Saturday, March 13, 2010

Keys To Creating Wealth and Investing Succesfully

Develop a Financial Plan
Always identify clear goals and objectives for your financial future. This applies to short, medium and long-term goals. Develop a plan to implement them. Without a clear plan, many things can go wrong.

Pay Yourself First

Invest on a regular basis. Regardless of age or income, you must place a high priority on the long-term investment in order to meet your financial goals.

Make sure you understand the importance of diversification. Don’t put all your eggs (or your stocks and bonds) in one basket.

Understand Risk

Make sure you fully understand the word ‘risk’. It is more than the possibility of losing money. Risk includes such things as currency risk, credit risk, interest rate risk, risk of inflation, health risk, loss of income risk.

Obtain Proper Insurance to help Mitigate Risk
Often, people do not have insurance or, if they have it, they may have the wrong kind. This applies to all types of insurance: life, automobile, homeowners, health and disability. You may also want to consider investments that have historically provided a hedge against inflation, such as precious metals, oil, gas or real estate, which may help “insure” against a decline in the value of the dollar and protect their purchasing power over the long term.

Plan Your Estate
Don’t forget to plan your estate. Such planning can save you huge amounts of tax and family arguments.

Put Cost In Perspective

Don’t focus too much on the cost of making sound investments. There is a cost for having one’s financial act together.

Minimise Expenses - Reduce Taxes
People often pay higher taxes than necessary. By simply asking for help, this tax consequence can be decreased.

Be Persistent

Don’t abandon your plans in times of extreme optimism or pessimism. When the market takes a leap or a fall, some investors suddenly start believing their doubts and doubting their beliefs. You should keep focused on your goals and maintain a long-term perspective—no matter what the current market conditions.

Use an Independent Financial Planner
A good financial planner can help you find your direction. They will help an individual set

Tips for Saving for Retirement

How to Save for Retirement
Saw a great article

Summary below:-
the golden rule of investing: START SAVING EARLY!! COMPOUND INTEREST IS KEY

How does compound interest work? By keeping your money invested over a long period of time, you earn interest on the interest you earned before, as well as on the part you save. It takes awhile, but soon you’ll see that a large part of your earnings is actually coming from interest earned on your “winnings,” sort of like playing blackjack with the house’s money.
Here’s how it plays out: Suppose you put $2,000 a year in an individual retirement account earning 11 percent compounded annually (the long-term average for stocks) from ages 30 to 39, then let the money sit there until age 65 without any other contribution. You’ll have around $418,000. Now suppose you start at age 40 with those same $2,000-a-year contributions. You still put the same $20,000 in, but because you started 10 years later, it’ll only be worth around $161,000 by age 65.
So, which would you rather have, the $418,000 retirement or the $161,000 retirement? The choice is largely yours: you can let compound interest do the work for you, or you can scramble like mad later.

Superannuation through Payroll Deductions

For the same reasons you withhold money to cover your taxes, you should use payroll deductions to fund your retirement. If the money never comes home, you won’t miss it much. Once the money hits your checking account, too many bills compete for your pay.
Put as much money into a Superannuation as you can afford. It is hugely tax effective.

Pay off your Credit Card Debts
Even if you make a decent wage, chances are that you have debt. If you’re like most people, the best financial move you can make is to cut up the cards and begin paying down credit-card debt. As you get a grip on your spending, you’ll have more and more money to save for retirement and other goals.
Pay off high-interest debt and pay yourself instead. If you carry a $6,000 credit card balance at 18 percent for a year, you’ll pay more than $1,000 in interest. Instead, invest that $1,000 in a stock fund that returns 10 percent and you’ll have $1,100 by the end of the year. That’s $1,100 more than you would have had if you carried all that credit-card debt. Do that over 20 years and you’ve made a massive down payment towards your happy retirement.
“When a client tells me they have $10,000 in the bank and $5,000 in credit card debt, I tell them to pay the credit cards off first. Sometimes they’ll say, ‘But I might need the money.’ Fine, if you need the money later, charge it on your card or take out a loan. In the meantime, you’re guaranteeing an 18 percent return on investment when you pay off your credit card debt, and there’s no way I’m going to guarantee that with another investment.”

Live within your Means
Live well, but within your means. Sometimes it seems like everyone else is doing better than you are, but you can bet if someone is making the same amount of money as you and they can afford things you can’t, they’re either deep in debt or they’re getting help from outside income sources.

Be Patient
Finally, remember that good investors need patience. By constantly jumping at every turn in the market or every hot trend, you may end up damaging your ability to amass the kind of wealth you’ll need to retire.

Tuesday, March 09, 2010

A Programme for innovators

Text: Evelyn Pesikan – article by
Gunnar Huss; to call him a man with many irons in the fire would be an understatement. Gunnar is Director of Operations for the Nordic Region at 3i, which owns a portfolio of 2800 companies. For 3i, a tailored in-company IFL programme is where owners and managements meet to build team spirit and mutual understanding.
One of the company's mottos is, 'None of us is as smart as all of us'," affirms this easy-going 52-year-old, who was deputy managing director and deputy CEO at Atle. He is quick to emphasize that teamwork, not individual "Supermen," is usually the key to success.
A newcomer in Swedish business, a portfolio of 100 companies, Atle (bought by 3i) was clearly a success story, with a 50-percent return on investment. "Not bad as a bank book. You'll have a hard time finding figures like that anywhere else," notes Gunnar Huss.

When 3i took over Atle last May, he became Operations Director for the Nordic Region, where the firm now owns some 150 companies in a broad spectrum of industries.
"I have a fair share of common sense, I'm good at delegating, and I can sift the wheat from the chaff, but what really counts is teamwork. You focus your attention and your involvement on the whole picture." To hold such a highly diversified enterprise together and to create a more distinct owner profile, it was suggested that Atle start an in-company management-development programme.

"We saw a need to position ourselves more clearly, to teach others how we think as active owners, while at the same time giving something back to the companies," says Gunnar Huss, who asked IFL to help 3i in establishing a programme entirely its own.
After six months of intensive collaboration, the in-company programme, "Value-Creating Management," now in its third session, was ready for launching. For a total of 15 days each year, 25 people come together. About two thirds of them are from the management groups of the portfolio companies, and one third from 3i. They meet to get to know each other and to join in searching for the common theme that unites them. The IFL programme has become the meeting ground for the ownership and leadership points of view.

The overall picture, and being able to view your company from the outside and create useful networks, are important aspects of the programme," he explains, adding that 3i has shown an interest in continuing this programme started by Atle.

Friday, March 05, 2010

An Awesome Site to Download Docs for Startups raising Seed Capital

Thanks for the heads up Romain Bonjean


The Series Seed Documents are a standardized set of documents that can be quickly and easily deployed for a seed investment: to help get a company financed properly, legally quickly and intelligently.

Up until now, various smart people have talked or blogged about reducing the transaction costs associated with seed stage investment without rallying around a particular attack. Of course both entrepreneurs and investors would rather see their investment dollars used toward developing a new product and bringing it to market than toward what are usually routine transaction costs. The problem has been crafting a set of documents that provide adequate protections without being unduly burdensome. [more...]

Questions For Entrepreneurs You Meet – Survey taken from a Chapel Hill Business Student - My Daughter

How did you come up with your Product Idea?
• History of idea/industry and how it was conceived
BSI Started when I left the accounting profession and said to myself that I would never fill another timesheet!

Everything that I did was based on some form of success fee based on a successful outcome for clients. Accessing Government grants was a major focus.

The grants that I focused on were was

• the EMDG – where for every $ spent on marketing and promoting your product overseas, the company gets 50c in the $ back up to $150k per annum.

• Import Credits in the Textile Industry – also export related

• R&D Tax Concessions and Grants – Incentives given to companies who innovate.

These companies had a huge need for business planning, capital, management advice and management accounting services.

2001 -
Enter an old school friend of mine, Alan Milwidsky, who was at the time a partner in a BIG 5 company, specializing in Growth Strategies – looking for a change…. I said Al… come spend a week in our business, have a look at our deal flow, join me in the business and you will make a lot more money and have a lot more fun… I was ½ right…. We have a lot more fun!!

We developed the BSI business plan – the Vision being “To Help Companies Grow” and “ To be a “one stop shop for the entrepreneur”
Providing Grants, Growth Strategies, International Gateways, Capital Raising.

We believed that in order for us to leverage our skill base, we would take equity stakes in Innovative Companies and back Motivated People, and over the years help there companies grow with the objective of getting a return on our investment.

We worked out the money that we needed to grow the business, identified a number of strategic investors and pitched our plan to them.
We were fortunate to raise the money that we were looking for from these parties, together with some of our own money.

With the money raised, we acquired
• A Bizcap team Specialising in Early Stage Capital Raising
• The leading R&D Tax Concession Firm, being run by an old friend of mine,
• a Recruitment Business (which acquired a few more recruiting businesses)
• a Training Business ((which acquired a few more training businesses).
• As well as making a number of Investments in Innovative Companies.
• More recently we acquired a financial planning business, focusing on helping an individual build wealth

Our model is to set up different Companies with a common brand and Philosophy, whereby each Head would be a stakeholder, and a group policy of X referring Clients, people and knowledge with a common culture.

It was 2001, and the dot com crash happened…. And there was no environment for the SME innovator looking to raise between 200k and $2m….
Alan M developed the
“BSI Investor Forum” – where every 3 months we showcase 8 innovative companies to 200 HNI and Funds in Sydney, Melb and Brisbane.
Over the past 8 years…. We have had 25 forums, showcased 200 companies, of which +100m have been raised for more than 80 of them.

We set up a USA office as part of our International Gateway Strategy, and have an Investor Forum every second year in Silicon Valley where we showcased 10 Innovative Australian Companies at “ALWAYS ON” – the key Silicon Valley Conference – attended by “the Captains of Innovation”

Our Investment Fund
In 2003, an amazing opportunity presented itself…..
We had the opportunity to acquire a small Government sponsored fund , from a group looking to get out of the early stage marketplace.
This Fund was a dream come true for us…. It gave us Capital to co-invest with our HNI and Funds, and we would not have to use our working capital to invest in these Innovative Companies.

We have subsequently merged with another fund, and together have made in excess of 30 Investments where we believe that some will be successful world beating companies.

Since 2001 – we have grown our Group from a turnover of 1m – 30m ….
Did I do this…. I have pretty much done nothing besides picking guys who are brighter than I am, passionate at what they do, with the right incentives to help them achieve their goals and objectives.

Where to from here?
We are currently working on a number of projects that will hopefully take us from $30m – 150m over the next 10 years.

• What would be a good new business opportunity if you were starting again (besides one you may be working on at the moment)

Currently we believe the best opportunity for us is growing a financial planning business, helping the individual grow wealth. If there was a better opportunity, we would be focusing on that!!

We have a large base of clients of which to x sell our services

• Were you solving a frustration or need and if so, what was it

The frustration for the entrepreneur was to pay for results vs paying for time. Everything we did was based on a fixed price or a % of the benefit, so the Client knew exactly what he was going to pay us, and that he could afford our bills.

The services of accessing grants solved a huge pain for the enrtrepreneur as there were/are mountains of red tape that need to go through to get the relevant grants.

We solved a pain for the Small Service Business Provider – by providing the back office, financing and marketing services in exchange for equity in their business.

• Describe the Market Opportunity at the time you started?
• What made it unique
Fixed fee and success fees vs fee for time

• How did you gauge the market acceptance of your idea before you started

Knocked on doors, pitched and performed. From there we got referrals. We focused on certain industries where government recognized market failure (TCF industry and ICT Industry) put our flags in that space, and became leading service providers in that industry.

Other services developed were based on client demand

• What was the competition like at the time and how did they react

Competition was and is accountants, business planners and consultants.
Many have adopted our model of fixed fees and success fees.

Our competition copied our methodologies, and tried to headhunt our key people.

• How important was location of your business and how did you pick the location

Location was important to retain the team. Inner City – access to public transport – good location and professional looking offices

• Tell us about the Business Planning Process?
• Did you develop and write a plan – if so, why and how good was it?

We spent 6 months developing our business plan. It was an awesome 5 year business plan… which we achieved in 2 years.
Our 2nd 5 year business plan was achieved in 18 months!!

The philosophy and concept and vision remains the same.

• How many iterations and how long was the process-
• How much did the original plan change over the company’s history

It set the path to our future growth

Basic philosophy the same. Achieved ahead of plan. We are on our 5th iteration!

• Did you have any help/would you recommend getting help and from whom

We had an independent facilitator – found it invaluable

• If you did not do a plan, would you do one if you started the same one today and why or why not

• How much industry knowledge did you have/should someone have

If you are interested in the industry.. give it a go, you will learn soon enough.

• What mistakes did you make in the planning process

We should have got an independent advisory board… who could make unemotional decisions based on fact.

4. Describe the Management Team and how it came together or evolved?

Management Team of the holding company was and is Alan, Mick Lynch and Me
We should have had an independent non executive board/advisory board on out team.

We were the founders of the business

Each division/subsidiary has its own management team, with either Alan , Mick or me on the Board of Directors

• What was your experience and background before starting the business

A Chartered Accountant working in a professional firm for 10 years

• What was your motivation to start your own venture

Independence and financial freedom.

• Did you have a mentor or someone to whom you turned for regular advice and why

Yes and still do… he keeps me sane, and prevents me from feeling alone!

• Who were the key employees you hired first and why

Key Employees were specialists in the relevant grants.. They cam on board, and offered them equity and profit share.

• If your partner or key employees are gone, why and what lessons did you learn
???? Our business is based on our people. Without our key partners/employees, we would not have a business.

• How did you motivate your employees to follow the same vision you had
We got them involved in the business planning process
Total transparency on results
There is generous profit shares

And the most important was picking the right people. Once we chose the right people.. everything else was easy

• Describe the impact of this venture on your personal life and would you change any of the way you managed the work/personal life balance

For the first 10 years there was no work life balance… the focus on the business was 24/7…

5. Describe how you Financed your venture?
• Who were the investors (not names) and how did you find them
Our staff/team
A large High Net Worth Individual

• What did you learn from those investors that did NOT invest
How to cope with rejection!!

• For those that did invest, what are their four or five most important factors (besides the quality of the management team) in their decision

The team
The vision
Ability to get a good ROI

• If you did not use outside investors, would you have done so if you started today

6. What Mistakes did you make with the Company after it was started and what might you have done differently in the planning process to prevent them?

Hiring the wrong people and not getting them leave fast enough
Not being able to enable fellow companies to x sell with each other and synergise
Focussing on business that is not scalable and has ability to exit
Being too opportunistic
Not being focused
Not having an independent advisory board
Being too diverse
Other mistakes too countless to mention

Some General Tips

• Passion – if you aint got it – get a job
•Have a Vision – “help companies grow” and “ be a one stop shop for the entrepreneur
• Pitch – Invest in getting your elevator 30 second pitch right – have a pitch for every occasion – for an investor , for a customer and for a potential employee – as an entrepreneur , you are constantly selling!!
• People – Hire slow and fire fast – focus on the best people – the right people.. Make sure you look after them , take them for lunch, communicate with them , show them that you care – it’s the little things that count. Founders are generally technically oriented – know when to change the guard – example eway Tony Mcgrath – has built his business to 20 people… both founders were techos – 6 months ago hired a sales and marketing team – and sales have gone crazy!!
• Customer focused and Sales and Marketing is key –Customer Service is important for all in organization to get involved in as this is free focus groups… be on same wavelength as your customers. Develop relationships with them .
• Planning – is key – with knowledge of where you are in the business cycle –
• Penossa – make sure you have enough cash to fund your growth – growth = cash burn – if you cannot afford organic growth – make sure you have a group who has deep pockets who are supporting you or you will get crunched… cash flow cash flow cash flow!!
• Point of Difference – is key – why are you different from the competition – why are you going to hit the home run!
• Persistance and staying focused – keep going (however , ensure that when climbing the ladder – you are climbing up the right wall! (also know when to quit!!)
• Network Network Network – develop relationship with advocates of your product, networked groups, consultants, advisors – they will help you inject your business into the ecosystem – get them to buy into your dream
• Don’t be scared of giving your investors a great return on their investment . If you do this , they will invest in you again and again.
• Always try to climb on the back of giants – align with organizations that will make you look

• Get the brightest and best people, and make sure you look after them like gold. Your people are your assets
• Keep communication lines open – our biggest failures have been through an inability to communicate
• Avoid FTI – take action – make a decision and implement it – even if it is the wrong decision – you can always change it
• Your Database is an valuable asset keep it updated, respect it and guard it. Use it for networking
• X referring clients throughout the service lines – providing a holistic service to clients has been important
• Build your Brand – this is where you will get leverage and credibility – update your website, provide links, use professional mweb marketers, create your blog, have events, seminars, attend seminars. Become “the college of knowledge” in your field of expertise. If people perceive you as a leader, performer and creator – then that is reality – PERCEPTION IS

Rates rise to 4 per cent but martket is still hot

Posted on Tuesday, March 02 2010 at 3:35 PM Reserve Bank has lifted official interest rates 0.25 of a per cent to four per cent and has hinted at further rises to come.

The latest rise comes three months after the previous rise in December, after the Reserve Bank (RBA) board didn't meet in January and then surprised economists by keeping rates on hold in February.

RBA Governor Glenn Stevens says the risk of serious economic contraction in Australia has passed, and the central bank is removing the monetary stimulus put in place when the outlook was much weaker.

"Interest rates to most borrowers nonetheless remain lower than average," Stevens says.

"The board judges that with growth likely to be close to trend and inflation close to target over the coming year, it is appropriate for interest rates to be closer to average. Today's decision is a further step in that process."

RP Data research analyst Cameron Kusher says the rates rise is in keeping with positive economic in recent weeks, though he adds that dwelling approvals and housing finance data have both still showed some softness.

"Despite the fact that the decision was made to increase rates today, we expect that the RBA will continue to keep a close eye on housing finance, dwelling approvals (and) commencement(s) and property value growth data," Kusher says.

"Higher interest rates are anticipated to result in a lower level of property value growth, however, it's a fine balance."

"The RBA have previously indicated that they would like to see the supply of dwellings nationally increase. Given this, they would like to see the number of dwelling approvals (and) commencement(s) increasing as well as the number of housing finance commitments for construction of new dwellings so that the supply of housing continue to increase at a rate commensurate with demand."

PRD nationwide managing director Jim Midgley says today's hike won't hit the property market too hard.

"There are enough signs in the current market that property is performing well. The intention of keeping inflation down is a good move," Midgley says.

"We're not going to see a great slowing. The dynamics of the property market still look very strong."

goal setting tip from Jack Canfield best selling authors of the Chicken Soup For The Soul series

It’s easy to lose sight of your goals. Sometimes we’re so busy we can’t see the big picture anymore. Schedule time to think. Make it a priority. Develop unusual clarity – a crystal-clear picture of what you want - so that you can refocus and look at things in perspective.
The Top-10 Goals Checklist
If you’re finding it difficult to focus on your goals, here is a wonderful checklist that will help you set, or re-set goals that will last the distance.

1. Your most important goals must be yours. It sounds obvious, but don’t let the media, parents, friends or neighbours set your goals. Make sure your goals are what you really want.

2. Your goals must be meaningful. If you’re goal isn’t meaningful it won’t last the distance. What are you willing to give up to achieve this goal? You can guarantee there will be sacrifices along the way. Your goals should be what drive you to get up in the morning – even when you don’t feel like it.

3. Your goals must be specific and measurable. Accurately define what you want. The more specific the better. If your goal is to be financially independent, define what that means. Does it mean having $50 million in the bank, being debt free etc. Be more specific.

4. Your goals must be flexible. On the road to achieve your goals, other opportunities may arise. You don’t need to try every new idea, but be open to genuine opportunities.

5. Your goals must be challenging and exciting. Think big. Your goals should be so exciting they keep you up at night. They don’t have to be epic, like climbing Mt. Everest (unless that’s what you want), but they shouldn’t be mediocre.

6. Your goals must be in alignment with your values. If your goals are in alignment with your values, achieving them becomes easier. There will be no internal conflict and this combined energy will propel you to greater success.

7. Your goals must be well balanced. When people in their eighties are asked what they would do differently if they could live their lives again, they never say, ‘I’d spend more time at the office.’

Set goals that include the more pleasant things of life such as family time, recreation, travel and hobbies.

8. Your goals must be realistic. If you’re four feet tall, it’s unlikely you’ll play professional basketball. Set goals that are challenging, but achievable, and give yourself enough time to complete them.

9. Your goals must include contribution. Many just set monetary goals and don’t leave any room for giving. Remember to also set goals that give something back. This contribution can take many forms, but the payback is guaranteed, though it often comes in unexpected ways.

10. Your goals need to be supported. You’ll need some help along the way. You have three options:
a) Tell the world – lots of pressure, but it works for some.
b) Don’t tell anyone – actions speak louder than words.
c) Tell a select few people whom you trust and who will support you (recommended).
When you find it difficult to focus on your goals, then it’s time to refocus. The next strategy will help you do this daily.