Finance Coach - Vol. 10

Here's a copy of the latest message from my Facebook Group - "Finance Coach (by Gareth Cotten)"...

Finance tip: Investing

Aim for real returns. When you invest money in a savings or investment account, the money that you make on your initial input (or capital) is known as the return. While most savings accounts will give you a return, and grow your money, you need to make sure that it’s a real return. You are getting a real return when the return is higher than the current rate of inflation. Inflation is the general price by which goods increase over a period and, because of it, your money is worth less in the future than it is today (because prices will generally increase over time, and you can thus buy less with the same amount of money). So, when measuring investment or savings opportunities, always aim to put your money in something where the return offered is higher than the inflation rate (which is roughly 11% in SA at the moment). If it’s not higher than the inflation rate, you may be earning interest, but you are theoretically losing money, due to the effects of inflation.

Business tip: Marketing

Have an ‘elevator pitch’. Whether you’re wanting to explain what you do, get potential investors involved in raising funds for growth, or just tell others about your business, create and perfect an elevator pitch. This is a short explanation which summarises the most important facets of your business into something no longer than 8-10 seconds. The name comes from business people who have pitched their ideas or businesses to others while traveling in an elevator – they only had a few seconds of the other person’s attention, and needed to get across a decent general idea, which would inspire the other person to want to find out more. Make sure that the pitch/summary is not too technical, but still gives the impression that you know what you are talking about. Also try to convey your passion in the short clip, as this will register with the listener more than facts and figures. Try it out on family, friends and colleagues, and ask them to give you an honest appraisal of whether they would get a good enough idea from just that short pitch if they’d never heard of you before.