How some big American companies take care of retirement

At some point, we all will have to give up working. Age and exhaustion will prevent us from being able to enter any form of labour. Businesses also recognise this, offering employees packages to aid them in retirement. This makes for an excellent incentive for loyalty, since the longer an employee works for a business the more they’ll get out at the end. Some of the best companies to handle retirement are in America and it’s worth considering what they offer their employees.

What is a 401(k)?

In the USA, people often talk about a 401(k) as shorthand for retirement. The name comes from American tax code that governs retirement plans. This must be distinguished from a pension fund. As the Wall Street Journal highlights:

Pension funds were managed by the employer and they paid out a steady income over the course of the retirement.” A 401(k), however, focuses more on investment. Employees are able to control how their money is invested. “Most plans offer a spread of mutual funds composed of stocks, bonds, and money market investments.”

Unlike pension funds, employees cannot access money immediately. It’s also tied to the concept of “vesting”, or ownership of funds. As CNN points out, the longer an employee is with a company, the more they’re able to retain at the end.

Two major companies plans

Knowing this, we can better appreciate what companies have done for their employees in America. As Reuters noted in 2013, Bank of America moved its $19 billion 401(k) in house, serving 300,000 participants. “Bank of America’s 401(k) plan is the eighth largest in the United States in terms of assets, based on the bank’s most recent numbers.” Employees know that working for such a prestigious company provides many options – meaning they’re less likely to leave or find other work. Loyalty pays off, in this case quite literally.

Another notable company is Publix, a supermarket chain. They offer a slightly different plan. ThinkAdvisor points out:

“In a 2013 Forbes report, Publix said that a store manager with 20 years of seniority, earning between $100,000–$130,000, probably has $300,000 in stock and has received another $30,000 in dividends.

“There is no dividend reinvestment plan, although there is a 401(k) plan—to which Publix contributes 50 cents on 3 percent of pay.”

These companies are large enough that they can afford such plans. They’re also working within a long established tax system, in one of the richest countries in the world. Naturally, not all businesses are in such positions. However, it’s worth seeing that even big companies put a lot of emphasis on looking after employees – even after their labour for the business has stopped.

(Credit: 401(k) 2012 / Flickr)

Improving your interpersonal skills

You may be the most brilliant person at your company, but if you can’t get along with your colleagues, you won’t get far. How your coworkers see you can have a big impact on your career long term, as well as on your day-to-day life. Fortunately, there are several things you can do to strengthen your social skills and become a team player. The following tips will not only help you make better connections at work, they’ll improve how others perceive you.

Put on a happy face

People who are the life of the party usually have one thing in common, they’re happy. If you smile often and have an upbeat attitude, your coworkers will be drawn to you. And when you’re having a bad day, don’t try to pull others down with you. You may find that people pass you by in favour of those with a more cheerful outlook.

Show that you care

When it comes to praise, don’t hold back the applause. If a coworker has done something you appreciate–no matter how small–thank them for it. Identify at least one attribute you value in each of your coworkers, and let them know about it. Give colleagues a warm welcome whenever they call you or visit your office.

Be an active listener

Unfortunately, active listening is becoming a lost art. Being an active listener shows that you intend to both hear and recognise another’s perspective. Using your own words, repeat what the speaker has said. By doing this, you’ll know that you’ve processed their words, and they’ll realise that your answers have been genuinely thought out. Colleagues will feel more connected to you knowing that you’re an active listener, and you’ll develop a better understanding of them.

Promote togetherness

Help co-workers thrive by creating a friendly, cooperative environment. Treat everyone the same, not like they’re part of a hierarchy, and don’t act like one person’s opinion is more important than another’s. As a team, you can do a communication or sales and marketing course together, or perhaps a leadership or time management course–to promote creativity, team spirit and togetherness. Make it fun and exciting, and at the end each employee will have an extra qualification.

Be a great communicator

In addition to being an active listener, you need to develop great communication skills. When in a discussion with colleagues, don’t blurt out the first thing that comes to mind. Instead, think carefully about the words you use. With clear communication, you’ll be able to avoid any potential misunderstandings with colleagues.

Make them laugh

Funny people are popular for a reason, so if you’ve got a great funny bone, use it. As long as you avoid inappropriate jokes and don’t laugh off serious situations, you’ll find your colleagues will be drawn to you. Humour can even be a great way to break down barriers with that super shy coworker or moody boss.

Put yourself in their shoes

An empathetic person can understand how another person feels, and empathy is an important trait when working with others. Always consider circumstances from another person’s viewpoint. What may seem like the obvious, correct answer to you, could have entirely different implications when seen from another perspective.


How to think of digital marketing in 2016

We’ve come a long way since almost every business began putting themselves online. However, this also means we’ve had to alter how we market ourselves. It’s no longer merely a matter of flashy TV adverts or full page newspaper material. These days, fewer people encounter such media, since they get their news and entertainment entirely online. We should therefore consider what are some important modern strategies for marketing.

The power of video

While it’s true fewer people are watching TV these days, that doesn’t mean the visual medium of film has stopped. YouTube has rapidly risen in popularity, allowing anyone to film, record and share their videos. The types of videos range from high quality, short films starring famous celebs to low quality snowboarding videos. All of it, however, finds an audience with some going inexplicably viral. Some companies have used virality as a powerful way to market themselves.

For example, Coca Cola used a hidden-camera style sequence for their “happiness machine”. Combining joy and surprise, the video was lovingly shared by millions. Flipping this on its head, Lenovo India decided to analyse viral videos with a comedian. This let them use other viral videos in order to showcase their own brand. With a likeable host and knowing we’ll find a fun video, Lenovo cleverly spun the viral nature on its head.

Virality then has a kind of trick-down effect.

Social media

More businesses are recognising the importance of social media. As Mobile Marketing Watch reports:

“[a recent study] found that 92 percent of retailers surveyed are investing in social media marketing to some degree this year, second only to email (94 percent). Social media is not only a cost effective tool for many retailers, but it is also driving revenue.”

For businesses, this is a free platform where they can demonstrate their products and work. They can reach potential customers and clients and engage meaningfully with those enquiring. Of course, social media flops cost jobs and clients, too – but that is the risk we take when trying something new on r any sort of marketing platform.


Of course, just because there is a heavy focus on digital doesn’t mean we should ignore physical angles. For example, it’s still advisable to use a video wall controller if we have the right environment. Digital Signage Today recommends hotel lobbies, for example, since people are often standing in line and are curious about the local surroundings (since there’s a high chance that someone checking into a hotel is a tourist). This makes it ideal for new business.

These are just some ways to use modern tech to aid us in advertising our business.  

(Picture credit: kvrkchowdari / Pixabay)

Best ways to get a handle on your money

Today, most people are aware about how volatile the markets are. Everyone is concerned about what could next bring the markets to a halt, collapsing years of financial investment and careful planning. Of course, even the smartest economists and finance experts in the world could not have seen the dramatic events of the last few years. All we can do as individuals is manage our own money in smart ways. With modern technology, this has proven easier than ever before.

Create a budget

The most important first step to any engagement with finances is budgeting. This involves knowing how much we’re earning versus how much we’re spending. As the Balance notes in their guide to making a budget: “If you spend less in one area, you can spend more in another or choose to save that money for a larger future purchase, building a ‘rainy day’ fund, or even for retirement.”

Budgeting is, primarily, about control. If we don’t have control then we can’t know the best action.

Track spending

With today’s technology it’s easier than ever to track how we’re spending money. Most major banks have official apps that automatically send out notifications for when we make purchases or money is deducted from our account. When making a budget, plan a month where we track every expense we’re notified of. Then start calculating.

Consider investments

Another advantage to better technology is having a handle on our investments. From being able to more easily compile fund fact sheets to informing us in real-time about changes in the market, tech has become more precise and faster recently. This shouldn’t stop us speaking to our brokers and experts, of course. Just because we can get the information more easily and faster doesn’t mean we know what to do with it.

Get rid of luxuries

None of us want to be too puritanical and conservative in what we spend our hard-earned money on. But in this difficult climate, it might be wise to take a harder look at what we’re purchasing and why. We need to be harder on ourselves and really question if we need something or whether we just want it. With modern tech, we can easily find price comparisons, whether this item is really necessary or if there aren’t alternatives and so on. With a quick Google search, for example, all our questions can be answered, helping us curb our buying something immediately. This can help us make better judgements and stop frivolous purchases.

(Image credit: Tech in Asia / Flickr)

Important health tips as we age

There’s no getting around the fact that we’ll age. Every birthday is a reminder we’re adding another year to our lives and that means our bodies alter, too. We can’t help but age, since we are part of the natural world. That doesn’t mean we’re completely vulnerable though. It’s important for us to know how to help ourselves in terms of aging, so we don’t succumb entirely to this process.

This matters to our lives, our ability to work and so on.

Stay active

These days, with the massive amount of incredible technology, it’s easy to work from the comfort of a desk and chair. Indeed, we can run an entire office, have meetings and complete complicated tasks all without leaving our homes. This does not encourage movement or activity though.

Due to workload, we often think we have no time for activity. We work a whole day, come home and have to prepare for the evening. Parents, in particular, have to add in the additional attention required to look after their children. This, however, should not be an excuse to ignore our health and fitness concerns.

At the office, we can take a few minutes every hour to walk around – if we’re lucky, we can have a room to ourselves to do simple quick exercises like push ups. If possible, bring weights and, when we’re not using our hands, do some exercises with at least one arm. Time Magazine has a list of what it calls “deskercises”, which are designed to be workouts performed at the desk.

Eat properly

What we put into our body is just as important as how we exercise it. Every person has individual requirements, but there are overarching foods we should stay away from – or at the very least cut down on. Sugar, for example, is of major concern to many health professionals. As Eat This notes:

“Although it’s impossible to stop the aging process, it’s possible to keep your youthful complexion later into life by cutting back on sugar, a nutrient that’s been shown to accelerate wrinkling and sagging.”

They provide an excellent list of what to avoid, showing precisely why such food stuffs only exacerbate the aging process.

Think about the future

Though we may not want to, we must start thinking about topics like retirement and medical aid schemes for pensioners. We will eventually reach these stages and we must have a foundation on which to create security. A secure foundation now means a better future later. Most of us think we might live forever, but this is obviously not true. And this mindset prevents proper preparation, meaning our later selves lose out.

It’s time we start preparing now and take a proper response to the reality of ageing.  

(Image credit: decor8 holly/flickr)

Traits that prevent people being in control of their finances

Most of us would love to have perfected ways to not mess up our finances. Yet, given how complex managing money is, it’s no wonder we’re not always the best. But, aside from studying for years to become experts at financial management, we should consider the link between the growing field of behavioural finance and wealth management.

First we should figure out what behavioural finance is and then see how it applies.

Behavioural finance defined

As Investopedia summarises:  

“Behavioral finance is a relatively new field that seeks to combine behavioral and cognitive psychological theory with conventional economics and finance to provide explanations for why people make irrational financial decisions.”

The importance of it is that it refocuses people as not being entirely rational, acting and behaving because of factors beyond their control. These often lead to bad financial decisions and terrible management of wealth.

Bad traits to avoid

The Royal Society for the encouragement of Arts, Manufactures and Commerce (or the RSA) compiled a recent list of the traits hindering people’s ability to manage their finances. Their report showed that particular bad beliefs shaped behaviours in unhelpful ways.

These are the six they noted.

Cognitive overload: When we have too much to worry about or on our minds, we make bad decisions. This often happens during times of financial distress, meaning we end up making matters worse. To counter this, we should seek professional financial help and try separate our knee-jerk responses.

Empathy gaps: This is when we purchase based on an inability to put ourselves into different stages of time. For example, we’ll buy food on an empty stomach but not when we’re full – this might be a bad choice for various reasons (buying while hungry could be cognitive overload, while full means we don’t save for later). This applies to bigger financial choices, too. The solution again is to be as neutral as possible when acting and acting sooner rather than later.

Optimism and overconfidence: Having unrealistic expectations drenched in optimism means we make bad decisions. We should operate on facts, not fantasy.

Instant gratification: Instead of saving for the long-term and making our money grow, we buy instantly. It feels better. We should be looking long-term (this ties into empathy gaps).

The report continues:

“Harmful habits: automatic or mindless behaviour can amplify a poor financial decision as it becomes a recurring event.

Social norms: we are heavily influenced by the actions of others; while this can be helpful in certain circumstances, it also contributes to the pressure to keep up with the Joneses through conspicuous consumption.”

In each of these, the common response is one where we should be neutral and operate on evidence. Only in this way can we do better for ourselves in the future.

How much should you spend on a car?

Cars – even the cheapest ones – are expensive. A junker that breaks down twice a month will still set you back a few thousand. A nice one with leather seats and a sweet sound system costs more than most people make in a year. For most people, having a car isn’t a choice. It’s required to get to and from work, to go the grocery, to see friends – basically to go almost anywhere in a country where public transport isn’t always reliable.

If you are looking at buying a new car or used car, it’s important to choose a car you can afford to spend money on.

How much do you earn?

The car you are able to afford should be based on your income and how much you are willing and able to spend on a car on a monthly basis. Affordability is the most important factor to consider when buying new or pre owned cars. Please also consider your net and disposable income. The general accepted rule of thumb is that you shouldn’t spend more than 20% of your total income on car payments.

What costs should you consider before buying a car?

Firstly, the purchase price will affect how much you pay every month. The more expensive the car, the more you can expect to spend in monthly instalments. Secondly, your down payment. The more money you pay upfront, the less your monthly instalment will be. You can trade in your current vehicle or sell it privately, which can contribute towards a larger down payment. Then, your monthly insurance cost will depend on the type of car you choose to drive and your driver risk profile. Also, the fuel price and the distances you travel will influence the cost of owning a car.

How can you save money when buying a car?

Buying a car is expensive and can easily become a financial burden. To save money when buying a car, consider paying cash for the car if you can. This means you won’t have to worry about monthly instalments and crippling interest rates. If you can’t pay cash for the car, you’ll have to finance the car. In that case, aim to pay off your car as quickly as possible at the lowest interest rate you are able to obtain.

Down Payment

Try to make your down payment as large as you possibly can, you may even be able to apply for a shorter financing period. No down payment often leads to an ‘upside down loan’ which means that you owe more than what the car is worth. Avoid this situation at all costs.

The amount of money you choose to spend on a car will depend on your personal financial situation and how much you are willing to spend. Remember, buying a car is expensive and you should therefore buy a car you are able to afford and maintain over time without compromising your financial security.


How design thinking can improve the world

Making things better is never a destination so much as it is a direction. Improvement is ongoing, as we try to make the world a better place for everyone in all sorts of spheres. One way the smartest people are examining the world is through the lens of design and applying it to areas they otherwise would not. This is worth considering for business people, in terms of thinking outside the box and finding new ways to approach their services.

What is design thinking?

The broad category of design thinking has long been recognised as an ideal focus for business and all manner of responses to problems. As FastCompany notes, design thinking consists of four principles

  1. Define the problem: this means constantly questioning what needs to be solved and why. It’s not merely agreeing there is a problem, but knowing exactly why it is a problem in the first place. Many who use design thinking stress the need for definition, since the act of defining is a constant focus on clarification.
  2. Diversify our options: Just because a response has worked in the past doesn’t make it the best one. We must consider as many as we can which can help solve the problem.
  3. Refine the direction: After outlining solutions, we must narrow down the best ones. This is hard, because some responses require time to reach their potential.
  4. Execute on the chosen response: This simply means putting the response into action.

Though each part sounds obvious, the key to design thinking is observation and challenging assumptions about what we’ve observed. One expert told the Stanford Daily that design thinking is “a tangible scaffolding through which [one] can approach problem solving.” For her “reframing” the problem was perhaps the central tenant of the process. She noted the redesign of scissors as a tangible example of design thinking in action.

Healthcare application

One area we might not think this has an application is medical healthcare. Yet, at a recent conference, this was precisely the topic at hand. Medical experts at a Stanford conference noted that it’s helped reframe their approach to healthcare. They “are working to change the system by integrating design thinking into medical school training and patient care. Together, the speakers painted a clear portrait of what design thinking means to them.” From speaking more carefully to patients to rethinking interventions, they consider design thinking important in helping them improve their responses.

This is a mindset that can, therefore, operate on many levels – from designing scissors to rethinking healthcare. With such a vast scale, anyone – from artists to business people – can benefit from implementing such structure in their approach to problems.

(Picture credit: Dave Gray / Flickr)

Common mistakes that decreases a business’ value

A business’ value is everything to us as entrepreneurs. We want to create a business that thrives, retaining and increasing its customer base, delivering on promises and expectations. Yet, value is not easily obtained or maintained. So often, even the smartest business people make mistakes they should’ve known to avoid.

Forgetting profit margins

It might seem impressive if a business makes, say, $2 million a month. But that can become meaningless if its expenses are $1.9. Too often, we forget to truly appreciate profit margins, instead of revenue.

As Investopedia summarises: “Profit margin is part of a category of profitability ratios calculated as net income divided by revenue.”

As CEO Carl Erickson points out: “Profit alone doesn’t tell you as much as profit margin.” Margins are the first line of defence in a financial buffer. For Erickson, failure to focus on profit margins will decrease a business’ value and tend to indicate one that has a higher chance of ending up in trouble.

Any company interested in managing its corporate finance properly must consider this seriously.

Tough decisions

Faced with being able to keep the company alive versus employing an underperforming staff member is tough. A simple realisation sometimes is that there won’t be a company to pay this employee if we keep them, if they are harming the business.

Dick Grote, a management consultant noted: “Firing is the single most difficult thing we ask leaders to do… Even when the business justification is clear.”

Many might think that business people are merely empty suits, but often we are in positions where we know everyone. They rely on us for income and to be able to make ends meet. Yet, sometimes we have to end that relationship.

After all, it’s not merely one person we need to think of but many – including ourselves and our families. Failure and drawing out tough decisions can mean a business does poorly, since it means we’re paying for bad labour.

Not being vigilant

Sometimes success can be a cage. Business owners can look back at how the business is doing well and conclude nothing needs to change. After all, if it worked in the past, it will work in the future – surely? Unfortunately, as we now all know, the markets are incredibly volatile and new, powerful ideas are emerging all the time. Competition is no longer clearly defined, with various  businesses able to operate in multiple fields and suddenly dominate.

We must constantly be vigilant and think outside the box, no matter how successful we’ve been. It’s not one particular method that makes us good, it’s our ability to think creatively and carefully.

(Picture credit: Foto Infinity / Flickr)

Insights for SA investments in 2016

Knowing what to do with money is one of the most important things we must do. Unless we do this properly, money won’t simply be there or work for us without input. We must put in the necessary work, time and planning before deciding where to place our money. Broadly speaking, there are two directions we can take: saving or investments.

What is the difference between saving and investing?

As Personal Finance by the Book notes, there are significant differences between saving and investing.

“Savings are low risk funds that must be liquid (available) when you need them. The purpose of saving money is so you can have it for a specific purpose within a short time frame.”

Investments serve a different purpose. These we utilise for wealth building and aren’t, for example, emergency funds we can access at anytime. They involve more risk but also provide greater rewards. The richest people in the world became that way most likely due to smart and lucky investing.

Investment tips for South Africans

Every country has its own issues when it comes to dealing with the stock market. This means what might work in America might not work in South Africa. However, sometimes there are overarching perspectives from which anyone can benefit.

The first step to anyone considering their investments is to speak with professionals. Brokers can provide greater insight into how best to use our money, but that doesn’t mean their word is gold. Nonetheless, experts have been speaking about what people can do to help their investments.

For example, finance expert Warren Ingram pointed out the markets are extremely unsettled at the moment. With international events like the American Presidential election and the recent “Brexit” move in the UK, people are scrutinising their options more carefully than ever. Says Ingram:

“When global and local markets are so volatile, investors would do well to keep their portfolios highly diversified across a range of asset classes and international markets.”

By this, Ingram means we must not only invest in one kind of option or stock. We should consider many. As the saying goes, we don’t want to put all our eggs in one basket.

Importantly, we must not think of investments in South Africa like gambling – investments aren’t purely about luck, but smart interventions and consideration of our options. Gambling is entirely luck-based and no amount of research will tell us how to get the dice to land in our favour.

Other ways we can do well is to start saving and investing early. This allows time to do a lot of the work for us. Young people have time on their side and should use this to their advantage.