The Value Factor”, where we discuss how values play a role in human behaviour in all levels of society. We will show how values can be practically applied in all areas of life, including relationships and business. Another project we just did in Phoenix, Arizona, is called “Leaving your baggage behind”. We have other programs dealing with women empowerment, breakthrough experiences in Japan dealing with the earthquake aftermath and many others. We have projects in almost every country of the world. I am involved in all areas where a difference can be made. I have studied many disciplines and devoured a lot of literature, but my core principle is human behaviour, which underlies all. I have a blessed life; every day is unique and very inspiring. Dr. Demartini is considered one of the world's leading authorities on human behaviour and personal development. He is the founder of the Demartini Institute, a private research and education organisation assisting people to activate leadership and empower themselves in all seven areas of their lives: financial, physical, mental, vocational, spiritual, family and social. Visit www.drdemartini.com for more information.
‘ I don't
believe in crisis, I believe in blessings
’
WealthWise 17
LifeWise Accept Yourself "If you accept that what's done is done, you are left with yourself exactly as you are. You can't go back and change anything, so you've got to work with what you've got. I'm not suggesting anything New Age here such as love yourself - that's far too ambitious. No, let's begin with simple accepting. Accepting is easy because it is exactly what it says - accepting. You don't have to improve or change or strive for perfection. Quite the opposite. Just accept. That means accepting all the warts and emotional lumps and bumps, the bad bits, the weaknesses and the rest of it. This doesn't mean we are happy with everything about ourselves, or that we are going to be lazy and lead a bad life. We are going to accept he way we are, initially, and then build on that. What we are not going to do is beat ourselves up bcause we don't like some bits."
Richard Templar, The Rules of Life
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The Illusion of Control by Leo Babauta
When
you think you control something, you’re wrong. It’s amazing how often we think we’re in control of something when really we aren’t. Control is an illusion, as I’ve said many times before. We constantly make plans that never actually turn out the way we envisioned. ‘If you want to make God laugh, make a plan,’ an old saying goes. We have been trained to set goals, and then work on the actions that lead to those goals … and yet how often do those goals fail? How often are we trying to control a future that we cannot predict? Did you know five years ago that the world would turn out as it has — that Obama would be president, that the stock markets would have crashed, that we’d be deep into a recession, that earthquakes and tsunamis would hit, that you’d be doing exactly what you’re doing today? Of course not. We don’t know the future, much less control it. We like to think we do, but that never turns out to be true. And yet we continue to believe in the illusion of control. We face a chaotic and complex world, and seek to control it however we can. Our attempts to control the world can be seen through: • Trying to control how our children turn out, as if we can shape them like blocks of clay, as if humans aren’t more complex than we can possibly understand.
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LifeWise
‘Theallows Master • Tracking every little thing, from spending to exercise to what we eat to what tasks we do to how many visitors are on our site to how many steps we’ve taken today and how many miles we’ve run. As if our selective tracking can possibly include the many, complex factors that influence outcomes. • Trying to control employees — again, complex human beings with many motivations and whims and habits that we don’t understand. • Obsessively planning projects, trips, days, parties, as if the outcomes of events are things we can control with our powers of manipulation of the world.If we can let go of this illusion, what are we left with? How can we live among this chaos? Consider the fish. A fish swims in a chaotic sea that it cannot possibly control — much as we all do. The fish, unlike us, is under no illusion that it controls the sea, or other fish in the sea. The fish doesn’t even try to control where it ends up — it just swims, either going with the flow or dealing with the flow as it comes. It eats, and hides, and mates, but does not try to control a thing.
things to happen. She shapes events as they come. She steps out of the way and lets the Tao speak for itself. - Lao Tzu
’
We are no better than that fish, yet our thinking creates the need for an illusion. Let go of that thinking. Learn to be the fish. When we are in the midst of chaos, let go of the need to control it. Be awash in it, experience it in that moment, try not to control the outcome but deal with the flow as it comes.
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How do we live our lives like this? It’s a completely different way of living, once we let go of the illusion: We stop setting goals, and instead do what excites us. We stop planning, and just do. We stop looking at the future, and live in the moment. We stop trying to control others, and focus instead on being kind to them. We learn that trusting our values is more important to taking action than desiring and striving for certain outcomes. We take each step lightly, with balance, in the moment, guided by those values and what we’re passionate about … rather than trying to plan the next 1,000 steps and where we’ll end up. We learn to accept the world as it is, rather than being annoyed with it, stressed by it, mad at it, despaired by it, or trying to change it into what we want it to be.
Leo Babauta is the author and blogger of Zen Habits, a weblog about “finding simplicity in the daily chaos of our lives”, as he describes it. His weblog is viewed by the publication Time as one of the top 25 blogs worldwide. Read his blog at www.zenhabits.net.
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We are never disappointed with how things turn out, because we never expected anything — we just accept what comes. This might seem like a passive way of living to some, and it’s against our aggressive, productive, goal-oriented cultural nature. If you can’t accept this way of living, that’s OK — many people live their lives with the illusion of control, and not realizing what it is that makes them unhappy or frustrated isn’t the worst thing ever. But if you can learn to live this way … it’s the most freeing thing in the world.
Improve Your Luck by Denisa Oosthuizen
Are some people simply born lucky or do we all
stand the same fair chance of luck? I have always believed that one can make his own luck, irrespective of the circumstances, and there are plenty examples of incredible achievers in this world.
If you have read Malcolm Gladwell’s amazing best-seller, “Outliers – The story of success”, you would have already learned by now that circumstances do play a major part in our lives, but this does not come with a “100% guarantee” label. What is missing then? The luck factor. Our attitude towards life, our personalities, our willingness to try new things, our perceptions, our thoughts and how we align them to our feelings, all these determine our luck. Being lucky is not for privileged people – there is no such thing as privilege, yet we know some of us are given a head start in life, whereas others have to try harder. It’s our own perception of luck, among other factors, that makes the difference. Everything action we take is in our control, every attitude we project over a person, thing or action can be changed. We can choose how we want to respond to a specific situation. We can change and adapt to circumstances. We can adjust our attitudes towards others and life in general. We just need to take action.
‘Being
lucky is not a privilege
’
Luck is not something we are born with. We can improve our chances of luck; we can learn how to make luck work for us.
WealthWise 23
LifeWise
Think you’re already lucky. To improve your luck, start with the right mindset. Consider yourself lucky – it’s a thought that will have a great influence on your daily actions. If you feel lucky, you will feel in control, happier, positive and on the lookout for the most fortuitous situations. Lucky people always expect good outcomes – and that’s when great things happen. Take advantage of opportunities coming your way. Keep your eyes open and look around for lucky breaks. The more chances you give yourself, the better the odds of achieving greatness. Don’t expect for great things to fall on your lap, take action. Luck does not come easily to people who do not take steps in order to win. If you are given a chance – without taking much effort – say thank you and see how you can best embrace the opportunity. Always put yourself in the position to have positive things happen.
open to trying new things, engage in more social activities, develop more friendships and strike out better deals in business. Risk-takers know that by affording themselves more chances, they can increase the good outcomes in all aspects of their lives, from family and relationships to your social life and career. The more risks you take, the better you prepare yourself for the future. Simply ask. Take the first step and you’ll be amazed of what you can achieve. Ask yourself what’s the worst that can happen and do it. Playing always safe could mean building up on regrets and the proverbial “what ifs”. If your “what ifs” are piling up, take the risk and you will know the answers you need. Accept failure. Even the luckiest people don’t always get what they want, but they do know what to do about this: they move on, learning what they can from the experience. Knowing how to adapt pays off. Don’t dwell on the lost opportunity; look for another ways of achieving what you want. And most importantly, don’t just give up and feel sorry for yourself.
Be positive. Optimism is a good start for tapping into luck. Being negative or counting your misfortunes or unhelpful circumstances is not productive. Remember that you are not your circumstances – you can outgrow them and give yourself the most rewarding present: a life of fulfillment and Next time when somebody utters “lucky you”, remind yourself that it was you happiness. who have chosen to be lucky and share Be flexible. Staying focused is good, this experience with others. but being too focused, so much that you overlook other opportunities, is not. Flexibility allows you to explore more opportunities, therefore improving your chances of greater outcomes. The unexpected is not your enemy. Take (more) risks. Every person has a different risk-adversity. Those who consider themselves lucky will be more
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LifeWise
5 Easy Steps to a Happier, Luckier You 1. Do something new every day. Change your routine to accommodate new ways of doing things, new opportunities and new people in your life. Change is good. 2. Write down all the things you are grateful for. Express gratitude and give thanks for the good thinks that happen in your life. You are already lucky! 3. Turn down negative thoughts. For at least a month, wear a rubber band around one of your arms and pull it out whenever you have a negative thought (that should hurt). Think of it as a destiny slapper. This technique was recommended to me by a good life coach and it does work in keeping negativity at bay! 4. Be aware of your surroundings. Don’t just exist while life goes past you, live your life to the fullest by being aware of your presence, of the things and people around you. Feel, taste, smell and don’t rush things unnecessarily. Enjoy life one day at a time. 5. Ask questions. Take an interest in the outside world, ask questions and learn new things as you go on with your life. Improve yourself to achieve better outcomes.
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MoneyWise The Driving Force
"Power is essential for success in the accumulation of money. Plans are inert and useless without sufficient power to translate them into action (...) Power may be defined as 'organised and intelligently directed knowledge'. Power, as the tem here is used, refers to organised effort, sufficient to enable an individual to transmute desire into its monetary equivalent. Organised effort is produced through the coordination of effort of two or more people, who work towards a definite end in a spirit of harmony. Power is required for the accumulation of money! Power is necessary for the retention of money after it has been accumulated!"
Napoleon Hill, Think and Grow Rich
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MoneyWise
Seeing the Stock For the Flow by Gavin Wood
As
financial analysts, much of our energy is spent assessing current information with the objective of valuing assets. It is very important for us to think about the sustainability of recent results we observe from the economy. For this, it is vital to maintain a long-term perspective and to identify where changes in “stock” items are impacting temporarily on “flow” items. As a precursor to comments on some specific market features that look unsustainable, I re-look at the basic economic concepts of “stock” and “flow”. “Stock” and “flow” economic variables “Flow” economic variables can be identified by the fact that a time dimension is required to give them meaning. That is: the variable has a value that is so much per unit of time. Some examples (per annum/per month/per week) are: your earnings from work, the profit achieved by a company and the budget deficit of a country. “Stock” variables, on the other hand, have no time dimension - they are just so much (as measured on a given day). Examples are: the amount of petrol in your car, the amount of grain in a silo and the foreign exchange reserves of the central bank. Flow variables often represent the change in a related stock variable over a period, for example: for a shop, the sales in a day (flow)
28 WealthWise
equal the change in the money in the till (stock). An analyst is like someone sitting on the banks of a river measuring the amount of water flowing past in one day (a flow variable) and then using that limited information to assess how much water is upstream. A very important influence on the flow of water arises from the presence of a dam upstream. If the water in the dam (a stock variable) is rising, this will cause the flow of water past our analyst to be lower than normal and vice versa. Clearly, a simplistic calculation using only one day’s flow measurement is likely to be flawed. Below we outline some current, real world examples where we see these principles at work. Gold The price of gold has risen by more than five times in the last decade, after stagnating at low levels for most of the 1980’s and 1990’s. The important stock variables in this market are the amount of gold held for investment purposes (by central banks or private sector investors) and the amount of gold jewellery in the world. The important flow variables (in a specific year) are gold produced by mines, gold bought for jewellery production and the change in investment holdings of gold. During the 1980’s and 1990’s, the fabrication demand for gold, the normal flow variable, was reasonably stable each year. However, investment demand for gold was so low each year that central banks had to sign agreements to limit the flow of gold they would release to the market from their stocks - so as not to unduly suppress the price of gold. In the last decade, the investment demand for gold has risen dramatically, as can be seen in the graphs below, with the advent of gold exchange traded funds (ETF’s). Gold demand has also been
‘level The
of unsecured loans has doubled in the last three years
’
WealthWise 29
MoneyWise
massively influenced by gold producer de-hedging (effectively buying back gold previously sold) and central banks changing from net sellers to net buyers.
unlikely to be sustainable. For this credit assisted expenditure to be sustainable, consumers would need to borrow the same amount again every year and thereby continuously increase their We believe the long-term outlook for the stock of credit. gold price is weak, given that the stock of producer hedges has just run dry. In Global stimulus addition, the current flow of investment demand requires ETF tons held to Continued US fiscal stimulus, increase to fill this gap and to rise each manifesting in large budget deficits, can year by the same record level, just to be seen as an unsustainable flow into maintain its flow and therefore to sustain the world economy, building up a stock the current gold price. of US government debt that ultimately must be repaid from the flow of tax Unsecured credit in South Africa revenues in future years. South African consumer expenditure has been particularly resilient through the last recession and is growing very strongly at present. This is despite the fact that our economy continues to shed jobs (although state sector jobs have held up and state sector wages have risen strongly).
On-going monetary stimulus in the US causes a flow of liquidity into world markets that manifests in a bulging Federal Reserve balance sheet (stock) that must one day be reduced via reversing the flow. This excess liquidity flow has (we think) temporarily boosted emerging market currencies, commodity prices and emerging market asset We have been surprised at the high prices. levels of retail sales (a flow variable) that have been achieved by the listed In conclusion retailers during this time. Our sense is that consumption expenditure, It is very important when analysing particularly for lower income earners, markets to consider the multitude of has been significantly boosted by a influences distorting recent observed substantial rise in unsecured loans (a economic flow variables and their stock variable) to these consumers. impact on financial markets - not least of which are distortions from The level of unsecured loans has doubled movements in stock variables. in the last three years (from R40 billion to R80 billion). A large part of this Gavin Wood is Chief Investment increase is due to average loan sizes and Officer and an executive director at average loan terms rising substantially. Kagiso Asset Management, an asset The same consumers are borrowing management company he founded more and for much longer. The level of in 2001. In 2010 Gavin was also these loans (stock) may be sustainable appointed as Chairman of Kagiso but the addition to annual consumption Collective Investments Limited. expenditure from this borrowing (flow) is Visit www.kagisoam.com for more information.
30 WealthWise
Is Human Behaviour A Catalyst for the Global Markets? by Denisa Oosthuizen
Having visited South Africa last month for a week
of inspiring talks and seminars, Dr. John Demartini has chatted to WealthWise magazine about the recent world economic crisis, the influence human behaviour has over the global markets and what the wealthiest people know and do to achieve and keep their wealth, irrespective of the market sentiment. According to human behavioural specialist, speaker and author Dr. John Demartini, people’s individual and collective sentiments determine the markets sentiment, an underlying factor of the recent global economic crisis. “Every individual has a set of priorities, a set of values, which dictate the things that are important or least important in their lives. Whenever a perception seems to support these values, people feel up, elated and excited. Whenever a value is challenged, they feel down, depressed. We all have our ups and downs, better known as mood swings. While we are in the elated or infatuated mode, we tend to be blinded by the downside and when we are depressed, we tend to be blinded by the upside. Extremes of emotion and a one-sided
‘Extremes of emotions create volatility
’
WealthWise 31
perception create volatility in our own. For example, feelings of infatuation are sometimes perceived as greed in the economic markets. On the collective scale, the sentiment of the economic markets displays the same volatility, because the values of the market are being challenged when there is a bear market or supported when there is a bull market. When the collective is elated or manic, it is blind to the downside; when depressed, it is blind to the upside. When the sentiment in the economic markets is in the elation mode, known as a bull market, the market loses his negative feedback, becomes silver lined and loses its reality and balance. In a bear market, when the sentiments are of fear, it loses its upside and goes into a vicious cycle.
‘markets When
are up people overleverage and overborrow
’
32 WealthWise
People become cocky extroverts and elated when the markets are in an upswing, and when the markets are down, they become introverts. During the market’s manic phase, around the earlier part of last decade (2001 – 2007), people were so elevated that they started borrowing from the banks to leverage even bigger returns. All markets have what is called an aggression and a regression to a mean, known as the average return on a particular class of investments. When the markets are above or below this mean, they will eventually bounce back to the mean. In the above phase, people will borrow money to leverage their investments, blinded to the fact that the markets will correct themselves. This reality occurred in the real estate market, the stock market and the margin accounts. People were trapped in a fantasy phase, believing they can go on forever even when markets where above the mean. Sometimes the real estate market is hedged against the stock market and is out of phase with it. When both markets were up, people over-leveraged, overborrowed, spending more than they had because they believed they would eventually make more money. The day of reckoning came and the markets corrected themselves back to the mean.
MoneyWise
When the market is in an upswing and you buy into the market, you are paying a higher price. When the market goes in the opposite direction and perceived to be on the downside, it’s the best time to buy. People who have lots of liquidity (cash) can easily buy into this market with less emotion and will make a fortune. Make sure you have a massive amount of liquidity to counter the volatilities in the market or the markets will run you instead of you running you.
burst and markets crashing, he had $27 billion in money market accounts in liquid moneys. Warren Buffet had $37 million in liquid moneys. The wealthiest people know the importance of having liquidity; to take advantage of the downturn by buying into the markets. The bigger the vision and the more structured the strategy, the less the outer world markets will dictate the financial movements of the individual or the collective.
In the current economic state, we have to compensate and correct our manic phase. This means tightening our belts, prioritizing, laying off people, start saving to build up liquid reserves and maybe start a business.
The majority of people do not learn their lesson and go through these up and down cycles. We have found that 99% of the population don’t really have a value on building wealth, but instead have a high value on spending money”.
The market sentiment equals the individual sentiment, depending on whether values are supported or challenged. Right now, the values are challenged, which makes us go back to prioritizing, serving people, delivering real quality, building liquidity. This is a great time and an opportunity for entrepreneurs, who get to learn the basics. When the market starts to turn, if they don’t become blind to what they learned, they can achieve great wealth.
Financially wealthy individuals, the billionaires’ are savvy with money. They don’t just fantasize, they are very grounded, they know their money and they know how to make sure they spend it wisely.
Any time you have a yield more than 10%, you tend to do foolish things with your money. When people start making returns of 30-40% on the market, like they experienced before the crash, they turn a blind eye because their ego says it’s about them, not the market. Then egos are crushed under the corrections of the market. The person who has the greatest liquidity is the wisest person in the market.
99% of people are not wise with their money. The second they get more money they raise their lifestyle and accumulate more debt. They stay in debt all the time. Their values won’t let them achieve wealth. It doesn’t matter how much you make, it’s about how you manage money and your values will always determine that. Only 1% will become financial independent and there’s nothing in the world that says you can’t be in the 1%.
Visit www.drdemartini.com more information abou Dr. Let’s take the example of Bill Gates. In Demartini and his work. 1999 to 2000, with the dot com bubble
for John
WealthWise 33
6 Things That Will Change Your Financial Destiny 1) Write down 200 benefits of serving a greater number of people. Any billionaire we know of today has built a business to serve a greater number of people. 2) Write down 200 benefits of refining the business, polishing the business, managing the business to work more effective, more efficient and have a bigger profit margin. Ask yourself: How do I produce the most with the least amount of money? 3) Write down 200 benefits of saving an ever-progressive portion of the profits, which drives the profit margin. Think of ways to save more money. 4) Write down 200 benefits of investing in ever progressive leverage and risk. Think about taking bigger volatilities and bigger risks to receive better returns. 5) Write down 200 benefits of accumulation of vast fortunes (more wealth). If you don’t have this value, once you are in a comfort zone, you will start spending on stuff that depreciates in value (toys). For example, people you might think are wealthy might in fact be highly leveraged and the second the markets go crazy, they face losing their house. 6) Write down 200 benefits of creating a financial cause that leaves a legacy.
34 WealthWise
Ask Shaun Question: “What would be the advantages of a family trust and what documents do I need to register such a trust?” - Lauren, Johannesburg Shaun says: Trusts over the last 20 years have gained immense popularity and, although they possess incredible planning opportunities for a founder, in some instances the purpose of a trust has been lost. The definition of a trust is as follows: Legal relationship created by a person (founder/donor/settlor) by placing assets under the control of another person (trustee) during the lifetime (inter vivos) or upon the death (testamentary) of the founder, for the benefit of third persons (beneficiaries) The ‘family trust’ you ask of is more often than not the inter vivos trust and therefore one set up during your lifetime (as the founder). Some of the benefits of a trust include the following: • Limit estate costs (pegging) – asset does not ‘disappear’ from Estate but ‘grows’ – Estate Duty (20%) – Executor fees (3.99%) – Capital Gains Tax (25% inclusion of marginal rate) • – – –
Estate efficiency Dependant income unaffected (winding up) Perpetual succession (future generations) Multiple ownership of assets (farms, properties etc)
• Tax efficiency – Conduit principle (income distributed beneficiaries and taxed in their own right) • –
‘has One to
carefully calculate the benefits of having a trust
’
to
Asset protection Creditors of founder cannot “attach” assets
WealthWise 35
Of course, as with most things in life, there is no such thing as a ‘free lunch’ and there are counter arguments to having a trust – something seldom thought about when setting it up, these include: • Costly – Transfer of assets (TD reduced recently) – CGT liability – Administer (professional trustee) • – –
Duty of a trustee Onerous Not exempt from personal liability
• Relinquish control – What happens circumstances change?
Shaun Latter is Director
and Wealth Manager of Quaestor Wealth Management where he specialises in Estate Planning and Investment Advice. He is a Certified Financial Planner® and a Certified Life Coach. He has hosted the popular money show “Financially Speaking” on CNBC Africa , holding a wide media presence with regular contributions on radio, in print and online. Shaun can be directly contacted at +27(0)11 575 3159 and shaun@quaestorwealth.co. za.
36 WealthWise
if
personal
In essence, one has to carefully calculate the benefit of having a trust against the costs and implications of managing it. Considering that most people undertake this option to limit Estate Duty and that there is serious talk in National Treasury scrapping this form of duty (tax), many may find themselves with a ‘white elephant’ trust – for the right individual, however, these structures can be invaluable. As far as documentation and setting up of a trust, you would be wise to consult a trust company to assist you in this and save a huge amount of stress.
Shaun
Latter, Director and Wealth Manager of Quaestor Wealth Management and Certified Financial Planner® will answer your most burning questions on wealth management, estate planning and investments. Send your question(s) to Shaun at editor@wealthwisemag.co.za and read his answer(s) in our next edition!
MoneyWise
Tactical Asset Allocation Can Make a Considerable Difference To Portfolios by Andrew Dittberner
One
of the most important skills in managing funds is asset allocation, yet it is one of the hardest aspects to master. Worse, a bad asset allocation decision can even lead to destruction of capital. A quick glance at some headlines of ASISA press releases reveals that unit trust investors regularly fail to add value through asset allocation: “Investors fail to time the markets, again!” (3 February 2010) “Nervous investors lose out as market timing fails” (5 May 2010) “Investors continue to avoid equities, but pour billions into fixed interest” (2 February 2011). Unfortunately equity funds were the better performers during the December 2010 quarter. We can see from the Figure 1 graph on the next page that over the long term, equities (ALSI) outperform bonds (ALBI) and cash (STeFi). Over the period 1980 to present, the ALSI has returned 10.5% per annum. However,
there are years where equities heavily underperform their lower beta counterparts, bonds and cash. If, with perfect hindsight, one were able to reduce equity exposure to zero in years where equities underperformed cash, and hold cash instead, the portfolio’s average annual return would have increased to a staggering 26.8% per annum, as shown in Figure 2 on the next page. Cannon Asset Managers finds a solution The solution proposed by Cannon Asset Managers is a market valuation tool that considers the earnings of both the market and the underlying companies over a seven-year period, a Cyclically Adjusted Price Earnings (CAPE) Ratio and applies this tool in South Africa. Earnings are cyclical, and by considering longer term trends one is able to get a good sense of “normalised” or “sustainable” earnings of the market as opposed to near-term
WealthWise 37
MoneyWise
Figure 1: Equities Outperform in the Long Run (1980–2010)
term earnings that are impacted by short-term economic cycles. By applying this normalised earnings number and the current price, the newly created CAPE ratio is far more effective in indicating the relative value of the market. This avoids decision-making based on sentiment and recent market experience, which often can be misleading.
The conventional PE ratio is highly sensitive to the state of the business cycle. On the other hand, the CAPE ratio inflates five to ten years’ worth of earnings to today’s prices and averages these earnings out over periods that, in all likelihood, span a business cycle. Therefore, by using long-term “normalised” earnings, the CAPE ratio places a greater emphasis on price Figure 2: Perfect Tactical Asset Allocation
38 WealthWise
MoneyWise
movement as opposed to changes in earnings. This result is important because, through investment and business cycles, earnings tend to be stable whilst price is far more volatile. In the case of buying any asset, price is what you pay while earnings are what you get.
benchmark performance of 20.2%. The asset allocation moves in 25% increments and has varied from being fully invested in equities at inception, to 75% invested in shares, back to fully invested and is equally invested in cash and equities at present. The portfolio has almost kept pace with the equity market, despite the market’s strong showing over this period, a testament to the strong tactical asset allocation toolkit that Cannon Asset Managers has developed.
For example, in 2007, all earnings were buoyant, and when measured against the equity market’s price, which was also high, a “fair” reading of 15 times earnings was given. By applying the CAPE ratio to that market, clear guidance would have been given to suggest that equities were extremely expensive, in excess of 25 times In summary “normalized” earnings. Over the long term equities How is the Cannon Flexible Fund outperform all other asset classes. managed? However, in the short term, equities are highly volatile. Therefore, The Cannon Flexible Fund is built using the through aggressively allocating above rules that guide when to hold cash, exposure between high and low beta and when to hold equities. Depending on asset classes, tactical asset allocation the domestic equity market CAPE valuation, has the potential to significantly tactical shifts in the exposure to the asset enhance investment returns. Equally, classes will be made between 100% deep getting these decisions wrong can be value equities and 100% cash, and the highly damaging to investment portfolio will move in increments of 25% results. The solution proposed by between these parameters. Cannon Asset Management, through its Flexible Fund, is designed to The long-term strategic asset allocation of overcome the obstacles to effective the portfolio is 50% equities, and 50% cash tactical asset allocation through and the benchmark is thus 50% FTSE-JSE removing emotion from decision ALSI J203T (equities) and 50% STeFI making, having the ability to reliably indices (cash). However, the fund will not determine market valuations and comply with Regulation 28 of the Pension knowing that history carries with it Funds Act, as at times, the fund will hold significant information about the up to 100% of its assets in equities. The future. fund makes no use of derivatives to either hedge or change the allocation to equities. Andrew Dittberner is Senior Investment Manager at Canon The Cannon Flexible Fund mirrors the Asset Managers. He overseas the “Allocator” portfolio, an institutional management of the Cannon Asset portfolio offering which has been managed Managers domestic asset since September 2009. Over this time, the allocation portfolios. For more Allocator portfolio has generated a return information visit of 23.3%, which compares with the www.cannonassets.co.za.
WealthWise 39
MoneyWise
Where Is The Value: Domestic Industrials or Global Industrials On the JSE? by Adrian Saville and Andrew Newell
The
gap in valuations between JSElisted industrial stocks that have a domestic or “home industry” focus and those industrials that have a global focus is at a near 25-year maximum. History teaches us that this gap is unsustainable, which represents a great opportunity for investors who are willing to avoid the popular and recently well performing but expensive global industrials, and dig a little deeper for some of the gems among the home industry stocks. While 1-year trailing price-earnings (PE) ratios can be a good guide to the valuation of stocks, the cyclicallyadjusted price earnings (CAPE) ratio is even more useful in assessing if a share is fairly priced or not. By utilising the seven-year or through-thecycle earnings of a company, which is then compared to the current share price, the CAPE ratio eliminates the excessive short-term volatility (or “noise”) associated with the one-year earnings figures. Thus, the CAPE metric gives a more accurate representation of value. If we consider the INDI 25 to represent globallyfocused industrials listed on the JSE –
40 WealthWise
typically large industrial stocks with high offshore exposure and priced globally, such as Naspers, SABMiller and Richemont – and use the INDI as representative of home industry stocks – smaller and more domestically focused shares, such as Aveng, Reunert, Lewis and Pinnacle Technology – we can compare their relative valuations. Even after the recent market fall, the INDI 25 CAPE ratio stands at 18.6 times, while that of the INDI is 11.3 times. With a difference of 7.3, the gap between these two indices’ CAPE ratios is nearly the widest we have seen in 25 years. This compares with the historic average gap of 1.7 and informs our view is that this pricing disparity is an anomaly that is not sustainable. This widening discrepancy can be seen in the chart on the next page. It is hard to know when this valuation gap will close out – often this is sparked by “hard to see” events, such as unexpected interest rate changes, price inflation, exchange rate moves or investor fatigue with expensive areas of the market when expected high earnings growth doesn’t materialise. The analysis says that not only are the home industry stocks cheap relative to the global industrials, and will outperform
MoneyWise Chart: Industri al Sector Valuatio ns: INDI 25 versus INDI
when the demanding rating on the INDI 25 is challenged, they are also attractively priced in absolute terms. In part, the lofty ratings being applied to our global industrials are explained by a global fascination with the theme of emerging market companies that have succeeded outside of their home markets, or alternatively any stocks that come with a good “story� about future prospects. However, the CAPE ratio on our global industrials of 18.6 times is about 20% above its long-term average. From an investment perspective, overpaying for a great business translates into a poor investment and, whilst these companies represent some exceptional businesses with admirable track records, this is all in the price, and more. By contrast, the home industry businesses have fallen out of favour as a consequence of the domestic economic slowdown; a flight to the safety of larger, less cyclical companies; rand strength; and concerns with the nature and extent of the domestic gross domestic fixed investment cycle amongst other things. Whilst each of these factors represents a valid concern, this is more than priced into
the home industry companies which now trade at about a 19% discount to their long-term average. Moreover, as argued above, if history is any guide, these adverse factors will lift, or industries will find ways to get over or around the obstacles. A good case in point is Metair Investments, which is heavily exposed to the domestic motor industry as a manufacturer and supplier of motor vehicle components for the original equipment and aftermarket parts market. Whilst the company has experienced difficult times over the past three years, evidenced by a material fall in earnings, this is changing under the care of a world-class management team. Recently, the company announced that interim earnings will rise by more than 40% off an already-improved earnings base, the company has a strong balance sheet that is cash rich and debt free and despite the incipient recovery, the company is priced on a PE of 6.8 times and yields 4.1%. If the art of investing is epitomised by buying low and selling high, then the price gap that has emerged between our global and home industries presents a clear investment opportunity.
WealthWise 41
BusinessWise Business Success
"(...) My definition of success in business has nothing to do with profits solely for their own sake. This is very important. Success for me is whether you have created something that you can be really prod of. Profits are necessary to invest in the next project - and pay the bills, repay investors and reward all the hard work - but that's all (...). What matters is whether you've created something special - and whether you've made a real difference to other people's lives (...). Succesful people arent' in possesion of secrets known only to themselves. Don't obsess over people who appear to you to be 'winners', but listen instead to the wisdom of people who'd led enriching lives - people, for instance, who've found time for friends and family. Be generous in your interpretation of what success looks like (...). In business, as in life, all that matters is that you do something positive" Richard Branson, Business Stripped Bare
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BusinessWise
How to Overcome Management Challenges During a Downturn by Denisa Oosthuizen
Although
globally the sub-prime crisis was already on everyone’s lips since August 2007, South Africa can claim its share of crisis from 2008 onwards, on a smaller scale though, which included over one million job losses.
In the past, reinventing a company was enforced every seven years or so; in times of crisis, reinventing ourselves should be done perhaps in less time and accordingly; Companies should not only regenerate their agenda for every year’s sake – companies should entire shift their policies from traditional to modern, from obsolete to new technologies (there has never been a better time to adopt the social media craze), from management to functionality and leadership in one.
How did the economic downturn influence the corporate sector and how should management have reacted was one of the topics, if not the focal point, of the Leadership Insights Peter’s best advice on event, presented by Dr. R Volpe Mark Leadership Consulting on the 30th of overcoming management challenges September at Regenesys Business in a crisis School in Sandton, Johannesburg. Mark Peters, Director of Corporate Learning, Senior Lecturer at Wits Business School, specializing in company direction, discussed today’s challenges of management and the questions that need to be answered in the face of a downturn.
Adopt a rival economic model. Do something different from your competitors rather than focusing on a price-driven strategy (lowering prices in a downturn). Take note from the “blue ocean strategy”: “Don’t compete where the others are competing. Look for the white space”.
“According to a recent study, 62% listed companies on the Johannesburg Stock Exchange (JSE) have not effected any changes to their agenda in the past 10 months, despite of the economic downturn. Boardrooms have hardly changed as well”, said Peters, addressing the audience, which was mainly represented by business professionals and corporate executives.
Look into future functionality. Is it easier to do business with you? Companies that are so internally focused are increasing bureaucracy level at the cost of making it harder for their clients and customers. Think of simple, but functional solutions. When was the last time somebody found your business via Yellow Pages? Have a website in place and entice your customers to look for
44 WealthWise
information. Is it easier for your clients to reach you? Decide how your clients should reach you faster and in emergency situations. Implement a customer lock-in strategy. Customer lock-in is not only about better customer service – is the ability to lock in and keep your customers. In the World Competitiveness Survey, a scale used to measure the consumer satisfaction and service levels in a country, South Africa secured only the 46th place out of 47 countries (France was last). But there’s good news too: customer service levels are improving in South Africa. The question should be: how do we lock in customers over a long term? Compete for the future. What opportunities could shape where the organization is going? What value can the management team add to the organization? Know your competitive advantage. Has your competitive advantage changed during the recessionary times? What would it take for you, now, to be an industry leader? What should the focus of senior management be now, in a downturn? Ask what is holding back quality. The top obstacles in organizations worldwide, according to a recent global research, are the mistrust in senior management, poor communication, people not being empowered and politics. Ask what is holding back empowerment. The reasons listed here are the management’s own fears of letting go (delegate), the presence of misaligned systems and the lack of skills.
‘Has your competitive advantage changed during recessionary times?
’
WealthWise 45
BusinessWise
Ernst & Young Top 10 Global Business Risks (2010) 1.
The Credit Crunch
2.
Regulations and
Compliance 3.
Deepening Recession
4. Radical Greening (environmental) 5.
Non-Traditional Entrants
6.
Cost Cutting
7.
Managing Talent
8. Executive Alliances and Transactions
Ask what effective leadership means now. In a study of over 15.000 managers and leaders, the values that were prized the most were integrity, communication and the ability to deal with people. Expertise was not as significant, as managers don’t have to be the experts in everything, but to be able to pull in the expertise. What values does your management team possess? Are trust, honesty, respect – integrity – part of your daily activities? Revisit your business model. Are you reengineering your core strategies? “If you haven’t revisited your business model in the last 5 years, chances are you will become obsolete in the next 5!”. Think opportunity management. Is the management team adding value or cost? Do you have an opportunity manager in your team? Can you afford to look at new opportunities? An opportunity manager should be ready to take in the challenge of growing a business by the percentage required. Questions to ask:
9. Business Model Redundancy 10. Reputation Risks Mark Peters is Director of Corporate Learning, Senior Lecture at Wits Business School and holds an MBA from Brunel and Henley Management College UK and a Graduate Diploma in Company Direction.
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What is your competitive advantage in a downturn? Do you have the capacity to continue with the market changes and the evolution of your industry? What will it take to be an industry leader in a downturn? What should the role of senior management be in the current situation?
BusinessWise
The SME Sector’s Role In Implementing The National Growth Plan by Michael Lombard, Optima
The
What can be done to assist these SMEs national growth plan, recently in facing the difficulties associated with announced by government, will have to implementing the national growth plan? involve a vibrant SME sector for its To assist entrepreneurs in growing their successful implementation. businesses options exist in terms of: The SME sector not only holds the key to the implementation of the plan, but, urgent attention to the sector is required, due to the harm done by the economic crisis to both the sector as well as prospects of employment recovery.
1.
Training
2. Business networking 3. to:
linkages
and
Mentoring and advice on how
Liquidation figures remain high in the a. Improve your business skills; SME sector. It is alarming to detect the as well as number of previously healthy businesses, that are experiencing b. Sustainability. difficulties, or, being closed down. Access to finance is also impeding on the growth of the SME sector in South Africa, because of the bank requirements for collateral, which most SMEs do not have. Another problem hampering SMEs is cash flow, due to slow payments by bigger corporates, as well as government departments.
4. Focusing on the longer term rather than short term gains towards achieving: a.
Profitability; and
b. A reputable business.
and
scalable
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BusinessWise
Figures extracted from: www.234next.com/csp/cms/sites/Next/Home/5649813-146/story.csp by Francis Daniels.
Michael Lombard has 21 years
experience in SME financing with 36 years in management. His technical experience ranges between marketing, training, coaching and analysing of businesses. His expertise is rooted in financing and analysing the SME sector.
Optima is a global specialist
provider of training and expert support to small and medium enterprises (SMEs), financiers of SMEs, business advisors to SMEs, entrepreneurs and other business leaders and managers in commercial organisations.
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Michael's opinion was previously published in NHBCs newsletter. Visit www.optima.mu for more information about Optima.
Book Publishing Trial, Error, Success by Georgina Hatch
There
are lots of clichés surrounding book publishing. “Everyone has a book inside them” is the favourite. “Write about what you know” is another. “To be an authority you first have to be an author”. Actually all three clichés have merit but what they fail to transmit is that book publishing is a business, plain and simple. People publish a book for many reasons. It may be purely for personal satisfaction. Others believe that they may have a story to tell or an important message to relate and that people would benefit from reading that message or story. Others, particularly those who write business books, do it to establish credibility – after all, the word “author” is derived from “authority”. Whatever the reason, the ultimate point of publishing a book is to sell copies – and for this to happen, authors need to adopt a business approach. A book is a product like any other. It is going to require marketing and it is going to have to be packaged properly in order to sell. So you have a manuscript. You are convinced that it has sales appeal. How do you go about turning it into a book? Very few people can go it alone. Those who do can find themselves sitting with boxes of books that they end up giving away as gifts to friends and family. Book stores are unlikely to take copies of a self-published book as they feel that the product lacks
‘Book publishing is a business, plain and simple
’
WealthWise 49
credibility. To publish a sellable book, you will need professional assistance. There are two basic avenues of book publishing: independent book publishing and traditional, royaltybased publishing. The route that you take is largely dependent on the type of book that you have written and also your goal for your book. Traditional book publishing
’ With independent publishing, the author is completely involved in the production process
‘
50 WealthWise
This is often the route that people take when they have an idea for a book, or have written a manuscript, that they believe has widespread appeal and needs to be sold via book stores. The topic of the book can be anything from cookery to finance, as long as the book publisher can be convinced the book will sell and that it will make money out of your idea. Well-known South African publishers receive several hundred manuscripts per month and with fierce competition and high distribution costs, they need to be selective about what they take on. Traditional book publishing is driven by the publishing company. Its shareholders, sales executives and marketing team will need to believe in the book and back its publication 100% if they are going to sell it. The traditional book publisher takes control of the book. Although the author is consulted along the way, the publisher will be responsible for: • Editing the book • Designing the interior and the book cover • Commissioning illustrations and photographs if necessary • Typesetting and proof reading • All administration of the book from beginning to end • Printing the book • Marketing and publicity • Distribution and sales In other words, the publisher will take on full financial responsibility for manufacturing the book. In return for its investment, it will require the bulk of any profits made from selling the book.
BusinessWise
At this point, let’s make one thing completely clear. You are unlikely to get rich from publishing a book! In South Africa, if you sell 3500 – 4000 books, it is considered to be a best-seller! Of course, there is the rare exception to the rule. John van de Ruit’s “Spud” sold more than 100 000 copies. Jack White’s book “In Black and White” sold more than 120 000 copies. But these truly are very rare exceptions.
process can be relatively hassle-free, provided you are, to a certain extent, prepared to relinquish control of your book. Independent book publishing
This is different from self-publishing because you are using the assistance of an independent publishing company to turn your book into a reality. Independent publishing is particularly In traditional book publishing, authors are suitable for non-fiction books or paid a royalty of between 10 and 15% on special fiction books that appeal to a the net receipt of the book. This is the niche and devoted market. trade price after bookseller discounts and choosing an independent VAT have been deducted. Discounts to When book sellers range from 40 – 60%, so the publisher, you need to be sure that the author is paid a percentage of the company can offer you a full range of remainder and the book publisher keeps services that include at least the the rest. For example, if a book has a following: retail price of R120, and the bookseller Manuscript evaluation deduction is 45%, the net receipt is R66 • Project management minus 14% VAT which equates to R56.76. • • Editing and manuscript If the author is being paid a 10% royalty, he or she will earn R5.67 for each book preparation • Book design, typesetting and sold. make up Book cover design In the South African market, the publisher • • ISBN application and barcode will own all rights to the book for the duration of the publishing contract. In generation Printing reality, there is very little room for • E book creation negotiation with publishing houses unless • Book store and distribution the author is a “celebrity”. Additional • options income can be generated from the sale of On line retail sales foreign rights to a book if it has • international appeal. When this happens, an international publisher will pay the Some independent publishers also South African publisher a fee to sell the offer marketing and publicity but this book in its country and the author will get is usually carried out by other, closely specialists or service a percentage return on this deal. There is affiliated no average return in this instance, as providers, and to a limited degree. each deal can be completely different Independent publishing means that depending on the market involved. the author covers the costs of book The main attraction of publishing through production – but he or she also reaps a traditional book publisher is that the the majority of the rewards via book
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BusinessWise
sales. By making a financial investment in the book, authors are entitled to all of the profits from the sale of each book. Depending on the project, most authors recover their costs by selling 200-250 of their books directly to clients and customers. This works particularly well when the author is involved in running workshops or presenting courses; or for businesses producing specialist information for their customers, as the author or company then has a captive market for book sales. By selling directly, the author can pre-set the retail price of the book without discounting to clients. This means that authors can make approximately 60-70% of the retail price, depending on production and printing costs. Independent publishing also means that the author is completely involved in the production process, from beginning to end. It also allows authors to have full ownership of their book as they will own the electronic file to print their book. Of course, there are rules that need to be followed in order to reap success. There is no point in investing in a book that is not going to sell. In the past, independent publishing has been seen as “self publishing” and has acquired a reputation for poor quality. Nowadays, good independent publishing companies are managing to overturn this perception by:
• Carefully controlling production so that it is a seamless process from concept to delivery. Quality is a key issue and trade quality production is essential. Book publishing is a highly competitive market and for a book to be a success, it must stand out from the crowd. It must look appealing inside and out, the title and cover text must read well and the content of the book must be well edited and easy to read. Publishing costs can vary drastically from one book to the next and they are affected by many factors, mainly related to the work involved in turning the manuscript into a publishable book. For those who are interested in working with an independent publishing company, here are some average costs which are meant as guidelines only: Manuscript and publishing consultations: +/- R1 500 – R3 000 Editing: +/- R185 – R240 per 1000 words Production: +/- R8 500 – R15 000 Project management: cost
15% of total
Marketing and publicity: costs start at R3 000 but are variable depending • Producing readable books. on requirements Manuscripts are carefully evaluated in terms of quality writing and Distribution: based on a percentage appeal to a specific target market. of the retail price and paid only on actual sales • Producing quality books. Books are professionally edited and Independent publishing companies can designed. assist authors with retail distribution if
52 WealthWise
required. The advantage of producing a good quality trade book is that book marketers and bookstores are more willing to take the book on. A good quality book is also essential for favourable book reviews as these will drive potential customers to the bookstores. If an author chooses the independent publishing option, then he or she must choose to get on board and be totally involved in the process as their responsibility cannot end with manuscript submission. It is particularly important that they be involved with sales and marketing, bearing in mind that direct sales will garner more profit than sales via bookstores. With the success of social media, authors today can gain valuable exposure for their books via various methods such as Facebook and Twitter. They can set up fan pages, form special interest clubs, promote the book via downloadable extracts, organise competitions, sell E book versions internationally – the possibilities are endless. The ideal author should be able to identify potential sales streams such as industry associations, professional bodies and industry partnerships; and also direct marketing opportunities via a ready-made client base. How the book sells can largely depend on author participation and effort. But remember that the author receives the full profit so the effort is more than worth it! There is really no definition for a best seller. Book sales are largely dependent on the topicality of the subject matter; the depth of the target market; the needs of the target market; and the attention devoted to marketing and publicity. “Everyone has a book inside them”. That may be true. But not everyone has a sellable book inside them. Think carefully about your options and choose the publishing route that you feel is right for you. Good luck!
An award winning journalist, Georgina Hatch has held several senior positions in the publishing and communications industry, including Publishing Director of Struik Publishers, the country’s largest publisher of illustrated books. She is now Publishing Consultant for Quickfox Publishing, a custom publishing company that offers professional book production, printing and publishing services for authors and companies who wish to publish their own books. Georgina can be contacted at 083 638 2156, georgina@quickfox.co.za or visit www.quickfox.co.za.
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CareerWise Career Impact
"It is no longer safe or responsible or ethical to carry on working without thinking about what we do and the effect it has (...). What we do for a living has an impact. We can be working in an industry that pollutes, causes harm, is unpleasant and bad. Or we might be working to help others, to benefit people positively. Knowing that what we do causes an effect - for good or bad - doesn't mean we have to instantly chuck everything up and change jobs. Nor does it mean we can sit back and relax and think we're doing ok just because we work in a caring job. Every job, every industry has some ramifications - good and bad. Everything we do at work can have great benefit or cause harm. We have to weight it all up and check how we feel about it. And if we are unhappy we can leave, but not too fast, because there's a great chance we can change things from the inside"
Richard Templar, The Rules of Life
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Organisational Wellness Versus Employee Wellness by Agnes Howe Chiweshe
Is
organisational wellness the same as employee wellness? What is the definition of wellness? We constantly hear the word wellness used in conversations, at work or read it in newspapers and magazines. Surprisingly, there seems to be no universally acceptable definition of wellness. The term wellness was introduced into business vocabulary about 30 years ago as a result of two developments in the United States: The upward spiral of healthcare costs and the increased societal emphasis on fitness and healthy lifestyles. Initially, the mission of wellness in the workplace was to coach employees through various channels in self-responsibility and lifestyle behaviours that influence one’s health, quality of life, work performance and health care use throughout a lifetime, as defined by Rothman Howard in 1990. Wellness is more than simply the absence of illness and/or disease. Wellness is a proactive and preventative approach that is designed to provide optimum levels of health, emotional and social functioning. Core to our understanding of wellness are three complementary concepts, which are: • Health promotion, • Prevention, • The determinants of health (or factors that influence our health). Health promotion is about encouraging individuals to make healthy lifestyle choices. The World Health
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Organisation defines health promotion as ‘the process of enabling people to increase control over, and to improve their health’. Prevention is about preventing disease and injury, which can be described as ‘activities aimed at reducing factors leading to health problems and injury.’ A growing body of evidence tells us that there are a number of interrelated factors that influence our health. These factors, called the determinants of health, include: income and social status, support networks, education, employment, working conditions, personal health factors and coping skills. The determinants of health form the foundation of a healthy organisation. Today, wellness has developed into a huge industry widely known as workplace health promotion, a multidisciplinary field integrating proactive disease management, lifestyle improvement, self-help care, and condition management strategies. It relies on awareness, education and targeted interventions to help change unhealthy behaviours that increase risk. Through wellness programmes, employers have found that they can boost productivity, reduce absenteeism, trim healthcare costs and increase morale in a supportive environment. Organisations use different approaches to impact on the wellness of their employees; some use organisational wellness programmes, others use employee wellness programmes. The approaches to both programmes are different as are the resultant benefits, and are defined below.
’ The determinants
of health form the foundation of a healthy organization
‘
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CareerWise
within a supportive Organisational Wellness Programmes management culture gain better performance from Organisational wellness programmes better employee health. A healthy, boost productivity, increase employee productive workforce is essential to a profitable business health and wellness, reduce on-the-job competitive, Workplace productivity stress, and cut healthcare costs. enterprise. Organisational wellness programmes are programmes help employees strike a a good investment, with a proven, strong good balance between work and return on investment. Additionally, personal life, while still doing a great organisational wellness programmes job. The topics of modern workplace improve morale, increase job satisfaction, productivity programmes range from and lower employee turnover, while getting organized, to dealing with stress, promoting teamwork, and reducing disability and absenteeism. coping with change. Employee Wellness Programmes Numerous organisational programmes Employee wellness programmes aim to contribute to wellness, but to date help employees take an active role in there have been few co-ordinated, being responsible for their own health broad, high-level strategic wellness and well-being. Employee wellness programmes that ensure maximum programmes provide education and impact. To design and implement an workplace wellness counselling on a wide range of issues, effective programme, the organisational from cancer prevention, to depression and anxiety, to eating smart, to wellness strategy needs to be based on managing everyday stress. Employee the unique wellness needs of each wellness programmes include a wide company’s employee profile. range of topics from smoking cessation, organisation’s wellness to weight management, exercise and an Each programme goals will differ depending active lifestyle. on the demographics of the employee These unique Added Emphasis: Linking population. characteristics evolve in tandem with Productivity to Lifestyle employee turnover; thus, the health A newly emerging strategy, health and promotion initiatives will need to be productivity management focuses on constantly adjusted as the needs of the demonstrating the value of improved workplace wellness programme change. employee health and wellness by measuring the impact of targeted In conclusion, to answer the question interventions on productivity. Many as to whether organisational wellness wellness programme designers and employee wellness is the same recommend the integration of health thing, the simple answer is no. promotion and productivity management, viewing the combination as essential to a Which one of the two approaches is results-oriented employee programme more effective? It depends on a and the most logical way to justify health number of organisational elements, all benefits. Companies that promote of which should be considered in the wellness and conduct disease quest towards having an effective wellness strategy.
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Agenda Competition Win with WealthWise magazine! Join WealthWise Club by subscribing to our free e-newsletter at www.wealthwisemag.com/wealthwise/subs cribe or directly on our website homepage www.wealthwisemag.com Or post a comment on our Facebook page (search for WealthWise magazine) about what you like the most or what would you like to read in our upcoming issues Or send an email editor@wealthwisemag.co.za with comments and suggestions
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And you could win your share of fabulous books, courtesy of WealthWise magazine and Penguin Books! WealthWise magazine would like to thank you for your valuable support!
WealthWise 59
Twelve Apostles Hotel and Spa by Carla Rossouw
ice tea) together with the Summer has sprung in Cape Town and homemade delicious and addictive dried pears and today we are sitting in beautiful hot mango strips. cloudless skies, albeit a wee bit windy, indulging in all that The Twelve Apostles Features has to offer. The Twelve Apostles Hotel and Spa is a beautiful property on Victoria Road, just outside Camps Bay, en route to Llandudno and Hout Bay. The Twelve Apostles has a long history as the original manor house dates back to the previous century. The Red Carnation Group acquired The Twelve Apostles in 2002, when the existing building has gone through extensive refurbishments and extensions. The old Oude Kraal Hotel was changed to The Twelve Apostles and the hotel has been a firm favourite with local and international travellers ever since. First Impressions Professional staff is ready at your beck and call from the second you arrive. Our check-in was done by the very competent Patience whilst we enjoyed something refreshing to drink (guests have a choice of sparkling wine, juice or
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The Twelve Apostles is an exquisite destination for local and international travellers, business or leisure. Being a renowned family business, the hotel focuses strongly on family holidays with a convenient location to explore the fairest Cape. The 5 star property is part of the Red Carnation group of hotels, the same group that owns the award-winning Bushmans Kloof Wilderness Reserve and Wellness Retreat, situated at approximately three hours drive from Cape Town, and The Oyster Box in Umhlanga. Red Carnation also has properties in the UK (London, Dorset & Guernsey), USA and Switzerland. A member of The Leading Small Hotels of the World, The Twelve Apostles spoils their guests with beautiful individually decorated rooms, all with exquisite views of the Atlantic Ocean or the mountains and the indigenous fynbos
gardens. Room facilities include mini bar, tea / coffee facilities, air conditioner, gowns and slippers, small laptop safe, beautiful turn-down in the evening with complimentary water, candles and something sweet to nibble on before turning in. Wi-Fi is complimentary and available in public areas and conference rooms. Facilities Hotel facilities further include a spa, conference facilities and business centre; secure covered parking, a private 16 seated cinema, two outdoor pools (one heated), gym and boutique shop. Walking trails and picnic spots are abundant behind the hotel, on the mountain. The hotel has its own helipad, a luxurious addition to the carefully thought services, including the 24 hour room service, laundry service, concierge service and the complimentary scheduled shuttle service to the V& A Waterfront between 08:00 and 20:00 daily. With a combination of 55 rooms and 15 suites and a selection of 8 conference and banquet / function spaces, the Twelve Apostles is also an ideal destination for conferencing for corporate and incentive groups. The conference facilities include the Llandudno Boardroom (8 delegates), The Conservatory (20 delegates), Milkwood 1 and 2 (up to 90 delegates, cinema), Lions Head (up to 50 delegates, cinema). The
CafÊ Grill can take up to 36 guests banquet and the Atlantic Terrace marquee can host up to 80 guest banquet seating, ideal for corporate events and a very popular venue for weddings. Fun The Twelve Apostles is a luxurious and professional facility in every way. Take a closer look though and you will discover more than a historical, sumptuous establishment: it’s the details and the fun element available to every guest that makes it a winner. The pool experience offers natural shade provided by indigenous trees or umbrellas, charming striped mattresses on the loungers and excellent views of the Atlantic: a very inviting picture indeed. Fluffy towels, jugs of ice cold lemon flavoured water, apples and a selection of magazines are fabulous additions. The Rock pool on the mountain side is also beautifully situated and has an additional wooden deck with loungers. Whilst enjoying the lovely weather I actually witnessed a business man in business attire enjoying the pool area with a newspaper in the one hand and a colourful cocktail in the other.
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Agenda: Destination
Cocktails are provided by the pool bar service. The attention to detail is a pleasant add-on to the experience. Beach / pool bags are available in the room for guest to use during their stay. No less than 38 hammocks are scattered in secluded spots in the extensive indigenous fynbos gardens for guests’ enjoyment. Eight beautifully located picnic sites await the nature lovers on the mountain behind the hotel or elsewhere. Two garden gazebos are ready to be booked for private individual or couple spa treatments with incredible views guaranteed.
The fun wouldn’t be complete without the 16 seated cinema, available for private use and for exciting movie nights together with dinner at Azzure. Patrons can enjoy dinner before the currently on the big screen or classic movies, complete with pop corn, milkshake / hot chocolate, magnum ice cream and marshmallows, Smarties or Jelly Tots. The sweet treats come in big glass containers in Azure and The Café Grill and are available to hotel guests at any time.
The hotel provides a detailed map indicating hiking trails, hammocks, furnished and unfurnished picnic sports as well as the outdoor gazebos.
For dining in style, we headed to the Azure Restaurant and Terrace for breakfast and dinner. The all day / night dining at The Café Grill featuring ‘simple,
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Food
Agenda: Destination
delicious fare’ is a lovely option, while the Leopard Bar is a must for indulgent cocktails.Azure is a renowned restaurant at Twelve Apostles and is also open to outside guests. With its terrace overlooking the Atlantic, it is a muchloved spot for merriments of all kinds. The Azure is utilized for breakfast, offering a wide continental menu, complete with fresh oysters and sparkling wine. Additionally, there is a selection of hot items and individually ordered items, such as Eggs Benedict, omelettes and waffles. We revelled in our exceptional dinner experience enhanced by the outstanding service received from Bonita Matroos. The winter menu was showcasing a selection of dishes from Bea Tollman, the president of the Red Carnation Hotel Collection who wrote her memoirs “A life in food”, a cookbook made up of a collection of recipes collected during her travels and from people she has met over the years. Furthermore, the menu has a collection of dishes from the executive chef, Henrico Grobbelaar, a qualified engineer turned chef with a long list of culinary accolades. Henrico is ultimately responsible for maintaining the hotel’s responsible and sustainable environmental policies on food, including free range products and support for
SASSI (South African Seafood Initiative).
Sustainable
Our culinary experience got underway with a selection of breads, the Cape seed loaf being my favourite with a quenelle of smoked snoek pate, utterly delicious, followed by a complimentary canapé to get the taste buds into alert mode. I enjoyed the Oven roasted duck created by Bea - half a slow roasted free range duck on wilted bok choy with a golden brown bacon mini cottage pie and apple jus (R150). As is often the case, a chef can be judged by the success of his duck, thus Henrico passed with flying colours. The duck was tender but crispy on the outside and magnificently complimented by the smoky bacon and sweet apple jus. Created by Chef Henrico Grobbelaar, my partner enjoyed the pork belly – eight hour confit pork belly with smoked mash potato, sherry poached prunes, red cabbage in hoisin and candy apple (R150). Pork belly has become a favourite in recent years and once again the fusion of savoury and sweet, together with the smoky mash, resulted in a very palatable experience. In addition, Henrico also offers four (R370) or five (R495) course tasting menus and a variety of vegetarian options. I was particularly interested in
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the Vegetable Essence, stir fried tatsoi, mizuna, julienne vegetables and spicy peanut sauce with smoked mash potato, braised red cabbage in hoisin and candy apple (R125), something I will have to keep in mind for the next visit. Cooking demonstrations can be arranged and mention needs to be made about the internationally renowned Fynbos menu. Fabulous
Photo: Carla Rossouw
The hotel is also home to the acclaimed Sanctuary Spa, open to in-house guests as well as outside guests. The spa has been developed around the existing rock formations resulting in a very unique interior. The result is a heated hydrotherapy pool, a flotation pool, as well as a cold plunge pool together with a Rasul Chamber and 7 treatment rooms, some of them suitable to wet treatments as well as couple treatments. A health bar is available to guests. The Sanctuary Spa offers a wide variety of single treatments and different celebration packages of variable duration. The spa features the B|Africa range of products, specifically developed in honour of Bea Tollman. The products are used at the spa, as well as in all the rooms of the hotels belonging to the South African Red Carnation Properties. The unique range is prepared by blending native plant extracts, natural sea elements and eco-friendly technology. The products and treatments endeavour to calm, detox, nourishing and energise mind, body and soul. The Twelve Apostles also offers a very impressive departure menu consisting of a range of services to assist guests with their onward journey, including packing and storing of luggage, late check-out if possible, an airport picnic or Padkos (South African Road picnic), travel music, car collection by the car rental company, car wash, pre jet lag treatment at the Sanctuary Spa, onward travel arrangements and many more.
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Fiction and Fact Nobody knows where the name of Twelve Apostles originated. Previously known as Gable Mountains, the mountain range actually has 18 buttresses, not 12, and none of them are named after saints. The buttresses from South to North are: Hout Bay Corner, Llandudno Corner, Llandudno Peak, Grove Buttress, Victoria Buttress, Separation, Grootkop, Corridor, Slangolie, Spring, Wood, Postern, Kasteel, Valken, Barrier, Jubilee, Porcupine and Blinkwater Peak.
Rates Leisure rates start from R2 500 per room per night (two guests), including breakfast and suites from R6 085, depending on the room type. Group rates can apply for ten rooms or more. Watch out for special offers and discounted packages. The Day Conference Package rate is R395 per person.
For bookings and more information Furthermore, it was interesting to read about The Twelve Apostles Hotel Spa, visit about the two derelict tankers wrecked and at Oudekraal Rocks and Llandudno on 29 www.12apostlehotel.com. July 1977, due to gale force winds of courtesy of The between 55 – 60 knots. The tug ropes Photographs snapped and both the Antipolis and the Twelve Apostels. Romelia were being driven towards the Carla Rossouw, a shore. Today one can still see some of Professional Conference the wreckage during low tide. Organiser and freelance writer has enjoyed the hospitality of The Twelve Apostles as a result of an industry prize. For more information on reviews or for assistance with your next conference, visit www.carlarossouw.com.
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Books Guy Kawasaki, Enchantment – The Art of Changing Hearts, Minds and Actions Penguin Business, www.kalahari.net
R240.00
from
Guy Kawasaki, the former chief evangelist of Apple and co-founder of Alltop.com, best known for his international bestseller “The Art of the Start”, defines “enchantment” as the process of delighting people with a product, service, organization or idea. Kawasaki’s concept around enchantment started 25 years ago, with his job in Apple’s Macintosh division, before the Steve Jobs’ era. Fascinated with the Macintosh computer and his capabilities, he marketed the Macintosh cause he believed, noticing the process of changing people’s hearts, minds and actions in a voluntary and natural way. His experience as entrepreneur with Alltop.com and other ventures strengthened his enchantment skills. Kawasaki’s manifest of enchantment is contagious. The book’s simplicity and modesty astonishes, making enchantment achievable for everyone. If you are looking for answers to questions such as how companies such as Apple create such enchanting products and how do some people enchant others, this book has it all. Starting with an explanatory chapter about the art of enchanting people and its basics (making yourself liked and trusted among others), the book continues with advice on how to start and make the necessary changes in business in order to delight customers, as well as how to overcome resistance from third parties and how
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Agenda: Books
to make enchantment last in an organization. Business owners will certainly like the chapter dedicated to enchanting employees, while the latter will find useful the information about enchanting a boss. Great insights indeed. Perhaps the most enchanting part of the book – and our favorite – is represented by the chapters dealing with the smart usage of push and pull technologies, a today’s necessity in constantly engaging with people. Be it through presentations, email, Twitter (push) or websites, blogs, Facebook, LinkedIn or YouTube, enchantment is nowadays fast-paced, diverse and widely spread. If you’re a beginner in actively using these social media avenues, you will find Kawasaki’s book a life-saver; if you’re already in the game, you will certainly learn something new and make use of Kawasaki’s practical points. Illustrations and personal stories depicted at the end of each chapter complete the experience.
Richard Branson, Stripped Bare Virgin Books, R159 www.kalahari.net
Business from
After reading his provocative autobiography, “Losing my Virginity”, more than two years ago, we have become more than fans of this unique global entrepreneur and his quirky style. Although not his newest book, “Business Stripped Bare – Adventures of a Global Entrepreneur” tops our list of must-have books for Named by Gartner “the best treatise on Branson’s rich business insights and interpersonal relationships since Dale life lessons learned during more than Carnegie’s How to Win Friends and 40 years in business. Influence people”, a solid statement not far from the truth, “Enchantment” is best Branson talks openly about his accompanied by a notebook to capture the unusual ways of doing business, the practical advice and business insights “Virgin” type of person and the he devotes to his present with every turn of a page and attention apply them in your business. It’s just that employees, the philosophy behind Virgin brand, his most adventurous great. business deals (setting up the airlines Have you read an inspiring book recently? Share your experience and send us your review at editor@wealthwisemag.co.za!
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Agenda: Books
Virgin Atlantic, Virgin Blue and Virgin America), his craziest (taking on giant Coca-Cola with Virgin Cola) and his riskiest unconcluded business adventure, Virgin Money’s bid for Northern Rock Bank, in an attempt to rescue the embattled British bank (which was nationalized later on). Richard Branson is the only person in the world to have built eight billion dollar companies from scratch, in eight different sectors. His remarkable achievements, his candid and honest stories and his inspirational business advice are enough reasons to read this fascinating book. Want to know how to build a lasting business, succeed and make a difference? There’s no better businessman than Branson to get inspired from. Go ahead, enjoy the read of a lifetime!
Stephen Denny, Killing Giants – 10 Strategies to Topple the Goliath in Your Industry Penguin Business, www.kalahari.net
R240.00
from
If you are familiar with the Bible story of David and Goliath, Stephen Denny’s book, “Killing Giants – 10 Strategies to Topple the Goliath in Your Industry” is the essential playbook that proves that size and scale are not the only formula for business success. Fortunately, for the millions of SMEs looking to strive in today’s competitive world (David), there are creative, ingenious ways to take on the big boys of any industry (Goliath). What started as a blog post in response to a former colleague, namely “Killing Giants” on the author’s Marketing Prof and Daily Fix blog, turned out to generate enough fascinating ideas about fighting giants, supported by business stories and interviews with leaders and managers whom Denny himself had the opportunity to share his insights with. Killing Giants is a must-read for every businessperson facing an industry giant. The
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Agenda: Books
author's aim is to provide thinking tools while addressing the business challenges faced by start-ups and medium sized businesses. There are practical bits, wonderful ideas and inspiring true stories at every page turn. Having a notebook aside to quickly write down the ideas you can apply yourself might come in handy. If you own a business or looking to start a business, or you are part of a team fighting the competition – the giant – “Killing Giant” offers a wealth of insights on working smarter with fewer resources, moving faster, doing the unthinkable or, why not, fighting dirty (if this is what works for you).
Kiki Theo, Mini Wealth Creation series, Penguin Books, R150 for all three
Stephen Denny is president of strategy, marketing and branding consultancy for Denny Marketing. He spent over twenty years as a senior manager at brands including mega-giant Sony, OnStar, Iomega and Plantronics. He is a frequent blogger and contributor to The Daily Fix and Marketing Profs.
Finally, 9 Steps to Become Wealthy shows the ultimate nine important steps in your wealth creation journey. More than changing perceptions, this book will help you attract wealth and confront any obstacles you might face in your wealth journey.
or R50 each, from www.kalahari.net
Launched this September, Kiki Theo’s new Wealth Creation mini books are based on the complete versions of her acclaimed wealth trio, “Money Alchemy – Into Wealth and Beyond”, “Money Well – How to Contain Wealth” and “Wealth Journey - 9 Steps to a Wealthier You”. Launched last year, the original versions One of the book’s most important expand on the ideas captured in the mini messages focuses on the idea of booklets. constraints – both in money and human power – and how to use it 8 Keys to Expand Wealth contains eight to your advantage. Constraints ways to look at money from a different are good. They make us think perspective. This book is aimed at changing harder, get more creative and your perceptions about money and help you make choices. Throwing money bring more money in your life. at problems is not always the wisest choice. If you are feeling 9 Ways to Contain Wealth shows nine limited, constraint or different ways to contain wealth and direct its unfortunate, this book will give energy. This is a must-read about keeping money in your life and not just attracting it. you the tools to succeed.
Kiki’s books are energetic and filled with positive intent to change your life. Visit www.moneyalchemy.com for more details about Kiki and her books.
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Events The
Leadership Insights event, organized by Dr. R Volpe Leadership Consulting on the 30th of September at Regenesys Business School in Sandton, Johannesburg, focused on prevalent topics in today’s leadership agendas, from the senior management’s pivotal role in responding to challenges during a downturn to the role of women executive in the boardroom. The four hours presentation featured speakers Mark Peters, Director: Corporate Learning, Senior Lecture at Wits Business School; Deshun Deysel, director of Deshun Deysel and Associates; Zine Nkukwana, 2010 Business Woman of the Year Finalist at BWASA and Dr. Renate Volpe, author, entrepreneur leadership coach and CEO of Dr. R Volpe Leadership Consulting. In this current edition on page 44 you can read Mark Peters’ valuable insights on how did the economic downturn influence the corporate sector and how should management have reacted to these challenges. 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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Agenda: Events The Photo & Film Expo Where: Coca-Cola Johannesburg When: 13 to 16 October
Dome,
The Photo and Film Expo is the largest photographic expo in Africa and the ideal platform for photographers to meet, network and learn more skills by attending the over 100 free workshops! For more information visit www.photofilmexpo.com.
Retirement Expo
Where: Coca-Cola Johannesburg When: 21 to 23 October
Dome,
The first-ever Retirement Expo to be held in South Africa promises to be a one of a kind “Expotainment� event, with a variety of product and services on offer for those planning their retirement or looking to add excitement to their current retirement lifestyle. For more info go to www.retirementexpo.co.za.
Waste in Business and Exhibition Where: Emperor's Johannesburg When: 9 November
International Conference 2011
Banking
Where: MSC Sinfonia, Durban When: 10 to14 November This year's International Banking Comnference will gather banking, risk management and finance professionals, researchers, educators, policy-makers and practitioners to discuss sustainability of the financial services industry.For more details go to www.unisa.ac.za/ibc.
Seminar Palace,
The Waste in Business Seminar 2011 focuses on the detrimental effects of current waste disposal technologies and the advancement of renewable and sustainable solutions in the context of the new Waste Management Act. For more info see www.wasterevolution.co.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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Last Word Has minimalism died with Steve Jobs? by Denisa Oosthuizen used by millions. It is not by chance Some say they are elitist products, and and that Apple has grown into world’s first even if not all of us own a piece of Apple’s history, billion of people couldn’t help feeling sad at the break of the news that Steve Jobs has passed away. What is fascinating about Steve Jobs, in my own opinion, is the way in which he created the Apple ecosystem so loved by millions of people today. Few people can claim today the followership that Apple has or the adulation felt by Steve’s supporters and fans. Why is Apple so powerful and uncontested today? My answer: its minimalism, whose face was not other than Steve Jobs. In a society so busy and invaded with thousands of products and similar technologies, Apple’s unique, innovative products have proven something that we all needed to hear, that less is more. Steve Jobs made minimalism cool. His philosophy has been an integrative part of Apple in more than one way. From changing the “Apple Computer Inc” to “Apple Inc” and the now famous apple icon to the sleek and barely there design and functionality of iPod and iPhone, minimalism breathes through Apple’s world, making it desirable, simple to understand, perceived and
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brand, with the highest market capitalization.“He employed the art of minimalism to enhance technology; he employed technology to advance the art of the minimal”, commented Daily Maverick’s Richard Poplack in a very evocative and emotional post. I totally agree. Steve Job had a different present than anyone of us – his “now” was constantly challenged by the future possibilities he could only envisioned himself. Will his philosophy continue to manifest at Apple, will his legacy prevail? Most certainly yes. Minimalism has not died with Steve Jobs. Steve’s death just ended an era and it’s up to his followers, fans and friends to prove that another era has begun, where simplicity, functionality and innovation are carried on by his team, now led by Apple CEO, Tim Cook. If I had something to say about Apple’s future, I would just ask for “innovate, change, but don’t change anything”. Let’s not add the unnecessary, let’s just keep Apple as it is. And let’s give a big thanks to Steve Jobs, the postmodern man, the industry leader, the tech god (not in a geeky sense), the genius and above all, the visionary. May you rest in peace, Steve!
In next edition... December/January issue Extreme Money International expert in financial derivatives with over 25 years experience in the market and consultant of banks and corporations worldwide, Satyajit Das talks about his latest book, "Extreme Money", and the world of extreme money from an insider's perspective - real, fascinating and shocking insights!
Attuned Leadership In a world where tyrants abound in corporations and in states, Attuned Leadership provides a compass for the direction of ethical leadership. Dr. Reuel J. Khoza, currently chairperson of Nedbank group and director of other major companies, discusses what makes an attuned leader and the African humanism as part of leadership.
Why are markets extremely volatile? The rout in global financial markets is continuing, characterised by extreme swings of up to 5% in some markets. Dr Prieur du Plessis, chairman of the Plexus group and author of the Investment Postcards blog, explains a couple of reasons behind the extreme volatility.
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