How much of your week do you spend being economically proactive?

I spent the last weekend painting the inside of the new house together with Nicole. I don’t know if it was the fumes of the Velvaglo or the monotony of the task, but I got to thinking about people and what they do in their lives. Sadly, I think most people moan. Then this was the though pattern:

Moan > About what > What they don’t have > Why? > Because they don’t have money > Why?

[Paints some more…]

But they all have good jobs?> Debt? > Maybe > Spending Patterns? > Spending versus Earning?

Yes now there’s an insight!

Everyone wants more. Nicer car. Bigger house. Cooler clothes. Better quality food. We’ve become conditioned to consumerism as being “The Western Way”. Everyone has ambitions, and generally gets a good annual salary increase. But so does everyone else. So the revenue stream increases annually, But so do the costs. At a minimum of CPI plus the “rate of perceived exclusivity” for all the fancy goods and gear.

So then what could be the “financial differentiator” between you and your peer? What gets your bank balance ticking and thus opening the doors of opportunity to:

  • Make more money off the initial capital
  • Spend it

The next logical influence on this topic is the compounding of money.  The more money you have the younger you are – the better your potential for significant financial freedom later in life (should you put it to good use and compound it – not blow it on material crap). In marrying the two concepts together, what I get out of it is the need to increase your earnings early in life – albeit that you’re a novice at whatever you do.

This got me thinking about how much of a person’s day is dedicated to being financially proactive – how many hours in your day are billable? The 8 that you spend sitting at your desk? What about the odd two or three after hours? If you can do this early in life, the cash remuneration can be put into assets that work while you play – houses, shares, equity in companies.

So I’ll put the question out there – how much of your day are you billing? And if it’s only those hours whilst in employment – best you trim back on those plans for a rosy future of excess.

Why South Africa needs entrepreneurs

Last week I attended a number of seminars with a focus on the South African economy and the future that it holds.  These particularly addressed the changes we might expect to see – and how the bright people can position themselves in such a way as to benefit from these changes on the business playing field.

It is evident that a shift in power is taking place from the West to the East. The expected GDP growth rates for China, India, Japan and other eastern economies over the next five years are expected to be between 6 and 8% pa, which by 2015 will have the East generating $7 trillion to the rest of the world’s $6 trillion. America will sit with a continent full of goods “Made in China” while it’s cash has been wired across the Pacific to the East.

To sustain the growth in the East, raw materials are key. And that is where South Africa comes into play. We are the continent’s biggest national GDP generator, and have the infrastructure and business environment in place to facilitate trade into the rest of Africa.

China et al’s economic clout and desire for resources will not ensure that growth happens as organically as we have seen it happen in the past. A mine or smelter will not simply be developed and put into production. If necessary, a direct road or railway to a new port will be built, with little inclusion of the SA government. So herein lies opportunity number one – own the resources, facilitate the transacting, or manage the logistics of resources – and you will do well. We cannot think generically in this regard about what has been the “Western” status quo in this regard.

The other problem faced by most governments is that they have bailed out a lot of companies operating in those territories. Government debt is a massive burden – and have very few ways of being bailed out. In South Africa, our own Government has run up a considerable level of debt with significant infrastructure spend in preparation for the World Cup. It now doesn’t have the means to stimulate the economy by creating positions for workers and reducing unemployment.

Opportunity number 2 is having the strategies in place to stimulate the private sector to grow, and get entrepreneurs to create new enterprises (servicing Eastern investment into Africa) and thus create jobs.

What will these companies offer? How will they come into being? Who will seed investment into assisting them grow? If the entrepreneurs can answer these questions, South Africa can prosper. Significantly.

What do you think?

The problem with flying

So haven’t posted in a little while as the last two months have blurred into a quasi-one-week overload. But I am due to get on a plane in a few hours and fly to Cape Town to do the Argus and “live the dream of the Cape Town euphoria” for a long weekend.  Got me thinking about the fear of flying.

So I qualified as an aeronautical engineer from TUKS. Fluid and air dynamics and mechanics, drag, lift and thrust make great sense to me. Flexure in a plane’s aluminium wings, control systems, failure modes and the implications of weather – although they “feel” scary – are really safe. Flying for me is a highlight. I know that an accident will only happen as a result of a combination of many sequential faults, not one big BANG. Saying that, I’ll bet my pension on the fact that I die in a plane. But I’ll die laughing – I guess.

But some people and their behaviour on a plane downright freak you out. Hyperventilating, squirming and screeching. I mean really. If you think you’re going to die, why not laugh it off. Put your head in your lap as the safety guide suggests, and just kiss your arse goodbye. But don’t bother me watching my quirky in-flight video clips.

But that is just me – what about all of you? Do you hate flying? Get some sweaty palms? Think of happy Labradors running in open fields as your aircraft loses touch with terra firma?

But I must tell you – there is one fear I have. And that is MEGA SHARK. That would be the only reason I’d have to open my sphincters mid-flight and give up on life. Check this one out!

Click on the image to make it bigger and read about Mega Shark!

The key to starting a successful business in South Africa – shared

Normally I spend Mondays investigating some of the things I’ve thought about over the weekend – work and personally related.  This last Monday I did a few searches for what I was looking for and sent off some email inquiries and made a few phone calls. They ranged from looking at internal microblogging platforms which I’m working on at work, to some fittings for the new house – even a mail to Mercedes Benz to inquire about their rentals. Solar Geysers, wooden flooring, Microsoft SharePoint training, software for 1400 users – to name a few.

So rather than being quickly replied to, so that their sales team could get in touch to close a deal – I actually have to forcefully persuade people to do business with me – does the customer have to remind the service provider to follow up on their order or product?  It’s Wednesday morning, and I haven’t had a single call or email back from the 12 odd I sent/called, except one.

So if you want to be successful in South Africa as a small business owner, all you have to do is act the least bit interested in your potential customers. Although there might be competing companies out there, it is not exactly hard to win customers away.

Recession? Tough economic times? Sure. Get off your arse, call your leads back and you’ll make a mint.

By the way – Lindsay Saker Hyde Park must be commended on their exceptional service. My turbo gave me some hassles on Monday night – I was able to book it in the next morning. Julian, the service consultant called back to say the vacuum pipes had holes in them, and he’d replace them. Picking up the car yesterday, he’d done it for free, given my car a great clean, and some tips on how to extend the lifetime on the turbo.

Grant Thornton predicts the World Cup will bring in R55bn over 2 months to our economy. That’s 2.5% of our GDP. If you want a piece of this – or just make a few bucks off another South African, please, lift your game!

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2009 – The Year of the Pretender | The Banker

Last year I went to Premier Personnel to try and make a quick buck off of the placing of students that finish up their studies and their jobs at Penguin Tutoring at the agency – in essence trying to “sell the recruitment agency a dose of their own medicine”. The MD and senior manager obviously thought I was mad, but Theo asked a few more questions about my background.  A mechanical-engineer-who-makes-heart-valves-now-runs-a-tutoring-company. Nice. How about we turn you into a banker? Hell, now there’s a twist.

So I applied for this awesome position at RMB. And the brochure-ware makes you think that these guys look like they own the A game! I put together an “out-of-the-ordinary” CV by mashing up my character traits with an engineering design. It secured an interview.  Armed with a suit but no clue as to what RMB actually did, I went to the interview.  Clinically impressive building. I always wondered who owned the third tallest building in Sandton.  You can all now wonder how it looks inside..

The interview was the first of four, each of which involved at least 8 senior people asking some tough questions. I even got asked what my net present value was.  I was impressed by the fact that they didn’t worry if you had no experience in banking, or knew what a credit committee was. Or even that IBD stood for “Investment Banking Division”. All they wanted to see was that you were the most willing to learn new things, and that you fitted into the dynamic culture of the fast paced and aggressively challenging financial world with the holistic balance of what RMBers strive to be. It helps that you think things through slightly differently.

So having worked here for just over 2 months now, I have to admit that it blows my mind how important necessary it is for you to work with clever people.  Most employers employ the cheapest staff they can to “keep the overheads in check”. It becomes a mess. Stupidity runs amock. Systems fail. Panic reigns.  In here, every person has been picked out because they have potential and add massive value to daily operations.  This, in turn, attracts the smartest clients, who funnily enough, have all this sensibility money to invest. And the wheel begins to turn.

Last week I had breakfast on the 18th floor with a view for miles, with delicious pastries, scrambled egg and those little fried and crumbed potato rolls. Thick carpet underfoot and business ideas bouncing around the room – could quite easily have been a five star hotel.

So I’m working on being a banker.  One day I’ll be a “corporate-finance-transactor” or a “debt-capital-markets-specialist” or “subject-matter-expert”.  But for now I’ll be the newbie.  And I love it.

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Why it’s sad that people think Avatar is such a great film

I went to watch Avatar in 3D last night. It’s a pretty long movie, and the sensory experience is unlike anything I’ve experienced before.  It had my brain working so intensely that I couldn’t fall asleep until 3am this morning.  The 3D affects are brilliant, and I can’t wait for the day ordinary television is transmitted in such a way.  I felt the story line was a bit standard-issue though.  Brash Americans want a commodity – they want to use force – some guy has a track on the inside for the troopers – a love story unfolds – things get nasty. Epic fight – key characters die; happiness returns; the end.

What worries me though, is the underlying story of escapism that our youth are subjected to, and play out in the imaginary world, because they can’t have normal lives – in the real world today. The story takes place on Pandora, an earth like planet with huge forests, floating islands and inhabited by freaky wildlife.  Glow in the dark plants, pet pterdactyls and six legged horses, to name a few.  Its very symbolic of the worlds kids (and adults) immerse themselves in through computer games. They can design how attractive they look, what they wear, what they say, and how they choose to behave.  All in an effort to juxtapose the set backs of the real world.  Either because they cant or wont go outside and ride a bike, or climb a tree or chat up a girl or be brave enough to be who they feel comfortable being.

Consumerism breeds consumer sadness.  No matter how much “stuff” you’ve got – it’s not going to make you happy.  But at the same time, neither is escaping the facts that you’re overweight and unpleasant because you binge eat KFC – by living in a superficial computer-based world.  There are far more good people out there than bad.  Far more friendly and insightful than sinful and useless.  But all these good people have an unwarranted fear of violence, or hate speech, or public humiliation – or something, and then don’t just go be happy.

I recommend you watch Avatar. But then while your mind tries to bend its way around the technological sensory overload you will suffer, think about your real world – the one you wake up to each day. Start putting things from your imaginary world in the real one, and share them with your buddy.

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My Stock Picks of 2010

Through the unsettling times of the credit crunch, huge opportunities opened up on the local stock market.  The problem was that most investors were so burned by the downturn that that wouldn’t consider getting back in after March 2009. But before most could clear their eyes, the JSE was up 26%, mostly influenced by net international investors purchasing R75.4bn of shares in 2009.  One might feel that getting into the market now would be chasing the bull market a bit..

My picks for the year are as follows:

Archelor Mittal. I feel that as China has to support restocking of depleted reserves, and industries start to pick up – particularly the manufacturing, and later in 2010 the automobile industry, steel prices are set to rise.  I’m buying at R105.00 and planning on selling at R150 in June/July.

Exxaro Resources.  Eskom has recently secured loans abroad to get out of jail. I feel the pressure of a recovering economy will demand higher electricity generation, and the initiation of sales to Medupi Power station to come in as a strong revenue after June 2010.  Holding stock from R81.00. Planning on selling in August at R150 odd. Today it is R110.00.

Metorex.  Recently Metorex announced the selling out of their Copper hedge.  Although carrying a huge amount of debt on their balance sheet, should China remain on track to grow at 8%, the demand for electronics to increase, and the copper price to strengthen, I think the share has legs to R10.00 in November. I’m already in the share, but you can buy it for R5.30 today. Risk associated is the DRC political environment.

Firstrand.  The risk adverse investors are diving into Standard Bank. With their ties to China and centralised model, they will do well.  I think Firstrand, which is slightly more entrepreneurially focused, has a great range of opportunities though.  It might sell out of Momentum or Outsurance, and rationalise its product offering.  Corridor investing from India and China into Africa will help the group to make profits off a low base after a shocker two years. I also happen to work here and am impressed every day by the intellect and savvy insight that the employees have into opportunities. Buy in today at R19.00, sell in September for R26.00.

Bidvest. This company already shows fantastic internal diversifation across the services, financial and international industries.  Offshore industries account for 40% of revenue, mostly in the catering and food services industry, and these will recover throughout the year. Services to 2010 World Cup and the possibility of acquisitions make this a good opportunity stock for me.  But at R128.00 Hold through until December for a hopeful R190.00.

Summary is thus:

Equity Buy Price Sell Price Sell Date
Archelor Mittal 105.00 150.00 June
Exxaro 110.00 150.00 August
Metorex 5.30 10.00 November
Firstrand 19.00 26.00 September
Bidvest 128.00 190.00 December

And for a bit of high risk fun stuff, I might long some Berkshire Hathaway and Google Single Stock Futures. Dont know if you knew you could trade these on the SA Futures Exchange. But you can.  And you can buy your wife Louis Vuitton SSFs, instead of the handbag..Maybe..

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2009 – Year of the Pretender | The web specialist

Everyone these days is a web specialist, SEO fundi, PPC authorised individual and Blog advisor. And so was I.  Having taken the reign from David who was handling I took over his clients and continued to do web development work, SEO and PPC campaign management.  Website development is slightly harder than people expect.  Visually, graphics have to meet customer expectations. Technically, code has to perform functions that clients don’t understand or appreciate. SEO has to present. Timelines have to be met.  Ongoing changes don’t stop.  Far more work that what gets charged for. However, more lessons were learnt. By having an ear to the ground, one could try and handle the ever evolving digital space. Blogs, articles, digital magazines and forums provided a wealth of information about a particular subject.  Through dealing with customers, I learnt that communication is key. When they are asking questions, if you’re not answering, they’re losing faith. Also, to become a big success in this space, one needs a diverse team of specialists.

On a personal note. it’s never a good thing to let people you know a little bit about computers. Small favours lead into family and friends asking “You know I’ve always had this business idea.  It involves the web.  Could you just maybe…” Here’s a great depiction of why its better to pretend you know anything about online web SEO design computers.

I am however very excited about this space, and 2010 is bound to deliver some pretty cool solutions for business, personal and social advancement.  The key will be to have adoption within bigger organisations happen before the-next-big-thing arrives.  Not 100% sure I’d like to be a web design specialist though.  Here’s another great Oatmeal description of how most projects go when you’re doing a website development.

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2009 – Year of the Pretender | The office admin

Late last year I entered Penguin Tutoring in the SAP Go-for-Growth competition.  We were finalists, and qualified to receive a 90% subsidy on a year’s consultancy and best business practice methodology training, to position the company for optimal growth.  This, together with seeing the potential upside the company could reach, made me take on a position of the general manager/managing director/receptionist/filing assistant/stamp licker.  In considering running a small company, one might think of all the niceties – sleeping in, working from home, not working when you don’t feel like it. I must say that the freedom to make your own decisions and follow these through with a reasonable amount of agility is possibly the best return for running your own business.  It does become all encompassing, though. 18 hour days and not having the security of a salary makes 18 hours seem like far too short!

I interviewed and trained new tutors, flew to Cape Town and Durban to set up new operational areas, and employed people to run these areas. Advertising and marketing functions, and skills development in Fireworks and Coda evolved. SAP consultants taught us about supplier management, the risks of growth and how to strike a balance in running the “optimal company”. In light of the global credit situation, parents were hard pressed to part with their money and pay up for lessons. By the 15th of the month I’d have the sweat in anxiety about not being able to pay salaries on the 25th if the cash flow didn’t improve.  I’d even skimp paying a student R100 to hand out flyers, and rather do it myself on the Wits and UJ campus.  You rarely see this kind of thinking done by employees, though, who are all to happy to spend money, and be unconcerned where their salaries are coming from.

We rented office space at Regus in Parktown – a phenomenal service where you have access to a business lounge, interviewing and office space as you need. People take you more seriously, I learnt, the more money you’ve spent (or have been perceived to have spent) on your business environment.  This made us appear to be a lot more credible as a service provider. Irrespective of how credible we were running the company from a converted garage..

The salesman hat came in handy.  Every transaction, whether financially, verbally or logistically, now included an element of sales and negotiation.  And as a small company, trading non-financial terms becomes most worthwhile. Whether I’d give people exposure through advertising, referral or a skillset I now possessed, I weathered my way through the beginning of the year.

Efforts were fruitful, and the company opened up new branches in Cape Town, Winelands, Pietermaritzburg, Durban, Port Elizabeth and continued to grow in Pretoria and Johannesburg.  On the Silver Apple side, we launched Careers for Moms, Liz at Lancaster, Kexin, Green Power House and a few others.

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2009 – The Year of the Pretender | The Salesman

The year started out with sleepless nights. Not due to worry, but rather, excessive heat.  Having moved back to Johannesburg after 7 strong years in Pretoria, I took residence in what used to be the garage at my parents’ house.  Bloody hot. Mosquitoes. Hadedas from 4am. This frustration was tempered with the value of returning to live back at home.  Hot and delicious dinners, a full time Roz, DSTV, time with the family, and all the luxuries afforded by family life.  It did take some adjustment, having spent many years of student and digs life only really looking out for yourself, but a super indulgence to be home.  Over the course of the year I played out a host of different roles to get to where the year is now.  The next couple of posts will form part of the #pretender series – a history of 2009.

The salesman
I had quit at Meltwater News at the end of December, after three horrid months of telesales and “Business consulting” which resulted in me not even selling a single product.  Big blow to the morale, but a number of lessons learnt. I learnt that life is all about sales. Whether you’re selling yourself to a potential girlfriend, employer, trying to tame a rabid dog, or negotiating a business deal, car sale, or even a contrast of opinion round the braai, it all comes down to understanding your customer. Listen to what they want, try and understand what value you can establish as an offering, and close them on terms that have a set window of opportunity. If it involves anything of decent proportions, have a record written down.  Often, to my amazement, the value of a correctly executed sale was worth more than the product itself.

I also realised that you cant get anything done unless you speak to the person who calls the shots. Speak to the top brass if you’d like something done. Earn some credibility with their gatekeepers so that your next approach is easier. So my start to the year saw me wearing The Salesman’s hat. A bittersweet short exposure making me realise I’m a crappy salesman. But I could book the experience to school fees – the fundamentals could come in handy somewhere.  Some people totally hated the Meltwater environment, like those who listed on this Antimeltwater blog, but I enjoyed the experience, even though it created a blot on my CV.

Still to come – The office administrator, The academic; The boyfriend; The traveller; The banker; The automotive specialist; The failure. Stay tuned!

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