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Business | Property | Shares | Alternative Investments | Entrepreneur

GROW RICH

FEBRUARY / MARCH 2012 $9.95 inc GST

JAMES MURDOCH can he take over News Ltd?page 78

PHIL STAUB the king of customer servicepage 82

NAPOLEON HILL science of success page 86

SINGO:SPECIAL FEATUREthe social media revolution: a brave new worldpage 18

BEHIND THE PLAYER

2

CLIENT: Maserati job NumbEr: MAS0806 KEY NumbEr: BWMMAS0806 CAPTIoN: A more beautiful form ProDuCEr: Jade

TrIm SIZE: 297H x 440W TYPESAFE ArEA: 267H x 370W CoLourS: Process ImAGES oK: Yes INK WEIGHT: 300???

PubLICATIoN: Think & Grow Rich WArNINGS / oTHEr INFo:

V8 4691 CC ENGINE – MAXIMUM POWER OUTPUT: 450 BHP AT 7000 RPM – MAXIMUM TORQUE: 510 NM AT 4750 RPM MAXIMUM SPEED: 285 KM/H – COMBINED CYCLE CONSUMPTION: 14.5 L/100 KM* – CO2 EMISSIONS: 337 G/KM*

MASERATI GRANCABRIO SPORT

Mustering 450 horsepower under the bonnet, the new Maserati GranCabrio Sport announces its arrival

with a sound that resonates in your soul. With tighter, highly responsive suspension and handling, black

oval exhaust pipes, side spoilers, Astro rims and M-design seats, it will make you feel as good as it sounds.

SYDNEY 1300 708 906 | MELBOURNE 1300 971 677 | BRISBANE 1300 707 147 | PERth 1300 685 754 | ADELAIDE 1300 964 574

www.maserat i .com.au

Overseas model shown. *As per Australian Design Rule (ADR) 81/02.

A MORE BEAUtIfUL fORM Of POwER

MAS0806_GranCabrio_TGR_DPS_R2.indd 1 16/12/11 9:22 AM

CLIENT: Maserati job NumbEr: MAS0806 KEY NumbEr: BWMMAS0806 CAPTIoN: A more beautiful form ProDuCEr: Jade

TrIm SIZE: 297H x 440W TYPESAFE ArEA: 267H x 370W CoLourS: Process ImAGES oK: Yes INK WEIGHT: 300???

PubLICATIoN: Think & Grow Rich WArNINGS / oTHEr INFo:

V8 4691 CC ENGINE – MAXIMUM POWER OUTPUT: 450 BHP AT 7000 RPM – MAXIMUM TORQUE: 510 NM AT 4750 RPM MAXIMUM SPEED: 285 KM/H – COMBINED CYCLE CONSUMPTION: 14.5 L/100 KM* – CO2 EMISSIONS: 337 G/KM*

MASERATI GRANCABRIO SPORT

Mustering 450 horsepower under the bonnet, the new Maserati GranCabrio Sport announces its arrival

with a sound that resonates in your soul. With tighter, highly responsive suspension and handling, black

oval exhaust pipes, side spoilers, Astro rims and M-design seats, it will make you feel as good as it sounds.

SYDNEY 1300 708 906 | MELBOURNE 1300 971 677 | BRISBANE 1300 707 147 | PERth 1300 685 754 | ADELAIDE 1300 964 574

www.maserat i .com.au

Overseas model shown. *As per Australian Design Rule (ADR) 81/02.

A MORE BEAUtIfUL fORM Of POwER

MAS0806_GranCabrio_TGR_DPS_R2.indd 1 16/12/11 9:22 AM

4

REGULARS06 Editor’s Desk08 The Beat Up10 Take it and Like it11 Rules of Engagement12 Women in Business84 New Business86 The Science of Success108 The Investor’s Book Club 109 The Guv’nor110 The Web111 Law and Order112 Calendar of Events114 The Last Word

18 SPECIAL FEATURE • Brave new world

• Facebook has got it all wrong

• Facebook for business

• Using social media to invest

• Social media survival guide

CONTENTS

THE CORETo breathe life into Think & Grow Rich,

the first thing that was necessary was

to create a core that is engaging,

educational and entertaining. Within

The Core, our sub-sections come under

the banners of Mindset, Mentor, Case Study,

Health Check and Legal-Ease. Our motto

is ‘read today, action tomorrow’.

34 BUSINESS

• Taking a proactive approach

• Your 2012 guide to good business

• Recruitment in the 21st Century

44 PROPERTY • How most wealth is made

• Don’t wait to buy property, buy and wait

• How to avoid capital gains problems

54 SHARES

• Early signs of a change in market trend

• The pitfalls of media investment

• Punters vs. traders

62 ALTERNATIVE INVESTMENTS

• Lessons for the smart alternative investor

• Creating your income streams

• My island home

70 ENTREPRENEUR • You cannot hit a target, you cannot see

• The world needs women entrepreneurs

• Improve your cash flow without borrowing money

100

106

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96COVER STORY14 JOHN SINGLETON: BEHIND THE PLAYER

He is an Australian icon and advertising

legend, but there is much more to John

Singleton the businessman, than

meets the eye.

FEATURES

78 JAMES MURDOCH: WILL THE CROWN REMAIN BEYOND HIS GRASP? Touted the most likely to take over the

Murdoch empire, 2011 proved a tough

year for the youngest Murdoch. How

he comes out of it, will tell us what he is

really made of.

82 HOW CUSTOMER SERVICE BUILT AN EMPIRE Phil Staub is the man in charge of

General Pants Co. He says his success

is due to his ability to interact with

customers and staff.

88 FINANCIAL EDUCATION COMING TO A SCHOOL NEAR YOU While literacy lessons remain the most

important throughout the school years,

it is imperative that financial education

is also a top priority.

STATUS94 THE ROLE OF PR IN VIP HOLIDAYS Some celebrities want to hide, others

use social media to tweet just how

much of a good time they are having.

96 BOYS’ TOYS: THE DUTCH EXPRESS The VanDutch 40 is for those who like

their luxury a little on the wild side.

98 PRIVATE, FIRST CLASS What if you could purchase your own

part of Fiji and steal away for a luxury

resort holiday...

100 FASHIONISTA: NO SUBSTITUTE FOR GREAT DESIGN Porsche is known for more things than

just its cars.

106 TASTE: TOP OF THE CHOCS The world’s most expensive chocolate

is just a diamond away.

82

78

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Year 2012 promises a lot: resolutions to certain financial, political and business crises are at the forefront. With the events of 2011, having major global impact, it will be interesting to see how individuals, governments and businesses respond and how those responses affect constituents, employees and Joe Everyman.

In Australia, we have debated whether Kevin 07 would take out the knife and become Kevin 11 or 12. It didn’t happen. Interest rates rose, then interest rates backed off as global fears hit our shores. Treasurer Wayne Swan proved that a budget surplus is more important than economic stability – methinks he thinks the people are stupid. The Queen came and went and Princess Mary visited Broadmeadows in Melbourne’s west.

Unions went nuts, nurses, pilots, police officers, teachers crippled business. They all deserve a pay rise, but at whose expense do you achieve those aims: patients, commuters, students? The strikes proved that the Fair Work Act doesn’t work and governments need to be stronger.

Let’s take a quick look at some events that shaped 2011.

February 22–March 14 – Uncertainty over Libyan oil output causes crude oil prices to rise 20% over a two-week period following the Arab Spring, causing the 2011 energy crisis.

March 11 – A 9.1-magnitude earthquake and subsequent tsunami hit the east of Japan, killing 15,822 and leaving another 3,926 missing. Tsunami warnings are issued in 50 countries and territories. Emergencies are declared at four nuclear power plants affected by the quake. It was the single most frightening event of the year and sparked debate about the use of nuclear energy.

May 1 – US President Barack Obama announces that Osama bin Laden has been killed during an American military operation in Pakistan. Bin Laden’s death sparks outrage and joy in equal measure. Is his death a war crime or warranted?

May 16 – The European Union agree to $78 billion rescue deal for Portugal. The bailout loan will be equally split between the European Financial Stabilisation Mechanism, the European Financial Stability Facility, and the International Monetary Fund.

July 7 – The world’s first artificial organ transplant is achieved, using an artificial windpipe coated with stem cells. A win for stem cell research.

August 5 – NASA announces that its Mars Reconnaissance Orbiter captured photographic evidence of possible liquid water on Mars during warm seasons. Life on Mars, we all knew it.

September 17 – Occupy Wall St movement begins. A legitimate movement in the US, becomes a ridiculous movement in Australia, marred by fools in Sydney and Melbourne.

October 20 – Former Libyan leader Muammar Gaddafi is killed in Sirte, with National Transitional Council forces taking control of the city, and ending the war. Another debate rages about civil liberties and rules of engagement.

October 27 – After an emergency meeting in Brussels, the European Union announced an agreement to tackle the European sovereign debt crisis including a writedown of 50% of Greek bonds, a recapitalisation of European banks and an increase of the bailout fund of the European Financial Stability Facility totalling to $1 trillion. The crisis is still a threat to the global economy. Just when things seem to be resolved, another problem occurs. As we reported last issue, it is the single most significant economic event, possibly ever.

November 3 – Prime Minister George Papandreou calls off a referendum on Greece’s new debt deal with the eurozone just days after calling for one. Papandreou calls off the vote after winning support from his opposition.

November 4 – Papandreou wins a confidence vote in Greek Parliament after he pledges to form a unity government. The vote is a sign of approval for the deal reached by European leaders in late October to help Greece avoid default and stabilise the euro.

November 6 – Papandreou agrees to create a transitional administration which will manage the country’s debt-relief deal and to resign after the country holds early elections.

November 11 – Italy’s Senate passes another round of austerity measures. Italy has no other option with its economy too big for a bailout and no end in sight for its debt crisis.

November 12 – Silvio Berlusconi steps down. Mario Monti, an economist and former antitrust commissioner for the European Commission, takes over, leading a cabinet of technocrats to implement the austerity plan.

That was the year that was. What will 2012 have in store? Aside from world events, hopefully it will be one of success for you and your business. Here’s to the New Year, may it be a prosperous one for you.

Think & Grow Rich Inc. welcomes your letters, feedback, opinions, criticism and comments. These are all subject to editing and must include a name,address and phone number (not for publication).

Twitter: @TGRmagazineEmail: [email protected]

Issue Three: Feb/Mar 201221st Century Media Holdings LtdPhone: 1800 999 270 Web: www.tgrmagazine.com Facebook: www.facebook.com/tgrmagazine Twitter: twitter.com/TGRmagazine

Publishing Manager Tony Maughan

Editorial – Editors J2Media: Jonathan Jackson, Jonathan Green

Production & Design Manager Elisa Malfitana

Online Content and Social Media Manager Nerissa Symon

Sub-editor Dimi Kyriakou

Administration – Accounts / Distribution / Subscription Manager Kerry Gladman Email: [email protected] Subscription Email: [email protected]

Media Sales Consultants Anamika Chowdhury, Jarrod Wilson

Advertising Phone: 02 8404 2357 Email: [email protected]

Contributors Andrew Barnett, Andrew Baxter, Warren Black, Konrad Bobilak, Kim Fenton, Andrew Griffiths, Aneta Gorelik, Chris Hagglund, Nik Halik, Lou Harty, Sue Hirst, Garry Kewish, Fabe Kieley, Julian Mellick, Dennis McIntyre, Jamie McIntyre, Jodie Nolan, Penny Ombler, James Paterson, Alex Pirouz, Andrew Phillips, Aaron Sansoni, Mike Smith, David Solomon, Daniel Turk

Publisher:

ABN 26 140 795 777

CEO of 21st Century Group Jamie McIntyre

Head of 21st Century Media Tony Maughan

Written Correspondence to: Think & Grow Rich Inc. Magazine Level 9, 222 Kingsway, South Melbourne, 3205, Victoria, Australia

Email: [email protected] Phone: 1800 999 270 Fax: 03 8456 5973

Think & Grow Rich inc. magazine is licensed and endorsed by Napoleon Hill Australia

Copyright All material appearing Think & Grow Rich inc. Magazine is copyright. Reproduction in whole or in part is not permissable without the written permission of the publisher.

IMPORTANT NOTICEThink & Grow Rich Inc. magazine is distributed by Network Services. Think & Grow Rich Inc. magazine publishes articles and information about people who have successfully devised and applied strategies that have proven successful for them. All information contained in Think & Grow Rich Inc. magazine is intended to inform and illustrate and should not be taken as financial, real estate, legal or accounting advice. We do not endorse the views, statements, claims, strategies or ideas put forward by contributors to the magazine. We are merely relaying information.Any strategy in business or investment should only be applied after taking into consideration your own financial situation and objectives. Investing and business can be risky and you should seek independent professional advice before making any decisions. We are not liable for losses you may incur directly or indirectly as a result of reading Think & Grow Rich Inc. magazine.Think & Grow Rich Inc. magazine does not endorse any of the advertisers or their products that appear in this magazine, nor do we support any representations or claims they may make. Readers are encouraged to do their own appropriate due diligence when making a purchasing decision as a result of reading this magazine.Several individuals associated with advertisers in this edition of Think & Grow Rich Inc. magazine have also contributed articles. These articles have been published because they fit the theme of our magazine. These articles are not advertorials.Publication of these articles is not in any way dependent on their respective authors or organisations taking up advertising space in this magazine. Where an article or feature has been included in this magazine in return for fee, it is identified as an “Advertisement” or “Advertorial.”

WELCOME TO THE NEW YEAR

Editor’sdesk

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the

BEATup

HE SAID... “A business that makes nothing but money is a poor kind of business.” – Henry Ford

BENTLEY’S BEST Bentley Motors executives accepted Robb Report magazine’s prestigious ‘Best of the Best’ award for luxury sedans at the 2011 Los Angeles Auto Show.

The prominent ‘Best of the Best’ award was presented in front of Bentley’s new Mulsanne Executive Interior Concept, a multimedia connectivity concept that offers an impressive array of bespoke business, comfort and entertainment features.

The Mulsanne EIC is designed to allow customers to conduct business on the move or just unwind between meetings – all beautifully integrated into the sumptuous and comfortable cabin. Mulsanne rear passengers receive individual Apple iPad workstations with full internet access (integrated into retractable picnic tables) whilst a large, drop-down LED screen ensures that a wide selection of movies as well as television can also be enjoyed.

NUMBER CRUNCH 1 $4.2 million. The amount the Federal Government is putting into the development of Aurora Stadium in Tasmania. Our Prime Minister got off cheaply; she initially quoted $4.7 million before being corrected by a local councillor.

DID YOU KNOW... Steve Wozniak sold his HP calculator and Steve Jobs sold his Volkswagen van raising $1,300 to fund the launch of Apple.

THE DOMINO’S FALL In 1961, brothers James and Tom Monaghan purchased a pizza restaurant, DomiNick’s for just $500. After eight months as a partnership, James had enough pizza and sold his stake to his brother for an old VW Beetle. Tom went on to create the worldwide phenomenon, Domino’s. Thirty eighty years later, Tom sold 93% of his own stake, not for a VW but for $1 billion.

GO FOR GOLD Almost $12 trillion was wiped off the value of global equities since May, on mounting concern about slower global growth, driving investors to what are perceived as the safest assets. Yields on Treasuries fell to a near-record low and gold is heading for an 11th consecutive annual gain. Bullion beat every other member of the Standard & Poor’s GSCI gauge of 24 commodities this year except for gasoil. Bullion rose 19% to $1,690.30 an ounce this year on the Comex exchange in New York, and reached a record $1,923.70 in September.

FUN FACTS

The first owner of the Marlboro Company died of lung cancer.

Dell Computers was started by a 19-year-old with only $1,000.

The creator of the NIKE Swoosh symbol was paid only $35 for the design.

Steve Jobs’ annual salary was $1, just enough to keep company health benefits.

All three founders of Apple worked at Atari before forming Apple.

8

9

SHE SAID... “Learn everything you can, anytime you can, from anyone you can – there will always come a time when you will be grateful you did.” – Sarah Caldwell.

NUMBER CRUNCH 2 According to checkfacebook.com there are 10,475,340 Facebook users in Australia making up 1.45% of the total Facebook population.

US INVESTMENT FEARS A poll taken by Investment News, a US site dedicated to investments in the country, found that fund managers and their clients are running scared for several reasons. The biggest fear is a lack of fund moving into retirement. With constant bad news emerging from media sources about the credit crisis, investors have little faith in seeing large returns to fund their retirements.

The European crisis is also playing on fears. It is not just a case of what happens in Europe stays in Europe. What happens in Europe has worldwide ramifications over market volatility. Thomas Reynolds, co-managing director at CRA Financial Services LLC, said his main concern is the European debt crisis.

“I really do not see an orderly unwinding there,” he said. “In the end, all of the European Union countries are worried about their own problems and really don’t want to support the union.”

Mr. Reynolds’ co-managing director, his brother Matthew, said they are concerned about Europe slipping into recession. “The question is whether or not the US can avoid being pulled into that,” Thomas Reynolds said.

Finally, the US is heading towards an uncertain election. Should President Obama be re-elected, he will move ahead with policies that slow the economy and create bigger government. Then there’s the question of Medicare and the abolition of it, which will increase costs and burden, not decrease it.

There’s a lot for investors to think about and these problems are not only US specific. It may be time to have a word with your fund manager.

NEW YEAR’S RESOLUTIONS

Now that you are back at work, you are probably working on your business plans for the year: what do you want to achieve and how will you go about doing that?

Here are six tips to help you start off the year on a successful note:

1. Review your business performance. An honest review of the business over the past year can show what worked well and what didn’t. Learn from mistakes and successes.

2. Commit to being more organised in the New Year so that time is not wasted

looking for things you need and to improve workflow.

3. Back up your business records to guard against a potential devastating impact on your business.

4. Commit to good cash flow management. Develop strategies to consider alternative methods of funding, which can guarantee your business has a flexible and ongoing supply of working capital, enabling you to put your business plans into action.

5. Commit to creating an environment that encourages the professional development of your staff.

6. Clear your computer. Delete all spam and junk emails that you do not need. Act on any urgent messages and organise the rest in appropriate files.

10

OPINION

N ot a day goes by when former Prime Minister Kevin Rudd isn’t said to be re-challenging for Party

leadership; clearly the knife that current PM, Julia Gillard thrust into his back wasn’t thrust deeply enough. Perhaps that’s why we saw Ms Gillard on Junior MasterChef in 2011; was she taking slice and dice lessons from George Calombaris and Matt Moran, or was she following in her predecessor’s footsteps, just trying to get her head on television.

No matter what the current government achieves, the shadow of our Foreign Minister hangs like a pall over the Party’s coffin in waiting.

In December last year, the Sydney Morning Herald obtained a secret Labor Party report accusing the Rudd-led government of being directionless and driven by spin. The report goes on to say that the Foreign Minister was behind the leaks that could have destroyed Julia Gillard’s election campaign.

THE REPORT SAYS:

“Throughout this period there were 1900 press releases, however unlike with the earlier periods of government, there were no iconic issues for the public to latch on to.

‘’Ministers would make announcements and then move on to something

different very quickly. In this context, the government was beginning to be seen by a portion of the population as lacking a core purpose and being driven by spin.’’

The ALP National Conference inflamed tensions between the two, when the Prime Minister failed to acknowledge Kevin Rudd’s time or achievements in the top post. His main achievement being the amount of time he spent on Rove.

Clearly Kevin 07 wants his job back. He won’t get it, despite ongoing rumours of a leadership challenge in 2012.

Labor must ask him politely to leave, or force a by-election, because Kevin 12 won’t back down. He is not content with taking the focus away from the current Prime Minister’s achievements (as little as there are); he wants his position of power back. Perhaps one other solution for the Party is to sell Kevin to India as part of the uranium deal – he’s certainly a deadly weapon.

Should Rudd find himself politically rudderless in 2012, he should

reassemble the team that helped him to appear

on Rove so many times. Rove LA beckons. I can see a record deal too; the Foreign Minister proved he could hold a tune, even with some form of laryngitis.

TRACK LISTINGS INCLUDE:

1. Pink Batts out of hell

2. The days of the old school halls program

3. Blue sky ‘mime’

4. Trading places

5. Taxman

6. Am I right (or am I right)?

7. Baby you can drive my clunker

8. Stop the boat, I want to get off

One song a week on Rove will give him William Shatner-like cult status and would eventually see him performing covers of Common People and Stairway to Heaven.

In the meantime, Rudd should do what is best for the Party – leave gracefully. He won’t, he likes to make noise. Which is why an album of his greatest misses, would be an apt postscript to his political career. TGR

Think & Grow Rich Inc. welcomes your letters, feedback, opinions, criticism and comments. These are all subject to editing and must include a name,address and phone number (not for publication).Twitter: @TGRmagazineEmail: [email protected]

FAILURE TO LAUNCH

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In August last year, several articles were published about the Australian Securities and Investment Commission (ASIC) cracking down on deceptive and misleading advertising by

financial services firms. Dennis McIntyre writes that this vigilance should have come sooner.

ADDING UP THE COSTS

I n recent articles I have been somewhat scathing of certain regulatory processes, however a continued provision for

regulation and guidelines (within reason) for marketing and advertising in financial services (or any industry) is a proactive approach to protecting consumers.

Let’s face it, we are all subject to influence; our only real choice is what influence/s we choose to subject ourselves to and how we educate ourselves about the objective realities of such influences.

When it comes to marketing and advertising, multiple spin is placed on products and services to appeal to consumers without care for any associated risk. Take for example, Life goes better with Coke! Does it really go better with Coke? Is it the optimum beverage to be subjecting our bodies to? This is only one example of advertising (among thousands of advertisements) we are subjected to, that do not disclose the true nature – warts and all – of a product within the advertising itself. Not some miniature or ‘fast-food’ disclaimer, I mean in the main body of the advertisement in the same font or tone as the ‘good bits’.

This is what ASIC aim to achieve through its financial services sector advertising reform. It is not enough for financial service and/or product suppliers to provide the juicy potential of their

products, they must include any risk and disclose all fees and hidden agendas.

That clients do not read all the details of a product or service is one argument ASIC used to present this reform. Clients are simply influenced by the advertising into making a decision. If such reform is established, it will mean less need for such burdensome expenditure on detailed Product Disclosure Statements (PDS); the PDS discloses every possible risk, even what happens to my investment if a nuclear holocaust eventuates?

I suspect ASIC will create further regulation to the financial services industry and shift focus. The upside of this is it may affect the bottom line of those businesses that have been profiting from misleading and/or deceptive advertising.

I am pro a balanced approach to advertising and I believe this reform is way overdue, especially in the high-risk derivatives market and the managed fund/superannuation sector run mainly by commission-driven financial planners. Clients should automatically be made aware of the risks and associated costs, along with potential and/or real benefits. However to fit all of this into advertising will be a tricky task, especially for those trained in a spin- dominant sales and marketing environment.

Marketing that once may have read: Trade the extremely lucrative CFD market from the comfort of your own home using low risk strategies, would now need to look more like: Trade the potentially lucrative, high-risk CFD market from the comfort of your own home using strategies designed to minimise the high risk of CFDs and aimed at preventing you from losing some, all or more of your money invested.

Sexy, isn’t it?

There are many other aspects to the reform including proper declaration of terms and conditions; if they greatly reduce the benefits, independent or partial advice must be genuine without remuneration, guaranteed returns must be genuine, comparisons must be apples against apples etc.

If you haven’t done so I recommend reading up on the current guidelines along with the proposed changes. They are really about keeping it real. ASIC get a thumbs up on this one. TGR


OPINION

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12

Are Women BetterFOREX TRADERS...?

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W hen the question of whether men or women are better when it comes to trading

is raised, there are often a slew of dissenting opinions. One pertinent point that is often made is that when you think of the stock exchanges, the majority of the traders are men. What this fact does not take into account, though, is that when it comes to trading, the people who are on the floors in these highly public arenas of finance are only a small tip of the iceberg.

The truth of the matter is that there are many men and women trading from home, over computer and phone, and their success rate is far above what you might suspect. Moreover, as more women get into what has traditionally been a male-dominated field, we are slowly realising that women have an edge.

WHY GET INVOLVED?

If you are a woman who has been interested in getting involved with trading, but you have been in a place where you are simply uncertain about how to proceed, it is important that you hear about some of the benefits.

For instance, when you look into trading Forex, which is essentially buying and selling currency, you will find that the rewards can be impressive. There is a lot

of information out there on Forex, and the truth is that it takes a lot less capital to get started than you think.

Remember that when you are thinking about getting involved, you are looking at limited investment for a high pay off. When looking at it from a gendered perspective, interestingly enough there may very well be a biological reason that women are better traders than men.

The traits that you need to make it big in trading include a thorough grasp of the situation and the willingness to go out on a limb and take risks. While these are traits commonly associated with men, the truth is that women have them in spades.

In primitive cultures, the role of males was fairly conservative; they needed to hunt and to defend territory, while women were gatherers. Because their role changed depending on where they were, women grew to be more innovative and inclined to experiment than men; this makes for a better trader as well as a better gatherer.

WHAT’S STANDING IN YOUR WAY?

When you want to get involved in trading, you will find that you may still have a lot of doubt. You might feel that finance is too difficult to get involved in without an education securing it,

or you may feel that you have too much to lose. The fact of the matter is that trading is something that can go a long way towards giving you the financial independence that you have always wanted, and that by being aware of the risks, you become involved in ways that keep you feeling comfortable.

Greg Secker, a leading Forex trader with the world’s largest coaching company, believes women make better traders than their male counterparts.

Secker said that between 2007 and 2010 the number of women trading at his international firm increased by a staggering 719%. Four years ago, only 45 women were being trained by his Forex Trading company compared to 361 in 2010.

Since then Secker said that he has seen an increase in women trading from 4% to 20%. Secker says: “Generally speaking, women find it easier to emotionally detach themselves from losing trades and don’t necessarily view cutting their losses as a sign of weakness. Men on the other hand view winning and being right as signs of masculinity.” TGR


WOMEN IN BUSINESS

D o you ever get to the end of the day after working, making lunches, doing the school drop-off, cooking

meals, doing the laundry (and don’t forget the ironing), cleaning the house, helping with homework, listening to everyone else’s day and wonder what in the world it’s all about?

After experiencing burnout at the end of 2007 as a result of things being out of balance in my life and my health and relationships being affected, I learnt the hard way what it takes to not only survive but thrive in the working woman’s jungle.

One thing I’ve come to discover about women (and it’s the same the world over) is that while we’re great at looking after everyone else, we’re not very good at looking after ourselves. When it comes to us…we are normally way down the bottom on the priority list. I can see many of you nodding your heads.

KEY NO. 1: PLANNING IS PARAMOUNT

While watching the Oprah show one day, I realised that even Oprah suffered from the dreaded ‘martha syndrome’ common

to women. Oprah had been on the verge of a breakdown, when finally she realised that for her to achieve the things she wanted to achieve, change was necessary. She developed the habit of planning her week to include time for herself: a massage here; a lunch with friends there.

No one ever went to their grave wishing they spent more time at work...so be sure to prioritise time for you, your family and your friends. Sunday is a good day to sit down before your week starts and do this. Make it a time to look forward to… sit down with your favourite brewed coffee or a glass of champagne and plan out your week. Those around you will thank you for it.

KEY NO. 2: EATING FOR ENERGY

Sometimes in the busyness of life we find ourselves grabbing food on the run and coffee to keep us awake (whoops I meant stimulated!). I’m not saying you have to cut out coffee, but make the decision to make healthy food choices for you and your family 80% of the time. When you eat poorly it not only affects your physical health, but your emotional health suffers as well. Lean meat, fish, chicken, fresh

fruits, vegetables and whole grains will not only ensure that you stay regular, but will keep your energy levels at a peak too. Choose to minimise your intake of coffee, chocolate and alcohol so that it becomes a treat and not the norm.

KEY NO. 3: EXERCISING FOR SANITY

If you say you’re too busy to exercise, then perhaps you’re too busy! Exercise is crucial for your mental and physical heath and increases your life expectancy by up to 10 years. To keep up an exercise routine however means finding something you enjoy doing. Zumba, a brisk walk, swimming, cycling, crossfit are just a few that you can choose. Some women find doing something during their lunch hour works well. This like time for yourself needs to be scheduled into your week, otherwise we both know it’s just not going to happen.

Make these three simple changes to your weekly routine and you’ll soon be Queen of your Jungle. TGR

Fabe Keily is CEO & founder of What Working Women Want.

Twitter: @fabekeily

THE WORKING WOMEN’S JUNGLEIt was 5am as I rose for my morning walk. The kids were still asleep and my partner was just getting up and getting ready for work himself. My walk in the morning was my sanity time before the mad rush I called work and life.

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WOMEN IN BUSINESS

14

COVER STORY

F ormer wife (wife number four), Liz Hayes, says of John Singleton, “He is really such an old-fashioned Aussie bloke.” Indeed, Singleton is the quintessential Aussie: a hard

living, hard talking down to earth party boy, whose healthy attitude to life and business remains intact despite his age.

Certainly age shall not weary him. While his profile is more subdued than it was in the later decades of the 20th century, Singleton is no less active. He is the majority shareholder of Macquarie Radio Network, is the man behind Banjo (what’s a Singleton decade with an advertising interest?), and with a consortium of high profile friends owns a range of high profit pubs and clubs.

Author of the Singleton biography, Gerald Stone says most Australians have an impression of Singleton as “the guy who shouts the whole hill at Rosehill when Belle Du Jour wins the Golden Slipper; the easygoing, carefree larrikin who doesn’t give a s..t about anybody. But it doesn’t take long to realise how vulnerable he is. If what I’m saying is true about his problem with alcohol and that he might have at least some of the symptoms of manic depression, the highs and lows, then he’s a much more complicated character and that just makes me respect the man all the more.”

Singleton laughed at being referred to as manic depressive. Though he can be wild, (there was one night when two cars drowned in his swimming pool) and he is a famous for an alcohol fuelled punch up or two, only his closest confidantes could comment on his mental state. Unfortunately, if they did they might expect a headbutt.

“John just sees it as a bit of biffo,” Stone told the Sydney Morning Herald. “They know this kind of thing runs in families ... he had a grandfather who

was an illiterate fuel peddler and once threw a cop in a horse trough. His oldest uncle killed a man because he hit him so hard in the boxing ring... And he had two mysterious uncles who wound up in Long Bay for fighting a brawl.”

Larrikin man, larrikin family history. Yet there’s more to ‘Singo’ than meets the eye. Since 1992, he has been bullish. His agency, Singleton Ogilvy Mathers churned out profits at an incredible rate – enough to set the stage for a public float worth millions. As his clout in the ad world grew, so did his network of influential political and business contacts. Singo became a powerbroker.

Yet his business empire is not limited to 30-second slots. During the course of the last 30 years, his interests have expanded to radio stations, racehorses, pubs and publishing businesses.

Singo can’t keep still. Perhaps it is his larrikin nature that drives him to turn profits. He is boorish and kind, complicated, but a stickler for keeping things simple, a risk taker, yet conservative when it comes to finalising the deal. There is no one thing that drives this man to succeed. Perhaps it is those contradictions that make his so powerful.

AD DAZE

Having served his apprenticeship with local and multinational agencies, Singleton opened Singleton Palmer Strauss McAllan (SPASM) in 1968. His first accounts were largely local Sydney retailers but his reputation grew as he recognised that Australian culture played an important role in message conveyance. Singo celebrated the voice and image of the average bloke from western Sydney. One of his most successful campaigns was for David Holdings wholesalers. It outlined the retailer’s prices before repeatedly chanting the catchphrase ‘Where do you get it?’ It is from this ad that the term ‘ocker advertising’ originated.

Accused of displaying unattractive parts of the Australian national character, Singo pioneered the Aussie ad. He was the first to use broad Australian accents, the first to revel in the vernacular and the

JOHN SINGLETON: Behind the Player

John Singleton can be credited with many things. He brought Alan Jones and Ray Hadley to 2GB Australian talkback radio, is the man

behind the Qantas Children’s Choir and 40 years ago spawned ‘ocker advertising’. While the 70-year-old could have retired long ago,

he shows no signs of slowing down. Jonathan Jackson examines the reasons behind Singo’s ongoing success.

15

COVER STORY

first to talk to consumers the way he talked to his mates. His ads were regarded as crass, vulgar and offensive to anyone who was not a football-playing, beer-swilling Aussie bloke.

IT WAS A STROKE OF GENIUS

In 1973, SPASM was sold to US-based agency Doyle Dane Bernbach for $1.2 million. Singo stayed on as managing director until 1977, and then took nine years off. He told TV host John Saffran, “I left advertising because I felt there was nothing left to achieve in it. I was 35; I had the largest Australian agency ... so far dominant it was ridiculous. I mean I used to sit around tomato sauce ... but I had Heinz, IXL, Tom Piper, PMU and I had in fashion, I had David Jones and Susanne’s and Katies. I mean I had every brand in every category. There was nothing left to do.”

Singleton came back to advertising in the late ’80s (in 1985 he founded John Singleton Advertising) and continued to further diversify his interests. Perhaps to understand his success and longevity is to understand his philosophy and principles. Again, some may seem contradictory. Let’s look at the Eagle Bitter ad campaign in which a woman, while skinny dipping, loses her blue jeans to a blue heeler. It was argued the ad was sexist and should have been pulled off air.

“It didn’t rip the jeans off, it ran away with it. There’s also a version where the blue heeler runs off with the bloke’s jeans. It’s just pretty funny when you’re having a skinny dip and the dog runs off with your jeans.”

The ad was a success. It spoke to Australian humour and it did what Singo believes all ads should do – promote the brand. He explains that no company would willingly risk or impugn its brand and that ad agencies are the custodians of the brand and the brand value.

The most important thing any ad agency executive should realise is that to be the custodian of the brand, they not only need to sell the brand, they need to protect the brand and what it stands for. This includes any cultural affiliation the brand may have.

In 1999, a Singleton employee was sacked for writing an anti-McDonald’s, anti-American multinational ad published in an industry magazine. The Singleton agency had KFC as a client, not McDonald’s, but Singo was incensed. He told Saffran, “We are in the business of selling, and if you don’t like selling get out, go and write a novel or a short story, do a painting ... be a TV star.”

Singo had designs on a television show. In 1980 he fronted the John Singleton Show; it must have given him a taste for TV ownership. It is said his best investment came as a member of the consortium that

bought the Ten Group TV network out of receivership. By 1993 he owned outright both the Ten investment and John Singleton Advertising. He sold both that year to the public company Singleton Group. In return, he received 35% of the listed company and $7.7 million in cash.

In July 1998, Singleton Group sold a minority interest in John Singleton Advertising to Ogilvy & Mather, a subsidiary of the giant UK-based holding company WPP Group. Retaining control was ‘a prerequisite’ for Singo, who had built his business with fierce independence.

For Ogilvy Mather, the deal was a no brainer. Singo’s influence was immediate. That year, Qantas launched arguably the most memorable campaign in Australian history: I Still Call Australia Home.

The combination of Peter Allen, children’s choirs, stirring voices, crisp white shirts and breathtaking locations was enough to raise the hairs on the necks of every Australian.

Since then, the campaign has been etched into the national psyche. It’s become a second anthem, and a much loved part of Australian culture. The Advertising Federation of Australia judged it the best Australian commercial of the last 50 years. It is the most ocker ad of all; patriotic and stirring – much like Singo himself. →

16

THE ONE THAT GOT AWAY

There’s always one business regret in an entrepreneur’s life. For Singo that moment came in 1998 when Hungry Jack’s founder Jack Cowin asked him to invest in an odd concept: a business that would allow tourists to walk across the Sydney Harbour Bridge. Singo believed the idea would fail.

Jealousy reigned. Singo once asked a journalist to ring Cowin to tell him a tourist had fallen off the bridge. Cowin didn’t take too kindly to the tall tale and retaliated (according to Singo), by sending him the monthly BridgeClimb accounts. For the record, Cowin denies the reports.

COVER STORY

In 2009, Ogilvy Sydney launched what many believe is the most powerful and moving version of the campaign in its 11 years. The 2009 commercial features a young Indigenous boy, Tyus, singing in a dialect of Kala Lawgaw Ya, one of the languages of the Torres Strait Islands. Tyus sings out to choristers around the world, calling them home to join together in the Bungle Bungle Ranges of Western Australia’s Purnululu National Park.

The campaign’s launch was a media first in this country – combining integrated broadcast content with paid advertising.It was the last ad Singo was involved with before selling out of STW and launching Banjo.

The sell out was a prime example of how astute Singo can be with his investments. He sold his 9% shareholding in STW Communications Group for $53.7 million. A day later his shares would have been worth just $1.5 million.

STW prices plummeted. Chairman Robert Mactier told The Australian Financial Review the group is “very concerned about our share price decline [but it is] being driven by investor sentiment and factors, many of which are outside our control”.

TALK RADIO

Singleton has approached his radio interests with much the same vigour as those in advertising. Back in the 1980s when he had his own radio show with talkback legend John Laws (the Ogre and the Ocker), it was an uncynical, down to earth approach to broadcasting.

“The consumers aren’t mugs. The people who try to manipulate them, they’re the mugs. The people who underestimate them, they’re the mugs.”

It’s a wholly Australian approach; never underestimate your enemy and always go down fighting. Yet Singo has never really been knocked out. He has, at various times, owned a circus, promoted rodeos, bred racehorses and bought and sold property.

Yet it is radio that is the dominant force in his life: radio and pubs. While he co-owns The Matty Johns Show, (showing faith in the former rugby league champion after he was tarnished by a group sex scandal) his ownership of Macquarie Radio Network has shaped the careers of several high profile DJs and influenced the opinions of millions of listeners.

Steve Price, Alan Jones, Ray Hadley are household radio names with enormous influence. Price heads up the talent at struggling Melbourne radio station MTR. It will be interesting to see what happens to the station and how Singo and his right hand men deal with the financial problems faced by the station.

Macquarie Radio wanted a national network of talk stations to add to 2GB in Sydney, and offered Fairfax Media good money to create one. Macquarie couldn’t raise the dough. However they did launch MTR, which is part owned by Fairfax. The plight of MTR has shown that it hasn’t all been smooth sailing. It seems this is one instance when Singo and co. may have underestimated his audience.

AT HOME WITH THE PUBLIC

As a good Aussie larrikin beer drinker, Singo knows the Australian culture well. He has based a career on speaking to the average Australian; men love him, women love him and they love his pubs.

“Let’s look at some pubs.” It was the start of a 15-hour pub crawl that would change the face of Sydney’s pub scene.

The marathon pub crawl from Sydney to The Entrance, and back, late in 2008, was all it took for Singo to decide he wanted to change the image of pubs from ‘pokie palaces’ to well-balanced food, beverage and entertainment venues. Of course pokies still exist in his venues – he is a businessman after all – and he recently accepted an ad job to represent a gaming consortium.

“I’m not in it for any emotional reason. It’s an investment decision,” he said.

The global financial crisis caused many pubs to close their doors, but Singo remained undeterred.

“We might end up with three pubs, or 33.”

On his list are pubs anywhere from the Sydney CBD to as far north as the Central Coast.

More than anything, his pub consortium shows how wily he can be with an investment. With former Qantas chief executive Geoff Dixon and friend and lifelong business partner Mark Carnegie, he launched a $200 million hotel leisure fund.

A report in The Australian announced the consortium the “cornerstone investors

in the new fund”, which began with $100 million in equity with the remainder being bank debt.

Nick Tinning of Chris Tinning & Company said the establishment of the fund showed there were profit-making opportunities in the sector, but he cautioned the overall impact was likely to be limited.

“I don’t see them pushing the value of hotels up – more just selecting assets. They’ll be buying at realistic prices, otherwise they’ll leave the hotels alone,” he said.

This supports statements by Dixon to The Australian.

“We have only gone into pubs when we thought we could buy them at the right price. Obviously, back when the music was playing last decade, when asset prices were so hugely inflated, that wasn’t the time,” Dixon said.

LOVEABLE LARRIKIN

Singo’s success can be put down to several things: knowing when to buy, knowing when to sell and being himself. Some would say he has made a career from being a larrikin, and certainly he has capitalised on that trait, however it is a genuine characteristic of an Aussie man who knows his mind. This true blue Australian is one of the richest in the country, not because he has played the larrikin card, but because he is the genuine Aussie larrikin and as such has been able to tap into the minds of all genuine Australians. TGR

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Protect your investmentyour business | your assets | your people

Choose an insurance broker that will champion your cause ... because cover matters



IC Frith works with clients across many industry segments including:

In addition to single client insurance placements, IC Frith specialises in the design of tailoredscheme, association and affinity client solutions, all of which can be implemented nationally.

• Construction & Infrastructure• Engineering• Finance• Manufacturing• Marine

• Professional Services• Property • Retail & Hospitality• Transport• Warehouse and Distribution

Our personalised and focused approach ensures your investment is protected and sets us apart from our competitors

TGR_FPC_Sept2011_FINAL_Layout 1 19/08/11 11:31 AM Page 1

18

Once upon a time (in a galaxy far away, if you like) there was Friendster. The year was 2002. Friendster was arguably the world’s first peer to peer social contact site. Napster

was created in 1999, but it was purely a file sharing platform aimed at swapping music files. It did change the way information is disseminated and opened up the eyes of lawmakers to a new kind of theft. In fact the advent of social media and information sharing has lawmakers scratching their heads trying to come up with ways to stop the socially unacceptable practices that now occur including identity theft and bullying and the passing on of sensitive documents (see Julian Assange and Wiki leaks – depending on what side of the fence you sit on there).

Today, those behind the social networking granddaddy– having recognised that Facebook is the social networking platform of choice – have transformed Friendster into a gaming site. This was the first site to allow users to contact other members, maintain those contacts, and share online content and media with those contacts. Does it sound familiar? It sounds like Facebook. Now, as a gamer platform, Friendster has attracted 115 million users since June 2011. For those looking for a lesson in business reinvention, they should look no further than this company’s rebirth.

As an interesting footnote, Friendster was offered US$30 million by Google in a buyout bid. Had the powerbrokers taken the money (and it is widely thought they should have), Google could well have become a pioneer in the space rather than a latecomer.

In the history of social networking, MySpace followed Friendster and quickly gained ascendance. MySpace is still in existence, but having once been the king of the social networking sites, seems to have had its day. A buy out by Specific Media and Justin Timberlake on 29 June 2011 for approximately US$35 million, may change its current fortunes.

Like Friendster, MySpace provides a lesson in big business history. After Friendster was released in 2002, some eUniverse employees came together and decided to copy the more popular features of the website. Ten days later, MySpace was ready for launch.

Using eUniverse employees, the company quickly reached 20 million users on MySpace. By 2004 MySpace.com made the transition from a storage site to a social-networking site. EUniverse was purchased in July of 2005 for US$580 million by Rupert Murdoch’s News Corporation. Of the $580 million, $327 million dollars was added to the site’s value.

MySpace was the most visited social networking site in the world, and in June 2006 surpassed Google as the most visited website in the United States. Since then the decline has been rapid. In April 2008, MySpace was overtaken by Facebook in the number of unique worldwide visitors, and was surpassed in the number of unique US visitors in May 2009. As of October 2011, MySpace was ranked 103rd by total web traffic.

Like Friendster it has tried to reinvent and redesign, but even with the might of News Corp behind it, revival met with a force too strong. It will be interesting to see if someone like Timberlake can have an influence – he has the financial and fan support, but does he have enough business acumen?

It is important to understand what has come to pass before we can analyse the future. In our opening story, world respected ad man David Jones discusses the relevance of Facebook and why they could do so much more business. Facebook continues to grow and reinvent itself, but will that be enough to fight off competitors like Google+, or will it suffer the same demise as its predecessors?

The thing about this form of social networking is that it caters to the ‘sound-byte’ generations. The next big thing will unfortunately always be... the next big thing. It’s like a popularity contest at high school; first Friendster was the cool kid, then MySpace, now Facebook. Which platform can best serve my purposes and entertain me the most?

Currently it is Twitter. And currently, questions are being asked among savvy media experts about how long Twitter can last without proper monetisation. Jones believes the platform is strong and will survive and it’s time for businesses to get on board.

Twitter and Facebook are the promotional tools of the 21st century. The reach of these platforms can make or break a business. Bad publicity via Twitter or Facebook and you have a lot of work to do to repair the damage among potential customers.

Social networking goes beyond the social; social networking is no longer about friends keeping in touch and sharing information. Today it is a business tool; a way to make money, to attract fans and customers. If you are literate in social media, then you have a solid foundation on which to create a 21st century business. TGR

Jonathan Jackson.

BRAVE NEW WORLD

Social media is a new form of literacy. As much as old school business minds and technophobes rail against it, they will soon learn to embrace it or fade away. The following feature is dedicated to social media; how it can be done better, how it can be used for business and for those who are still unsure, we offer a social media for dummies guide.

FEATURE

19

TIMELINEWith more than 750 million people on Facebook, 200 million tweets posted on Twitter each day, and two billion video views each day on YouTube, social media has become an integral part of our connected lives. But this is just the beginning.

May 2001 – Wikipedia launched. An online encyclopaedia that can be modified by users. Has come under fire because the potential to modify information or make things up is quite substantial.

November 2001 – StumbleUpon launched. StumbleUpon helps you discover interesting web pages, photos and videos recommended by friends and like-minded people, wherever you are.

June 2002 – Technorati founded. Technorati is an internet search engine for searching blogs. By June 2008, Technorati was indexing 112.8 million blogs and over 250 million pieces of tagged social media.

March 2003 – Friendster launched.

May 2003 – LinkedIn launched. Slow to get started, LinkedIn is now one of the primary social networking sites for businesses and businesspeople, looking to grow their professional networks.

May 2003 – Wordpress launched. One of the platforms of choice for bloggers. Not only can you say your piece, you can design the website that allows you to say it.

August 2003 – Skype launched. No need to make cumbersome phone calls for ridiculous amounts of money when you can Skype to Skype for free... or video conference.

January 2004 – MySpace launched.

February 2004 – FlickR launched. A file sharing site designed purely for photography. It is one of the premier photography sites today.

December 2004 – Digg launched. Digg is a social news website, where people vote for their favourite news stories.

May 2005 – YouTube launched. Post your own videos, watch somebody else’s or catch up on TV and music clips – nostalgic or otherwise, YouTube is a video-sharing website, created by three former PayPal employees in February 2005, on which users can upload, view and share videos. In November 2006, YouTube, LLC was bought by Google Inc. for US$1.65 billion, and now operates as a subsidiary of Google.

July 2005 – Bebo launched. Similar to Facebook, Bebo is a social networking site currently owned and operated by Criterion Capital Partners after taking over from AOL in June 2010.

The website’s name is an acronym for Blog Early, Blog Often. Users receive a personal profile page where they can post blogs, photographs, music, videos and questionnaires to which other users may answer.

July 2005 – Google purchase Android. Having missed out on purchasing MySpace, Google buy Android, an operating system for mobile devices such as smartphones and tablet computers.

June 2006 – Public launch of Twitter.

September 2006 – Facebook launched.

May 2007 – StumbleUpon is acquired by Ebay.

July 2008 – Tweetdeck is launched.

October 2008 – Apple launches its App Store via an update through iTunes.

The social media platforms above have either departed this world, or have developed to make our lives much easier. What comes next, we can only wait to see.

TGR

W ho wants to tell Mark Zuckerberg that he got it wrong with Facebook, the social networking

phenomenon he founded? David Jones is happy to have a go.

Jones, 44, is chief executive of advertising group Havas, which is the second–largest advertising group in the UK market and the fifth–largest worldwide. His business is seeing much more growth from digital and social media than from traditional ad campaigns.

As such he reckons he’s in a good position to judge the efforts of Facebook to make advertising profits from its army of members and he is not impressed.

“When you’ve got 750 million people using your platform, you’re clearly not going to do badly unless you do something dramatically wrong,” he says, “so I have no doubt Facebook will do very well based on that platform. But the actual revenue Facebook generates is not in line with its profile. The revenue is way below the line. If I were Facebook, I would look at new models.

“They almost appear to be copying the old model of how you monetise, which is that you go after advertising dollars, rather than the new model which is about creating clever new ways of making money through genuine retail transactions.”

David Jones, top guru at Havas, would set Mark Zuckerberg

straight on how to make money out of his 750 million users,

writes Andrew Cave.

20

FACEBOOK HAS GOT IT ALL WRONG

Instead, he says, Facebook should embrace location–based internet services, which he believes will be “probably as significant” as anything the internet has produced so far in its short history.

“My model for how Facebook should make money isn’t actually through advertising,” continues Jones. “I would do it through retail.

“You would say to Starbucks: ‘Would you give us 0.1% of a dollar for the purchase of a coffee by everybody who checks in at Facebook?’ Then you would say to consumers: ‘If 20,000 of you buy a coffee in Starbucks today, you’ll get a 15% discount’.”

“You accumulate that across not just Starbucks, but Burger King and McDonald’s and every retail outlet, and all of a sudden you start seeing enormous potential for major revenue opportunities which are nothing to do with advertising because I’m not sure that the intrusive advertising model is one that people want in a medium like Facebook.”

Controversial stuff, then, from an ‘adland’ executive who critics might counter has no direct technology experience.

But then Facebook is arguably not a technology business any more; Jones says Havas is no longer an advertising and communications group but “a company that connects brands with consumers using technology”.

He’s less bearish on Twitter, which he thinks could make money from paid Tweets, just as Google charges for paid search listings.

“It’s easier for Twitter to over–deliver on its potential,” he says, “because Facebook has been so hyped up because of its 750 million people and the revenue expectations are now pretty dramatic.

“A lot of people on Twitter are looking for something, so if the content you place before them is interesting or relevant, people are not going to find advertising that annoying, whereas you basically go on to Facebook to interact socially and look at your friend’s wedding pictures and you don’t necessarily want to be interrupted.”

What he calls ‘collaborative consumption’ is much more interesting to social media customers than mere advertising, he says, because it is where “the sexy exciting digital world meets the cold hard cash of retail.”

Buying something by comparing prices on the internet and then clicking to make a purchase will be old hat, replaced by consumers’ ability to tap into the mobile internet when they are standing in the high street and declare: “I want to buy this.”

The idea is that all the vendors in the vicinity who sell what customers are looking for can then bid for people’s custom as well as make offers that apply only if other people are roped in too.

“I think you’re going to see an enormous revolution in that space,” Jones concludes.

Jones’s career has all been in advertising, working for a usual collection from adland’s alphabet soup, from BDH to JWT to Abbott Mead Vickers BBDO, before joining Havas subsidiary Euro RSCG and running its business in Australia.

He launched the firm’s digital agency in 1998 from inside the overall advertising firm – much to the bewilderment of observers who questioned why an ad company was getting into software.

But it worked, with Jones trebling the agency’s size in four years. He then ran the Reckitt Benckiser’s advertising account as president of global brands for Euro RSCG Worldwide before becoming chief executive of the firm’s New York operations and then global CEO in 2005.

Havas’s businesses now serve as digital agencies to the likes of IBM and Unilever, while a subsidiary has just won Sony’s worldwide social media business.

Jones reckons digital now accounts for 15% of companies’ total external media spending and 15% to 25% of most advertising groups’ revenue.

How much further can that proportion grow? “It depends on how our industry defines itself,” he says. “Some of the biggest revolutions that are going to happen over the coming years are actually not in what you would call advertising.

“So if our industry remains just the advertising and communications industry, I think it will miss out on an enormous amount of growth that’s going to happen.”

He wants location–based technology to provide a major revenue stream for Havas. “If we confine ourselves to thinking we’re a traditional advertising business, we’ll miss out on that,” he adds. “I certainly don’t intend to miss out on that.”

So far it seems to be working, with Havas claiming 9.7% growth in turnover to $361m (£325m) in the first quarter of this year. Its companies now work with 72 of the world’s top 100 advertisers, including Tesco, Barclays, Peugeot, Santander and Reckitt Benckiser. Havas also came up with Citroen’s dancing robots and Evian’s rollerbabies, as well as advising David Cameron on last year’s general election campaign.

Jones, who in his younger days played first division rugby in France and was a professional tennis coach, is also an enthusiastic advocate of corporate and social responsibility.

He devised the Tck Tck Tck climate justice campaign with Kofi Annan that he calls the “most successful cause campaign in history” and co–founded One Young World, the Davos for under–25s, which is holding its summit in Zurich next month to give the next generation “a platform to make positive change”.

Jones also has written a book about social responsibility.

“The last century was about non–governmental organisations having good intentions but poor execution and business sometimes having poor intentions but great execution,” he says. “This century will be all about great intentions and great execution.

“Because of what social media has done in driving transparency and empowering people, if you behave as a good corporation people will support and reward you and if you don’t people will take you down.” TGR

Andrew Cave / The Daily Telegraph / The Interview People

FEATURE

21

With over 750 million users, Facebook is the number one social networking platform in the world. TGR spoke with social media expert Kate Hughes to discuss how it is best used for business.

FEATURE

FOR BUSINESS

22

Like. Poke. Friend. De-friend. Status update…

F acebook has spawned its own phrasebook around the world and redefined the way many

of us think about social networking. It can no longer be considered just somewhere for teenagers and social-wannabes to interact with each other, with its possibilities continually evolving through personal and commercial interests.

Its use as a business tool is extensive – a quick search will show that basically every major corporation around the world has a Facebook page. And when current data suggests that over 750 million people around the world have active accounts, you can’t deny its reach.

In Australia alone, the social media kingpin announced last August that it had 9.5 million subscribers and according to Stat Counter that accounts for about 65% of internet social media use in Australia. And don’t think that Facebook is just for the under 30s. Data shows that some of the fastest-growing sectors are actually men and women over 50.

But just because something is popular with the masses, doesn’t mean it’s entirely effective, does it?

Kate Hughes is a digital and social media expert who has worked with agencies across major brands in Australia and

the UK. She says that, like many things in business, you can get as much out of Facebook as you’re willing to put in.

“I think most brands should have a Facebook page for a couple of simple reasons. The first is simply the sheer volume of people who are already using it means you can’t ignore it. But one of the best reasons is that it allows you to have a two-way conversation with your clients and customers.

“While every brand would undeniably have a website, there is only so much you can do with that. With a website you put up your content and leave it – website analytics aside you don’t really know whether people like it or find it relevant. With social media you have the ability to converse with your users and track their responses immediately.

“A great benefit of Facebook specifically is that it builds communities around your brand in a way that I don’t think other social media platforms are able to match just yet.

“There’s a large volume of conversation on Twitter which shouldn’t be ignored. It is very immediate and immensely valuable and it can be grouped and spread incredibly quickly. But Facebook tends to promote conversation between more people over a more sustained period of time and that, in turn, makes communities who speak together as a collaborative

group. For example – you may put up a ‘how to’ video on Facebook and someone may ask a question about it, and the next thing you know someone else from the community answers it for you, and shares the video through their other online channels. They’re working for you and building a relationship between each other. Furthermore, you also find out that you perhaps should have put more or different information about that video when you posted it, or perhaps it should have been a totally different kind of video– you don’t get that interaction with a website.”

The advantages of creating a community around your brand, says Kate, is that you also build loyalty in the process and can discover brand advocates on the way.

You can build excitement through communities. You can tease them with new products or offerings and let them ask questions so there is a sense of anticipation before it is actually launched. These communities talk within themselves and spread the word for you. And throughout all of this, you help the customer feel like they have a real value to you and make them a part of the brand.

While this ability to open a conversation with your customers has obvious benefits, some people will always have major reservations.

“People often get scared with social media in that they think it can damage their brand,” says Kate. “But the truth is if people are making negative comments about your brand, then they’re going to make them anyway – so you might as well be part of it so you can do something to rectify it.

“If someone writes something bad you have a chance to assess it. If that criticism is unfair, you’ll often find that your brand loyalists will jump in and defend you before you even have to – and that is a major win. And if the criticism is warranted, you at least have the opportunity to defend yourself, explain or even apologise.”

This ability to talk to, and listen to, your community may be one of Facebook’s greatest strengths, but it is also the area where many companies fail to perform.

When the world moved into websites, companies would spend considerable time

and money in development and then leave it up there and wait for something to happen. While that thought is almost laughable now, many companies treat their Facebook page with the same lack of regard.

“You need to invest time and money in your Facebook page,” says Kate. “If you’re building a community and want them to engage in a conversation, you need to start that conversation and take part in it yourself.

“People build these lovely Facebook pages, they brand them and they put all their content in and then they sit back and wait. Well … not much will happen.

“The silly part is that you’ve got all these people out there who will help you get it right if you’re willing to talk and listen. You need good moderators in place who continually stimulate conversation by putting up valuable content and monitoring what the reaction is. If you do, you can find out if your content is relevant, if you’re getting through to the right people and if you’re building that community that will ultimately help drive your business with fantastic loyalty.

“But you need to be willing to listen to your audience and ask them in the first place.”

The key to managing all of this is to ensure you are prepared to allocate the necessary funds and time. With an existing platform already built, many people fall into the trap of believing that using Facebook for business is free, yet effective use requires thorough planning, promotion, ongoing maintenance, controls and analysis.

The beauty of social media is its fast-paced immediacy, but you need to be prepared to deal with that – if you take too long to answer a query or complaint the damage caused in your absence could be substantial. As such, you need to have a social media crisis policy plan in place before you go live and ensure you have adequate resources to maintain it ongoing.

“Once the page is built with your plan and policy in place, your moderators are on board and conversations are beginning to happen; you then need to think about driving people to your page. The ‘build it and they will come’ adage is erroneous; you should look to promote your Facebook page via your standard marketing materials as well as potentially via Facebook adverts.”

While this does cost money, it is still cost-effective. When you consider that companies will happily spend hundreds of thousands for a TVC, it does seem mind-boggling that they would balk at spending a fraction of that on a social media plan, strategy and advertising.

“A lot of social media is like holding a cocktail party,” says Kate. “You want to be organised and ensure everything looks great and reflects who you are. But your role as host goes beyond the invites and the room décor. Don’t invite people to join you and then leave them there – you wouldn’t start a conversation with someone in a room and then walk off, so you can’t do it here. A good conversation involves two-way interaction, so be prepared to listen as much as you talk.”

Fast Facebook advice:

• Although Facebook is very cost effective, don’t fall into the trap of thinking that it’s free.

• Don’t think you can put up a Facebook page and just leave it – people need to know it exists and when they are there they expect new ideas and interaction on a regular basis.

• Make sure you have the resources in place to maintain your page – you don’t want to start the conversation and then leave.

• Social media is a fast-paced platform so you need to ensure you have a social media crisis policy plan in place so you are able to deal with issues quickly.

• Clearly identify the tone of voice your brand will have for Facebook – and accept that it may not be consistent to your other channels.

• Be honest in social media – if you make a mistake, put your hand up and own it. You won’t fool whole communities and they will keep talking to each other.

• Don’t think that social media can damage your brand. TGR

Comments and thoughts are welcome. Twitter: @katehughes211

23

Social media sites such as Facebook, LinkedIn and Twitter, have introduced a whole new age of transparency, revolutionising the world of finance, writes Johnathan Assia.

FEATURE

A re private investors the trading experts of the future? Until recently, trading was considered the

exclusive domain of specialists working for banks and investment funds. After all, they have access to reams of information in real time, and they are often part of a global team of experts which provides a steady stream of comprehensive market analysis.

However, recent studies have shown that typically a mere third of all actively managed investment funds succeed in outperforming the benchmark. In these turbulent trading times, it is becoming more and more difficult to make the right investment decisions. With the growth of social networks supporting the free exchange of information and copying of expert traders , institutional investment experts now face increasing competition from private investors, who based on their performance have turned into investment gurus.

Social networks are online platforms that are open to everyone. They are based on the principle that knowledge should be shared and made accessible to all. Knowledge and experiences are shared openly and transparently. There are no secret or covert areas, no ‘black boxes’ containing expertise that is hidden.

Social investment platforms allow traders to register, trade transparently to others, and benefit from other traders’ experiences. All traders publish their activities for everyone else – in real time. Information on each trader’s track records is also visible, including not only their average returns, but also the risk level taken to achieve them.

Many finance experts were dubious about a social investing platform and the transparency that comes with that. They didn’t think people would talk about what they do with their money. As it turns out, people enjoy sharing their success. Most traders with followers say they have tremendous personal satisfaction from their ability to attract a loyal following.

More impressive than the available scientific studies and hard facts is a real-life example of the efficiency of social networks. When the earthquake and the following tsunami hit Japan in the spring of 2011, the social network proved to be an uncanny seismograph. Before the horrible news spread around the globe via major agencies like Bloomberg and Reuters, the eToro network recorded drastically increased activity, e.g. in USD/Yen currency trading.

Preliminary evaluations show that trading in social networks significantly improves returns. Comparing traditional trading transactions and transactions via CopyTrader, I found that ‘copied’ trades deliver both better success rates and higher average returns per trade. Traders improved their results by 10% to 100%. The ratio of profits compared to all trades increased by 8% to 12%.

eToro is participating in a scientific study carried out at the Massachusetts Institute of Technology’s (MIT) Media Lab. The study, which is part of the NYU Stern School of Business’s Workshop on Information in Networks (WIN), examines how information in social networks influence social and economic processes. It analyses the dynamics of information dissemination in social networks. According to research carried out by Dr. Yaniv Altshuler, MIT Media Lab study director, the conditions can be calculated mathematically. Social trading platform providers can use these insights to develop new tools and systems for their users. The study results are expected in about six months. TGR

Johnathan Assia, chief executive officer, co-founded eToro with his brother David in 2007. He has eight years experience in software development and software management as well as 10 years experience in investment and currency trading.

Twitter: @eTor

USING SOCIAL MEDIA TO INVEST

24

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Overseas model shown

I n S I D e , A h A n D C r A f t e D C A B I n I n f u S e D w I t h

t h e L A t e S t I n t o u C h S C r e e n t e C h n o L o g y.

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t r A n S p o r t S t h e n e w g t t o n e w L e v e L S o f A t h L e t I C S C u L p t u r e

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p r o D u C e S 4 2 3 k w o f u n A D u Lt e r A t e D p o w e r ,

D e L I v e r I n g A t r u Ly e f f o r t L e S S g r A n D t o u r I n g e x p e r I e n C e .t h e n e w C o n t I n e n t A L g t. A u t o m o t I v e A r t.

Bentley DPS TGR FINAL PB.indd 1 20/10/11 4:06 PM

Meet the contributorsIn each issue, Think & Grow Rich will pose a topical question to a selection of contributors to give our readers an insight into their minds and philosophies. We hope this enables you to familiarise yourselves with our great writers.

Q. How will social media and networking influence business decisions in the foreseeable future?

28

Lies, damned lies, and statistics is a phrase describing the persuasive power of numbers, particularly the use of statistics to bolster weak arguments. But in the case of social media statistics perhaps it should be rewritten as Truth, honest truth and measurement.

Bottom line – there is no doubt of the exponentially increasing influence and reach of social media and networking. And we are not just talking about Facebook, even though it currently dominates the landscape.

Latest figures show the following estimated unique monthly visitors to the following sites:

» Facebook = 700 million

» Twitter = 200 million

» LinkedIn = 100 million

» MySpace = 80.5 million

» Ning = 60 million

» Google+ = 32 million

You may perhaps say that only LinkedIn is a true business network and therefore relevant to the topic, but consider the following:

96% of small businesses are using Facebook as a marketing tool and 86% of them found social networking to be effective. 70% of small businesses using social media see increased traffic and 60% say social media has improved search rankings. 24% of consumers consult their Facebook friends before making a purchase and 1 in 3 consumers say they’re likely to purchase from a company they follow on Facebook. These facts alone demonstrate that social media has become an integral part of the marketing mix for businesses. Add to that the globalisation of markets that the internet has enabled and the end result is the creation of the closest we have yet come to a ‘perfect market’ where word of mouth can make you or break you in a matter of hours or days. This influences all business decisions.

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For SME business owners and entrepreneurs, one of the most exciting prospects of social media, lies in the ability to radically magnify your visibility and value proposition among your existing and potential client base.

Social media is quickly shifting the environment of how people find and share information. It’s connecting people in ways that weave a dedicated network of prospects and supporters within networks that invite your value-added participation. As a result, once scattered customer-bases are now unifying online as converged contextual markets, allowing the formation of bridges and highways between businesses and prospects and ultimately creating new opportunities in the process.

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The growth in social media has totally revolutionised the way companies make their decisions.

This area is not simply how advertising is driven, but increasingly so when it comes to corporate profile and perception. Managing this channel has never been more important and the skills set, as well as methods of communication, have really shifted into a new realm – Twitter, Facebook and viral marketing, not to mention more, albeit ‘newly traditional’ areas like Google where more and more customers source their information. →

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Social media will impact on business greatly in the future and it is critical for businesses to utilise this new medium to strengthen relationships with customers and also interact on a more personable level.

Business is about relationships and social media, in particular Facebook and Twitter, enables companies to develop and enhance customer relationships.

However it also requires companies to be on their toes and have a social media team able to respond instantly to posts in the event of issues that can quickly snowball and cause significant PR damage if not contained or resolved rapidly.

Social media also enables businesses the opportunity to generate mass awareness inexpensively and compile large databases of prospective new clients.

It is a two edge sword though and has to be handled with care due to the speed at which it spreads both good and bad publicity.

Overall businesses should see it as a positive and accept social media as a valid communications and marketing strategy .

The key is to not try and blatantly sell via social media. This is a typical rookie mistake. People don’t like to be sold to; people like to be involved, considered and value added.

Social media is the perfect medium to find out what your customers want. Just ask them.

Those who are slow to uptake social media will lose ground to competitors, so it’s a must to develop a social media strategy.

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Social media cannot be ignored in business now or in the future; it is a must in a sensible business marketing plan. However, there is a huge amount of hype about what this media can deliver to business; for the most part the actual percentage of closed sales in the mainstream business arena is low. That being said, as we gain a better understanding of the communications model of Social media and we structure the messaging around that correctly, the performance and ROI outcomes will improve. Ask yourself this simple question: “When did I last go to Facebook, Twitter or another mainstream social media platform to specifically buy something?” If you are like the 98.4% of people we surveyed during 2011, your answer will be ‘never’. The social media platform is a communication, relationship and awareness tool that cannot be ignored and it is a platform that will grow and mature into a critical marketing medium over the next five years. Ignore it at your own peril, but understand it is not a silver bullet to your marketing needs.

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Social media is now a mainstream marketing and PR tool for most individuals, companies and corporations and this fast-paced, ever changing environment is here to stay. For the uninitiated, social media appears daunting, however good social media is all about managing relationships, which won’t be difficult for those of us who practice good public relations with our clients and customers already. Social media is a brilliant tool for business, creating opportunities for promotion, marketing and feedback albeit sometimes also hindering our time management skills! Going forward, the options are limitless as social media has the ability to change not only our lifestyles but the power to impact on a company’s brand and reputation.

This power has sent PR and marketing experts into overdrive as they plan strategies to deal with not only the positive media but damage control for any unforeseen negative posts. A simple post on Facebook or Twitter often gets a message out to a wider audience faster than any other means and is able to be ‘shared’ or re-tweeted by others instantly. The power is in the user’s hands. Business then makes decisions accordingly, mindful that everyone is able to be a company’s critic, supporter or promoter daily. This type of customer control certainly changes the way SME and corporations make decisions as mindful they are in the public eye, business is training staff to be social-media savvy. The ability to subtly influence and persuade customer opinion by way of positive and encouraging interaction, self-promotion and product offers leaves no doubt social media is crucial to business and an active part of any good marketing strategy. TGR

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Social media is already having a major influence on business decision making, and it will only increase. More and more customers are now buying online, and are using Google and the internet to help them research their purchases. Today, and in the foreseeable future, businesses will need good rankings in Google, as well as good public relations on the

internet, because once your business gets negative press online, it is all over red rover (just think of News of the World and Rupert Murdoch!). Not only that, but Facebook, Twitter, LinkedIn, YouTube and eBay, open businesses to markets that in the past would have been too costly to enter and enables businesses to keep communication with their clients at relatively low cost. For very little cost, using Google adwords, or getting quality backlinks on your site, you can advertise your business, or get top rankings in Google search engine. And YouTube allows people to effectively ‘meet you’ by watching you on video, and hearing about your products. In my view, social media is here... and here to stay.

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Social media has enabled our lives to be more effective and efficient in how we connect and stay in touch with people. Because of this more and more consumers are turning to their friends for product/service recommendations before making a purchasing decision.

According to a study conducted by The Nielsen Company, participated by approximately 25,000 respondents from 50 countries, 90% of consumers surveyed noted that they are more likely to make a buying decision based on what they read

and see on platforms we call ‘social’ but only if it is presented to them by someone they trust; while 70% trusted consumer opinions posted online.

This is one of the main reasons why building social authority with credibility is so important to a company or individual’s success both online and offline. It is through the process of ‘building social authority’ that social media becomes effective. However, this must be cleverly executed because while people are resistant to marketing in general, they are even more resistant to direct marketing through social media platforms.

To stay ahead in a global marketplace, business owners must continue to explore and innovate their online social strategy and how they deal with their customer’s behaviours if they are to become a dominate player within their industry.

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With the growth of social networks supporting the free exchange of information and copying of expert trades, institutional investment experts now face increasing competition from private investors, who based on their performance have turned into investment gurus.

Social trading platforms are becoming common place. Based on the principle that knowledge and experiences are shared openly and transparently, they are available for everyone with no ‘black boxes’ containing hidden expertise.

Using social trading platforms, traders can register, trade transparently to others, and benefit from other traders’ experiences. All traders publish their activities for everyone else – in real time. Information on traders’ track records is also visible, including not only average returns, but also the risk level they take to achieve them.

Preliminary evaluations show that trading in social networks can significantly improve returns.

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31

Welcome to the world of social media. In this article, Think & Grow Rich walks you through four popular social media platforms and how they can add an interactive facet to your business.

SOCIAL MEDIA SURVIVAL GUIDE

It is predicted that 2012 will bring a whole new level of endorsement for social media. Any company that has failed

to invest in its various platforms will soon face no other choice. Blog writing and video creation may enhance a company’s search engine optimisation, customer relationship management and many other areas of sales and marketing, but there are more platforms out there that must be integrated.

For those of you who are unsure of how a social media platform can work for your

business, we have put together a brief guide to Facebook, Twitter, LinkedIn and Google+ to give you an insight into how they operate. The hardest part is really getting used to the social media lingo – before you know it, you’ll be adding contacts, posting links and tweeting updates like a seasoned cyberspace professional.

Every minute brings us 695,000 Facebook updates, 98,000 tweets and 600 YouTube video uploads. There is a lot going on and it’s your job to keep ahead of the pack.

FACEBOOK

Facebook is one of the more dominant social networking sites in the world.

It lets you find and ‘add’ friends, share status updates, photos, videos, links and more. In the words of the website itself, Facebook is: “Giving people the power to share and make the world more open and connected.”

Now that it has surpassed the 750 million user mark, you will find that more and more businesses are becoming involved with this social networking phenomenon.

You can create a profile as an individual and then a page for your business. The idea behind it is that you can add any information or contact details in the ‘Information’ tab that can be seen when people click on your business page. From there, you can add photos, notes and updates (your individual profile works in the same way).

You can recommend your business page to friends to ‘Like’ – this will then display on their profile and they can recommend the page to their friends as well. Once you’ve established a web of contacts, any updates that you make will appear on your friends’ News Feeds so they can keep an eye on your progress, and people can interact with your page as well by writing on your Wall. Facebook also keeps track of how many people like your page and how many are talking about it (friends can also ‘tag’ your page in their updates).

Remember to constantly update your page with news feeds about your business. The more you do this, the greater chance you will have of tattooing your brand into the psyches of existing and/or potential customers.

Facebook has been going strong since 2006 and it shows few signs of slowing down. It is definitely worth taking advantage of this service and spruiking

your business to other Facebook users. → “All

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SOCIAL MEDIA SURVIVAL GUIDE

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Twitter is a social network and micro-blogging service used to send short messages to groups of friends. It is not for the long-winded, as users send and read posts of up to 140 characters, known as ‘tweets’.

As a social network, Twitter revolves around the principle of ‘followers’. When you choose to follow a Twitter user – be it celebrities, colleagues or companies – their tweets will appear on your main page in reverse chronological order. Tweets are publicly visible by default, but you can restrict the delivery so they are only seen by your followers.

Twitter has somewhat reinvented the role of the hashtag (#) as users can group their posts by topic, words or phrases prefixed with a hashtag. Similarly, the ‘@’ sign followed by a user’s name is used for mentioning or replying to other users.

In June 2008, Twitter launched a verification program, which is good news for businesses using the platform. A verification badge (a white check in a blue background) can be used to maintain the credibility of your tweets, separating yours from fake accounts.

Twitter seems to be going from strength to strength – just look at how many celebrities are tweeting their way through life. While it may be a useful social media platform, Twitter should also be exercised with caution. You don’t want to find your business in the same hot water as Qantas, which launched an ill-timed social media competition that instead invited an online rebellion. Users hijacked the #qantasluxury hashtag to vent their anger at the airline, which late last year cancelled all its flights around the world in an attempt to force government intervention in its industrial negotiations.

A similar thing happened to journalist Giles Coren in the UK, after tweeting by name a footballer who had obtained an injunction to stop reports of an alleged affair. The moral of the story is: be careful what you tweet.

LinkedIn arguably operates the world’s largest online professional network with more than 135 million members in over 200 countries. This website is ideal for businesspeople – it helps you get the most from your professional network, find past and present colleagues easily, as well as discover inside connections when looking for new business opportunities.

When you sign up to LinkedIn, you can choose to create a Basic profile for free, or a Premium profile with extra features for an additional fee. The website also offers the opportunity to import your email contacts as a way to start building your network with those who already have a LinkedIn profile.

From here it works similarly to Facebook – you can add extra information to your profile and share updates with your network. A sidebar also shows a list of companies and groups that you may want to follow.

Once you start to build a list of connections, you can also create a Company Page to provide a snapshot of your business. LinkedIn finds current and former employees (and their titles) who were linked to your business, as well as annual company growth as reflected by LinkedIn member profiles. Users who click on your Company Page can also look at ‘insightful statistics’ about your employees; once again based on the information provided by members.

LinkedIn was officially launched in 2003 and while it was slow to get off the ground, it has grown rapidly since then. According to the website, business professionals are now signing up to join LinkedIn at a rate that is faster than two new members per second and more than two million businesses have LinkedIn Company Pages.

The site represents a valuable demographic to your business with an affluent and influential membership. As of September 2011, hundreds of thousands of job applications have been submitted using Apply With LinkedIn, so you can also use it as a recruitment tool.

People use Google billions of times a day, and a lot of the time they’re searching for a business or a brand.

Google+ is a social networking and identity service that was launched last year. While it obviously plays a role in the social side of life, Google boasts that it can “help people learn about what makes your business tick” – it even has a page dedicated to using this website to share, promote and measure your business.

To access the service, there is a +You link at the top left corner of the Google search engine. Once you’ve set up your own personal profile, you can then create a Page for your business. If the information that you add onto your Page is up-to-date, it makes it easier to find it in Google+ searches.

You can then start to build relationships with your contacts by sharing your thoughts, links and promotions. You can use your Stream to post relative content (including photos and videos) or engage followers by starting a discussion.

This social media platform also offers Google Circles, which consist of groups of people that you can organise by topic. People can also recommend you to others using something called the +1 button.

A new feature known as Direct Connect also lets people enter the plus symbol (+) followed by the name of your Page in a Google search to view it directly. If your business already has a website of its own, you can connect it to your Google+ Page by adding the Google+ badge.

Most recently, the website’s measurement tools will make it easier to understand Google+ activity: what people are saying about your business, how many +1s your business receives and how these affect your traffic.

It’s still early days for Google+, but it is safe to say that this service does offer a great opportunity to promote and network your business. Only time will tell if it takes off as a useful social media platform in the corporate world. TGR

33

CORE STRENGTH IS OFTEN SPOKEN ABOUT IN FITNESS TERMS. THE STRONGER THE CORE, THE FITTER, FASTER AND MORE FLEXIBLE YOU ARE. YOU CAN LIFT WEIGHT YOU ONCE THOUGHT UNATTAINABLE, JUMP HIGHER, BREAK THROUGH BARRIERS AND FEEL HEALTHIER. A STRONG CORE BUILDS NOT ONLY CONFIDENCE IN YOURSELF, BUT INCREASES CONFIDENCE IN YOU BY THOSE WHO HAVE OUTSIDE INTERESTS.

While we can write an entire paper on the benefits of core strength to fitness, the concept transcends physicality. We often hear the expressions: core values, core philosophies, core business.

In fact the core is what foundations are built on. A strong core leads to success in life, fitness, business and really whatever you put your mind to.

That’s why when we sat down to breathe life into Think & Grow Rich, the first thing that was necessary was to create a core: what is the magazine’s purpose, how will that purpose be delivered and what are the values driving the delivery?

Our core values stem from a need to engage, educate and entertain. We put our audience first; help them take away information that can grow their businesses, increase their wealth and improve their lives. Our core has been created to build trust, get personal, listen and understand.

We will strive for excellence by seeking criticism and measuring ourselves against the best. We believe that anything is possible if you dream big, have an open mind and embrace new ideas.

The following sections are the heart of this magazine. They are the key to delivering our philosophy.

The Core is broken up into sections and sub sections covering property, business, entrepreneurship, stocks and alternative investments. It is designed to stimulate the mind, act as a mentor, inform through case studies and Q&As, let you in on some secrets and give you a range of top tips.

Through The Core we ask whether the average investor or business person can implement an idea, tip or epiphany. If they can’t, we have failed to deliver. Our motto is ‘read today, action tomorrow’.

WELCOME TO THE CORE

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One of the major problems circulating around the recruitment process of most organisations around the globe is the ability to recruit quality people, get the best out of them and keep them interested for the long haul, writes Alex Pirouz.

Recruitment in the21st CENTURY

T hings aren’t the way they used to be. In the 1980s, work was all about job security and entitlements, in the

1990s it became about flexibility and career progression. In the 21st century more and more individuals are placing importance on job engagement and want to be part of a company who they believe in. The mission and direction of the company needs to be compelling and the individual needs to feel a sense of ownership and contribution within that mission.

Employee engagement fosters and drives discretionary behaviour, eliciting employees’ highest productivity, their best ideas and their genuine commitment to the success of the organisation. Engagement can contribute significantly to an organisation’s performance, leading to improvements in service quality, customer satisfaction and long-term financial results.

While it is fairly easy to say what engagement is and why it is good for organisations, it has proven more difficult to determine how to increase engagement. Cracking the code to employee engagement and learning how to win the hearts and minds of employees is a complex yet critically important challenge to overcome as a business owner.

There are two main reasons why most businesses fail at this challenge and therefore continue to spend a lot of their time recruiting new staff. One is because they don’t have a formal process or

procedure for recruitment. While most businesses say their staff is their most valuable resource, a survey from recruitment company Chandler Macleod revealed that six out of 10 Australian businesses do not have a documented recruitment plan.

When you take into consideration the process of hiring a new staff member costs thousands of dollars and months of hard work for training and development, without proper recruitment systems and procedures staffing costs can quickly blow out of proportion. This can become a huge liability to any business looking to operate in a global business environment.

The second main reason is because most employers make the mistake of assuming what their employees want from their job rather then asking them. Studies by Ken Kovach and Achievers International indicated the following list of reasons employees look for when wanting to join an organisation:

1. Full appreciation for work done

2. Feeling ‘in’ on things

3. Sympathetic help on personal problems

4. Job security

5. Good wages

6. Interesting work

7. Promotion/growth opportunities

8. Personal loyalty to workers

9. Good working conditions

10. Tactful discipline.

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Now take a look at what managers THINK employees want, starting with what they think is most important:

1. Good wages

2. Job security

3. Promotion/growth opportunities

4. Good working conditions

5. Interesting work

6. Personal loyalty to workers

7. Tactful discipline

8. Full appreciation for work done

9. Sympathetic help with personal problems

10. Feeling ‘in’ on things.

Quite alarming isn’t it? Do you see the inconsistency and lack of communication? Both parties have different intentions in what they are looking to achieve within the workplace.

Let’s face it, finding, training and retaining quality staff is not easy. So it makes business sense to have a proper recruitment process in place along with an in-depth understanding of what your new recruits are looking for in order for that relationship to be a successful one.

Here are a couple of steps you can take in order to achieve greater success within your recruitment process:

1) Company mission: First and foremost every business should have a company mission. This is the most vital component of any recruitment process because everything within the process should be structured around the company mission. As mentioned previously, employees these days are looking to be engaged so that they can feel part of an organisation’s core mission and direction.

2) Employee profile: The next step is to create a profile of the type of employee you would like to recruit. This profile should be created once you have looked at the following aspects:

» The culture you have or are looking to build within the business

» Research existing employees and management to find out the reasons why they like working at your organisation

» Attitude traits you would like to see in a new employee

» What skills they must have and what can be trained

» Roles and responsibilities of each new recruit.

Designing an employee profile will greatly increase your rate of success within the recruitment process because you now have a more targeted approach in who you are looking for and are no longer assuming but instead making decisions based on facts.

3) Document your recruitment process: Your entire recruitment process should be documented from start to finish. From writing down your company mission, creating an employee profile, writing job ads, different styles in which to recruit, screening candidates, which strategies have worked well and which haven’t, interview process, hiring, ongoing training and support.

Everything should be documented, put into a procedures manual and regularly updated so that anyone within the HR department is able to pick up the manual and know step by step how to recruit a new staff member.

4) Systemise the training department: One of the main reasons why hiring new staff is an expensive project is the time and resources it takes to train a new sales consultant in your product and company. Start systemising this part of your business by creating videos, manuals and documents which staff can study without the need of a trainer.

By doing this you cut down the amount of time and money it takes to train new staff and increase your bottom line quicker.

Knowledge in an organisation begins and ends with people. The knowledge and experience that employees bring to their work is probably the greatest driver of an organisation’s success. What employees know helps to build an organisation as well as to preserve, maintain and improve it.

It is rare to meet a CEO who won’t tell you that his or her organisation has the ‘best people’ in the market. Harness the power of the recruitment process and you too will see a greater level of productivity and success within your organisation. TGR

Alex is an author, business advisor and mentor. He advises CEOs, executives, directors, entrepreneurs and SMEs on their overall business strategy and execution.

Twitter: @alexpirouz

...The knowledge and experience that employees bring to their work is probably the greatest driver of an organisation’s success...

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If you planned some much needed R&R from a 2011 that was packed with successes, setbacks and everything else in between, then you also would have looked at four key areas in your business from a reflective and forward planning perspective, writes Aaron Sansoni.

Your 2012 Guide toGOOD BUSINESS

It is important to reflect on the last two quarters of 2011, before planning for the successes of 2012. To do this,

you need to look at the four key areas of your potential success: marketing, sales, team and finance.

MARKETING

I am often asked, ‘Aaron where should I be marketing?’ My response is always the same – be where your customers are. If your customers are predominantly males aged 60+ then you probably don’t need to invest your marketing dollars into developing an iPhone app, or a strong Facebook presence. Consider the traditional print marketing of the daily newspaper, which your customer is demographically more likely to read.

Another quick tip is measuring previous marketing efforts.

So what worked during the last two quarters? What gave you the most dollar return? What did the Yellow Pages ad get you in return? Or the Google ad word campaign, the Facebook advert or mail out? Whatever you did, measure what worked and what didn’t. Don’t just assume or ‘guesstimate’, do some research, run the necessary reports and work out what the return on investment really was.

So now that you know a little about what did and didn’t work, it’s time to

plan. Marketing is not just a quarterly campaign. It needs to be at the forefront of your mind with all business decisions, and more importantly, it needs to be a cohesive, integrated part of your overall sales and business plan. If you have planned or are currently planning your marketing activity for 2012, think about what your business goals are for the year: are you looking to grow your brand, client base or profit base? What’s the goal and what role do you need your marketing activity to play in achieving this goal?

Don’t do it just because it’s the ‘newest’ thing – SEO, social media, web banners, guerrilla marketing – they aren’t for all small businesses. Sometimes traditional marketing still is the most effective and most times, it’s a combination of both. However, you can’t plan and decide on your marketing strategy in isolation, or before you plan your business and sales goals – it’s like putting the cart before the horse. You won’t get anywhere.

SALES

The biggest improvements come in the areas of sales process, training, strategy implementation and consistency. The questions you need to ask are how are the sales figures going and are you achieving the budgeted result? If not, look for three ways to improve product pricing, value and the sales process. Can you sell your product

or service via a new channel? Phone sales, face to face, joint ventures? How can you improve the total sales and how can you improve your sales force?

TEAM

Looking at your team on a regular basis is key. If you employ one other person, or if you employ 100 other people, the process is almost the same when looking at the effectiveness they have in your business. Remember in a SME one of the most important factors are the people you employ. They are the people that make your company what it is. First I’d start with a rating for each staff member from 1-10 in two areas: the area of their SKILL to do the role they are in; and their WILL to do their role. It’s relatively black and white, especially in a small business where staff performance is absolutely critical; if a staff member is low-skilled and high-willed then can you train them up quickly enough while maintaining their will? Or if they are highly skilled but don’t seem to have the will to do their role, can you help them remove any ‘blockages’ they may be having, (either personal or professional) or do you have to make the decision to replace them?

A good way to conduct this is to get regular staff feedback from your team and thorough self assessments. This is where they rate themselves on how they think they are going in the job.

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So why is this all so important? Well, we can talk marketing, we can talk sales and we can even talk about your financial goal, but if your team is not firing on all cylinders then your business is not either.

FINANCE

There are three key reports you must have as a business owner. You don’t need to do your own accounting or bookkeeping, in fact I implore you not to! Leave it to the ‘bean counters’ (endearing term for accountants), they are trained professionals and must have a key relationship in business. As a business owner you must have three key monthly financial reports to inspect. They are crucial for the effective running of you business. They are the Balance Sheet, Profit and Loss Statement and Cash Flow statement. For those not 100% familiar with these I’ll explain briefly.

BALANCE SHEET

The Balance Sheet presents the financial position of a company at a given point in time. It is made up of three parts: Assets, Liabilities and Equity.

Assets are the economic resources that a company uses to operate its business: e.g. cash, inventories, and equipment.

Liabilities represent the debts of the company, the claims that creditors have on the company’s resources.

Equity represents the net worth of a company, and equals Assets minus Liabilities. Equity holders are the owners of the business.

It is important to notice that Equity is defined as a residual amount. As a rule, companies do not promise to pay back Equity holders.

PROFIT AND LOSS STATEMENT

The Profit and Loss Statement measures the success of a company’s operations; it provides investors and creditors with information to determine the profitability and ‘creditworthiness’ of the enterprise.

The Profit and Loss Statement presents the results of operations of a business over a specified period of time (e.g. one year, one quarter, one month); it is comprised of Revenues, Expenses, and Net Profit (Loss).

Revenue is the income that is generated from trading, i.e. when the company sells goods or services. Expenses are the costs incurred by a business over a specified period of time to generate the revenues earned during the same period. It is important to distinguish Assets from Expenses.

CASH FLOW STATEMENT

The Profit and Loss Statement does not provide information about the actual receipt and use of cash generated during a company’s operations.

The Cash Flow Statement presents a detailed summary of all of the cash inflows and outflows over a specified period of time; it is divided into three sections based on three types of activity:

1. Cash flows from operating activities: includes the cash effects of transactions involved in calculating net profit (loss).

2. Cash flows from investing activities: involves items classified as assets in the Balance Sheet; it includes the purchase and sale of equipment and investments.

3. Cash flows from financing activities: involves items classified as liabilities and equity in the Balance Sheet; it includes the payment of dividends as well as the issuing and payment of debt or equity.

So now you know what the key financial reports are, the next thing is to get a copy of these for your planning. First take a good look and make sure you understand each line, whatever the expense and income may be.

Comparing these to last year’s in the same time period is also crucial for understanding your growth areas and areas of concern. Look at your Q1 & Q2 operating profit (Operating Revenue – Operating Costs) and compare this to what the business goals were.

Finally, cost cutting will be important in a tough year. Choose top five costs including phone, electricity, packaging, delivery, printing, and get three comparative competitor quotes.

So that’s a quick checklist that will give you not only food for thought about the first half of 2012, but also some planning to go into the second half of 2012. TGR

Aaron Sansoni is the founder and CEO of Coach Me.

Twitter: @aaronsansoni

...You can’t plan and decide on your marketing strategy in isolation, or before you plan your business and sales goals...

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There is no doubt that global economic uncertainty has transformed into a very real economic challenge for the small business community in Australia, writes Andrew Griffiths.

Taking a ProactiveAPPROACH

T imes are tough, but I can’t help feeling that many businesses are making it even tougher on themselves

by spending way too much time wallowing in the negative instead of taking a more proactive approach.

One thing is certain, after every tough time comes a good time. The problem is we just don’t know how long we have to wait. I am working with many businesses around Australia who are taking a proactive approach to the economic downturn. This doesn’t mean they don’t have their challenges, or that they live in fantasy land, but they are refusing to buy into the negativity or the doom and gloom, preferring to focus on the things they can control as opposed the things they can’t.

In particular there is an outdoor signage company that I have been working with for some time. Paradise Outdoor is an exceptional business. In these dire economic times, where advertising revenue is down, especially in regional parts of Australia (where they are located), they continue to show year on year impressive growth. They made the decision not to buy into the GFC, as they say. “We didn’t get

the memo to be miserable and depressed so we do what we always do. We invest in our business, our people, our customers and the future. Because of this our company is bucking all the trends and booming.”

So what do you need to be doing right now to overcome the economic challenges that we hear so much about? Here are eight strategies that I think can have a profound impact on your business:

1. DEAL WITH FACTS NOT FICTION

It is very easy to get caught up in the headlines or the coffee shop chatter and before we know it, we are filled with fear and dread about the world coming to an end. Of course we are in the midst of an economic downturn, not an economic stop. This means that many businesses have noticed a decline in revenue over the past few years, but I doubt that a single business has had their revenue stop completely. So if your business revenue has dropped, you need to either lower your expenses or increase your revenue, or ideally both. So rather than focusing on the negative news, focus on dealing with the two real issues – lowering your operating costs

Case Study

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in a realistic way, not a panic, and attract more business.

2. CEMENT YOUR RELATIONSHIP WITH YOUR EXISTING CUSTOMERS

In a weirdly ironic way, when times are tough, many businesses actually stop servicing their existing and loyal customer. A depressed mood descends on the business and this in turn affects customer service. That’s why businesses in this negative space lose far more customers than they should, which of course only makes matters worse. Now is the time to build bulletproof relationships with each and every customer you are fortunate enough to have. You need to be communicating with your customers, engaging them, finding out what is going on in their world and most importantly of all, becoming very clear on what your customers need from you.

3. USE THIS TIME TO RETHINK YOUR BUSINESS

This is the perfect time to stop and really reflect on your business. It is a great time to change the things you don’t like about your business and to redefine what you do and how you work and, in many ways, make your business work for you again. This is especially relevant for those people who feel that their business is a bit out of control.

4. IT IS TIME TO GET OUT AND CHASE BUSINESS

The days of sitting back and waiting for business to come to you are gone. We need to accept that. I don’t think they will be back, because the world has changed so much. We need to be prepared to go out and chase new customers, new markets and new

revenue streams. Those businesses that are not prepared to do this will slowly fade away.

5. BE CAREFUL WHO YOU SPEND YOUR TIME WITH

One of my favourite sayings is that ‘if you lay down with dogs you get up with fleas’. It is more important than ever to avoid the harbingers of doom, those people who are negative all the time, they only every focus on what they haven’t got as opposed to what they have got and so on. Don’t let yourself get caught up in the negativity vortex. Keep away from people who are like this and find the positive, proactive and energetic business owners who are too busy getting on with it to get caught up with misery brigade.

6. BE PREPARED TO TRY ‘NEW’

In this new business environment that we find ourselves in we have to be prepared to try new ways of doing pretty much everything. The reality here is that the modern consumer doesn’t just like ‘NEW’, they love ‘NEW’. So I think that now is the time to try ‘new’ in as many aspects of your business as you can. New pricing systems, products, shop layout, wording on your website, images in your advertising and so on.

7. INVEST IN YOUR BUSINESS

This is the very best time to invest in your business. It is time to give the outside a coat of paint, upgrade the website, come up with a new corporate image, train your staff, invest in new technology and really anything else that will make your business look more impressive and run more impressively. Of course this takes money, time and energy but to me it is a great investment

(actually the best investment you can make) in your financial future. This investment sends a very clear message to everyone – you are well and truly open for business and you are looking to the future. You are confident, you are motivated and you are ready to put your money where your mouth is.

8. INVEST IN YOURSELF

Just as I believe that it is an important time to invest in your business it is also an important time to invest in yourself. This means learning new skills through books, seminars, online training, mentoring, coaching… really whatever it takes. To do this you need to invest time and money. Secondly, you need to recharge the batteries. I know this is hard when you feel that you should be spending every second in your business, but the reality is that when the economy does turn, most business owners will be burnt out and really fatigued and they miss many opportunities. It is far smarter to be feeling energised, vibrant, empowered with new knowledge and excited about the future. This will put you in a great position to leap ahead as the economy recovers. Plus, when you invest in yourself you can’t help but feel better about everything, which goes a long way to improving the financial position of your business.

Some of these ideas might sound like common sense, but the reality is that common sense is not that common anymore. Just like my friends at Paradise Outdoor, you don’t have to surrender to what is going on around us, we have a choice. My advice is to choose your state of mind and your action wisely. TGR

Andrew Griffiths is Australia’s number one small business author.

Twitter: @AGauthor

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C ompanies which assume that

their ability to pass on the costs

of the carbon tax is protected by

standard ‘change in law’ clauses in their

existing contracts could be in for a nasty

surprise.

Change in law clauses allow prices to

be adjusted where there’s been a major

regulatory change. But they are unlikely to

be very helpful on the carbon tax because

they typically require the change to be ‘not

reasonably anticipated’, which is hardly

the case since these reforms have been

expected for some time.

Also, the clauses often only cover

situations where reforms require payment

of a particular fee or charge. While the

large carbon emitters who are directly

liable for the tax may fall into this category,

every other downstream business saddled

with higher input costs – whether they be

rising electricity prices or more expensive

carbon-intensive products and raw

materials – would be left out in the cold.

All businesses should consider whether it

is in their interests to incorporate specific

carbon pass-through clauses into their new

contracts.

When tailoring a carbon pass-through

clause, companies should consider the

scope of the costs that may be passed on,

such as whether both direct and indirect

costs are covered as well as any incidental

compliance costs.

There should also be transparency, equity

and accountability around how those costs

are calculated. For example, companies

should have to substantiate their price

increases and only be allowed to pass

through ‘net costs’ after their carbon

tax liability is offset by any government

compensation or free permits, so they

don’t end up with a windfall.

Finally, given the regime will move from

a fixed price to a fluctuating market price

in 2015, the contract should also include

a process for assessing the carbon cost

pass-through mechanism every couple of

years to ensure it is operating as intended.

In the case of existing long-term contracts,

businesses should consider negotiating

amendments to deal specifically with

how the costs and risks of the carbon tax

should be allocated between the parties.

There’s no doubt that certain suppliers

and contractors may now find themselves

locked into contracts where they are

unable to pass on higher costs. Dominant

parties may seek to rely on the muscle

of their market power to negotiate

amendments in their favour. But even so,

businesses should still question whether

it’s in their longer term interests to insist

their suppliers and contractors take on

100% of the risk. Could this jeopardise the

viability of a strategic relationship, or lead

to undesirable short cuts being taken?

It may well be that some sharing of the costs

and risks is in everyone’s best interests

and could achieve better commercial

relationships for all parties along the

supply chain.

If they have not already done so, all

companies should now be reviewing how

the carbon tax will affect their bottom

line and be taking steps to ensure their

contractual arrangements protect them

as far as possible from undue commercial

risks. With the legislation now a done deal,

there’s no longer any excuse for inaction.

ELEMENTS OF A FIRST-RATE CARBON

PASS-THROUGH CLAUSE » Ensure there is an appropriate

allocation of the risks and costs associated with the carbon tax/price between contracting parties.

» Consider the scope of costs that can be passed through such as whether direct and indirect costs are covered and how any fines or penalties are to be dealt with.

» Include incentives for suppliers to minimise their carbon costs through the adoption of emission reduction strategies or acquisition of well- priced permits.

» Ensure there is transparency, equity and accountability in how the pass-through costs are determined.

» Provide for a periodic evaluation of the carbon costs pass-through mechanism over the contract term.

» Incorporate a cost-effective and efficient dispute resolution process to sort out any disagreements. TGR

Mr Julian Mellick is a senior associate in the energy and resources team at CBP Lawyers.

With the carbon tax a hard and fast certainty, businesses must actively review their contractual rights and obligations concerning the pass-through of carbon costs to ensure they are not left carrying an unacceptable share of the cost burden when the legislation kicks in next July, writes Julian Mellick.

The Business CostsOF CARBON

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No matter what type of business you are running, your product and or service can now be judged via a vast social network. It is important therefore to keep tabs on what people are saying about your brand and the methods they are using. It’s a new world and you have to learn to protect your brand in this world.

This can be intimidating, however it is necessary, so here is a checklist of steps you can take to be aware of what people are saying about you.

SOCIAL MEDIA 101

Have you checked out ‘discussions’ boards about your brand? Google discussion sections will let you know every social discussion being conducted. Do a quick scan of the search results, and explore some of the discussion boards and blogs mentioning your business.

The worst thing you can do about negative publicity is take a negative stance. Have you addressed the issues politely and professionally?

Have you nominated a formal spokesperson for the business to address any problematic issues?

Have you thanked consumers for the good word they may be spreading? Some sincerity over the various networks builds a great deal of goodwill.

Have you researched your competitors to find out what people are saying about them? This may be a great way to stay ahead of the pack.

» No one is exempt from word-of-mouth criticism on the web, but you can minimise that by listening to what is being said about you in the social network stratosphere.

» If you circled YES to all of the above either before or after your business consideration, then you have made a reasonably sound investigation of your options and you could be confident in making the right decision going forward.

Yes / No

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“Could it be that the purpose of my story is to serve as a WARNING to you?”

‘Surviving the Storm’ is an easy to read no nonsense book devoted to teaching people how to build wealth explained in an easy to understand no nonsense way. This Excellent book is a much needed how-to-guide for ALL investors, large and small. The no-nonsense approach tells you how it really is from someone who has been on both sides of the fence.” – Ken Wright, Former Head of Westpac Investments and Insurances

Self made millionaire by age 29, Jodie Nolan knows how to start with nothing and turn it into millions. She’s done it… twice!

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Mindset

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While lucrative, investing in the US property market can also be fickle and dependent on factors such as the rising and falling dollar, as well as market recovery, writes Aneta Gorelik.

Rising FromTHE ASHES

W hile our dollar seems to have stabilised and is sitting slightly above the US dollar, it seems

that the drop from its high point of $1.10 in correlation with US property prices rising, means the opportunity to invest in US property may be disappearing.

First, let’s have a look at the comparative dollars. There’s no arguing the US dollar bottomed out. How long it will remain in this state is up for conjecture. Long-term trends in the currency markets have ranged from six to 10 years, measured by the various bull and bear markets in the dollar since the inception of the free-floating currency market back in 1971.

US economy expert, Jay Crooks believes the dollar is at the beginning phase of a self-reinforcing process in the other direction. He says this is the precursor to the most powerful leg up.

There’s a while to go after this stage until confidence is at its height and the currency moves higher in spite of bad news because players are still adding to their winning bet.

As Jay says, “When everyone in the world will love the dollar every day, all the time, you’ll know the trend is at its peak. Shoeshine boys will be playing the FX market, going long the dollar and making a killing.”

What this means is that the US dollar has bottomed and now the only way is up.

It may take a while for it to reach past heights, but the trend is changing. The credit crunch is forcing change and US savings are going up; debt sentiment has changed. Also, growth in the US is not as bad as reported; it’s much better in the US than Europe, the UK and Japan. It is likely you will also see interest rates cut.

If you are looking to invest, based on the current US dollar trend, now would be a great time to buy.

RISE OF THE PHOENIX

Investment in property within the US is also trending up. In October 2011, there were 7,556 closed sales, up 16% from this time the previous year. Demand is accelerating while supply is falling, especially in the price ranges below $150,000. And we all know what that means. While active listings are down, median sales prices are at their highest in 12 months.

The biggest jumps have come in Phoenix, Arizona. For greater Phoenix the monthly median sales price jumped from $80,000 to $86,000 in less than seven weeks, an 8% increase.

If you are an Australian looking to invest in the US market, Phoenix is currently the perfect place to invest.

There are clear signs that supply is decreasing and demand is increasing,

vacancies are down, rents are up, and price momentum is starting to build. The property market bottom out, is mirroring that of the dollar.

If you are an Australian investor the good news is that rental properties, especially single family homes, are in huge demand. This demand coupled with rising rental rates is giving Phoenix landlords reasons to celebrate their decision to invest in cash flow property.

It is an unfortunate situation, but as many US citizens lost their homes to foreclosure or short sales, there is a greater need for single home rentals.

Demand has pushed the supply of rentals down to about a 6.6% vacancy rate and rents have recently risen about 2.5%. This is very good news for landlords and investors.

There may never be a better time than now to become a landlord, particularly in greater Phoenix. Take advantage of the still high dollar, before the trend reverses and utilise that to get into the US property market now, before time runs out. And it will, it’s just a matter of time. TGR

Aneta has a diverse range of business experiences including media, property investment and business development. Aneta currently runs a US investment strategy company with strong partnerships throughout Australia and America.

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Many will rightly say most wealth has been made in residential real estate and that’s where most wealth is tied up, writes Jamie McIntyre.

How Most WealthIS MADE

I t is true that the wealth of most Australians is tied up in residential real estate, however many people

just assume that means it is tied to residential houses.

Yet this is not where the super rich have made or invested most of their money. In fact the way many have made – and continue to make – their money is simpler than residential investment. Unfortunately, most never recognise how simple it can be.

This method has created consistently rising wealth that not even a severe global credit crisis can derail.

Actually this strategy mostly involves price fixing, and it is completely legal to do so.

Price fixing allows you to legally manipulate the value of the asset to always rise.

Government policies surrounding this strategy ensure your asset has the best chance of rising, regardless of the state of economy. The banks also do whatever they can to ensure the value of your asset continues to rise. There is no doubt this is in everybody’s best interest.

There is a way to acquire these assets without borrowing, without any interest or holding costs and which allows close friends and colleagues to profit from it as well, with an outlay of no more than $35,000.

For that small outlay, anyone with $35,000 in superannuation could replicate this strategy.

No one has ever been able to make this strategy available for retail investors (which is understandable as it isn’t easy to do). However, the strategy is so profitable and possibly the safest investment strategy I’ve used, that it creates a desire not to share it – despite the promise I made to my first millionaire mentor to share all my knowledge, which is the foundation of my wealth.

The reality though is that the average person couldn’t replicate this strategy without some substantial help to do so.

The strategy is landbanking, which the act of securing future development sites immediately.

Successful landbanking by the use of options, ensures zero holding costs.

Once your site is up and running, you can tap into several important elements that will increase your wealth.

Here are some further advantages.

1. Land blocks throughout Australia have consistently performed over the last decade. Despite all the volatility and the “end of the world as we know it” doom and gloom perpetuated by the media.

2. You can secure land with a tiny deposit.

3. You don’t need any finance for up to four to 12 years.

4. You get all the capital growth with zero holding costs.

5. Because you don’t need finance, there are no lending restrictions.

As you can see, landbanking can be a highly profitable way to utilise the property market to your advantage. I suggest you find out as much about it as you can as quickly as possible. TGR

Twitter: @jamiemcintyre21

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BANKS TRY TO TAKE AUSTRALIANS FOR A RIDE

While the banks have passed on the last two interest rate cuts, you shouldn’t believe them for a second when they state they blame higher wholesale funding for delays or partial rate decreases.

Australian banks for some time now have sourced most of their funds from domestic deposits, rather than foreign wholesale markets.

So even if wholesale fund rates have risen, this only affects a small percentage of the funds they borrow.

In fact the Australian banks don’t need to rely on wholesale fund markets.

Since the credit crisis began in 2008, there has been plenty of domestic savings. The Federal Government also arranged other mechanisms to ensure Australian banks aren’t reliant on just the wholesale fund markets.

Not to mention that in a downturn there is naturally less demand for loans.

To try to hold onto the 0.25% rate cut, as they were planning, and to threaten to hold onto future cuts is a joke.

Australians need to force competition amongst the banks.

There are two possible solutions to this problem:

1. Turn Australia Post into a bank to provide serious competition to the existing industry, with a government guarantee to give it a competitive advantage over the top four banks. Australia Post could offer lower rates, and as it is Australian owned and would not possess the need to make as much profit

2. Make it a legal requirement for the top four banks to pass on all rate cuts in full.

These measures would ensure the independent Reserve Bank policy could achieve its outcomes.

If banks don’t pass on full rate cuts they are dictating Australian monetary policy for self-interests, which is hardly democratic.

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48

PROP

ERTY

C harles Dickens’ famous novel A Tale of Two Cities best captures the economic and financial

market turmoil that everyone has been experiencing in 2011: It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness.

Lately, I have seen many examples of the media thriving on the ‘doom and gloom’ of the current environment, and for most people it’s been one big rollercoaster ride, with the bailout of the US debt market, the decline and talk of the possible breakup of the European markets and single euro currency, and the near collapse, then subsequent recovery of the Australian stock market.

This fear-mongering bandwagon, which the media loves to jump on, has created a very negative overall consumer sentiment in Australia. In fact, Australians have reverted to increasing their spending equivalent to that of the 1985 era, delaying the purchasing of big-ticket items, and, many first home buyers are delaying their entry into the property market. This, in turn, has resulted in low clearance rates of 50% across the major capital cities in 2011, low volume of new listings and a slight decline in the median price across the major capital cities, seen in the table above.

Simultaneously, all of this has created ideal buying opportunities for ‘cashed-up’, and market-ready property investors who are capitalising on the dire market conditions, by negotiating massive discounts on blue-chip properties, in premium locations across the major capital cities. Not only are there bargains to be had after a property is passed in at an auction, I have personally witnessed developers slashing tens of thousands of dollars off existing and off-the-plan stock, in an attempt to sell out projects before the end of this uncertain and volatile year. It is truly a time of wisdom, and the age of foolishness.

With a high probability of substantial interest cuts in early 2012, coupled with escalating rental yields across the major capital cities, 2012 is looking like the beginning of the next strong upward trend in the property cycle, especially in Melbourne and Sydney. Many people will look back at 2011 and correctly identify it as the ‘best time to buy property’ under market value, and by that stage of course, it will be too late, as all the bargains will be gone, and the market would have moved into the next phase of the property cycle.

In spite of the doomsayers, there are ways to profit in the property market, writes Konrad Bobilak.

Don’t Wait to Buy Property,BUY PROPERTY AND WAIT

CASE

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CHANGE IN DWELLING VALUESYear-on-year change, seasonally adjusted

Brisbane Melbourne Adelaide Perth Hobart* Darwin Sydney Canberra% 0

-1 -2 -3 -4 -5 -6 -7 -8 -9

-10

SOURCE: RP DATA-RISMARK *HOBART DATA TO SEPTEMBER 2011

-1.1%

-8%

-5.4% -5.2% -5%-4%

-3.1% -1.1%

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Case Study

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One of the most fundamental principles of investing in property in Australia is to appreciate that the market moves in distinct cycles which are characterised by periods of strong capital growth and demand for properties, through to periods of a flat-lining market, following periods of distinctive falling median prices, lower demand for properties, and a decline in property prices. The money is made by both the timing of the market, and of time in the market. Hence my advice right now to investors is not to wait to buy property, rather, buy property and wait.

The general rule of thumb is that these property cycles last seven to 10 years, and can be segmented into four main parts, the ‘Peak of the Market’ being the shortest of the four:

1. Peak of the Property Market – high capital growth, auction clearance rates of 85%+.

2. Decline of the Property Market – declining capital growth, auction clearance rates dropping from 80% to 60% and 50%.

3. Bottom of the Property Market – extended periods of low capital growth, auction clearance rates of 45% to 50%.

4. Growth of the Property Market – increasing capital growth, increase demand for property, increasing auction clearance rates, 55% to 75%.

It is interesting to note that not only do these cycles vary drastically across the major capital cities in Australia, but the variance can be further observed on a smaller scale within the major cities themselves. For example in Melbourne, the western suburbs and bayside Twitter: @konradbobilak are counter-cyclical to each other, while in Sydney, the north shore and the western suburbs at times have shown similar behaviour. Furthermore, these property cycles can be further characterised by a shifting balance between capital growth and rental yields, this relationship being largely an ‘inverse one’. That is, during times of strong capital growth, rental yields tend to drop as a percentage; the reverse is true during times of stagnant capital growth, or declining capital growth, when rental yields eventually catch up to the market, and increase as a percentage.

So what is the implication of all of this for the average investor?

In essence, successful property investors practice counter-cyclical investing, or they do the exact opposite of what the market is doing. When the consumer sentiment is low, characterised by low clearance rates of 50% or lower, they buy. When the market is booming, which is usually the shortest part of the property cycle, sophisticated investors focus their energy on ‘revaluating’ their properties, and lock in their lines of credit (LOC) at the highest

possible level, waiting once again for an opportunity to snap up a bargain at the low point in the market.

Perhaps the best example of ‘counter-cyclical-investing’ is that of Warren Buffett, who by age 79 built Berkshire Hathaway into a $198 billion company, averaging an annual growth in book value of 20.3% to its shareholders for the last 44 years, while employing large amounts of capital and minimal debt. Buffetts’ famous style of investing was encapsulated in his quote:

“I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.”

Remember that the ‘risk’ always lies with ‘you’, not with the market. The market is simply a vehicle that transfers wealth from the uneducated to the educated. The sooner you gain the necessary skills and education to take advantage of the property market, the sooner you will be making money and taking advantage of rare opportunities such as what the current property and share markets are presenting right now. TGR

Konrad Bobilak has years of experience in the property industry as a financier working for one of the major four banks, he then set up a mortgage broking company consisting of 15 mortgage brokers and finally achieved substantial personal wealth through property investing. Twitter: @konradbobilak

...Many people will look back at 2011 and correctly identify it as the ‘best time to buy property’ under market value...

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B uying an investment property, starting a business, or growing a business, can be an exciting

time for anyone expanding their wealth portfolio. Yet as investors and business owners, we become so focused on our due diligence and calculating the expected returns that we forget one of the most important considerations: taxation.

Let me demonstrate by illustrating a real live case with one of my clients where one simple mistake in signing a contract cost them $67,000. This article let’s you in on how to avoid that mistake.

John and Kelly (not their real names) purchased a property at an auction. They didn’t consult their accountant, and bought it in the name of their company. They did this, thinking they were smart, as they were protecting their property if someone sued them in their business.

The shock came for them when it was time to sell their property.

The good news for John and Kelly is they were thinking smart as business owners and investors: protect your assets at all costs. Lawsuits are higher than ever, and according to statistics, the average person on the east coast is sued three times in their lifetime.

Further good news was that they made a massive profit on the sale of the property. They bought in the beginning of the property boom and sold at its peak.

The bad news for John and Kelly was by buying the property in a company, they would be paying twice as much capital gains tax on the profits.

You see, a company is not entitled to the 50% capital gains tax discount that the ATO gives business owners and investors who hold assets for more than 12 months. Only individuals or family trusts can claim this exemption.

The sad thing was, if John and Kelly had bought the property in a family trust, not only would they have slashed their tax and received the 50% discount, but they would have protected their property from golddigging predators who would be tempted to have a crack at them. By not getting proper advice, John and Kelly had to pay over $67,000 in capital gains tax that they wouldn’t otherwise have had to pay.

So what is the moral of the story?

When buying a property, starting a business, or opening a trading account, make sure that you get proper advice and don’t make any unanticipated donations to the Federal Government (via the ATO).

See an accountant who specialises in tax and asset protection for business owners and investors. TGR

Warren Black is a specialist accountant, tax and commercial lawyer, who specialises in Australian tax law and international tax law.

Twitter: @warrenblack777

Nobody likes being taxed, but if you know taxation law then you can minimise the government’s impact on your portfolio, writes Warren Black.

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HEAL

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Health Check

IS SOLIDMaking Sure the Structure

The surveyor will check for defects allowing the purchaser to renegotiate. The aim of a property health check is to help avoid any nasty surprises and potentially speed up the sale.

Have you checked the gutters? If the gutters are blocked this could cause leakage problems inside.

Have you checked for plant growth in the external wall?

Have you checked for damp and damaged plaster?

Have you checked for damaged gutter and roof tiles?

Have you checked for blackspot mould/condensation?

Have you checked the brickwork?

Have you checked for defective external paintwork?

» The above is just a small sample of what a surveyor will check for. If you circled YES to all of the above either before or after your property consideration, then you have made a reasonably sound investigation of your options and you could be confident in making the right decision for you going forward.

Yes / No

Most of the people involved with this magazine, whether a consumer or producer, will have investments in property or shares. Each investment strand needs its own due diligence. The following is a checklist for those looking to buy investment properties. Property buying isn’t just buying at a great price; there are too many properties that need a lot of work that are bought needing ridiculous amounts of money spent on them. Unless you were in it to renovate, this is unacceptable. Tragically, not enough people do their due diligence by sending in a surveyor.

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A lthough this article is written from someone who has a preference for using options to match investing

ideas, the principles discussed have application beyond options to other vehicles.

Some major challenges for those investing are:

a. Which strategies/vehicles should I use to trade this particular set of market conditions (e.g. with a technical buy signal which of six commonly used strategies should I choose to take advantage of this);

b. How do I determine early on if there is an actual or potential for a significant market change in order to change strategy quickly or normal risk management methods.

I would propose that becoming data-smart helps to meet these two challenges and justifies why it is an essential piece of learning for any short-term investor, irrespective of the chosen investment vehicle.

This article has a focus on the second of the challenges above and aims to supply a set of criteria that may help in detecting and so taking action on a potential change quickly.

Such actions may include:

a. Altering strategy to increase/decrease risk exposure;

b. Altering position sizing between base level and increased risk level.

Early signs of change in trend.

We know that prices in specific equities fluctuate according to changes in market sentiment. Market sentiment changes according to whether relevant economic data release matches expectations. Beating or failing to meet expectations will result in a move in price.

For a complete picture there are three issues that will form the basis of our discussion:

a. Longer term prevailing market sentiment as seen in movements of the major indices;

b. How the market responds to data (i.e. does it respond ‘appropriately’ in relation to market expectation);

c. Are there leading indicators that pre-warn of a potential market move.

There are seven key signs to watch:

a. Short-term

» Key established technical levels

» Ignoring ‘normal’ response to data

» VIX index

» USD

» Energy and base metals

» Precious metals

b. Longer term

» Baltic dry index

» Libor

a. Key established technical levels

Whether you personally choose to subscribe and base your investment decisions on technical analysis there is little doubting the influence of technically key levels for no other reason that many in the market choose to use this. In this context, it is such levels on the major indices that are our focus e.g. DJI (Dow Jones) SPI (S&P500) or local markets e.g. ASX200 (XJO).

Broadly speaking, there are two major levels which historically seem to result in a proliferation of buying or selling:

i. Breach of long-term support and resistance lines;

ii. Price/200 day moving average (MA) crossing, or 50/200 MA crossing.

The chart below illustrates when these have occurred in the last five years using support and resistance lines. Green arrows represent a move to an upwards trend, red arrows indicating a downwards trend.

Figure 1 – Major sentiment changes in S&P500 2006-2011 (weekly chart)

One question often asked of educators about share market products is, “If technical analysis is the major influence on decisions to enter or exit a specific position, why is it important to understand what is going on in the market as a whole?”, or as we shall call it being ‘data-smart’, writes Mike Smith.

IN MARKET TRENDEarly Signs of a Change

MIN

DSET

PART 1 – FOUNDATIONS IN DETERMINING IMMINENT CHANGE IN TREND

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Mindset

If this is the indicator of trend change it is worth questioning why we would look at anything else. If we can develop a set of criteria that forewarn us of such an event occurring we can be better prepared in terms of risk management and strategy selection. The remaining signs are those which may give us this information.

b. Ignoring ‘normal’ response to data

As discussed earlier market sentiment changes according to whether economic data hit or miss expectations, the normal response being that if expectation is surpassed then we get a general market move upwards. If the markets expect further downwards pressures one often finds that the market stops responding positively to good data and is hypersensitive to poor data (or vice versa).

c. VIX index

The VIX index (sometimes termed ‘the fear index’) is a measure of the implied volatility of options. For those of you less versed in options terminology here is a brief explanation. If the market is nervous, one of the common responses is to utilise options to protect capital (one of those advantages of learning options mentioned earlier). However, as with any asset class, if there is a sudden increase in demand then price goes up quickly, often more so than a theoretical fair price. Volatility relates to the movement of an asset class. Implied volatility relates to swings in options pricing (which are forward looking vehicles).

So increase demand = quick increased price = change in implied volatility.

Historically, whenever the VIX increases in value there is an inverse relationship with the major indices. Therefore this makes this essential viewing in determining whether major market sentiment change is happening.

d. US Dollar (USD)

As a general rule the value of a currency is a reflection of the market perception of that country’s economic health. Despite the challenges to the US economy over the last few years and many ‘expert’ voices predicting the demise of the USD, such comments fail to take into account two key factors.

i. As currencies are traded in pairs then it has got to be compared against another currency’s health. For over 18 months the sovereign debt issues in the eurozone have influenced market concerns globally. So, when predicting USD downturn what you are saying is that the problems in the US outweigh the problems in Europe. This obviously has not been the case.

ii. The USD is seen as a risk haven trade. So in times of increased risk the market buys USD as opposed to other currencies. It is this point that has the most relevance for this article. A sign that the risk trade into USD is on or off is that an inverse relationship often develops between the USD and indices.

Hence, a rise in USD when markets go down is an important relationship to note.

e. Energy and base metals

As both increased demand for energy and base metals are signs of economic growth potential both of these could also be justified on your monitoring radar. With reference to base metals, Copper is seen as the major metal mover and there are many who use the Copper price as a leading indicator of perceived economic health.

f. Precious metals

The normal inverse relationship between USD and precious metals is well documented. However, as precious metals are also often used as a risk hedge, one would expect increased buying as a leading indicator that the market has concerns. With reference to our discussion above re: USD, in times of risk (and so of interest to you) it would not be uncommon to see both move in tandem breaking from the normal inverse relationship.

Longer term

g. Baltic dry index (BDI)

The BDI is often touted as a leading indicator. It shows activity in the shipping movement of dry goods and hence is thought to be a valid reading of potential economic growth or slowdown. Although there was some evidence of this during the Global Financial Crisis (GFC), it is questionable as to whether this is the case on a consistent enough basis to be a valid leading indicator of a potential move.

h. LIBOR

LIBOR (London Interbank Offered Rate) is the average rate at which banks lend

to other banks and therefore may be a good indicator as to the general health of the credit markets (three month LIBOR is a reasonable choice). More accurately, I would suggest the relationship of LIBOR to the base rate set by the central bank is worth extra scrutiny. It is a widening of these rather than the LIBOR figure itself that is the issue as seen during GFC. In the US this is known as the TED spread.

As this really is an issue for credit market problems and often the market will have moved significantly already, we will leave this out of our summary information as it merits a separate discussion at a future stage.

From what we have discussed above theoretically the following table summarises the information above and can be used to form the basis of a monitoring system:

Table 1. Summarisation.

So to summarise let us go back to what this all means to you as an investor.

The strength of your belief about prevailing market conditions, and so investing decisions, can be assisted by having a monitoring system that has the above on the radar.

a. The information you gather can assist in choosing a strategy that has an appropriate risk profile. e.g. when seeing a technical buy signal, with market conditions being a little nervous, you might choose a bull call spread (with a greater risk cap) rather than a straight bought call.

b. Your normal position sizing calculation (i.e. how to decide how many to buy of an asset) can be tightened in cases where prevailing market conditions are under pressure e.g. 2% of capital risk reduced to 1%.

Part 2 of this article will look more closely at the evidence behind this theory and suggest in practical terms how to adjust positions as the potential change turns into an actual change. TGR

INDICATOR UPTREND TO DOWNTREND DOWNTREND TO UPTREND

Key technical levels Breakthrough support Breakthrough resistance

Ignoring normal data response

Ignores good data; hypersensitive to poor data

Ignores poor data; hypersensitive to good data

VIX index (VIX) Rises Falls

US Dollar (USD) Rises Falls

Oil Falls Rises

Copper Falls Rises

Baltic dry index (BDI) Falls Rises

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T he punters risk too much; they are always in a hurry and when they slump – which happens a few months

after they start – they quit trading. Traders on the other hand are those who understand money management, are prepared to learn how to master the art of trading and when they get to the slump, power through it rather than quit and walk away.

Over the last seven years I have been trading with thousands of traders from all over the world. I have figured out what causes punters to quit, why they lose and how you can become a trader and potentially make a lot of money if you have great money management skills.

One of the worst things you can do is to start Forex trading, spend a lot of time and money, get to the slump and then give up in the middle of the slump.

So here is what you need to do to become a trader and not a punter.

1. Join a winning trading team that knows how to quit and quit often with outstanding money management.

2. Learn to trade real money from day one with micro lots so you are actually trading real money. Don’t paper trade; it will likely get you nowhere. And being wealthy or having money doesn’t give you a license to short cut the system.

3. To overcome the slump and reach the long-term success that you desire, you need to be prepared for it and be able to trade through it. The only way you will be able to trade through it is by building up your trading muscle steadily. When the slump starts to come you can lean into it with confidence, continuing to step up to your trades with conviction and belief with real money, instead of living in hope and anxiety like a punter who risks too much and is in too much of a hurry.

4. Don’t go walkabout when the slump starts to come. Traders hang in there and focus on money management and don’t diversify at the first sight of failure. Punters jump ship at the first sight of failure and begin the quest for the Holy Grail that does not exist.

5. Don’t be afraid to quit a trade when you learn to see it is no longer working. You won’t have this skill to start with and you will need to reply on your trading team.

The great news is that the market is full of punters who are giving their money away to the traders who know how to prepare with a plan and overcome the slumps. TGR

Andrew Barnett, is a professional trader and co-founder of LTG GoldRock.

Twitter: @LTGGoldRock

From my experience there are essentially two types of people who trade financial markets: punters and traders, writes Andrew Barnett.

Punters vs.TRADERS

MentorM

ENTO

R

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The definition of media advertising has changed massively over the past decade. What does this mean for investors in this market, asks Andrew Baxter.

The Pitfalls of MediaINVESTMENT

T raditionally, the stalwarts of TV, radio and print media (magazines and newspapers)

were the channels that businesses looked to in order to promote their brand, advertise and so on.

However, the landscape has changed immeasurably. The stratospheric growth of social media, the amount of time people spend online and the acceptance of technology, as the mainstream norm, has turned the sector on its head.

Slowing global growth has no doubt impacted on advertising spend as companies tighten their belts and media rates soften, following the boom years; however, has there been a shift in the sectoral spend?

The answer undoubtedly is yes – according to The Business Insider, there have been quantum shifts in spend. Over the past decade (2000 to 2010) newspaper advertising spend in the US has gone from $48,670 million to $23,434m, while TV advertising has seen a shift from $60,257m to $63,883m, albeit with the growth coming from cable not broadcast TV. So against that backdrop, where has the money gone? The answer is of course the internet, where the spend has increased from $8,087m to $25,353 over the same time frame*.

So if this is where the growth is coming from, how does one capitalise on it?

The traditional media companies – let’s look at Australia – News Corporation, Fairfax, Ten and Seven have all seen their share prices decline over the past five years; some very aggressively. Some of this has been to do with corporate restructures shifting the focus of the businesses. However, if we look at the performance, albeit outside of Australia, of Google, the price action has been mind blowing.

Google’s share price over the past decade has gone from US$100 in 2004 through to more than US$580 currently – by contrast the Dow Jones Index over the same timeframe has added less that 10%.

So, will you be making your next windfall from investing in online media? The answer is not quite so cut and dry,

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Case Study

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for everything there is to laud from Google and Facebook’s success, there have been many others that have come and gone from the online media segment – or at least failed to dominate in the way their competitors have.

Traditional investment analysis looks at valuing a business based on earnings – not always the case in the online sector, where valuations can often inflate on the back of expected or anticipated earnings. Traditional investment looks at the competitive advantages a company may have, versus a new competitor. However, the speed and evolution of change in the online sector can mean the first mover is not the winner. Something bigger, better, shinier or more innovative can very quickly capture and dominate market share.

As a result, perhaps a different strategy needs to be used when identifying how to invest in these kinds of businesses. The difficulty is in structuring a model that can quantify the CEO’s charisma, viral growth the company may enjoy and what the next hot button in one of the most dynamic and constantly evolving sectors in the marketplace. Any suggestions – answers on a postcard/tweet/blog/status update – depending on your preferred media channel! TGR

*Note that the figures for 2010 are estimates only.

Andrew Baxter is one of the leading trader coaches in Asia.

Figure 1. (Source: The Business Insider Oct 27th 2009)

...So if this is where the growth is coming from, how does one capitalise on it?...

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A n effective financial management system gives you the ability to analyse your

business and to prepare carefully considered long and short-term plans, and therefore be as ready as possible for any pending changes that could impact your business.

BE READY FOR LEGISLATIVE CHANGES

Federal and State governments regularly announce legislative changes that can have an impact on businesses of all sizes. While a professional is best placed to offer you specific advice on what legislation affects your particular circumstances, by maintaining appropriate financial records you will be better placed to analyse how your business will fare when changes take place.

Having a very clear picture of your finances can also improve how quickly and effectively your business reacts to changes. You can ensure your business is agile enough to take advantage of any entitlements and not scramble to get the information together in time.

KEY REPORTS FOR ANALYSING FINANCIAL HEALTH

While there are a number of reports that are very important for a business manager to frequently refer to, and these vary based on the type

of business being run, the three reports generally considered to be essential are: cash flow reports and forecasts; balance sheet; and the profit and loss report.

To run effectively, businesses need to perform regular health checks on their performance and financial position, and this means having access to and reviewing critical reports almost daily.

A cash flow forecast will compare money that should be paid to you, against the money you need to pay within the same period, and so highlight trends and any potential shortfalls or surplus funds. For many smaller businesses having cash readily available is crucial to their success, therefore having a solid base for forecasting cash (i.e. reliable historical records as well as visibility of future transactions) can be extremely beneficial.

» The balance sheet is the statement of your business financial position at a point in time. This will clearly show you assets versus your liabilities, in other words what you own and what you owe.

» The Profit and Loss statement shows your business trading result over a specified period. You can compare specific months, quarters or years against each other to get an overall picture of how the business is performing.

» Invest in a system that can measure the business

» The best way to keep track of all money coming in and going out, and then measure how the business is performing, is to use accounting software. But you need a system that’s appropriate to your business size, as well as being able to grow with your business.

By having information recorded in a way that’s easy for you and your accountant to analyse, you could reduce the amount of time spent preparing submissions for government agencies, and your compliance costs, which could provide more of an opportunity to spend time planning how your business can grow. TGR

Please note. The information in this article is of a general nature and does not take into account individual requirements. Independent professional advice should be sought before making any decision relating to any information in this article.

Written by Chris Hagglund, CFO Reckon Limited.

www.facebook.com/QuickBooks.Australia

It’s not enough to simply record the dollars and cents coming in and out of your business, writes Chris Hagglund.

CHANGESBe Prepared For

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Health Check

THE MARKETKnowing

Does the company you are looking to invest in, have stable earnings, a historically low valuation and a convincing long-term strategy?

Are you looking at a company that can recover if its price dips or it’s affected by market volatility?

Does the company add short and long-term value to your portfolio, as well as diversification?

Can you sell a put option to gain exposure and lower the cost price to generate income from the cash premium received? (The sale of put options entails the receipt of this cash premium in return for the obligation to purchase the security at a specific price.)

Have you chosen an industry sector you wish to invest in? Some industry sectors offer better opportunities than others, particularly in the current circumstances.

Have you looked at international sectors? The international market is larger and has more diversification.

Have you looked at strong diversified sectors? The oil sector is one that allows you to diversify and remains potent. Petrol prices keep rising and the array of oil-related companies including refineries and drillers allow for an excellent spread.

» It is possible to achieve higher returns in a volatile but low-performing environment. There are significant opportunities available to those that can find and take full advantage of them.

» If you circled YES to all of the above either before or after your shares consideration, then you have made a reasonably sound investigation of your options and you could be confident in making the right decision for you going forward.

Yes / No

The market is volatile and it takes a savvy investor to come to terms with how to negotiate the fluctuating trends. There are still some certainties and the following is a checklist of things you should consider if you take the plunge to invest or diversify. Low market returns and high volatility may provide investors with some unusual opportunities.

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The strategy of Renting Shares is primarily designed for investors who have been thinking about high-return strategies, but don’t know where to start, for investors whose traditional forms of investment are not producing the returns they want or for investors who are searching for a part-time profit-based cash flow system to produce a secondary income stream, writes Nik Halik.

Creating Your IncomeSTREAMS

‘R ent your shares’ among other terms was created to simplify the description of

various strategies that entail writing or selling call options over stock or shares. Options, in their many forms are a derivative of the stockmarket or sharemarket. ‘Buying insurance’ among other terms was created to simplify the description of terms commonly used for various strategies that entail selling or buying put options on the stock or sharemarket.

Allow me to explain. Just as a landlord rents out an investment property to a tenant, the same strategy has existed within the stock market since 1973.

We can also be a Sharelord® in the stockmarket. In this case, an educated investor will receive an income rental for simply renting out their share portfolio. However, as it stands now, millions of uneducated stockholders worldwide will simply buy shares and maintain them devoid of any rental income. This is the equivalent to a property investor having 10 or 20 investment properties and maintaining them vacant

As an example, let’s assume you bought shares that were valued at $20 each. If you received 6% rental for the month per share, that would equate to $1.20 in rental premium per share. Now if we calculated the real cost of the share incorporating the rental premium, you would now have the share wholesale rate of $18.80. This means the real purchase cost of acquiring the share was

$18.80, meaning you have an automatic downside buffer protecting you if the share was to drop by $1.20 in price.

As the Sharelord we give the tenant, who is the speculator, the right but not the obligation to purchase our shares. For that right, the option buyer, who is the tenant of our shares, is allocated a selling price for our shares, at all times chosen at our discretion. This means, we set the guaranteed selling price of our shares if the tenant wishes to exercise their right to buy our shares. In the event of being exercised, we simply surrender our shares over.

Assuming we purchase the shares at $8.80 and rent them out at $10 during the month, whilst receiving $0.65 in premium, this would equate to a 7% rental premium. If our shares have been exercised at the $10 guaranteed selling price, we receive $10 per share and our Sharelord return for the month skyrockets to 21%. This exceptional scenario offers us a second opportunity in generating additional cash-flow. If our shares are exercised we acquire new stock to rent out. If our shares are not exercised, we simply re-rent out the same shares.

The Share Renting strategy is designed specifically for the US market. It is an excellent high leverage money maker for any investor globally. This is so lucrative that the US government – and most US retirement accounts – allow this styled system of share rental to be transacted in a 401(k) plan. Similar to Australian Superannuation.

The 401(k) plan is a type of employer-sponsored defined contribution retirement plan, allowing an employee to select from a number of investment options in the money market arena.

This allows them to utilise the Share Renting system in order to expedite the cash flow process and adequately make up for the years they didn’t save enough, in order to service their retirement. When Share Renting, you will need to define the specific criteria of shares best for rental, at which price, sector group and time frame during the rental month to achieve the highest rent.

Another strategy for investors to incorporate is to purchase stock insurance which protects their nest egg from capital decimation, so that they can reduce risks and sleep well at night. This is an excellent low-risk strategy. Buying an insurance policy for a stock holding has been on offer to the general public since 1973, yet millions of investors have no idea of its existence.

In fact an investor can purchase stock market insurance with none of your own money. By using a certain portion of the initial rental premium paid, an investor can use these funds to purchase an insurance policy providing further downside protection to their stock portfolio.

Share Renting works in harmony with property investing and is an excellent tandem strategy. Property investments generate capital growth and the Share Renting strategies provide the bonfire and cash-flow fuel source to acquire more properties. By developing a recession proof investing system, the additional cash-flow generated can also catapult a negative geared or negative cashflow property into a positive geared property. This enables the investor to transform a liability into a valid cash-flow asset investment. TGR

Nik is the founder and CEO of Financial Freedom Institute, Money Masters Global, The Thrillionaires® and iCoach Global.

Twitter: @nikhalik

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Trading is a real profession; like many others where you learn the ropes, plan well and then hope for the best, writes Jodie Nolan.

T here have always been professionals associated with brokerage firms that make

their living from trading, but it wasn’t until the last decade, with significant advancements in technology, that the average investor had direct access to the markets. Live data feeds and extensive global news coverage fans the flames for the novice trader and allows almost anyone to take advantage of the alternative investments arena such as commodities and foreign exchange.

The only real problem with the information superhighway is the masses of irrelevant data which can distract and distort the judgement of even the best professional traders. Trying to remove the ‘noise’ and not overload your sensory system is an essential skill of the master trader. Ideally a skilled trader will learn to pay attention to what is important, filter the signals from the noise and appreciate that patience is a virtue. Learning to remove all emotion from your trade decisions is also essential.

If you are serious about becoming a trader and accessing the alternative market space, trade for a living or simply diversifying your portfolio, then you really need to hone your skills from an educator who can show you the essentials.

When traders are looking to enter a position, there are two types of information which assist in making an approach to trade. The first is ‘Fundamental Analysis’. This is the background story that determines whether a trade is bullish or bearish. If you are looking at a commodity like sugar, (and recent reports show excellent high yield crops in all the major growing areas but the demand forecast is low), then you might surmise that the trend for sugar is bearish given there is great supply but limited demand. The second type is ‘Technical Analysis’. This is the use of technical information like numbers, charts, volumes etc. to determine whether a particular market is trading up, down or is ranging.

The number one rule in analysing technical information is to keep it simple. Most technical indicators are ‘lagging indicators’, meaning the information they provide is calculated from the price action that has already occurred. There are also leading indicators such as Oscillators, which assume a particular price movement pattern will result in the same reversal pattern and Fibonacci (or Fibs as it is commonly known). Fibs rely on a recurring psychological human pattern that price action will retrace as a percent of previous price movements.

Lessons for theALTERNATIVE INVESTOR

Leading indicators aren’t there to predict the future; they are a tool to show opportunities that may be approaching. Most experienced traders know it is impossible to pick the tops or bottoms consistently and confirmation of a new trend is paramount for sustainable trading, otherwise it can be considered just gambling.

The number one indicator in my opinion is price action. It is the most current information and has priced in all the market data and effects. By following price action and its recent history, you gain valuable information in combination with how your chart is displayed. Useful information can also be displayed with bar charts (Bar OHLC) displaying open/high/low and the close details. Another common one is Candlestick which shows the same information but in a visually different way. This information is used to determine a trade’s entry point, an exit, profit target and a stop loss, even before you enter a trade.

Part of being a successful trader is having a game plan. Today’s traders have access to a multitude of investment areas from shares, foreign exchange and global commodities. A trader needs to be familiar with various types of trade philosophy, systems and platforms as each different market condition, be it a bull or bear market, brings with it different potential outcomes. It also brings crucial understanding of how your trading system will perform in the current environment. So are you the type of trader that prefers the story of fundamental analysis, technical analysis or a mixture of them all?

Anyone can become a trader, it is as simple as opening a brokerage account or buying a company’s specially designed platform, but to become successful at trading takes dedication, commitment and planning. One of the first things you will learn is ‘sometimes

the best trades are the ones you don’t make’. This old trading term is still bandied around today and adds weight to the importance of not only intuitively making good decisions, but also the experience that comes with knowing when to not place a trade.

Experience is critical and yet as you can appreciate, takes a while to develop. The most effective training is the act of trading itself. With experience comes the ability to learn from your mistakes, which is difficult as mistakes cost money. Experience also allows you to build your own trading system around current strategic and tactical methods and this should be converted to a specific trading plan – a written set of rules you follow regardless of all else.

There is a well-known saying that ‘failing to plan, is planning to fail’ and never has this been truer than in the context of a professional trader. Very often these traders will have every detail of their trading strategy written down. It doesn’t need to be fancy, but plainly lists your personal rules. Consider developing your own trade strategy addressing some of the issues below, regardless of what market, sector or asset you invest in:

1. Your trading goals and objectives.

2. Your business (of trading) structure – are you investing in your own name, business or trust etc.?

3. What tools, platform and data sources will you use?

4. How do you propose to manage or account for your trades?

5. What are your rules in relation

to your trading style, trade exits, entries, indicators etc.? How do you plan to manage your risk?

6. How do you propose to monitor, evaluate and objectively analyse your trades?

Think of your trading plan as a comprehensive business plan. It is your way to help remove the emotion from your decisions and act on data, experience and key indicators.

No doubt you are aware that the past is uniquely determined and the future is uncertain, so it is easier to understand where you have been than to try and predict how your present position will play out. This strategy of prediction is the job of the professional trader. It is human nature to want to know what lies ahead but to quote the famous Warren Buffet: “In the business world, the rear-view mirror is always clearer than the windshield’” so often trying to forecast an outcome, especially to a novice investor is daunting.

Learn to trust your own ability. Your written plan will assist in making decisive and confident trades for yourself. It will also help you measure, analyse and examine any post-mortems of trade outcomes so you can better understand what is successful and what needs more work. Remember what you can measure, you can manage. TGR

A respected financial educator, author and keynote speaker, Jodie Nolan has extensive experience in the financial planning industry with major financial firms and institutional banks.

www.facebook.com/nolanjodie

...The number one rule in analysing technical information is to keep it simple. ...

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Opportunities exist to not only increase the wealth of your portfolio, but enjoy the spoils

of your investment. The problem with alternative investments is that the due diligence you do is often personal, rather than based on past results and analysis.

Offshore property investment offers a different type of investment, particularly when you are investing in an island resort.

After a successful property career in Brisbane, Bob Lowres relocated to Fiji with his wife Libby in 2004 with retirement plans on the horizon – but soon realised he needed a new challenge. The couple began looking for development opportunities and stumbled across the untapped potential of Naisoso Island.

Today, Bob is now heading up the Fiji arm of his Brisbane-based property development company Relcorp. As managing director of Relcorp (Fiji) Limited, Bob is the driving force behind the Naisoso Island project, a half a billion dollar master-planned luxury development located on tranquil Nadi Bay on the western side of Fiji.

Bob says making an offshore investment successful is all about sticking to investment fundamentals.

“A great offshore property investment follows the same principles of a great Australian property investment. Position is the first key. If your property is not in the right position you will struggle with returns and capital growth. The Nadi Bay area is a proven investment area where most of the major hotels and resorts are located. Buying new property maximises your investment returns, particularly when non-cash depreciable items are able to be discounted against your taxable income. This is where our house and land packages and our Peppers apartments offer tremendous investment opportunities. The uniqueness of the offering in Naisoso Island’s case is that we are talking about half acre white sand freehold beachfront and riverfront properties at extremely attractive prices.”

There is, however, a difference between the Australian and Fijian investment markets that investors should be aware of.

“People who don’t understand the Fiji market would argue that the ‘coup culture’ would put them off investing.

Fiji now had a stable political situation, and has been stable for five years. The economic indicators suggest that many things are being done correctly. I can personally recount that my home in Fiji has probably been the best single investment I’ve ever made obtaining a capital growth of approximately 300% over the past eight years.

“There is a lot of scare mongering about taking our Aussie dollars offshore, but Fiji is right on our door step and with Fiji tourism at an all time high, people with an investment portfolio are crazy not to investigate overseas opportunities.”

While Bob has a vested interest, it is clear that market indicators point favourably to property investment with our close neighbours. Yet he does say that like any investment, due diligence is paramount to your success.

“You obviously need to research secure investments and indeed that has been why we have had such success since launching Naisoso Island. Being owned by an Australian gives people comfort, the land is freehold, which is unheard of for many Pacific Islands and with reputable brands like Peppers involved, this has added to our credibility as an exceptional opportunity.”

Looking at offshore property investments usually means tracking the US market, but it’s worth investigating other property investments, including your own island. Jonathan Jackson speaks with Bob Lowres about what to look for when investing in a Fiji island resort.

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Case Study

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The Double Tax Treaty with Fiji, New Zealand and Australia coupled with the recent introduction of a low 10% Capital Gains tax, enables investors to plan for the most effective taxation planning and repatriation of profits with absolute security.

When Australian property investors are looking at purchasing beach front land, the options may be Noosa, Byron Bay, the Gold Coast, Hamilton Island or Palm Cove. The challenge is finding a beach-front for $500,000 in Australia – it is almost unheard of — which is why Fiji has become a viable option for many.

It means Australians and New Zealanders are looking closely at the Fijian property market.

“We are now seeing however, a more global interest coming from countries like America, Canada, India, Russia, Korea and China. We are also seeing expat Fijians who, after having educated their children abroad and developed businesses there, want to come home.

They have enjoyed a higher standard of living overseas and want to maintain that level upon their return which is where Naisoso Island fits the bill.”

Naisoso is indeed a beautiful location, which is part of its charm, but will over- development harm the local ambience? The problem with the development of islands is that too many high rises often end up destroying the very thing that attracted developers and tourists in the first place.

“I think the trick is not to over-develop and to allow plenty of green space which is beautifully landscaped. For example, we could have put another 20 or so lots in our subdivision but we would have had to compromise on the size of the lots. We know our buyers are very discerning and they will be building substantial homes upon their land. We did not want to see any privacy invasion or concrete jungles, hence

a reduced number of lots have enabled us to meet that criteria,” Bob says.

The Naisoso Island development is expected to be near completion in 2017. However, Bob is realistic about whether the development will be a success or not.

“We won’t have the entire island finished by 2017 but I would suggest that we won’t be that far away. It really is dependent upon market conditions i.e. demand and supply that will drive us to the finishing line.”

Naisoso and similar islands are certainly worth the time to do some due diligence and if the price is right and the returns high enough, could double as a great investment and a cheap, but beautiful getaway. TGR

...There is, however, a difference between the Australian and Fijian investment markets that investors should be aware of...

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Most industries are subject to regulatory systems: rules and regulations are the cornerstone of good business and should be upheld. If not, those in charge must be held accountable, particularly in relation to alternative investing. TGR examines the need for good governance.

Better Protection is

T he Global Financial Crisis (GFC) has had implications that many of us dared not think about.

Superannuation funds have taken a hit, while investors have had to ride a nail-biting rollercoaster into the financial unknown. Some investors have lost everything, but there are protection processes in place to prevent the worst case scenarios affecting the majority of people.

In the US particularly, these practices are prevalent and perhaps Australia should take a more focused lead.

There are three major objectives of regulatory systems when it comes to alternative investing. These are, in no particular order:

1. Protecting investors and customers against fraudulent or deceptive practices (both Madoff-type ‘theft’ and subtler practices in which investors pay for something other than what they thought they were getting);

2. Protecting depositors and similar types of customers from losing money they have entrusted to financial institutions (generally by ensuring that those institutions are ‘safe and sound’); and

3. Protecting the broad financial system from shocks that jeopardise its overall functioning.

Each of these systems, based on a particular statute or set of statutes

passed by government, has tended to be dominated by one of these objectives. In the time of the GFC, protecting the broad financial system from financial shocks was paramount.

In the US Federal Securities laws, administered by the SEC, and commodities laws, administered by the CFTC, are intended to accomplish objective #1 (protecting investors). Federal and state banking laws, administered by a variety of different regulators are generally dominated by objective #2 (safety and soundness protection of depositors). Insurance laws (the province of the states) are directed to different degrees by both objectives #1 and #2. The Federal Reserve is primarily concerned with objective #3 (systemic stability).

The collapse of credit markets in the US has taken an enormous toll on consumers, particularly homeowners and revealed weaknesses in the country’s financial and market systems. This has brought the different types of regulatory objectives under intense scrutiny.

Overlapping regulations tseem to be a massive problem. This, in fact, is a problem in any industry from construction to investments; who is in charge, where do the reports go, who makes the decisions and how do those decisions conflict with the decisions of others in a similar area? Regulation can be a minefield of red tape and bureaucracy and in some

cases nothing ever gets done, because bureaucrats fear they may lose their jobs – they run scared.

Regulations must conform across industry sectors. In the financial markets these regulations should be written to simultaneously protect investors, borrowers, depositors, consumers, and homeowners and foster — or avoid stifling — the continuing development and evolution of vibrant markets that the economy requires.

In Australia and America, rapid action by government to stimulate the economy worked to varying degrees. However, more could have been done. While Australians spent their Prime Minister Rudd gifted $900, it seemed nothing was done to protect the individual in the markets or homeowners who were affected by global events beyond their control.

Those in the alternative space will always take risks, however those risks can be minimised by good legislation. In the US, when the crunch first hit, the SEC formally proposed some new rules and changes. However, activities were limited to general suggestions and the biggest changes were a long time in the planning.

When it comes to regulation, talk is cheap. The risks people should take, should be market related only, and there should be protection against wider global events, should these problems occur again. TGR

NECESSARY

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LIFESTYLESAlternative

Can you compare and contrast the conflicts of interest affecting stock and operating performance of internally-advised Real Estate Investment Trust (REITs) versus externally-advised REITs? REITs are publicly traded companies that pool investors’ capital to invest in a variety of real estate ventures, such as apartment and office buildings, shopping centres, medical facilities, industrial buildings, and hotels.

Do you understand or can you construct hedges, including stock hedge with mandatory issues, basket hedge, synthetic worksheet hedge, and dividend reduction convertible hedge, and analyse associated risks? If you thought there was only one type of hedge, you need to do more research.

Are you able to identify how adding a passive commodity index to a portfolio of stocks and bonds changes the efficient frontier?

Can you discuss how asymmetry of information and illiquidity in the private equity markets presents problems for performance measurement?

» If you circled YES to all of the above either before or after your alternative investment consideration, then you have made a reasonably sound investigation of your options and you could be confident in making the right decision for you going forward.

Yes / No

Alternative investments require a different way of thinking. Before you even begin to think about investing in things like Hedge Funds, Commodities and Managed Futures, Private Equity, Real Assets or Credit Derivatives and Structured Products, it is important to increase your knowledge base. You need to tick several boxes to understand what it is your are getting yourself into. The following is just a sample.

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N egative feedback, even in the form of constructive criticism, activates our instinctive, fight or flight, response.

This defensive reaction can affect our ability to think clearly and rationally, create the need to justify, and inhibit our capacity to act positively on the feedback received.

To avoid this stress response and ensure you’re not having the same conversation over and over again, there a number of techniques you can employ to give feedback that results in real change.

1. Ensure the environment is private and non-threatening. Neutral territory is a must. Public criticism will never be well received.

2. Ask questions. Before launching into your advice, find out the other point of view. Remember, you’re searching for common ground to facilitate long-term change.

3. Find out the other person’s priorities and values. What motivates you may not be the same thing that motivates them.

4. Give information. Just as you need to find out the other point of view, you also have to clearly share your own perspective. The reasons behind your opinion may be obvious to you, but not necessarily to others.

5. Think about how you will deliver your message. Focus on voice volume and

tone as well as body language and facial expressions. The more at ease you are, the less defensive others will be.

6. Maintain objectivity. Take the opportunity to actively express your understanding where possible. Remember, the idea is to initiate change, not to be right.

7. Concentrate most on what is of value to the other person, as a good reason to change. That’s what will resonate most strongly. Owning the solution will be motivating to the receiver.

8. Give yourselves time to process the information and ideas discussed during the conversation. Allow silence for thinking time, avoid bombarding, and ensure one of you doesn’t have to rush off in the middle of the conversation.

9. Focus on the outcome that you want. Provide some specific examples where necessary, but always bring it back to the big picture. This will also help you find out if your big picture is the same as theirs.

10. Remember, change is not easy and often takes time. Ensure you’re offering regular positive encouragement and reinforcement to support the goal of long-term change. TGR

Kim Fenton and Penny Ombler co-founded Successful Minds with the vision of providing personal and organisation development.

Twitter: @SuccessfulMinds

Giving feedback can feel like a perilous task. Receiving it can feel like a threat. Both with good reason. It all stems back to our primitive biology. Humans have a tendency to negate positive feedback and amplify negative feedback, write Kim Fenton and Penny Ombler.

FEEDBACK TIPSTOP 10

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The Key to Success is Finding the Right Coach

Translate this into a plan for success tailor made for you! You have all the great motivational know-how of Eric on an up close and personalized basis. Whatever you want to accomplish in life, you will find the Pathway to Progress plan perfect for you. Even better, you can do it from the comfort of your home or office. For further information visit www.ericbaileyglobal.com

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There is a gradual but steady global shift that will result in women being the inevitable future leaders of our societies. If not, at the very least the current imbalance will be redressed, writes David Solomon.

ENTREPRENEURSThe World Needs Women

O n a smaller scale there is also a huge opportunity for any business or organisation that

can step out of its limited, ‘safe’ traditions and bring forward a more rounded, holistic and balanced way of doing things. Women and their inherent creativity are uniquely positioned to do this.

But the game of business is a game created by men. That’s a procreation thing, governed by genetics. Men regularly used to venture forth and conquer other civilisations, raping and pillaging as they went. They would kill the men and impregnate the women because it was a matter of survival – about fulfillment of their bloodline. That’s what they used to do. Now they do it in business.

Men typically do business from a win-lose point of view. From their perspective, “For me to win, you have to lose. The ‘pie’ of business is only so big, and my job is to go and carve out as big a piece of pie as I can.”

In contrast the attitude generally taken by women is, “Well here is a pie that’s only so big. Why don’t we see how we can make that pie go further? Or why not share the pie and enjoy it? Or why don’t we work at making another pie – then

I can have a pie, and you can have a pie and we’ll have more pie.” So it’s very much about win-win.

Over the last 25 years it’s been my observation that better business is done by people who are playing win-win.

Men will go to extreme lengths to compete and win while women want a completely different business experience. The critical challenge for women comes when they go out into the world and declare, “I want to play win-win in business” and all the men go ,“Yes, we want to play win-win too!”

But the reality is that the men are still playing win-lose. This will overwhelm every time. This is because if somebody is playing win-lose but telling you that they are playing win-win, as a win-win player you’ll trust them. You’ll go along with it and be taken advantage of every time.

So what do most women do? Some will play along with the men’s rules, but many will start their own businesses. Women can (very slowly) change corporate culture from the inside, or they can change the world by starting their own companies. Becoming an entrepreneur doesn’t require any shifts in corporate culture.

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For the last century or so, we have been addressing business issues as if they are linear, independent, and containable. Look around the world and you’ll find it hard to agree this is true. But if, as Einstein said, the thinking skills that create an issue are not the thinking skills you need to resolve that issue, we need more people with a different perspective on the problem and a new set of skills and abilities.

What is needed in business today is a better grasp of (and comfort with) relationships of all kinds. And this is the kind of thinking and problem solving that is most natural to women as typically:

» Women are intuitively systems/relationship thinkers;

» Women seek balance;

» Women care more about solutions than who gets credit;

» Women are experts on collaboration;

» When they are passionate about something, women never give up.

As a result, women entrepreneurs intuitively create businesses that are better for themselves, their families, their employees, their communities, their customers and the world. Women tend to be more holistic about their understanding of their place in the universe. For example, they will operate from a perspective of abundance rather than scarcity, and they appreciate the

energy and vibration of their actions in the business (and broader) world. They more readily bring ‘soul to business’ by being more in touch with their spirit and emotions and converse openly about them.

Women’s measures of success also tend to be much broader. They are by nature, equipped for the Triple Bottom Line challenge. In fact, they assume that’s the goal, although they can get sidetracked by the attempt to play a game the rules of which we have established have essentially been created by men.

It is the tendency to create holistic enterprises that make women so effective at entrepreneurship. This is enabled by being able to see an issue from so many angles at once.

On a deeper level, women are interested in other people. They invariably notice things that are outside the awareness of most men. They do the right thing, they treat people well, and they listen to other people.

Women entrepreneurs are great. But not because they’re caricatures or stereotypes of some altruistic awesomeness, but rather because they often bring a different set of experiences that are equally valid to what men bring. The more we have of both, the richer everything gets. How could we do without the action

and results orientation of men?

And before we over-glorify women, we should recognise that they are just as diverse and varied as men, coming with their own set of issues and idiosyncrasies. Indeed, many women end up being selfish and obnoxious, just as some men are really sensitive and thoughtful.

Not only do we need women entrepreneurs, we need growth oriented women entrepreneurs. Women are starting businesses twice as fast as men. But they are not all growth oriented, employment producing businesses. Many of them end up employing just one person.

A transformative and participative leadership style is not enough. For example, women need to learn all the regular business skills necessary such as raising capital to fund growth. Furthermore they need role models of growth oriented women entrepreneurs that are not behaving like Machiavellian males.

Things are continuing to change in the 21st Century with regards to more opportunities for women. But they are still the underdog, which means they’ll continue to work harder to the benefit of all. TGR

David Solomon works with female entrepreneurs running small to medium businesses.

Twitter: @quidditybus

Mentor

...Not only do we need women entrepreneurs, we need growth oriented women entrepreneurs...

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I am always amazed at the information provided to me when I go into businesses and sit with the owners

for the first time. As we start the conversation, exchange pleasantries and get into a business discussion, I ask a question that stops most business owners in their tracks… What is the most profitable product or service you sell and what is the least profitable? Most stumble, er and um before answering: “Well Garry, I think it is probably, maybe these...”

Running a business without any understanding of factors such as how much profit you are making is comparable to sailing a boat with holes in the hull; it is only a matter of time before it takes on too much water and sinks. At a minimum your journey will be stressful, unpleasant and worrisome. Most people have an accounting package of some variety in their business and most account packages have reporting capability that can give you great insight into what is happening in your business – especially in terms of profit and loss and cash-flow. Please take some time to understand how these reports work and review them on a regular basis, or discuss this with your accountant and get him or her to explain how to read these with you.

Remember ‘You cannot fix what you cannot see’. The ways to reduce costs, improve profits and decrease efficiency losses are all there ready for you to action. If you are reading this now saying you don’t have an accounting system and don’t need one because you are only a one man or woman business, STOP. Before you say another word, change your thinking; this type of thinking will limit you and cripple your business. Go online, look up MYOB and get yourself an account system and open up your view on what is making your business work. This will give you the information to start pulling the financial levers in your business for consistent and ongoing improvements. If you have an accounting system and you are not using it to consistently investigate what is working or not working in your business, you had better start using this in your business improvement strategy from today.

You need to be able to measure what is working for and against your business, before you can take your business to the next level, writes Garry Kewish.

You Cannot Hit a TargetYOU CANNOT SEE

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Case Study

CASE

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If you have an online business, (and this is where I spend 80% to 90% of my coaching time with my clients) then you are lucky because this area of business is skyrocketing in popularity and end user acceptance. Today, you have an incredible array of tools that allow you to monitor each and every part of your online business in incredible detail ... and the very best part is they are all free. You don’t have to spend a single cent on your business; Google provide tools such as Google Analytics, Google Website Optimizer and Google Webmaster Central

that allow you to monitor down to the smallest detail of what people are doing on your site, what is working and what is not.

Each and every aspect of the online business is trackable and measurable. There are no stories, nowhere to hide, just the information about outcomes that allow you to make a well-weighted decision on what to change, modify or enhance to gain even better results or stop what you are doing because it is costing you and your business money.

I have a client that had over 200,000 unique visitors to her website each and every month, yet even with this level of traffic she lost money. With the addition of the free Google Analytics on her site and then one month’s worth of data review, we were able to see what keywords were driving what traffic from what specific search engines, what pages those keywords were landing on and

then what on those pages were causing the customers (in her case potential customers) to leave the site without buying.

Within 90 days the website – with a series of small tweaks and changes including graphics, some online form field changes and several simple page layout changes – created a cash-flow windfall of more than $50,000 in revenue at 46.2% net profit per month. Within six months that same website was producing an average of $148,634 per month at 64.7% net profit.

Because of this huge online success, this client has now shut down her physical store and invested in expanding the online store. She is looking for a monthly income of $350,000 while holding or increasing her net profit by June 2012.

The moral to the story is simple: had we not been able to measure and see what the business was and was not doing, the required changes that made such an improvement possible would never have been put in place and our client would have continued to lose money.

If you are online in business or thinking of going online you need to have Web Metrics and Analytics as part of your core business strategy, you cannot afford to ignore the elephant in the room one single day longer. TGR

Garry Kewish is a professional business coach and the former President of Brian Tracey International.

... The ways to reduce costs, improve profits and decrease efficiency losses are all there ready for you to action...

“Des

ire

is th

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artin

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f all

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desi

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hich

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— N

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I n this climate we need to think ‘outside the square’ to manage growth funding and create efficiencies

in business.

There are two main areas (financially speaking) where there are improvement opportunities.

1. Profit and Loss Statement

2. Balance Sheet

PROFIT AND LOSS STATEMENT

SALES

» Review what’s selling and most profitable. Many businesses lump revenue into one account, which limits the ability to compare profit by type of product or service. Once you know which are most profitable you can focus on them and limit or eliminate less profitable lines.

» Review which customers are profitable and which aren’t. You can get a report on sales by customer from your accounting system. Look at how long customers are

taking to pay you. Some customers can be costing you money – may be time to sack a few!

» Look at how you’re marketing and selling your products/services. The internet has opened opportunities. Business models need to be constantly reviewed.

DIRECT COSTS

» Review what you’re buying to deliver your product/service, to see if there are more efficient and cost-effective ways to achieve results.

» Shop around for alternative suppliers, if current ones won’t negotiate a better deal. Don’t underestimate your value as a customer.

OVERHEADS

» Review all overheads and ask:

a. Why am I spending this and what value does it deliver to the bottom line?

b. How could I do it differently to get a better result?

c. Who else could deliver and how much would they charge?

BALANCE SHEET

» Customers who owe you money – install a system to speed it up and ensure the best person is doing the job (not always the bookkeeper). Chase smartly – small amounts get email follow-ups and large ones get phone calls and keep good records.

» Suppliers – don’t pay before the due date (unless a discount is offered) and negotiate extended terms. Ensure whoever pays suppliers has a cash improvement mentality. Get an account wherever you can – reduce COD wherever possible.

» Stock – think of it as dollars piled up on the floor. Reduce the time it sits there. Have good systems for monitoring and predicting stock requirements.

» Jobs in progress – again think of them as dollars piled up on the floor. Reduce the time it takes until they’re finished and can be invoiced. Get deposits and progress payments wherever possible.

» Loans – review what types you have and ask yourself if it’s the best type of finance. An overdraft could be costing more than Bank Bills, which are typically 3% cheaper.

An ‘Off Balance Sheet’ asset is staff. Have a look at resources to ensure they’re best utilised. Don’t have highly skilled people doing low skill work. Do an organisational chart and ensure all have tight job descriptions.

If you can achieve all of the above you’ll have lenders and investors flocking to you! TGR

Sue Hirst is the CEO of CAD Partners CFO On-Call.

Twitter: @CFOonCall

We all know how hard it is to borrow money and renew existing loans now. If you’ve got a viable business, with great prospects this can be very frustrating, writes Sue Hirst.

Improve Your Cash Flow WithoutBORROWING MONEY

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MANAGEMENTWebsite

Have you figured out who your target market is? Once you can do this, your objectives and web strategies will become much clearer.

Is your domain name appropriate? Does your name, reflect the business and what you are trying to achieve?

Are you using the right software (marketing, content management and web hosting) to get the most out of your business?

Is the website easy to navigate and accessible?

Are your templates and common page info appropriate for your audience? Is it too simple, too complicated or just too much?

Have you used your corporate logos, fonts and banners to properly reflect who you are and what you do?

Did you proofread your content? Content with mistakes won’t be taken seriously.

Do you have links to appropriate social media channels? This is now an important facet of your business and you need to move into the social media age.

Do you have inbound links and are you referenced by search engines and directories? Technical optimisation is highly relevant.

» If you circled YES to all of the above either before or after your entrepreneur consideration, then you have made a reasonably sound investigation of your options and you could be confident in making the right decision for you going forward.

Yes / No

Your website is your window to the world, but is it working for you? There are so many things you need to be aware of that it can be difficult to know where to start. Some terms you should know are, search engine optimisation, site maps and content management systems, yet, there is so much more. Here is a basic health check to steer you on the right web path.

Health Check

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W hen he was a teenager, James Murdoch and his older brother, Lachlan, used to hang from

the rafters of their father’s house in Aspen, Colorado, and challenge one another to pull-up competitions. One former Murdoch executive who attended a retreat at the holiday home recalls seeing red stains on the woodwork and being told by their mother Anna – Rupert Murdoch’s second wife – that the boys were so pig-headed they would compete until their hands bled. “James usually won,” he adds.

Two decades later, he also looked set to triumph over Lachlan in the race to become their father’s successor at News Corp. But now his grip on that prize is starting to slip. When James Murdoch returned to UK Parliament to face questions from MPs investigating the phone-hacking affair, he was fighting to repair his reputation and that of the company his father founded. He was shaping his destiny and determining the fortunes of a dynasty. In the wash up, should he fail to convince, the chances of James succeeding Rupert at the helm of the world’s most powerful media conglomerate will be remote. Succeed, on the other hand, and the hereditary principle may yet hold at News Corp.

It is no exaggeration to say that the future of the company is in the hands of the 38-year-old London-born executive, once regarded as the most rebellious and unconventional of his father’s four adult children. The teenager who once sported an eyebrow piercing and ran a hip-hop label called Rawkus Records was at the time of the hearing deputy chief operating officer at News Corp, where only Rupert and his number two, Chase Carey, outranked him.

James was groomed to take charge of News Corp, the owner of the Sun, Fox News and the Wall Street Journal, since Lachlan resigned as deputy chief operating officer six years ago. James had already served a youthful apprenticeship at News Corp’s internet arm by then, followed by a rapid rise through the executive ranks at the company’s television businesses.

By the time he appeared before MPs alongside his father in July, when public revulsion over the News of the World’s targeting of a mobile phone which belonged to murdered schoolgirl Milly Dowler was at its height, Rupert’s sharply suited son had also run News Corp’s UK newspapers, Murdoch’s power base for decades.

Yet the activities of the News of the World, a paper which generated less than 1% of the group’s profits, has shaken the foundations of the Wall Street-listed company so hard it is in danger of crumbling.

When he was questioned by the culture, media and sport committee, which has been investigating phone-hacking for four years, his meandering responses were peppered with management-speak. His father, sitting beside him, grunted his answers. James faced MPs alone recently in what was a far tougher ordeal.

Immediately after the Murdochs gave evidence in July, two former News of the World executives, the paper’s former editor, Colin Myler, and ex-head of legal affairs, Tom Crone, issued a dramatic statement contradicting the evidence of their former boss. Both men insisted they had told Murdoch three years before about the existence of a company email from 2005 which showed beyond doubt that phone-hacking had not been

the work of a single ‘rogue reporter’. Myler and Crone allege that is why Murdoch agreed to pay more than £700,000 (AU$1.08m) – to settle the case – to Professional Footballers’ Association chief executive Gordon Taylor, who was suing the paper after discovering it had intercepted voicemails left on his mobile phone.

Murdoch denies he was told about the full content of what became known as the ‘for Neville’ email, after the paper’s chief reporter, Neville Thurlbeck. He told MPs that Myler and Crone informed him in June 2008 about the existence of the email and they made it clear that it proved Taylor’s phone had been hacked by the News of the World. Crucially, Murdoch denied the two men had also told him that the email showed hacking was not just the work of one reporter, as they insisted they did.

The decision to settle, Murdoch said, was based on legal advice which said Taylor would settle. That legal advice was published by the committee. In it, the company’s QC, Michael Silverleaf, warned the ‘for Neville’ email constituted “overwhelming evidence” there was “a culture” of hacking at the paper. MPs pressed Murdoch about how much he knew about that advice, because it blew apart the company’s claim that hacking was the work of a single reporter. That is crucial, because News International subsequently issued a series of denials sanctioned by its most senior executives, including one in July 2009 which accused the Guardian, the Observer’s sister paper, of choosing to “mislead the British public” when it claimed News of the World journalists were engaged in systematic phone-hacking.

Will the crown remain beyond his grasp?JAMES MURDOCH:

A relative newcomer to the title of News Corp successor, his recent performance following the select committee hearing on phone hacking will shape not only his own destiny,

but that of the dynasty founded by his father, Rupert, writes James Robinson.

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Murdoch’s judgment and his integrity are at stake. Sources close to the company insist he stands by his version of events.

If Murdoch was nervous about the encounter, he was hiding it well. He and his glamorous American wife, Kathryn Hufschmid, who works for the Clinton Climate Initiative, attended a party organised by BSkyB, 39.1% owned by News Corp and which Murdoch still chairs. Murdoch, dressed in jeans and a sharply tailored jacket, seemed relaxed and amiable. The message, intentional or otherwise, was that it was business as usual at News Corp. In reality, however, the phone-hacking scandal meant it was anything but. Around two-thirds of News Corp’s independent shareholders voted against the re-election of James Murdoch to the board of the company. The Murdoch family controls nearly 40% of News Corp voting shares, enough to ensure Murdoch was re-elected regardless, but that vote cannot be ignored. It is an indictment of Murdoch’s handling of the phone-hacking affair and the clearest signal yet that News

Corp’s investors do not want him to succeed his father.

This has thrown the family firm (it may be publicly quoted in New York, but it’s run as if it were a private concern) into crisis. It has also disturbed the delicate equilibrium that exists between the younger members of the family, three of whom have held, or still do hold, senior positions at News Corp.

Lachlan, Murdoch’s oldest son, remains on the board and the company recently bought Shine, the production company owned by Elisabeth, the eldest of Rupert’s three children from his second marriage.

Both had been viewed as the most likely to succeed Rupert in the past – James only emerged in recent years as his father’s heir apparent. The family – Murdoch also has two young children with his wife Wendi, and an older daughter, Prudence, from his first marriage – had accepted James as primus inter pares.

But according to an article published in Vanity Fair, Elisabeth blames James for the company’s disastrous response to phone-hacking. She reportedly urged her father to send James on a leave of absence, an idea he seems to have considered, if only fleetingly. The disagreements are serious, but as yet there is no rift.

...It is no exaggeration to say that the future of the company is in the hands of the 38-year-old London-born executive, once regarded as the most rebellious and unconventional of his father’s four adult children...

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The family has sought help from a psychologist, however, in an attempt to ensure the succession issue does not result in schism.

James is regarded as a ‘chip off the old block’ in the media industry. He poured scorn on the BBC in an industry lecture two years ago, and shouted at the former editor of the Independent during a visit to the paper’s offices. When the hacking scandal was at its height, it was James who argued the News of the World should be closed while his father prevaricated. At Sky, he demonstrated his mettle by authorising an audacious dawn raid on ITV, snapping up a stake of the rival broadcaster in a successful attempt to prevent it being sold to Sky’s main competitor, Virgin Media.

James was highly regarded at Sky. However, News Corp would have owned Sky outright by now if the hacking scandal hadn’t derailed its multibillion pound bid for the remainder of the company it did not already own.

The key question now, for the Murdoch family and beyond is: has James been so tarnished by the hacking affair that he will never land the top job at News Corp itself?

POST SCRIPT

James Murdoch resigned from a string of directorships linking him to The Sun,

The Times and The Sunday Times.Speculation suggests the move paves the way for News Corp to sell off its London newspaper interests.

James is still a director on the boards of News Corp and BSkyB.

According to documents lodged at Companies House, he stepped down as a director of News Group Newspapers, which publishes The Sun and used to produce News of the World before the tabloid was axed.

He also resigned from the board of Times Newspapers Limited, which operates The Times and The Sunday Times, and News International.

It is a strong move by James which means the Murdoch family has no representative with News International‘s flagship newspapers.

James is thought to be happy to sever ties if necessary and is credited with the decision to close News of the World. Recently he refused to rule out a similar course of action for The Sun if further phone hacking was found.

James is expected to move to New York following his appointment as News Corp‘s deputy chief operating officer. TGR

THE MURDOCH FILE

Born: London, 13 December 1972, the third child of Rupert and Anna Murdoch. Raised in the US. He won a place at Harvard but dropped out. Married American Kathryn Hufschmid in 2000.

Best of times: When he was made heir apparent to his father in 2007, becoming chairman and chief executive officer of Europe and Asia at News Corporation.

Worst of times: Ongoing. He has been under intense scrutiny following the phone-hacking affair.

What he says: “In this all-media marketplace, the expansion of state-sponsored journalism is a threat to the plurality and independence of news provision, which are so important for our democracy.” On the BBC at Edinburgh television festival 2009.

What others say: “There is an intensity to him. The guy’s got intensity wrapped around energy.” - Frank Luntz, the Republican pollster

“I think he bears a great deal of responsibility. There’s an expectation people have of you if you are a Murdoch that has made him quite mature.” - Charles Dunstone, chairman, Carphone Warehouse

James Robinson / The Observer / The Interview People

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F E AT U R E

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GENE SIMMONS: image is everythingpage 74

TIM FERRISS: the four-hour millionairepage 116

T H I N K &

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BEHIND THE PLAYER

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WORD UPWhen Rupert Murdoch said, “Content isn’t just King, it’s the Emperor of all things electronic,” he was referring to the content to be published on the iPad. We don’t think he was referring to electronic listening devices, but we could be wrong...

A DAY IN THE LIFE

There are many days, weeks

or months dedicated to causes

we’ve never heard about: World

Plumbing Day, National Bath

Safety Month, Run up the Flagpole

to See if Anyone Salutes Day...

and that’s just the tip of the

iceberg. It’s good to know

that entrepreneurs also have

a dedicated day, or in this case week.

Global Entrepreneurship Week

began life as Enterprise Week

in the UK back in 2004. When

news of the phenomenal success

of Enterprise Week in the UK

spread the globe, lots of other

countries became excited at

the potential of running similar

initiatives in their own countries.

So in 2008, Enterprise UK and

the Kauffman Foundation (the

world’s largest entrepreneurship

foundation based in the US)

founded the very first Global

Entrepreneurship Week.

Last year, there were over 32,000

events run in 88 countries,

attended by more than 7.5 million

people. That’s a big think tank.

Global Entrepreneurship Week

is a worldwide movement

of entrepreneurial people,

with millions unleashing their

enterprising talents and turning

their ideas into reality. This year’s

event occurs from 14-20 November.

Go to www.gew.org.uk

WHAT’S THE MEANING OF THIS...Affirmative Covenants are not what Indiana Jones was looking for and asset stripping doesn’t happen on a buck’s night. Likewise, bancassurance is not the assurances that a bank can give you, but the insurances it can sell to you. Barrels Per Day is not how you measure wine consumption. Financial reporting terminology can be complicated and confusing. There’s little hope that things will change on this issue in the foreseeable future, but a good financial dictionary can help considerably. Get one.

NUMBER CRUNCH 134% of women now have bachelor’s degrees, compared to 27% of men (U.S. Census Bureau 2011)

the

BEATup

WISE MAN SAYConfucius say:By three methods we may learn wisdom:First, by reflection, which is the noblest;Second, by imitation, which is the easiest; andThird by experience, which is the bitterest.

8 | | Foundation Issue

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DICK SMITHtaking care of businesspage 80

INVEST YOUNG & MATURE RICHpage 44

SKYPE HIGHthe evolution of modern communication page 84

STEVE JOBS

SPECIAL FEATUREthriving in an economic downturnpage 18

HOW HE CREATED THE iPSYCHE

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to have your copy of Think & Grow Rich inc. magazine delivered to your door and enjoy full VIP access to TGRmagazine.com PLUS receive our monthly e-newsletter.

SUBSCRIBE NOW AT: TGRmagazine.com | Telephone: 03 8637 1577 | E-Mail: [email protected]

Think & Grow Rich Inc. magazine’s special offer is Napoleon Hill’s Science of Success Self Study Course Set...

If you are one of the first 60 people to subscribe to this subscription offer, you have the option to receive Napoleon Hill’s Science of Success Self Study Course Set for just $595 (normally $2,995). As stated this deal is limited to the first 60 people, so make your decision quickly. This offer also includes a 12 month subscription to Think & Grow Rich Inc. magazine (6 issues).

If you do not wish to take up the offer, simply subscribe to Think & Grow Rich Inc. magazine for only $49.95 to receive VIP access to all content and exclusive offers.

As a special holiday bonus, we are including a special Xmas bonus gift: Jamie McIntyre’s book, Think & Grow Rich for the 21st Century, delivered to your door for free with your subscription.

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BEHIND THE PLAYER

STOCKS ARE LIMITED, SO BE QUICK!

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Ask any experienced business owner and they will tell you that their most vital asset alongside

their employees is their customers. Let’s face it, without customers we would not and could not exist in business. The main purpose for moving into business in the first place is to provide a need or solution to a problem that our customers may be facing. A huge part of providing that solution is ensuring we deliver them the best experience possible.

One businessman who has built his entire model around the mantra of: ‘The Customer Is King’ is Phil Staub, executive chairman of General Pants Co. After successfully operating a string of dance clubs, nightclubs and restaurants in his early 20s, Phil purchased General Pants Co. in 1995 when it was a much smaller business in NSW.

Over the past 17 years Phil has built General Pants Co. to become one of the most recognised fashion brands in Australia with 80-plus stores, 1,500 staff and over $250m in annual revenue. He credits much of the growth and success to great customer service and an ability to change with the times.

“Our general mission and vision has never really changed, but how we attack it is always shifting due to market requirements. We are continuously developing and changing with the times,” Phil says.

The past two years has seen a significant change in retail, Phil put this down to the role of social media. Phil is proud of his company’s ability to adapt and use the new media constructively.

“Our entire marketing department has totally shifted. Today we are not only talking with our customers, but more importantly our customers are talking with us.

“The way we do things when marketing is incredibly different to what it was in the past. It’s no longer about preaching to the customers, it’s about listening to what they want and acting on that.”

The retail industry has, is and will continue to change and evolve more rapidly than ever before. There are many things you can do as a business owner to stay on top of your customer service objectives. Aside from the use of social media, Phil believes in taking a balanced approach with his management team.

“We like to stay ahead of the game by having a lot of people in the organisation who are doing different things – all at different ages. This helps us understand our customers. We have people in the office who are 18, 24, 30, 40, which gives us a great blend of experience and development. This leads to a balanced perspective of where we are and where we are heading.”

While nine out of 10 business owners normally opt for experience over attitude, Phil sees both as an advantage for his customer service department and other areas of the business. He is not afraid to hire people with the right attitude. He credits a lot of this success to the culture and relationship the company has with staff and management within all General Pants Co. stores.

“We pay our staff well, they are all on incentives, we hold a lot of staff functions and provide extensive training for all different levels of employment. We teach them not only about sales, but also awareness, interaction with different types of people and how to grow as an individual. This ensures staff members remain happy and motivated, which then reflects on our customer service in store.

It all starts at recruitment. If you have the right people with the right attitude and energy that fit what you’re all about, then the job becomes easy to execute and all that is left is the refining of the process to continue improving. At the end of the day it all boils down to attitude. You can teach someone how to use the computers within the stores, but you can’t teach someone how to have a good attitude.”

Hiring staff on attitude rather then skill, providing consistent customer service and sales training has been one of the main reasons why General Pants Co. turn over in excess of $250 million revenue per year.

“I see so many people cutting training budgets when times are tough, but I say let’s add to the training budget because if someone has limited money they will want to shop in the store that gives them the best service and experience. The customer is king. I can’t run my business successfully if I don’t have happy customers, so it makes sense to invest in regular training.

Training is made simple at General Pants Co. and is understood by everyone. Customer service is all about simplicity, there is no point complicating things.

“We teach our staff the importance of being intuitive and aware of all the different personality types. Some customers like to be left alone until they need help, some want fast service and others do it all by themselves.”

Successful customer service is about having a really clear strategy on what your business is about. Once you have identified this, your customer service policy will come together naturally. It is a philosophy that Phil holds dear.

“You can’t have good customer service with a bad system and poor product/service line. You need to take a holistic approach to your entire strategy.” TGR

How customer service built an

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Phil Staub is the king of customer service, it is why General Pants Co.

is currently at the top if its game, writes Alex Pirouz.

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STAYING MOBILE AND MOVING FORWARDWelcome to New Business, a Q&A with emerging entrepreneurs. In this first issue, Catherine Rohan-Lawler, the founder of Sydney Mobile Make Up and Hair speaks with TGR about finding her niche and the rise of her business.

Think & Grow Rich (TGR): Where did the original business idea stem from and what was the original philosophy?

CR-L: I am a celebrity makeup artist and therefore go to hotel rooms and houses to do hair and makeup. However, the average woman has to go to David Jones or Myer to have their makeup applied and their hair somewhere else. This is a tiresome experience and you can’t gauge the quality of work as many makeup counter girls are sales girls not makeup artists. This leaves the customer frustrated and often they have to redeem their makeup service in return for product. I have a measurable outcome, only the best will do and I offer a 100% money back guarantee on that offer.

TGR: Why do you believe the business has worked and what principles have you followed?

CR-L: I understand my clients concerns, fears and desires and I can deliver the perfect outcome. SMMH comes to you in the comfort of your hotel room or home and all you have to do is get dressed without the stress…Hollywood style and ready for the red carpet. The principles I follow are anytime, anyplace, anywhere and the principle of excellence when only the best will do. The business is about the

feeling I infuse in the client, the advice and aftercare and going that extra mile with a smile. SMMH is about integrity, expertise, quality and value.

TGR: Where do you draw business inspiration from?

CR-L: I read every book and trade magazine I can; you never stop learning and I often get inspired by the most unusual things. I see the beauty in everything and try to see how I can make the world different even if it is, one woman at a time. I also have two amazing mentors Siimon Reynolds and Brian Sher.

TGR: How do you describe your brand and what are you trying to achieve with this?

CR-L: I want to introduce my mobile services to all national cities as there is a wealth of experienced and well trained makeup and hair people looking for work in this area; I will be an agent and I will advertise and supply the demand. It gives the busy woman other options beyond the poorly experienced staff at department stores who ask you to close your eyes and get made-over, then send you home with more makeup to add to your drawers of unused and never to be used cosmetics.

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TGR: Do you follow trends or set your own?

CR-L: I do watch trends, but I definitely set my own. I find that everyone has their own unique style that can never be copied – no matter how many people you teach. I am creating a cheeky line of cosmetics that will definitely set a new benchmark in the cosmetics world.

TGR: What is your business plan?

CR-L: I have a daily plan, weekly plan, 90 day plan, a one year and three year vision for my business. I want to get the structure correct for SMMH within 12 months and have a training academy to polish the skills of my team so SMMH has a guaranteed customer satisfaction.

TGR: What are your 5 keys to success?

1. Decide where you want to go.

2. Create a small step how-to program.

3. Move forward every day.

4. Know and model the best.

5. Adjust your strategy. TGR

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YOUR TREASURE MAP TO SUCCESS

The 17 guiding Napoleon Hill principles are:

1. Definite Major Purpose

2. Master Mind Alliance

3. Applied Faith

4. Going the Extra Mile

5. Pleasing Personality

6. Personal Initiative

7. Positive Mental Attitude

8. Enthusiasm

9. Self-discipline

10. Accurate Thinking

11. Controlled Attention

12. Teamwork

13. Learning from Adversity and Defeat

14. Creative Vision

15. Sound Health

16. Budgeting Time and Money

17. Universal Law

“Whatever the mind of man can conceive and believe, the mind can achieve.” — Napoleon Hill

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T o carry on Hill’s legacy, the Foundation has decided to re-release his personalised course

for individual study, The Science of Success course. This practical self-study program will help you thoroughly understand and apply the seventeen principles of success in your own life, to achieve any goal – however ambitious – you may set for yourself.

TGR is proud to be able to bring you excerpts from this course that we hope will help you improve your health and wealth and drive you to realise your dreams.

The first lesson is to have a definite major purpose; always keep in mind your Definite Action Plan. As Hill said, “The way of success, is the way to action based upon organised thinking, followed by action, action, action.”

To fully achieve the goals of your life, study, think, plan and apply. If you can do this, your subconscious mind will act positively and the door to success will open.

The R₂A₂ Formula – how to recognise, relate, assimilate and apply success principles.

Your ability to recognise, relate, assimilate and apply the PMA Principles will give you the power to open any door, meet any challenge, overcome any obstacle and achieve wealth, health, happiness and the true riches of life.

The Science of Success is composed of 17 fundamental principles that have stood the test of time. They can be compared to an orchestra that is composed of different sections – strings, brass, woodwind and percussion – to complement each other and produce a melodious, full and pleasant sound. Think of yourself as the maestro of your own orchestra of self-help principles. The ability to recognise, relate, assimilate and apply the principles is your baton. Use it to

blend all 17 principles into a symphony of success – a meaningful and productive life.

Like any formula, the R₂A₂ formula is made up of individual parts. Let’s analyse each ingredient:

Recognise: to identify the principle idea or technique

Relate: to connect or join together; to establish a relationship to your own life

Assimilate: to make similar or alike; to incorporate; to absorb; to become a part of your thinking and action

Apply: follow through and act upon.

Each ingredient in the formula is important and has special meaning; when combined, they will lead you to success. By using the formula, you will be able to focus the spotlight on the Success Principles that directed and guided Napoleon Hill and many other successful people to achieve their objectives. The same principles will help you achieve your Definite Major Goals in Life.

How to develop the habit of using the R₂A₂ formula

First of all, you need a mental success reflex, a trigger phrase that will immediately direct your mind when you recognise a success principle, idea or technique.

Example:

Recognise: I recognise the principle, idea or technique that is being used. Say to yourself, “It helped someone else. I can see the results and it will work for me if I use it. That’s for me!”

Relate: Ask yourself, “What will the principle, idea or technique do for me?” Important: You must relate it to yourself. Start with the most important living person as far as you are concerned: YOU.

Assimilate: Ask yourself, “How can I use the principles, ideas or techniques to achieve my goals or solve my problems? How can I absorb them into my behaviour so that they become a part of me? How can I develop a success habit – a success reflex so that the right thing will be done?

Apply: Ask yourself, “What action will I take. Where am I going to start? Ask the important questions and then follow through with the self-starter, “Do it now, yes, do it now!”

The R₂A₂ formula should become so ingrained in your mind that you can recognise success principles, ideas or techniques by listening to a sermon, or an inspirational CD, reading a newspaper or magazine article or a self-help book, and by studying the lives of great men and women. Remember, develop and use your own success reflex by seeking ways to say, “That’s for me.”

In the next issue of Think & Grow Rich magazine, we take a look at what principle number one is and how to apply it to have meaning in your life. TGR

Napoleon Hill’s work has touched the lives of countless thousands through his lectures, teachings and prolific writings. Now, in this ongoing series, Think & Grow Rich magazine presents those teachings to you.

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FINANCIAL EDUCATIONcoming to a school near you

Maths, English and if we’re lucky economics and politics are part of a school’s curriculum. While these are crucial to our social and educational

development, there is one subject that is missing that could have broad social ramifications – financial education. Jamie McIntyre reports that

financial education should be available in all schools’ curricula.

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W e all know how critical it is for children to have strong literacy and numeracy skills in order

to be successful in life. We constantly measure and rank our children’s literacy and numeracy levels not only with each other, but also with the rest of the world, to ensure we are keeping up. But there is another vital skill set our children should have – financial literacy.

Financial literacy or money lessons can be learnt through numeracy activities at school and or from watching parents manage household finances, however there is no consistent effort or formalised program that ensures our children understand financial matters, beyond the scope of a blackboard or family shopping list and bill payments.

If we needed any more proof of just how important it is to provide children with a financial education all we need to do is look at the alarming increase in teenage debt and youth bankruptcy. So many young people are too easily falling into the trap of store credit, credit cards and other easily obtainable finance without having a clear idea of exactly what it is they’re getting themselves into.

The simple solution to this would be to provide compulsory financial education at school from early schooling right through to high school, similar to the way our schools currently teach physical education. A compulsory financial education would ensure children have a clear understanding of how to successfully manage their finances. Financial education is not a guarantee of wealth and while some may still experience some financial troubles, it would certainly lower the rates of bankruptcy and bad debt.

Children must be exposed to all aspects of finance, including day to day basics such as budgeting and saving, as well as more complex financial matters such as borrowing money, using credit cards and investing. Along with the practical side of finance, this would also be an excellent opportunity to teach more of the skills they need to succeed in life such as planning and goal setting, motivation, time management, entrepreneurship and emotional intelligence.

Covering all of these topics would not only ensure future generations have more financial skills, but also help provide them with the skills they need to be successful in life, something our education system is sadly lacking in. This would also require relatively few resources, so consequently would cost virtually nothing to implement.

Already some teachers have had similar ideas themselves, and have taken the initiative to set up classroom societies, where students earn and spend money. A few teachers have even set up intricate systems that reflect the real world including getting students to create their own businesses and ways to earn income, charging them taxes and even running health systems. Wouldn’t it be great if these types of activities were happening in all classrooms, rather than a select few? These teachers are exactly the sort of teachers we need to retain and we must pay them appropriately.

A key factor in the success of these initiatives is encouraging children to take an active role in creating these systems. Encouraging children to be actively involved in this process will mean they can funnel their own interests and skills into the process. Many of today’s wealthy Australians develop an early awareness of their purpose or niche, utilise their natural or developed skills, demonstrate passion for what they do and seize opportunities in a changing environment.

Allowing children to be involved in this process would also help to remove some of the standardisation that currently chokes our education system. Standardisation has proven time and again to reduce creativity and stifle creativity. People, as opposed to products, have hopes and aspirations, feelings and purposes. Education is a personal process. What and how young people are taught have to engage their energies, imaginations and their different ways of learning.

Providing financial education in schools in this manner would be an invaluable opportunity to develop natural skills and passions within our young people and develop their talents so they can make money from something they truly enjoy. Young entrepreneurial minds are also very creative and have many ideas, so it’s important to ask and listen to what they have to say, rather than just instructing.

I’m a big believer that education is the solution to most of the world’s problems. It is also the fastest way to both improve the productive capacity of our country and ensure a great future for our country. Providing financial education within our national school curriculum would definitely be a step in the right direction.

A better educated country also leads to massive out-performance; Singapore for example, is a country with virtually no natural resources which has managed to transform itself from a developing nation to a first world country, within a matter of decades. This development was largely created through encouraging high level education and a high degree of discipline. There’s no reason why a country as wealthy as Australia, (with access to as many resources) can’t take similar action and offer a world class education.

Providing a financial education as part of a standard education will help ensure our future generations learn and master financial concepts in their formative years and will help them to steer clear of the common mistakes and traps so many of us fall into as adults. TGR

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Continued professional development (CPD) is the cornerstone to personal growth and wealth. TGR looks at the importance of keeping up your credentials.

A lthough there is no mandatory system in place, CPD and post-degree training should be a top

priority for many employees in Australia; keeping up to date with new technologies, changes in standards, regulations and new practices is essential to make sure you don’t fall behind industry requirements.

This level of training is referred to as the knowledge economy; described as one where the generation and exploitation of knowledge plays a predominant role in the creation of wealth. Knowledge has become the most important factor in economic development. The trend toward globalisation is increasing the importance of knowledge to the competitive position and economic performance of all nations. Knowledge assets are considered essential for economic growth, competitive advantage, human development and quality of life (Malhotra, 2003).

The National Innovation Summit in 2000 resulted in the report Innovation: Unlocking the Future which made recommendations about government and business funding for innovation and the measurement of innovative activities. Later that same year, the Government Chief Scientist released a report, The Chance to Change, making a number of recommendations about general university funding and research grant funding within Australia. In January 2001, the Federal Government released the strategy Backing Australia’s Ability, a document which

outlined the government’s approach to further ‘encourage and support innovation and enhance Australia’s international competitiveness, economic prosperity and social well-being’ (ABS, 2002).

It is therefore quite important that Australians, no matter what industry they reside, update their skills. Professional development can come in a range of formats: mentorship, coaching, seminars and higher learning.

Great Australian businessmen like Siimon Reynolds and Brian Sher are sticklers for ongoing development. Brian runs the Fortune Institute where Siimon is one of the teachers.

The Fortune Institute is an online business school that is reported to deliver practical, street smart lessons on how to create a profitable business.

“If you study these techniques followed by immediate implemented action, then you possess a guaranteed recipe for success,” Sher says.

“Our philosophy is about cutting to the heart of business success in a matter of days and weeks unlike other degrees or masters courses that usually take two or three years or possibly more.

“There’s no silly theories, no overly academic, impractical teachings, just powerful lessons on proven real world

techniques for profit maximisation and business growth.”

This is not to say that universities don’t have a place in the education of entrepreneurs and skilled businesspeople.

Macquarie University has a very well respected Centre for Professional Development. Likewise the University of Adelaide.

The University of Queensland’s CPD programs demonstrate insights and an understanding of the complexities of the environment corporate organisations operate in and the challenges they face.

UQ’s CPD courses provide corporations with high-quality, learner-focused corporate learning solutions that update and broaden staff knowledge and skills, build effective and motivated teams, and develop strong leadership skills. The course even allows for customised learning solutions and jointly developed courses that meet unique organisational learning objectives and delivery preferences.

The value of any of these university courses is that they can create a professional development workforce approach for all employees, for specialised areas in the workforce, and for staff at all career stages – recent graduates entering industry, employees taking on new roles, and managers wanting to refresh their leadership skills.

THE KNOWLEDGE ECONOMY

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CPD does not have to be corporate or company related. Individuals should also look into improving their skills.

The following are five reasons why you need to consider CPD as a way forward.

1. IT GIVES YOU A CLEAR VISION AND GOAL

Personal goals and professional goals are often aligned and professional goals may be aligned with those of your employer, but what about you, what do you want from your career? CPD allows you to define your own personal vision, who and what you want to be and have.

2. TIME MANAGEMENT AND PRODUCTIVITY

Time is one of those things that everyone wants more of, yet it is a finite resource forever disappearing faster and faster as the years go on. So how do we get more time? By making the time we use more efficient and effective.

What are you spending your time on? Do you really need to be doing that? With

everything you do consider how great an impact it will have on your end goal, and if you are tossing up between two tasks, decide which will have the greatest impact, even if it is the harder of the two.

Consider that a few hours of mentoring on a task could free up weeks of your time in the long run, and help someone else grow their skill set also.

3. COMMUNICATION

Communication skills are skills everyone can improve. If you can partake in a course that is tailored to specific industry communication, then take it. It will do your career wonders. “The single biggest problem in communication is the illusion that it has taken place” – George Bernard Shaw.

It’s time to get your message across.

4. LEADERSHIP

Do you lead by example and do you know what your leadership style is? There are many courses out there that deal in leadership.

Most leadership courses will look at the behaviours of great leaders past and teach you how to you apply those techniques in your everyday life.

5. SHARING KNOWLEDGE

If you’ve come to a course, then you know the value in learning from others. This is something you can pass on. CPD isn’t just taking information and applying it, it is imparting information also.

Whenever you have the opportunity to show someone a better way, don’t say ‘too hard, I don’t have time’, make the time to show them. You will be amazed at how those few minutes actually gave you the positive boost you needed and will result in you working better too.

Continuing professional development is about learning better ways to do things and applying those things to your personal and professional lives. Don’t get left behind, take the time to work on yourself, the investment will be repaid tenfold as you move forward and up in what is a competitive knowledge economy. TGR

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N E W C E L L A R D O O R N O W O P E NChalk Hill Road, McLaren Vale

W E L C O M E T O T H E F A M I L YIn 1886 Dr. William Thomas Angove first experimented with vines and winemaking. From thesehumble beginnings Angove Family Winemakers has grown to become one of Australia’s oldest family owned wineries. The evolution continues to this day with the opening of the new Cellar Door in McLaren Vale and the launching of an exclusive, limited release range of McLaren Vale regional wines available only

to cellar door customers and club members.

W. T. Angove1854 - 1912

T. C. Angove1880 - 1952

T. W. C. Angove1917 - 2010

J. C. Angove1947

V. M. Angove1977

SCAN WITH QR CODE READER

R. R. C. Angove1979

WINE TASTING & SALES PRIVATE TASTINGS BOARD ROOM EVENTS REGIONAL FOOD FAIRTRADE ORGANIC COFFEEAngove McLaren Vale Vineyards and Cellar Door 117 Chalk Hill Road, McLaren Vale SA 5171 08 8323 6900 [email protected] angove.com.au

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statusLifestyleWelcome to Status

If you’ve got it, flaunt it. If you have a vault full of cash,

spend it. If you own a helicopter, land it on top of the Burj

Dubai. If you own a jet plane fly it low, invert it and flip the

bird to someone you don’t like. That’s right, you’ve worked

hard, so now it’s time to enjoy the fruits of your labour

in any manner you see fit.

Don’t be nasty about the things you do, but hey, if you can

afford to buy an island or just buy up space for your own

private getaway, then you shouldn’t be made to feel guilty

about your success.

This section is about the excess that comes with success.

It is about those destinations that are out of the reach

of the common man: the luxury cars, the toys, the gadgets

and everything in between. It is about how you spend your

money, splash your cash, enjoy your life.

So sit back into that big black couch that you had

handstitched by a thousand Orangutan, light the Cuban,

put your feet up on the Cessna engine-turned-coffee table

and lose yourself in this world of the wildest riches.

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T here are generally two types of summertime snapshot. In the first one there are more or less

attractive people to be seen getting a suntan in a crowd of other people doing the same thing. The second category of photo shows graceful looking women and athletic men having a good time on the deck of a yacht or beside a swimming pool. This type of picture shows celebrities on holiday and could have been taken in Hawaii or in Saint Tropez. Summer is the time when VIPs get the chance to set themselves in a scene as part of a public relations strategy.

If you are not concerned about the invasive attention of the paparazzi and you want to place yourself in a good setting then France’s Mediterranean coast is the place to be. The perfect blue waters of the Cote d’Azur, the enormous yachts and free flowing champagne are in abundance.

“The classic resort spots on the Mediterranean in southern France or Italy are still popular. Old Europe has a glamour factor especially for the stars from America,” says Alexander Stilcken, deputy editor at German society magazine Gala.

This year has already seen the newly married model Kate Moss, X-Men actor Hugh Jackman and Elton John with his partner on holiday. Paris Hilton is a regular in Saint Tropez and is fond of having herself photographed at parties in skimpy bikinis. If you come here your object is to get photographed. “Kate Moss doesn’t

care if she’s photographed diving into the sea. But it’s a different matter for Bernie Ecclestone’s daughter,” says Stilcken.

A few of the stars are good for a surprise or two while on holiday. Karl Lagerfeld, for example, was photographed without his trademark sunglasses in Saint Tropez.

Rapper Sean “P.Diddy” Combs wanted to bring his own supply of vodka to France but was prevented from importing it by the customs authority in Nice, according to the magazine Closer.

German supermodel Heidi Klum was photographed topless on the island of Corsica. Was it by accident or design? No-one knows but the press reacted favourably to her perfect model body.

The sheer number of ‘accidental’ photographs of celebrities has led some commentators to the conclusion that the images have been staged.

Some well known people, however, do not look their best in their bathing trunks. Britain’s Prime Minister David Cameron has been photographed looking rather pale-skinned beside a pool in Tuscany. Cameron, however, belongs to the category of political VIPs of which there is little demand for photos.

A few celebrities such as former Spice Girl Melanie C do complain about paparazzi attention.

“We all want to relax on holiday. I have a small daughter and I don’t want to be followed by photographers,” said the pop star in interview with the German Press Agency dpa while recalling a vacation to Barbados. But anyone who is really looking for peace and quiet can find it in remote places.

Holiday resorts are very happy to have a few VIPs visiting their beaches. The Balearic Island of Ibiza manages to distance itself from its image as cheap holiday destination whenever a celebrity like Kylie Minogue talks about the wonderful light to be found there. Mallorca has also benefited from having Britain’s Prince Harry visit its shores.

Some European countries are less suited as destinations for holidaymaking VIPs.

“There are hardly any places in Germany that can be sold as a destination for famous people,” says Stilcken. One of those places is the North Sea island of Sylt, which is popular with German celebrities, but rarely sees the international jet set.

A call to Germany’s tourist association illustrates the point well: the organisation does not collect any data on visits from VIPs. Stars and celebrities do not play any role in marketing Germany as a holiday destination, according to the association. TGR

S T A T U S

THE ROLE OF PR IN VIP HOLIDAYS

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In this issue there has been a heavy focus on the use of new media. The biggest users of new media are celebrities. When in need of some publicity, there’s nothing more powerful than a tweet or some sort of social media update, to let media and photographers know what you are up to. In celebrity world media and PR are king, even when the VIPs go on holiday.

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for the

BOYSTOYS

S T A T U S

I n pursuit of an assassin, James Bond pushes the powerboat throttle to its limits. The river Thames

explodes behind him. The world may not be enough, but the boat gives him the speed he needs. However, had he a VanDutch 40, the assassin would have been terminated long before Bond cracked a sweat.

The VanDutch 40 is for those who like their luxury a little on the wild side. This is a powerboat that managed to pull off the potentially impossible feat of holding its own in Formula 1. Partnering with the Red Bull Renault team and in league with Patfer, which distributes the Dutch craft in Italy and Monaco, the VanDutch 40 starred at the 68th Monaco Grand Prix.

The nautical technology makes it as agile and nimble as an F1 race car. The concept is original too, as Patfer boss Patrizio Ferrarese, who managed the 10 VanDutch 40s used as tenders by the Red Bull team in the Monaco Marina during the race weekend, explains. “This is no ordinary boat. It’s something completely new. Much simpler, less pretentious, more human. I like to describe it as a minimalist boat but not one that will go unremarked.”

Designed by Frank Mulder, the hull and deck are vacuum-bagged fibreglass sandwich with Kevlar reinforcements at critical stress points. The result is a solid, reliable boat that’s light, agile on the waves, quiet and vibration-free. It has an Esthec deck that is not only very clean and linear, thanks to hideaway deck hardware, but also superbly elegant too. Engine-wise it goes a long way towards achieving perfect weight distribution, improved performance and lower fuel consumption.

Fitted with a hydraulic motor hatch and two Yanmar 480 horsepower engines it will reach a top speed of 45 knots.

It is so well liked that no less than 35 were sold in two years. We’ll get to the cost later, but that’s a pretty impressive feat.

This is an uncompromised boat. The standard specification includes everything an owner could possibly want. “It wants for nothing and everything is absolutely first-class quality,” stresses Ferrarese. “On the other side of the coin, I think I can sum up this boat in a comment made to me recently which I took very much as a compliment. I was told that it looked like a ’poor’ boat. And it’s true in a way because it is simple – there’s nothing aboard that isn’t necessary. It’s a powerhouse of substance.”

The inviting cockpit seats eight guests on the immense white Silvertex L shaped seating while the rear sunbathing platform will lounge three comfortably.

So imagine yourself in the black sleek hull of the power boat with almost a thousand horsepower underneath you, cutting a fine line through the water, because now you can.

The VanDutch has recently arrived in Australia courtesy of importer and distributor VanDutch Australia who are now taking orders for the 40’ and 55’ versions.

Importer Dick van Damme says the VanDutch represents a new level of boating in Australia.

“We’ve never had anything like it in Australia before. VanDutch is for the discerning boat lover who understands and appreciates excellence, exclusive motors and sheer sophistication on the water,” says van Damme.

“Australia with its impeccable waterways and harbours is the perfect setting for the VanDutch.”

VanDutch provides not only a superior boating experience but also an entertainer’s heaven with two refrigerators, air conditioning, sound system and microwave.

Available in a range of custom colours, the VanDutch distinguishes itself by its intelligent underwater ship, making slamming and spray a thing of the past.

The deck is fitted with pop-up cleats, flush deck hatches and pop-up navigation lights.

The swim ladder and the fender storage are also recessed. Such thoughtful design allows the smooth lines to be fully appreciated. The bridge, floor and swim platform are created in Esthec, a material offering all the advantages of teak without the high maintenance. TGR

VANDUTCH SPECS

» VanDutch 40’ starts at $825,000; delivery time is 12 – 24 weeks.

» VanDutch 40’ is available in a range of colours.

» Vacuum technology, Sandwich construction, Colour in two component “AWL-grip”.

» Sandwich technique, Swim Platform, Cabin, Side Decks, Deck and Cockpit floor covered with Esthec®.

» Hydraulic Motor Hatch, 2 x 260hm or 2 x Yanmar 480hp, Automatic fire extinguishing system, fan.

» Flush desk hatches and anchor hatch, pop-up navigation lights, pop-up cleats, LED floor lighting.

» 2 x Yanmar digital canbus combo instrument, Electronic canbus throttle controls.

» East Manoeuvring System, consisting of bow and stern thrusters, including joystick control.

THE DUTCH EXPRESS

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The better they’re built, the faster they come. This is true of cars; it is also true of power

boats. VanDutch has combined luxury with speed to create the ultimate boy’s toy.

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PRIVATE,

S T A T U S

First ClassF iji offers a laidback lifestyle, warm

weather all year round and now luxury living. Take it from someone

who liked it so much, he bought the company that is developing Fiji’s most exclusive resort.

“Being able to surround oneself with the good things in life such as boats, tennis courts, playing golf, a nice home, media rooms, wine cellar etc. Having a laid back lifestyle and a fantastic climate to enjoy is my kind of luxury,” Bob says.

So what makes this destination so prestigious?

“Everything in the delivery process is questioned to provide the best possible outcome,” Bob says. “It is 100 little things that go into making the whole island, that make a big difference. We’ve made sure this development is a million miles away from being a traditional holiday package. Attention to every detail has been considered, from raising the island, placing white sand on the beaches and building a state of the art marina.”

Travellers will notice the attention to detail put into every facet of the development.

“To be the best we can be. We constantly challenge everything and pay strict attention to detail. For example I am still not happy with our bridge handrails which have been replaced twice. We are now looking at other solutions because the extreme temperature has affected our handrails and caused them to warp. Most people don’t notice it but I do. We are now redesigning the handrails for the third time.”

That attention to detail is rife throughout the island. In fact, the whole of Fiji is a luxury paradise that attracts myriad celebrities.

Mel Gibson, Tom Cruise, Nicole Kidman, Julia Roberts, Ronnie Wood, Russell Crowe, Sandra Bullock and Meg Ryan are just a few of the celebrities spotted enjoying a respite from the world’s attention. Fiji offers a very private luxury experience

Fiji’s upmarket resort scene caters to the world’s glitterati, with large wallet-sized prices to match and a host of island destinations.

Laucala Island is at the top end of the scale. The largest private island in the southern hemisphere, owned by one person, the resort offers 25 residences, five restaurants, an 18-hole golf course, 240 acres of farmland and a private airstrip.

Qamea Resort & Spa was named one of the ‘Top Ten Hideaway Resorts in the World’ by the influential Robb Report.

The six-star Intercontinental Golf Resort & Spa at Natadola Beach on the big island of Viti Levu has given even more depth to Fiji’s ability to deliver luxury large scale resort holidays.

One of the most luxurious properties located there is the former home of high profile American actor Raymond Burr of Perry Mason and Ironside fame.

The actor’s two existing houses have been transformed into a gourmet restaurant, and six inspirational ‘bures’, each with a very modern flavour, are dotted around the location of Burr’s world-famous orchid garden, each one topped by a white textile tent-like roof, cut to the shape of a traditional Fijian-style house.

Fiji may not be as exotic as a trip to the moon or underwater adventure, but if you are looking for a luxury hideaway or want to purchase your own slice of opulence, then Fiji is the place to be, just ask Sandra, Mel and Russell.

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Fiji wouldn’t be considered the most exotic place on earth to spend a holiday, but what if you could purchase your own part of it and steal away for a luxury resort holiday? Well, that’s exactly what Bob Lowres did.

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Luxury travel requires luxury goods to take with you or to pack your valuables in. Here are a few must have items for your travels.

WELL SUITED

What is HENK? HENK is the ultimate valise, created in the Netherlands by skilled engineers and talented designers with hundreds of individual parts assembled by hand to suit your individual taste.

Each HENK is unique – your own personal serial number, monogram, and other details make it totally yours. All elements of your HENK are fully customisable and the telescopic handle is gently curved to preserve the line of your suit jacket.

The internal divider is moveable, allowing you to customise your space for each trip if you wish and both sides open fully when flat, but only open to 45 degrees when upright – allowing easy access to your documents with affording everyone else a view into your files.

Materials evolve with style trends, but the current materials on offer include:

» Carbon fibre

» Calfskin

» Calfskin with ostrich or crocodile embossing in 11 colours (the material is as hard wearing as leather, but looks exactly like ostrich/crocodile)

» Calf hide with zebra print

» Italian wood in light brown, red, Coast Red Wood Burl, Bird’s Eye Maple, Sapeli, Madrone Burl

» Prussian Horsehair

» Madagascar Ebony

» Sterling Silver

» Lambskin

For those who wish to match their HENK to clothing, fabric, or an interior – new finish options and colours can be made available to you upon request. From $38,500.

REMEMBER THE COLOSIMO

If you’ve bought a piece of your own island, but are still a little worried about securing your valuables, the Colosimo will ensure your Cubans, diamonds and multiple identity spy passports are kept safe.

Since 1919 the southern German town of Maichingen has been the home of the finest locksmith and metal working artisanship. Now, after almost a century of excellence in handcrafted safes, Döttling present the Colosimo.

Inspired by the massive vaults favoured

by banks in the US during Prohibition, the Colosimo is built on a scale of 1:13 and is the world’s smallest safe.

With the original designed to keep the likes of Al Capone out, this one is named in honour of the original gangster from Chicago – ‘Big Jim’ Colosimo.

Available in a range of internal configurations and finishes. From $30,000.

SIMPLY THE BEST

The name Roland Iten is known by those who expect things to be better than the best. Roland Iten Mechnical Luxury for Gentlemen pieces are a delicate balance of performance mechanics, functionality, and style.

Utilising the high precision mechanics capability of the Swiss watch making industry, Roland Iten creates highly unique mechanical accessories for men.

The RCD81 Mechanical Credit Card Dispenser is an excellent example. This light and ergonomic dispenser houses a trigger dispensing mechanism which cascades up to four credit cards for easy handling and collapses them back inside the case with the same trigger action.

These lightweight dispensers are available in three combinations of black titanium, natural aluminium, and rose gold – all featuring a discrete row of diamonds. It is a complex piece offering simplistic use. For the man who expects better than the ‘best’ that other people settle for. From $11,900. TGR

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S T A T U S

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S T A T U S

While there is no substitute for the Porsche automobile, the design accessories under the Porsche Design name, fit nicely into that same category.

NO SUBSTITUTE FOR GREAT DESIGN

GET SMART

Porsche Design in conjunction with Research In Motion has created the elite new Porsche Design P’9981 smartphone from BlackBerry®.

The exclusive material choices for this unique smartphone include a forged stainless steel frame, hand-wrapped leather back cover, sculpted QWERTY keyboard, and crystal clear touch display. Customized inside and out, the new Porsche Design P’9981 comes with an exclusive Porsche Design UI and a bespoke Wikitude World Browser augmented reality app experience. It also includes premium, exclusive PINs that help easily identify another P’9981 smartphone user.

There is a connection between the Porsche you know and the Porsche you want to get to know. The Porsche Design Studio was established in Stuttgart in 1972 by Profes-sor Ferdinand Alexander Porsche, grand-son of the Porsche founder and designer of the Porsche 911. The 911 quickly became the very embodiment of the sports car and, like many other items designed by Professor F.A. Porsche, a design classic. In the decades that followed, numerous classic men’s accessories such as watches, eyeglasses, and writing utensils were created and marketed worldwide under the ‘Porsche Design’ brand. At the same time, a large number of industrial prod-ucts, household appliances, and consumer goods – even streetcars for the city of Vienna – were designed under the ‘Design by F.A. Porsche’ brand for internationally known clients. Since 2005 all products have been developed and marketed under the brand name Porsche Design.

As early as the 1950s, the luggage series, purses, T-shirts, calendars, model cars, and buttons – even tie pins and cufflinks – specially developed for the 911 were being offered in the ‘Porsche Boutique’. These items were sold in Porsche Centers all over the world and at such events as the Carrera Cup.

Porsche Design has become one of the leading luxury brands in the high-end men’s accessories segment. It now includes a sport and fashion collection, electronic products as well as a men’s fragrance line. It stands for products that combine functional, timeless and pure design with impressive technical innovations.

Following are two Porsche design products that should be adopted by the modern businessman.

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“Since 1972 Porsche Design has presented milestone products with iconic style; the P’9981 will be our next landmark,” said Dr. Juergen Gessler, CEO Porsche Design Group. “The pure and distinctive design, coupled with authentic materials and an emphasis on the manufacturing process, perfectly match our philosophy and complement the Porsche Design product assortment.”

“This collaboration stems from the shared belief that form equals function,” said Todd Wood, SVP for Industrial Design, Research In Motion. “The Porsche Design P’9981 is a truly modern luxury smartphone, where the timeless style of Porsche Design meets the unmatched mobile experience provided by BlackBerry.”

The Porsche Design P’9981 is built on a performance driven platform that features a 1.2 GHz processor, HD video recording, 24-bit high resolution graphics, and advanced sensors enabling new augmented reality applications. It comes with 8GB of on-board memory, expandable up to 40GB with a micro SD card.

It also features Liquid Graphics™ technology, which delivers a highly responsive touch experience with incredibly fast and smooth graphics.

LIMITED EDITION

What would a Porsche accessory business be, without the watch that all men want to wear? For Porche lovers it is the flyback chronograph P’6920 Rattrapante Limited Edition.

“Porsche Design focuses on technically inspired products with a timeless, functional and purist design”, said Dr. Gessler. “We do not follow fashionable trends; instead we offer our customers long-lasting products which are created to be lifelong companions. Trends come and go – design endures. Our products do without bells and whistles. They are always credible and genuine. Since the foundation of the brand, we have already won more than 130 national and international awards and we regard this as our duty.”

The Porsche Design P’6920 Rattrapante Limited Edition is a mechanical flyback chronograph, which is available in a limited edition of 200 watches in the titanium version. The chronometer allows the user to precisely measure and display intermediate times as often as required. The Rattrapante has a striking 45 millimetre casing which is made of titanium, a metal known for its light weight and resistance to corrosion. The casing gets its black surface thanks to PVD technology: this vacuum-based process causes a matt black layer

of metal nitrides to condense, protecting the watch from external influences. The sapphire glass back provides a view of the Valjoux 7750 automatic mechanism with Porsche Design rotor system.

Additionally the flyback chronograph comes with a certificate of precision issued by the Contrôle Officiel Suisse des Chronomètres (COSC) and offers a power reserve of 48 hours.

“The P’6920 Rattrapante Limited Edition combines venerable Swiss watchmaking with the purist Porsche design in an exceptional way”, says Patrick Schwarz, CEO the Swiss watchmaking company Eterna SA, the licensee for the production and sale of Porsche Design watches. The split-second mechanism is a complicated function which is not easy to realise.” TGR

RRP: $18,230

THE SHAPE OF MY HEART

NO SUBSTITUTE FOR GREAT DESIGN

If you want something a little different in your timepiece, Frédérique Constant Genève has launched its new Heart Beat Manufacture GMT Automatic. It is prestigious Swiss watch making.

The new collection comprises of six models. Each model is a limited edition of 1,888 pieces for the stainless steel versions and 188 pieces for the 18K gold versions, all delivered in a luxurious wooden gift box. The calibre ticking inside each Heart Beat Manufacture GMT (cal FC-938) has new second time zone functionality, a 42-hour power reserve, a diameter of 30.50mm, sports 27 jewels, KIF ant-shock system, Glucydur balance and a Nivarox balance spring. Bridges of the movement are decorated with Côtes de Genève and perlage, and have anglage and rhodiage finishing. Each dial has a second time zone counter and day/night indicator at

12 o’clock position, Heart Beat aperture at 6 o’clock position, and black oxidized hands. Its practical design lends itself to adjust the time zones through the crown, preventing the usage of a separate pusher. Turn the crown clockwise, to set time zones, turn the crown counter-clockwise, and only the central hands will move.

The purpose of the Heart Beat was to distinguish mechanical Frédérique Constant watches from their battery-operated counterparts. The watches have a dial aperture at the position of the balance wheel to show that the movement inside is mechanical. The balance wheel beats 28,800 times per hour.

The balance wheel rotates clockwise and counter clockwise on its axis in a large ruby jewel. Its rotation is controlled by the hairspring, which constantly coils and

uncoils, and is visible through the open eye of the Heart Beat. In 2004, Frederique Constant entered in to the elite circle of Swiss watch brands that develop and produce their movements in-house. To this day, no other Swiss, classical watch brand in the Accessible Luxury-segment has achieved a similar development of producing its own movement.

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OUTWITTED

While crust and chocolate shouldn’t really be spoken about in the same sentence, the woman in your life will love you forever if you came home with the world’s most expensive praline.

Since the Aztec and Mayan civilizations, chocolate has been used to gain social prominence and/or affection. Designers and chefs have created legendary pieces of chocolate for their super-wealthy clients for centuries. Thus chocolatier Paul Wittamer and jeweller Fabienne Lascar, following in the footsteps of their predecessors, created this rich praline.

Wittamer’s Belgian delight is worth a tidy $240,000. If you buy it, you better enjoy it. This isn’t an appreciating investment asset and while it may generate appreciation (from the recipient)... you can’t bank it.

While the chocolate may be considered art, featuring dark ganache, caramel, with helpings of ginger and a dressing of edible gold leaf, the special touch is the single 3.63-karat diamond which garnishes the chocolate. Each piece is packaged singularly and the packaging is crafted specially to hold this unique item, as well as details of the authenticity of the jewel.

HOT, HOT, HOT CHOCOLATE

Wittamer’s is not the most expensive chocolate. In fact, some may scoff at the cheap $240,000 price tag. Some men have that as pocket change in their smoking jackets. If that is the case, the $1.5 million chocolate box may be more to your taste. Le Chocolate Box has been designed by Simon’s Jewelers. Inside the box, the chocolate is decorated with an arrangement of high-end jewellery necklaces, earrings, rings and bracelets decked with yellow and blue diamonds, emeralds, and sapphires.

YOU DON’T BRING ME FLOWERS ANYMORE

Swarovski, the company behind the diamond encrusted toilet is also into chocolate. Crust, toilet, chocolate – again three words that should not be used in the same sentence, launched by Harrods in London and packed by Lebanese chocolatier Patchi, this luxury is hand wrapped in Indian silk and topped with Swarowski crystal flowers or a delicate silk rose. Each piece is presented on suede leather with gold and platinum linings. The chocolate box has a price tag of $10,000. Cheap, compared to Wittamer and Le Chocolate Box, but tasty nonetheless.

TOPof the chocs

If you’ve just won the lottery or invested like Nik Halik (but don’t fancy a trip into space), then how about pampering your partner with the world’s most expensive chocolate? Not only are the following chocolates the world’s finest, some of them are diamond encrusted.

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ART FOR CHOCOLATE’S SAKE

If you want a small taste, not a whole box, then Fritz Knipschildt’s Chocopolagie is considered one of the finest. Knipschildt studied culinary art and has been creating the Chocopolagie recipe since 1999. This dark jewel, made of handmade truffle oil mixed with 70% cocoa Valhrona Ganache, is priced at $250 per piece.

100% PURE

Noka Vintages Collection is the world’s second most expensive collection, produced by Noka Vintages collection, and obtained from selective plantations in Venezuela, Côte d’Ivoire, Trinidad and Ecuador. This chocolate consists of 75% pure, single-origin cacao. It is the purest chocolate of all and has a price tag of $854.

YOU ARE GOLD

“You are gold,” is a famous line from a famous Spandau Ballet song and lead singer Tony Hadley was singing it about chocolate – Wispa gold chocolate. Priced at $1,628.

DIAMONDS ON THE INSIDE

“You can’t eat diamonds, they aren’t tasty, and they are meant to be worn on the outside, not the inside.”I hear you, but The Royal Collection from Cocoa Gourmet has proved us all wrong. There are 12 pieces of chocolate made of gold, diamond and silver (edible) with a soft texture of Swiss ganache. Edible metals were used in the delicacy and are absolutely safe and certified by the international food industry standards.

THE SAVOY TRUFFLE

If you like truffles and chocolate then put your snout in the trough and sniff out these gems. (Note: no gems are included in the making of this chocolate.) Even the box is edible. It is made of Bourbon vanilla cheesecake on a macadamia nut crust all boxed within dark Belgian chocolate. You have to eat the truffle to actually eat the cheesecake. Another work of art and priced at only $ 180. TGR

TOPof the chocs

S T A T U S

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From Bicycles to Bentleys

Joseph Chou was born in Beijing in 1962 and in his formative years was driven by a strong desire to break the shackles of a closed mindset.

Armed with self belief, an absolute focus on outcomes, dogged determination and $4,000 in his pocket he began his new journey in Australia.

His first job was delivering pizzas for $7 per hour. Today, Joseph is CEO of a dynamic property investment brand.

Bicycles to Bentleys is the inspirational story of Chou, whose journey, so far, has taken him from an old bicycle in a mountain town outside Beijing to a brand new Bentley in metropolitan Sydney.

This is not just a migrant’s story, it is a story everyone can draw inspiration from and proves that determination and a little knowledge will push you a long way to achieving your dreams and goals.

The Honourable Philip Ruddock, MP, Former Minister for Immigration and Multicultural Affairs further observed: “Joseph’s book exemplifies the story of many people coming to Australia to seek a better life. As former Immigration Minister, I witnessed and heard of many such stories time and time again, but few as moving and intricate as Joseph’s.”

If you believe you have what it takes, but need an extra push, From Bicycles to Bentleys should indeed motivate you to do so.

The 7 Habits of Happy Kids

As we have stated previously in this issue, financial education for children is paramount to their future success. It should be taught in schools and parents should also jump on the bandwagon. In The 7 Habits of Happy Kids, Sean Covey creates the playful world of 7 Oaks, where Goob Bear, Jumper Rabbit, Sophie Squirrel, and their friends, learn what really makes them happy; things like having a plan, thinking of others as well of themselves, and how balance feels best. A parents’ guide

follows each of the seven picture stories, with questions to talk about what kids have learned, and baby steps kids can do to live the lessons.

Sean Covey’s gift is taking his father’s lifework and making it accessible for younger people. He first did this with The 7 Habits of Highly Effective Teens, and now he’s opened the habits up to more kids. We want our youngsters to be happy and here kids get the compass that will lead them there.

The Tao of Warren Buffett

Warren Buffett’s mindset will always be a mystery to some. How does the man, with such a simple philosophy, make so much dough, and what is the thinking behind those successful decisions? In The Tao of Warren Buffett, readers can gain an insight into what has made him the world’s most successful investor. He lets us in on how he crunches the numbers and comes to a business decision. Expect one aphorism per page, produced by either himself or his former daughter-in-law. The book is written in such a context that

readers should have no problem applying the insights presented.

The book repeats its lessons – which may seem tedious – however repetition is one of the great forms of learning.

As for that simple philosophy: buy quality stocks cheaply and wait for bargains. The Tao of Warren Buffett is a great introduction to the man and his philosophies and anyone from the novice to the experienced investor will learn some valuable lessons.

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Issues the UK Inquiry into executive pay has put up for discussion

1. Would a binding vote on remuneration improve shareholders’ ability to hold companies to account on pay and performance? If so, how could this work in practice?

2. Are there any further measures that could be taken to prevent payments for failure?

3. What would be the advantages and disadvantages of requiring companies to include shareholder representatives on nominations committees?

4. Would there be benefits of having independent remuneration committee members with a more diverse range of professional backgrounds and what would be the risks and practical implications of any such measures?

5. Is there a need for stronger guidance on membership of remuneration committees, to prevent conflict of interest issues from arising?

6. Would there be any benefits of requiring companies to include employee representatives on remuneration committees and what would be the risks and practical implications of any such measures?

7. What would be the costs and benefits of an employee vote on remuneration proposals?

8. Will an increase in transparency over the use of remuneration consultants help to prevent conflict of interest or is there a need for stronger guidance or regulation in this area?

9. Could the link between pay and performance be strengthened by companies choosing more appropriate measures of performance?

10. Should companies be encouraged to defer a larger proportion of pay over more than three years?

11. Should companies be encouraged to reduce the frequency with which long-term incentive plans and other elements of remuneration are reviewed?

12. Would radically simpler models of remuneration which rely on a director’s level of share ownership to incentivise them to boost share value more effectively align directors with the interests of shareholders?

13. Are there other ways in which remunerattion — including bonuses, LTIPs, share options and pensions — could be simplified?

Think & Grow Rich Inc. welcomes your letters, feedback, opinions, criticism and comments. These are all subject to editing and must include a name, address and phone number (not for publication).Twitter: @TGRmagazineEmail: [email protected]

Chartered Secretaries Australia (CSA) has told a UK Government Inquiry into executive pay to follow Australia’s lead and ditch proposals for a binding shareholder vote on the remuneration report.

IT’S ALL ABOUT

THE MONEY

OPINION

A ccording to CSA’s chief executive, Tim Sheehy, the Australian Productivity Commission led the debate on this

issue more than two years ago and the UK would benefit from noting the many reasons why the binding vote was ultimately rejected in favour of the ‘two strikes’ rule introduced this year.

“At face value a binding vote can seem like the democratic solution. But scratch the surface and it’s clear it creates more problems than it solves,” Sheehy says.

“Importantly, removing responsibility for remuneration from the board blurs long-established company law principles separating the rights and obligations of owners and managers of a company. It creates confusion over who’s accountable for the performance of executives given that shareholders have no fiduciary duty to act in the best interests of the company — they need only look out for ‘number one’.”

Sheehy added that in contrast, the ‘two strikes’ rule ultimately adopted by the Productivity Commission appropriately kept directors responsible for executive performance and pay while allowing shareholders to hold the board accountable through the ‘spill’ vote.

Nevertheless, the jury was still out on whether this was the right approach.

“The ‘two-strikes’ rule has opened a Pandora’s box of unintended consequences. This AGM season, we’ve seen it employed not just to send a message about remuneration practices but as a tactic to create instability within companies. While the full implications of the rule are still being played out, it would be premature to say Australia has found the ‘magic bullet’.

“What is clear is that the rule has been effective in getting boards to sit up and pay closer attention to shareholder concerns. Overall, boards appear to be more conscious about keeping a lid on pay growth.”

CSA noted that the UK Inquiry is also investigating whether all UK-listed companies should put in place ‘clawback’ processes to facilitate recovery of amounts paid to executives where, for example, they are based on financial statements subsequently found to be materially misleading.

“The Australian Government consulted on this issue earlier this year and has uncovered many concerns regarding the workability of a legislative solution”, Sheehy says.

“CSA has conveyed our view to both the UK and Australian Governments that the clawback of executive remuneration is best dealt with in the employment contract between the executive and the company, with directors accountable through disclosure to their shareholders about whether such contractual arrangements are in place.

“In contract, the company would have greater scope to implement broader clawback provisions covering not just fraudulent mis-statements in the financials but also unjust enrichment and other inappropriate payments. Contractual provisions are also capable of going further than statute by covering not just the CEO and CFO who have sign-off responsibility for the financials, but a broader range of senior executives as well.

“Legislation can be superficially attractive because it appears holistic and is easily enforceable. But ultimately, it is inflexible and will not produce a solution that’s appropriate

for all companies.” TGR

Article supplied by Chartered Secretaries Australia (CSA) an independent leader in governance and risk management.

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A ll your marketing efforts need

to concentrate on driving traffic from

different channels, including social

media, into your website. This is why you

should start planning the integration of social

media within your web properties otherwise

you will be missing out on valuable online

opportunities. Lack of social integration may

lead to a website being seen as irrelevant.

SOCIAL MEDIA INTEGRATION

Social media integration should happen

in stages to reach a mature level. Here

are some common stages that businesses

experience as they travel the road towards

social media maturity.

SOCIAL SHARING

Description: Social sharing are participation

mechanisms that encourage recommendations

and referral from social media channels such

as Facebook Like or Tweet buttons.

Benefits: Triggers social alerts as a form

of endorsement and starts a viral loop; for

example inviting friends to the website.

SOCIAL AGGREGATION

Description: Aggregate social content, for

example tweets, comments, reviews, etc.

occurring on your website.

Benefits: Brings to the surface all social

discussion right on your website and enhances

editorial connectivity and relevancy. It is highly

recommended to keep the good and the bad

and then filter the ugly discussions. Focus more

on brand oriented content.

SOCIAL CONTEXT

Description: Users login using existing

credentials and can connect with friends

and/or followers right on your website.

Benefits: May increase more client signups and

create a sense of familiarity and community.

The page on your website can have the same

look as Facebook or a Twitter page. Marketers

can also leverage the registration process

allowing users to register using Facebook

or Twitter login details.

You may also offer instant personalisation

where website visitors can immediately see

their friends’ ratings and reviews on a product

page on your website. How powerful is this?

CONCLUSION

Many businesses are missing the mark by not

integrating social media. We have discovered

some businesses are active on social media

but are not taking advantage of their social

content to drive prospective customers to their

websites, nor are they using the social viral

factors to increase qualified traffic, conversion

rate and ROI.

Social media is always new and evolving, and

as such, these stages represent a moment in

time. They will continue to evolve and expand

with new technologies and experiences and

in the end social media is a privilege and a

tool — therefore it is yet another important

opportunity to run a more meaningful and

relevant business. TGR

Kark Bentamy is WebTech Pro’s managing director.

MAKE YOUR WEBSITE MORE SOCIAL

Today there are many platforms that businesses can use to engage prospective customers; your website

is the most likely place where those prospective customers can be converted, writes Karl Bentamy.

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T H E W E B

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T he PPSA requires businesses to register their security interest in customers’ assets in a national

Personal Property Security Register (PPSR). Registration will be critical to ensure businesses have valid and enforceable claims over assets in the event their customer becomes insolvent or enters into administration.

Introduction of the PPSA has been pushed back to no later than 1 February 2012.

No precise date for commencement has been announced, which makes it even more important for businesses to be prepared for its introduction.

The PPSR will apply to any businesses that lease goods, supply goods on consignment, financiers and trade creditors who supply goods on credit subject to retention of title provisions.

In the case of leases, all assets leased for an indefinite period or longer than one year, including business equipment, furniture, cars, boats and large capital assets, will need to be registered by the lessor to mitigate loss of rights in the face of insolvency or administration of the lessee.

The changes are substantial and will affect more businesses than is immediately obvious.

Businesses supplying goods such as books, clothes, or computing equipment on consignment to retailers will also need to register their interest in assets held by the retailer. Even businesses in the hospitality sector who lease out crockery and signage will be affected.

Retention of title clauses will no longer be enough to protect a supplier’s ownership of unpaid goods.

While the larger banks and financing companies were reasonably prepared for the new laws, there was still a risk that lower tier financiers have not got the message.

For instance, invoice financiers and factoring companies are also impacted and will need to protect their interests in any invoices and receivables by registering the assets on the PPSR.

The introduction of the law had been pushed back several times, which is an indication of the complexity it will present to business and the wide range of industries affected.

While the delay will be welcome relief to many businesses, it is not a licence to be complacent. The legislation will come in, and the preparations needed are substantial.

Tips to protect the interests of goods suppliers:

» Identify if the PPSA applies to your business.

» Ensure terms of trade containing retention of title clauses are in writing and signed or properly acknowledged by the customer.

» Ensure your trading terms are PPSA ready with provisions inserted to make management of the new system easier. For example ask your customers to waive their right to be notified of the registration.

» Register your customers on the PPSR before goods are supplied.

» Retention of Title clauses should be drafted so as to secure all monies owed to the supplier.

» Ensure the terms cover future advances or ongoing sale of goods. TGR

Daniel Turk is a commercial law partner with TurksLegal.

Think & Grow Rich Inc. welcomes your letters, feedback, opinions, criticism and comments. These are all subject to editing and must include a name, address and phone number (not for publication).Twitter: @TGRmagazineEmail: [email protected]

NO EXCUSE FOR BUSINESS COMPLACENCYDelays to the introduction of the new Personal Property Securities Act (PPSA) have provided affected parties including businesses supplying goods on credit, consignment, under lease arrangements and other financiers, with four months ‘breathing space’, however businesses must use the time wisely, writes Daniel Turk.

LAW & ORDER

OPINION

“Th

e ba

sis

of p

ersi

sten

ce is

the

Pow

er o

f Will

.” —

Nap

oleo

n H

ill

112

O F E V E N T SCALENDAR

Editor’s note: Event dates are subject to change without notice. We apologise for any inconvenience if this occurs.

For bookings, visit 21stcenturyevents.com or phone 1800 999 270

Resources For Investors visit: thinkandgrowrichfinancialservices.com.au

2012 2012 21ST CENTURY EDUCATION EVENTS

Millionaire Mind IntensiveFebruary 17-19Melbourne, VIC

▶ Masterminds of the Caribbean Cruise June 30-July 14 Caribbean

▶

Perth, WA February 4-5Venue TBA

▶

Melbourne, VIC February 18-19Venue TBA

▶

Sydney, NSW February 25-26Venue TBA

▶

Brisbane, QLD March 3-4Venue TBA

▶

Basel 111 Conference March 22-23 Sydney, NSW

▶

Philanthropy Australia ConferenceSeptember 4-5Sydney, NSW

▶

4 Day Education for Life Event November Brisbane, QLD

▶

Financial Education Summit

September

Brisbane, QLD financialeducationsummit.com

▶

IIR’s 2nd Annual Managing Ward Finances & Budgets Conference, May Brisbane, QLD

▶

iStrategy ConferenceFebruary 21-22Sydney, NSW

▶

Property Direct Express Weekend February 25-26Melbourne, VIC

▶

Bank Tech Summit, July Sydney, NSW

▶

4 Day Education for Life Event May Melbourne, VIC

▶

Youth Summit May Melbourne, VIC

▶

Unleash the Power Within Anthony Robbins April 27-30 Sydney, NSW

▶

Business Mastery April Melbourne, VIC

▶

Mastering SAP FinancialsMay 21-23Melbourne, VIC

▶

Banking Regulations Forum, June Sydney, NSW

▶

FRANCHISING EXPO AND BUSINESS OPPORTUNITIES

ROCKSTAR INDUSTRY SYSTEM - JEFF AND JANE

Sydney, NSW March 23-25Venue TBA

▶

Perth, WA July 21-22Venue TBA

▶

Perth, WA May 26-27Venue TBA

▶

Melbourne, VIC August 17-19Venue TBA

▶

113

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O ne of the first acts of an Abbott government should be to repeal the Labor Party’s Fair Work Act. Industrial

relations reform has a strong political rationale and serious policy merit.

Following the 2007 federal election it became conventional political wisdom that industrial relations policy was a no-go zone for the Liberal Party. After all, the much-loathed WorkChoices legislation had contributed in a significant way to the party’s loss of office after 11 years in power.

While it is certainly true that WorkChoices hastened the Liberal Party’s demise in 2007, it is far from clear that the political response in 2011 should be to abandon the field of workplace relations reform.

In the 2010 federal election, opposition leader Tony Abbott was forced into an awkward promise to do precisely nothing in the field of labour market reform under pressure from Labor Party scare tactics and grilling from journalists. From this came his now infamous pledge that WorkChoices was ‘dead, buried and cremated.’

But surrendering the battle before the industrial relations war even began in the last election had two serious consequences that Abbott must avoid before the next election, due in 2013. Firstly, by declining to prosecute the obvious failings of the Fair Work regime, the Liberal Party allowed the ALP to escape reasonable criticism of their workplace policies, and gave voters the impression that they were not causing major headaches for business and impacting on economic efficiency.

Secondly, in the minds of many voters, the Liberal Party has a deep-seated commitment to labour market liberalisation, so a promise to do nothing in this area has little credibility. Voters who doubted the opposition leader’s sincerity had only Labor Party talking points about a return to WorkChoices as a guide to what the Liberal Party would do if it won office. By contrast, had Abbott outlined a sensible and moderate reform package, he would have been able to more credibly deny charges of a resurrection of John Howard’s laws.

The economic case for industrial relations reform is strong. Productivity is the single most reliable measure for predicting increases in living standards. If productivity is rising, incomes soon follow. In fact, there’s no other sustainable way of increasing national wealth. But after strong growth in the 1990s, productivity growth has been lagging for the best part of 10 years, and has slowed to a crawl in last few years. It would be fanciful to attribute all of this slowdown to stagnant industrial relations laws, as productivity is affected by many economic factors. But it would be equally foolish to argue that substantially re-regulating the labour market has absolutely no impact on productivity.

After all, the Fair Work Act not only overturned the 2005 WorkChoices laws, but also features of much earlier – and less controversial reforms. For example, Fair Work eliminated statutory individual agreements, a policy introduced by industrial relations minister Peter Reith in 1997, which were obviously not egregious enough to prevent the Liberal Party winning elections in 1998, 2001 and 2004. In effect, Labor has returned Australia to an industrial relations era of the early 1990s.

The signs of strain from this system are now becoming apparent. High profile disputes such as the battle between unions and management at Qantas highlight the way in which the union movement has been emboldened by laws which tilt the system substantially in their favour. Appalling stories of over the top salaries and ridiculously generous conditions at worksites like Victoria’s Wonthaggi desalination plant demonstrate that taxpayers are bearing the cost of a system that pays little heed to economic reality. We know from cases like that of students employed at a hardware store in rural Victoria – who were denied the chance to work two hour shifts under the laws – that the system is costing jobs.

And the business community is becoming more vocal every day of the increased compliance costs, the embedded disincentives to hire and the inflexibility that characterises the Fair Work Act.

Let’s not lose sight of the moral component here either. Why shouldn’t employees and their employers be able to negotiate agreements that they believe are mutually beneficial? Why should a third party like a union, or a tribunal of Fair Work Australia, be able to tell a small business how they should spend their money and who they should employ?

Australians should be grateful that we don’t suffer under the perennially high unemployment that besets Europe. Even in good economic times, countries like France and Germany have belaboured under the strain of unemployment rates of almost 10%. This isn’t just economically inefficient and expensive for taxpayers, but has a very real personal cost. We know that unemployment is associated with a whole range of social ills and that the dignity of work is an extremely effective tool for combating them. One of the reasons Australia has traditionally enjoyed lower unemployment and less of its associated costs is because of our relatively liberal labour markets. But the current rigid system puts that at risk, particularly if we see the second global economic slump that many predict.

Ultimately, you can’t shackle a 21st century economy with a 20th century industrial relations system without negative economic consequences. If Labor won’t reform Fair Work, it falls for Tony Abbott to do so. The only question is, is he up to the task?

James Paterson is the associate editor of the IPA Review at the Institute of Public Affairs.

Twitter: @jameswpaterson

theLASTWORD

Liberal Labour Reform

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