Strive Masiyiwa Writes__Protect the root of your business.

Strive Masiyiwa Writes__Protect the root of your business.

Friday, 5 February 2016 / No Comments

Protect the root of your business

So I was on Facebook scrolling and reading some news feeds aside checking some pages to like and I came across this nice peace on the the official page of Strive Masiyiwa, the Executive Chairman & Founder of the Econet Group. I was so overwhelmed by his post, so I decided to share it on this blog. And he writes:

A young man and his father were watching a huge fire coming down from the hills towards their family vineyard. At first, the young man tried to organize buckets of water but it was clear that the fire would engulf everything and consume the vineyard. Then to his surprise he saw the old man pick up an axe and run towards the vines. Systematically he began to cut the vines, leaving only the roots.

"We must protect the root, my son. Do as I show you."

And with this they saved a business that was several generations old.

Every business has a root, and you must know that root. You must be able to protect that root, when things are tough. Sometimes protecting that root looks cruel, but you must protect it at all costs. Sometimes it can come down to reducing activity to the bare minimum, with just a handful of staff. Your most valuable resource will always be good people.

There's no successful entrepreneur who does not know what I'm talking about. It may well be one of the most difficult things you'll ever do.

# Stay very clear about who you are and what business you're in.

# Don’t underestimate the crisis.

# Make sure you’re looking at credible data.

# Manage with grace under pressure.

# Review and revise your game plan as needed, acknowledging which plans aren’t working.

# Decide what you need to do in order to get where you want to go.

# Tackle the problems systematically. Don’t throw kerosene onto a fire.

# Don’t get distracted; make the tough decisions that you need to, without delay. One bucket of water won’t save a hectare of crisis.

# Seek and value professional advice.

# Don’t be afraid to try something new. Crisis is often how great innovation begins. (When the going gets tough, don’t give up on new growth!)

# Lead with courage and vision, even if your heart is sad.

Don’t panic. Pray and plan.

Source: Strive Masiyiwa

Petra Trust MD urges workers to invest in 3rd tier pension schemes

Petra Trust MD urges workers to invest in 3rd tier pension schemes

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Kofi Fynn - Managing Director of Pensions Service Provider, Petra Trust

Endeavour to invest in the 3rd tier voluntary pension schemes if you want to enjoy the special incentives in the 3-tier Pension scheme, that is the advice to workers in both the formal and informal sectors by Kofi Fynn – the Managing Director of Pensions Service Provider, Petra Trust.

The 1st and 2nd tier schemes are patronised more because they are mandatory. But Mr. Fynn says workers need to add the 3rd tier to benefit from the pre-tax savings provision in the Pensions Law. He explained this to JOY BUSINESS at the launch of his company’s investment product called ‘Savings Booster’.

Most Ghanaians know about the tier 1, which is managed by SSNIT and tier 2 which is a contributory pension just as the tier 3.

However, the tier 3 products which are long-term savings products created under the Pension Act of 2008 (Act 766) is not known by many even though it has enormous benefits.

The most significant advantage of tier 3 he said is that it is tax-beneficial as well, just as Tier 1 and 2 but allows an individual to make contributions into a personal pension scheme without taxes being accessed on that contribution.

“In effect what the government is saying is that if you’re willing to even try to save for the long term we are not going to take taxes from you on that amount. Those taxes can be added to the savings thereby, boosting your returns hence, the name of our product which is ‘Savings Booster,’” he stressed.

He explained that when one makes a savings booster contribution and is from a payroll there are no taxes to it and so the money one would have paid as tax would then be added to that savings hence, putting the contributor ahead even before the investment begun. “If you made any other kind of investments what you are going to have to take is money that have already been taxed so for example if you are in the 20 percent tax bracket, and you wanted to invest a 100 Cedis, only 80 Cedis of that will be available for investment because the government takes 20 Cedis as tax, with Savings Booster all 100 can be invested so that even before you begin, you are ahead of other kinds of investment products” emphasized.

The 3rd tier voluntary pension scheme Mr. Fynn indicated is most secure given that it is regulated by the National Pensions Regulatory Authority and therefore, ensures a very high level of quality in the investments made, and a very high level of discipline that brings about safety to ensure that it is a good product for clients.

So we are talking here about high returns in the product itself, a boost that is coming from the additional tax savings, and proper regulation by the NPRA.

The instruments that we invest in are similar to what other investment vehicles would invest in, except that we are regulated by NPRA hence the quality levels of our investments is very high.

Source: My Joyonline

The Guy who bought Google.com from under Google's Nose - Google Paid $12,000.00 To Get It Back

The Guy who bought Google.com from under Google's Nose - Google Paid $12,000.00 To Get It Back

Sunday, 31 January 2016 / No Comments

Sanmay Ved.

Google.com, one of the most valuable domains on the Internet, was mistakenly sold for $12 last fall.

Google paid $12,000 to get it back. The buyer was a former Googler, Sanmay Ved, who discovered Google.com on the list of domains available for sale on September 29. He bought it, charging the $12 fee to his Discover card, never really expecting the transaction to go through.

"I was hoping I would get an error at sometime saying transaction did not go through, but I was able to complete purchase, and my credit card was actually charged!" he wrote in a post on LinkedIn last fall.

He told CNNMoney he made the purchase simply out of curiosity. "I thought at some point in time it would block me out, but I wanted to see how far it would go," he said.

Google offered to pay $6,006.13 to Sanmay Ved, who bought the Google.com domain for $12. It ended up paying twice that amount to a charity he picked.

The transaction did go through - for about a minute. He said during that brief time he got a flood of information from Google users, though he was not able actually change the Google home page. Then he got an e-mail from Google canceling the transaction.

Ved worked for 5-1/2 years at Google, according to his LinkedIn page, and likes the company enough to have its logo as his profile picture on Facebook. He is now an MBA student at Babson College in suburban Boston.

Google (GOOGL, Tech30) admits Ved owned the domain, albeit very temporarily. The company said that it offered him $6006.13, which is a numerical version of the word Google. "Squint a little and you'll see it," the company said in blog post about the incident.

When Google learned that Ved didn't intend to keep the money but instead donate it to charity, the company doubled the reward. Ved, who is from India, directed that the money be given to the Art of Living India Foundation. The group runs free schools in parts of that country where poverty and child labor are widespread.

Google regularly pays people who discover security problems with its systems and notifies the company. It said the largest single award it paid last year was $37,500 to an Android security researcher. (We assume that's a human, not a humanoid robot who performs security research. But given how strange and quirky this entire story is, who knows).

Source: CNNMoney

4 Streams of Income to Look Out For When Purchasing a Real Property

4 Streams of Income to Look Out For When Purchasing a Real Property

Wednesday, 27 January 2016 / No Comments

Streams of Income In Real Property

When you buy a piece of real estate, you should be concerned about the price at the time of purchase because price determines returns. There is an intrinsic value of a well-financed real estate investment, purchased at the right price and well-managed. As a real estate investor, this is what you are to invest for. You invest for increased value and cash flows. What you should be looking for when you purchase a property are the following four streams of income (or cash flow):

1. Income (cash flow)

This is hopefully called positive cash flow after all expenses are paid, including my mortgage payment and taxes.

2. Depreciation (phantom cash flow)

Depreciation appears as an expense when it really is income that comes from a tax break. This confuses many people who are new to investing in real estate. It is cash flow or income you do not see.

3. Amortization

This is income to you because your tenant is paying down your loan. When you pay the mortgage on your personal residence, this is not income to you but an expense. When your tenant pays your loan down, it is cash flow.

4. Appreciation

This is really inflation that appears as appreciation. If your rental income goes up, you as an investor can refinance and borrow your appreciation out as tax-free cash and have your tenant pay for the amortization of the new loan amount. In other words, it could be tax-free cash flow.

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10 Importance of Investing In Real Estate

10 Importance of Investing In Real Estate

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Importance of Investing In Real Estate

Real estate offers many great advantages. If a piece of real estate is purchased at the right price, is financed well, is in a good area and is well managed - then some of the advantages of real estate are the following:

1. Control

One major advantage of real estate investment is that it offers a great deal control. Many people feel investing is risky because they do not have control over the asset in which they invest. There is very little control over savings, stocks, bonds and mutual funds. 

 People worry about job security because they lack control over their job. Few employees have any control over the ownership of the company, how much they earn, how much they are taxed or the future of their job.

2. Cash flow

Checks come in every month.

3. Leverage

Bankers will line up to lend you money for investing in property. Ask your banker if he or she will lend you money to buy mutual funds.

4. Amortization

This is simply the gradual reduction of an amount over time. Tenants pay off the debt owed on your house over a time period without you working hard to pay off the debt.

5. Depreciation

The government offers tax breaks for real estate because it goes down in value. Real estate can go down in value, but it tends not to. In reality, the reason why governments offer depreciation incentives is because real estate investors provide housing.

Related: 4 Streams of Income to Look Out For When Purchasing a Real Property

6. Creativity

The value of the property improves through creativity. For example, if I buy a piece of raw land, I can change the zoning. Or I can buy an old house and fix it up. Or I can convert an apartment house to condominiums.

7. Expandability

Once you learn how to buy single-family homes, you can expand it into multiple units.

8. Predictability

It takes about a year after purchase to stabilize an apartment complex. After a year, the management is able to get rid of bad tenants, make the cosmetic repairs that good tenants want, and you can sometimes, slowly, raise the rents. Once a building is stabilized, the checks come in every month like clockwork. This certainly beats watching the ups and downs of the stock market -- feeling good when prices go up and feeling bad when prices come down. The key to good real estate is great management. 

The reason many stock, bond and mutual fund investors do not do well in real estate is because they are either poor managers or do not want to be managers. Since management of real estate is the key to success, some of the best investment opportunities are buying properties that are owned by poor managers.

9. Tax-deferred Money

One of the great advantages of real estate is tax-deferred money. There are many ways a real estate investor can avoid paying taxes ever - legally. One way is known as the 1031 tax-deferred exchange. This tax-deferred treatment is not available for people who invest in stocks, bonds and mutual funds. You'd be surprised how fast you can get rich if you don't have to pay taxes.

10. Appreciation

Because the currency is going down in value, real estate tends to increase in value. Also, as our population increases, demand increases, which also drives up prices. Most investors invest for appreciation (capital gains).

In the stock market, most people invest low hoping to sell high. This is investing for capital gains. In real estate, these investors are known as flippers. Flippers also buy low and hope to sell high. The problem with a capital gains strategy is that the strategy generally only works in an up-trending market. If the market trends down also known as a bear market, many paper-asset investors and flippers are toast.

Investing for cash flow is better than investing for capital gains in real estate because the tax laws favor the cash-flow investor.

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Investment Banking Career Paths

Investment Banking Career Paths

Tuesday, 26 January 2016 / No Comments

Investment Banking Career Paths

The career of an investment banker progresses along a fairly standard path. Investment banking positions from junior to senior:

Analyst (grunt)

Associate (glorified grunt)

Vice President (account manager)

Director (senior account manager, rainmaker in training)

Managing Director (rainmaker)

Some banks call certain investment banker positions different names or have added levels of hierarchy. For example, sometimes banks separate Senior Vice President from Vice President. Other times, Director is split up into Director and Executive Director (more senior). However, regardless of the names, the general job functions of each relative position tend to be consistent bank to bank.

If you are an undergraduate, you are applying to banks with the aim of landing an investment banking analyst position. Assuming you do well, have an interest in staying, and there is a need, some banks offer direct promotions from analyst to associate instead of requiring that you go back and get your MBA (typically called “A to A”). If you are an MBA student, you are applying to banks with the aim of landing an investment banking associate position and aspire to work up the ranks to Managing Director one day.

The Investment Banking Analyst

Investment banking analysts are typically men and women directly out of undergraduate institutions who join an investment bank for a two-year program.

After two years of working for the investment bank, top performing analysts are often offered the chance to stay for a third year, and the most successful analysts can be promoted after three years to investment banking associate. Analysts are the lowest in the hierarchy chain and therefore do the majority of the work. The work includes three primary tasks: presentations, analysis, and administrative.

Investment banking analysts spend a lot of time putting together PowerPoint presentations called pitch books. These pitch books get printed in color and are bound with professional looking covers (usually in-house at the bulge brackets) for meetings with clients and prospective clients. The process is very formatting intensive, attention to detail is critical, and many analysts find this part of the job to be the most mundane and frustrating.

The second task of an analyst is analytical work. Pretty much anything done in Excel is considered “analytical work.” Examples include entering historic company data from public documents, financial statement modeling, valuation, credit analysis, etc. Interview questions often focus on this part of the job.

The third main task is administrative work. Such a task involves scheduling, setting up conference calls and meetings, making travel arrangements and keeping an up-to-date working group list of deal team members. Lastly, if you are the sole analyst on the deal and it is sell-side (you’re advising a client on selling its business), you may have control of the virtual data room and will need to keep it organized so all parties have access to the information. It is an interesting experience in that there are several data room providers and many times they will try to win business by offering free sports tickets, etc. It gives you a chance to feel how your clients feel as you try to win their business.

The Investment Banking Associate

Investment banking associates are usually recruited directly out of MBA programs or analysts that have been promoted. Typically, bankers will be at the associate level for three and a half years before they are promoted to Vice President. Associates are also categorized into class years (i.e. First Year, Second Year and Third Year or say, Class of ‘05, ‘06 and ‘07). The number of years it takes for Associates to get promoted actually depends on the bank. Sometimes it could be more than three and a half years if there is not a need for another Vice President.

At that point, an associate should evaluate whether it makes sense to stay at the bank or try to move elsewhere to receive a promotion.

The investment banking associate’s role is similar to the analyst’s role, with the additional responsibility of serving as a liaison between junior and senior bankers, and in some instances, to work directly with clients.

How Analysts and Associates Work Together

Analysts and associates work very closely together. Associates check the work of analysts and assign them tasks. Checks could be in-depth where the Associate literally looks through models and checks inputs with filings or it could be much more high level where the Associate looks at an output and determines whether the numbers make sense.

The Senior Bankers (VPs and MDs)

Senior bankers primarily source deals and maintain relationships. Senior bankers have a wide variety of past backgrounds ranging from investment banking to corporate executive management.

Aside from relationships, senior bankers often understand their industry landscape at a very detailed level and can anticipate deals in the sector. As economic environments shift, they anticipate when companies will need to raise capital or when strategic discussions (M&A, LBO) are necessary. By anticipating such needs, Managing Directors can start crafting appropriate pitches early-on to clients with the aim of turning these pitches into live deals.

Source: Wall Street Prep

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4 Amazing Types Of Jobs In Investing

4 Amazing Types Of Jobs In Investing

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Types Of Jobs In Investing

A degree in accounting or finance and various credentials can lead to a number of lucrative jobs in the investment field. Many certified financial planners work for themselves, while others with a financial background choose larger corporations that offer numerous opportunities.

You need to have a solid math background and a thorough knowledge of the stock market, bonds, real estate and other personal and business investment vehicles to thrive in the industry.

Financial Manager

If you’re willing to work long hours and develop a clientele of your own, you can work for yourself as a personal financial manager. In the position, you’ll work with individuals to advise them of the best investments and then manage their portfolios. In addition to a financial degree, you should earn a certified financial planner designation to increase your credibility. To take the CFP certification exam, you’ll need a few years’ experience, which you can gain working at a bank, investment brokerage or insurance company.

Broker

To break into the securities industry, you need to have at least a bachelor’s degree with a heavy emphasis on finance, business, economics and accounting. To advance in the field, you should consider pursuing a master's in business administration, even though a good portion of your education comes from working on the job. You’ll need to obtain a license from the Financial Industry Regulatory Authority of your country as well. As an investment broker, you’ll work with individuals and businesses to conduct stock trades and advise them of financial opportunities.

Actuary

An actuary works for insurance companies to analyze data to help businesses determine the risk of certain events and how they affect financial outcomes. Actuaries also are employed by large corporations to help determine appropriate risk levels for various investments. You’ll need a four-year degree with an emphasis in statistics, math and financial theory. You’ll also need certifications from either the Casual Actuarial Society or the Society of Actuaries. Both certifications increase your chances for advancement.

Banker

Investment bankers typically work for banks, managing company bond issuances and developing strategies for mergers and acquisitions. While you may start out as an analyst with a bachelor’s degree, you’ll need to earn an MBA to rise to the level of investment banker. You can expect to work long hours, up to 70 hours a week, doing work that includes regular travel to investigate investments and meet with clients.