Learn, learn, and learn some more…

I fully believe in the principle of continuous learning. This is where a person chooses to actively learn something that is not necessarily prescribed to them to do so by their boss, teacher, mentor, etc. They find something that interests them, or something that could help them in some way, and take the time and effort to study it – taking what they learn on board in their everyday lives.

When the subject of learning comes up, many people I meet feel that they’ve done all the learning they need to. “I did well at school” they say, or “I’ve paid my dues at university”; and they have no intention of taking any more courses ever again. I can’t help but feel that they are really limiting themselves by having that mindset. The way I see it is: Learning is growing, and if you’re not growing, you’re dying. There is so much to this wonderful world of ours – how could you not want to find out as much as you can?

And it’s not only to cure your inquisitiveness that I prescribe ongoing learning, either. Learning more, and having an open mind, makes you a better friend, a better parent, a better employee – just a well-rounded person in general. Think about it: If your kid one day asks you about how electricity works, would you not rather be able to give them some form of educated answer, rather than “Uhhhh, I don’t really know…”? Or if two people are applying for the same position at some company: They’re the same age, have the same qualifications, have the same experience, but one happens to have done a course in marketing, or speaks an extra language. Who do you think they’re gonna hire?

I’ve practiced this principle for most of my teenage and adult life, and I feel it’s made me a much more balanced individual. Having studied seemingly random courses, and having seen things from the viewpoint of industries I previously knew very little about, has opened up my mind to the world of possibilities out there, and given me a much wider perspective on almost everything. Knowing a little about many industries or topics allows you to see the common threads that run between them, and perhaps even spot opportunities for them to combine and collaborate, creating a whole new industry or area rich with possibility (and potentially profit!).

Right now, I’m 25 years old, and here’s a summary of what I have studied “officially”:

• At age 16, while still in high school, I qualified as a cocktail bartender. Not even old enough to work behind the bar, on the surface I learnt how to combine flavours and alcohol to make a killer cocktail. Over and above that, though, I learnt about stock control, up-selling, reading patrons, crowd control, and the nightlife industry in general.
• After finishing high school, I did a degree in Accounting at university. Not only did this teach me about the technicality and processes of being a good accountant, but I also learnt about the different inter-dependent parts and functions of a business (like marketing, operations, staffing, cost control, growth) as well as the business world in general (finance, economics, statistics, valuations).
• Not content to just learn about business, I took French and Spanish as extra subjects while at university. I haven’t been able to use them as much as I’d like to have, but they’ve exposed me to the culture and lifestyle of these fascinating people (and never fail to impress women!).
• Also while at university, I passed the Estate Agents Board Exam, and became a certified estate agent. Again, this was about more than learning to sell houses – it taught me about the housing market cycles, property types, housing legislation, how home-owners can get caught out, how to nail down a bargain, developers methods, and much more.
• After finishing my undergraduate degree, I decided to take a year off from studying and focus on growing my limousine business. Two months out of university and the environment of learning, I started to get fidgety. So I registered to do a Paralegal Diploma through a private college. The course was part-time, so I was able to spend time on my business, and it really opened my eyes to the legal side of the world. I learnt about criminal law; civil law; what happens to your assets when you die; contract law; the legal system; and plenty more.
• Deciding that I needed a bit more than an undergraduate degree to pass muster in the cut-and-thrust corporate world, I then did my Honours degree in Taxation over the next two years. While this obviously taught me the nitty-gritty of our tax system, I also learnt about how to read and decipher legal judgements and legislation, as this was the essence of the course material. It was fantastic, as I went in a number-focused accountant, and came out thinking like a sharp-minded lawyer. Being extremely demanding, this course was also an exercise in time management – we were expected to put in a couple of hours of study every day, while we all had full-time jobs or businesses to run! It also made me raise my game in terms of the people I associated with – I was the youngest member of the class by a good few years, and it introduced me to a brilliant network of professionals and business owners.
• This year, I have just finished a certificate in Guest House Management (through www.getsmarter.co.za – a great learning provider, check them out). Well over and above what the title suggests, it has given me amazing insights into the travel and tourism industry in general, which will be priceless for the future!

And it doesn’t stop there! As I’m looking at opening a coaching and business advisory practice later this year, I’ve just started a life-coaching course. Not only will this give me the knowledge and tools to help others and run a successful practice, but I’m also applying the principles inwards, and learning an absolute ton about myself in the process.

Having read this, don’t feel that you have to run out there and sign up for your nearest university course, either. There are many other ways to broaden your mind: pick up a book or two on a topic that interests you; read a newspaper; follow blogs about your particular industry; ask questions of people you admire. There’s so much to learn out there, just pick a topic, and get going. One day you’ll look back, and be glad you did!

Finance Coach - Vol. 28

Finance tip: Assets

Buy appreciating assets. Many of the more expensive, or big-ticket, items that we purchase lose their value over time. This is known as depreciation, and your car is generally a good example. Many people view their car as an asset, but fail to realize how much value it actually loses over time. As a general rule, a car will lose 20% of its value in a year (this number is higher for certain makes, and lower for others). A good financial habit, though – especially when buying big-ticket or luxury items – is to aim for assets that appreciate in value. Essentially, this means that you should aim to own assets that will increase in value over time. As this is not always possible, a close second is to have assets that at least hold their value well and do not depreciate much or at all. There are certain assets or luxury items that are generally regarded as having a good chance of holding or increasing in value: Boats; planes; art (especially if by a recognised artist); collectors items; antiques; etc. The application of this principle in everyday life would be when looking at buying a car, for example. If you are simply needing a vehicle as a run-around, rather look at one that has lost most of its value already – it’s value should remain fairly static, and you will not lose much when it comes time to sell it on. If you are looking at buying a vehicle as a reward for years of hard work, though, consider looking at buying a classic car instead of a brand new one. You could find one going for a steal, spend a little restoring it, and then be the proud owner of a collectors item that’s in hot demand, and appreciates in value every year. Or if you’re doing some re-decorating at home, rather than wasting money on decorative knick-knacks, look at buying a few choice pieces of art by up-and-coming artists. If the artist is only just starting out, you could get them for almost nothing and, if they start to grow a following in the art community, you could have your hands on some valuable pieces in a few year’s time…

Business tip: Staff

This week’s Finance Tip was a bit lengthy, so I’ll keep this one short! Think carefully about how you refer to your employees. When you’re talking to people about your business, how you refer to your employees can make a big difference. Using the word ‘employees’ can give the impression that you are somewhat autocratic or condescending. Rather use words such as ‘colleagues’ or ‘associates’. These are both fair reflections of your relationships with your staff, and shows that you value and appreciate their contributions to the business…

Finance Coach - Vol. 27

Finance tip: Debt

Speak to you creditors. For most people, when they owe someone money, they try their hardest to avoid contact with them. They ignore their calls, don’t reply to messages, delete their emails, etc. If you owe people or institutions money, and are having trouble meeting your payments, don’t go down this road. Pick up the phone and call them. If you explain your situation, and make it clear that they will be paid, and that it’s just a matter of when, they will feel more at ease. Alternatively, offer to pay a smaller amount, just so that they can see the debt is being reduced somewhat. What lenders want to know is that they will get their money back, and it’s only when they’re ignored that they start to get aggressive. Also, these days, everything is negotiable. So speak to your bank about dropping your interest rate slightly, or chat to the stores that you have outstanding accounts with about reducing your finance charges. You may get stonewalled, but the chances are good that they will give you a break of some kind, especially if you make it clear that you do fully intend to pay off the debt…

Business tip: Strategy

Plan for a worst case scenario, before it happens. Most business owners would like to think that their businesses will carry on functioning as long as they want them to, and don’t like to dwell on what would happen if disaster were to strike. Planning for a worst case scenario, however, is an exercise that all businesses should go through. What would happen if you or one of your key employees were to die unexpectedly? Is the succession plan clearly laid out? Are your operating systems written down so that someone could step into the breach and take over? What if your premises were hit by extreme weather? Is your insurance up to date? Or what would happen if you were to lose your biggest customers? How would you go about replacing them? These are just some of the questions you should ask. Each business is different, and is exposed to risks of different types, so these questions will vary. But they are necessary questions to ask – and they should be asked now, before disaster strikes. This way, if something terrible were to happen, you would already have a plan in place. You would be better prepared to deal with the blow, and would stand a much better chance of recovering from it…

Yours in finance,

Gareth Cotten

Making money at the movies...

I recently saw a small article on our local newspaper, about a website called RunPee. Essentially, what the site revolves around is providing information about the best time to go run and pee during a movie at the cinema, to ensure that you miss as little as possible of the film. I think it's great, cos we all tend to overdo it on the Coke at the movies, don't we? And then not only do you miss some of the film, but you've gotta bug the people you're with, to find out what you missed! Check the site out at www.runpee.com...

Seeing this, though, triggered thoughts about the cinema business in general. A cinema's business model is an interesting one: They don't make a lot of money off of the actual ticket sales - most of their profit comes from selling you snacks and drinks at huge margins. As many big cinema chains have been struggling somewhat recently (with the advent of everybody just downloading the movie, or copying it from friends), they've been looking for other ways to boost their profits.

Apparently one of the front-running ideas is to bring back intervals for every movie, and not just the 3-hour epics. The rationale behind this is that it then gives them a second shot to sell you something to chow on, over and above the pre-movie rush. Just think about it: How many times have you been running late, and skipped the popcorn to catch the start of the movie? I know I have, plenty of times!

The last movie with an interval that I saw was Titanic, waaaaay back in the day. Now it makes sense why it was given such a long run (here in SA, it probably stayed on the circuit three times as long as any other movie) - not only would youngsters come and watch it again and again, but they'd have two lots of snack-buying in one movie!

And, out of interest, when I say big profit margins on snacks, I mean beeeeeeeeg margins. Apparently, in some cinema chains around the world, the margin on popcorn is 1000 percent - now that's what I call profit!

Finance Coach - Vol. 26

Finance tip: Income

How to ask for a raise. Getting a raise at work is no longer a given, especially in these new economic times, so how you approach the topic with your bosses becomes all the more important. Firstly, you need to showcase your value to the company, so show them what you have achieved recently – this could be a reminder of a project that went off perfectly, or very positive feedback from clients about your work. Secondly, explain why you feel you are worthy of getting a bump up in salary – you have taken some of the workload off of your immediate superior, for example, or feel you are ready to take on some more responsibilities. Thirdly, be prepared to actually have more of these afore-mentioned responsibilities put onto your shoulders. Companies these days often feel that raises are not automatic, and must be linked to an increased scope of work – so don’t think you can talk up what you’re prepared to take on, and then just pass it on at crunch-time. And finally, timing is everything. Try and wait until there is some good news to preface your request for an increase – this could be the release of better-than-expected company results, or the fact that you’ve just landed a new client. Also remember that the person you’re pitching to is human, and will have good moods and bad moods – there’s not much point in approaching your boss if he’s still fuming from a screaming match on the phone with his wife!

Business tip: Marketing

Always remember to have a ‘call to action’ in your advertising. The final part of any piece of effective advertising material is a call to action – where you want the potential client to act on what they’ve seen and take some form of immediate action. This could be a prompt to pick up the phone and call you now, to visit your website to take advantage of a special offer, or to email you for further information. The public (and thus your particular target market) is so bombarded with media and messages every second of the day that, if you don’t get them to act immediately, your message could be lost and forgotten. Also ensure that they have as many ways to contact you as possible – not everyone uses a computer, for example, so even if your preferred form of contact is email, have a phone number displayed as well. And make sure that your contact details are clearly visible – there’s no point in having a roadside billboard asking people to call you, but your number is printed in a font that’s impossible to read from a moving car…