The advantages of leasing or equipment and land

A business makes decisions daily that will impact the financial course of the company. Whether you’re considering leasing or buying the equipment or land for your business, you need to consider these options in order to make the best decision:

Benefits of leasing:

  • Some office equipment needs to be updated after a certain period. For example, computers, cellphones and machinery. Leasing would be beneficial and crucial in such cases, because when the products become outdated they can be easily replaced.
  • The landlord is usually responsible for the maintenance of land. This means that the cost it will take to keep the land maintained will be eliminated. The business will not have to be concerned about expenses such as cleaning windows, repairing the roof and mowing the lawn.
  • Certain equipment requires an immediate down payment in order to purchase it. The company may need the equipment immediately and may not have the down payment readily available. In this case a lease could be the solution to this problem, as leasing rarely requires a down payment. This is the most cost-effective option if the company is on a tight budget and needs cash flow.
  • Most vehicle leases can reach up to four years. During those four years the vehicle will usually be covered by a warranty so if the vehicle endures a breakdown it will be covered. The vehicle will also have a service plan. If the vehicle is in need of servicing and certain parts need to be replaced, such as oil filters, air filters, brake fluid and spark plugs, it will be taken care of. Therefore the business owner can focus on other aspects of the business instead of worrying about the expenditure of the maintenance of the vehicle. Leasing a car for business is helpful in such cases.
  • When the business is in its early stages or you have a bad credit score, you may not qualify for a mortgage loan. Leasing land may be the option to opt for.
  • The monthly payments that an individual pays will be substantially lower for car leases than when you purchase a vehicle. The business benefits from leasing because it does not pay for the vehicle as a whole, it pays for the depreciation.
  • The business may have a specific place they envisioned for their business. If the business has not found a place that meets specific requirements, then leasing land may be the best preference.

If you are a small business you may face tough competition from larger companies who have the latest innovations. It is best to lease equipment to keep up with the latest trends if the business is small with a low budget.

Benefits of buying:

  • If your business employs drivers to drive the vehicles. It may be more feasible to buy the vehicle instead of leasing it. The owner will not have direct control of the vehicles and how they will be maneuvered on the road. It is therefore advisable to rather purchase the vehicle.
  • A business should rather purchase land if it will appreciate over time. It makes good financial sense to purchase the property because if you decide to sell the land in future the business may stand to gain a good investment.
  • The amount of kilometres that will be driven each year should be taken into account when deciding to lease or purchase vehicles. Lease contracts will usually state the amount of kilometres that can be driven for a specific payment. If more kilometres are driven then the company will have to pay more than they originally planned on. Purchasing the vehicle would make more financial sense because there is no limit to the amount of kilometres that can be driven by a company-owned vehicle.
  • If the business plans on renovating a place or adding on to the building they want, the best option would be to purchase the land. Leasing the land will limit the alterations that can be made to a building.
  • Another benefit of purchasing land or equipment is that you will have full ownership. This is extremely beneficial if the asset you have bought is not likely to become obsolete in the short term.
  • The longer the business is expected to be around for, the more financial sense it makes to purchase the equipment. If the equipment will be used extensively over long periods, then the company will benefit from owning the equipment.

A business will endure ups and downs over the course of its life. In certain circumstances it will make financial sense to lease equipment such as in the case of technology where it could become obsolete. The aim is for the business to make decisions that will be most cost effective in order to improve its cash flow.

Businesses that benefit from the mining sector

The mining industry is a very expensive and dangerous sector that needs to be provided with equipment and services. Mining companies have deadlines they need to meet in order to finish projects on time. They rely on outside forces to provide them with the tools to finish their day-to-day activities. Indirect Businesses profit substantially from providing services and products to businesses in the mining industry.

Here are a few ways to make money indirectly in the Industry.

Mining equipment finance

There are some businesses in the mining Industry that cannot afford to buy mining equipment. To own a business in the mining industry there needs to be a big budget that will cover the high cost of machinery. The company may be in its early development stages and cannot afford to make such an expensive purchase. Another reason is that the business may be experiencing cash-flow problems and may not be able to come up with large amounts of cash to purchase equipment. Leasing out equipment is a good idea. The monthly payments to lease equipment will be significantly lower and this will allow the business to budget more effectively.

Protective equipment suppliers

Workers in the mining industry are surrounded by danger and they need gear that will protect them from any injury. The workers in the mining industry need to be provided with adequate clothes, boots and protective gear. The gear should be highly visible as it’s dark underground. The fabrics should also contain padding, and be water resistant. There are other items that business could sell for example earplugs, boots and helmets.

Blogging and online magazines

There are many people who are curious and are interested in the mining industry. They could need information on how to run their businesses in the mining Industry. The magazine and blog could provide inside information on how the global mining industry works. Tips could be provided on the best way businesses can navigate themselves in the mining industry.

Chemical suppliers

The mining industry needs high performance chemicals in order to achieve their tasks. The businesses need different chemicals during various stages of the process. Chemicals can include diluents during the extraction process and depressants during the flotation process and others.

Safety services

There are services that a business could provide to help the mining businesses with tools to safeguard against any chemical releases and fires. The mining Industry is surrounded by a lot of risk and the workers need protection from any imminent danger. The services could include detection of any problem areas that are at risk for explosions.

Machinery

Businesses that sell machinery in the industry are vital. There is a variety of machinery needed in the mining industry, for example, bulldozers, drills, huge trucks and rock bolting machines, just to name a few.

Logistics

Companies are needed to transport goods. After the minerals have been excavated they need to be processed. Transportation will be needed to move the goods around the site. Therefore there is a need for businesses that will provide that transportation to the industry.

Power supply

Mining businesses need to save on energy and may need to be provided with tools that save them on costs. Mining businesses need generators and solar energy. Businesses are needed that can provide them with these goods in order to provide the most efficient and effective services while cutting down on costs.

Risk assessment services

There are companies that provide assessment services that will gradually help businesses and equip them with information to move forward with the their tasks. There are several risks that could take place during the mining process, such as, landslides, oil spills and other catastrophes that could be detrimental to the environment. Risk assessment services can be beneficial in that they determine the risks associated with cost, performance and the safety of the project and the environment.

Data mining

Data mining companies help the mining industry by aiding companies with information they will need to run their business. Businesses need to be aware of the internal and external factors that affect their business. Internal factors include positioning, staff skills and price. External factors include competition and customers.

Heavy equipment repair

Businesses can be established that provide the mining sector with repair services. They help with rebuilding and reconstructing broken equipment that is used during mining. They can repair and provide maintenance services. The business can provide on-site and off-site services. The maintenance and servicing of machinery in the mining industry is vital. The machinery and equipment needs to be in top condition in order to provide the best production and service for the mine workers.

There are many businesses that are successful in the mining Industry. They provide services that bring a solution to the people that need it.

Searching for a mining job? This is what you should know

Despite a slowdown in some sectors of the mining industry, there are still plenty of high paid jobs on offer. You don’t necessarily have to be an engineer to work in the mining industry, there are opportunities for tradesmen such as electricians, mechanics, miners, machine operators, boilermakers and the list goes on.

If you want to pursue a career in mining, you can never go wrong by choosing subjects like math, science and technology as majors. The mining industry is an exciting career to follow. If you’re a person who loves a challenge then mining is for you. It also takes creativity, perseverance and hard work if you want to succeed in this industry.

Mining is a diverse career and wherever your interest lie, there’s probably a place for you. This is one of the jobs that is always in demand. Mining is also one of the highest paying jobs. Bear in mind that mining jobs aren’t just found anywhere but in the mining areas of specific countries only. So it might cost you to move if there’s no mining taking place in your region.

Are you searching for a mining job? Well, here are five things you need to know about how the industry works first.

Jobs are found in the mining area of the country

As mentioned earlier, you’ll only find mining jobs in specific areas of the country, depending on where mining takes place. If you’re looking for a mining job you might have to move closer to work. If you can’t move closer due to personal reasons, then you might want to opt for something else. Also be sure you’re prepared to adapt to the new environment. Should you be working underground, your work conditions may include heat, noise and darkness. You also have to be prepared to go on the site. With the location and possibility to move in mind, make sure you’re ready for all of this.

They work according to shifts

People in the mining industry are always working. They work shifts according to a schedule set up by management. You need to be prepared to work night shifts as well. You might be required to do a 12-hour shift. There are mines requiring some of its miners to stay in the mining camp for a few months before going home. You should also be in good health and have a lot of stamina to keep you throughout shifts. Also, drink plenty of water because it’s hard to function when you’re dehydrated.

Most jobs require you to be qualified

When it comes to mining, learning on the job might be something of the past. These days you need to be qualified in order to get a decent job in the mining industry. As technology progresses, management requires job seekers to have a certain set of skills and they should be computer literate. As a result, most mining companies will hire graduates who obtained a mining qualification. For example, they should be able to know and understand what mining equipment finance is or how to finance the mining or construction equipment. Many institutions offering a mining qualification are usually located near a mine, giving students the opportunity to explore and spend some time on the site. You might also get the chance to have professional training.

It’s not only for men

We live in the 21st century and the days where specific jobs were only for men are gone. Mining is a historically male-dominated industry but things have changed. Today more women are encouraged to pursue a career in mining. Mine manager Wilhemina Manaso says: “Mining is an industry that has always been male-dominated, regardless of geographical location. There have been positive steps which have helped to integrate women into the industry, but females continue to be under-represented and mining is still largely a man’s domain.”

The industry can be dangerous

Many people are aware that the mining profession can become dangerous. Any accidents from cave-ins, floods or gas explosions may occur when you’re in the mine. Make sure you know how to react to all of these accidents and are still willing or prepared to work in the industry. Many health risks may also affect you if you’re not prepared. It’s important to remember that miners face constant exposure to roof falls, moving machinery, fires, etc. There are different types of mines, however, many of the dangers remain the same across multiple environments.

Working in the mining industry is quite a challenging choice and requires stamina to be successful. As a recent graduate, completing the right trade or professional qualification is critical. Set your mind on a type of mining you would like to do and look for a job in that specific field. Once you’re in it, you’ll love it.

 

Giving your office an upgrade

It’s the start of a new year, the perfect time to give your office a new look. Do you work in an office that desperately needs an injection of vibrancy and colour? Making your office look attractive and appealing doesn’t have to cost a fortune. All you want is for employees to come to work in an inviting and engaging environment. Giving your offices an upgrade will make your employees happy and more productive.

Staying motivated and keeping productivity high aren’t always easy, especially if you’re sitting at a desk with an old computer and no one to talk to. You’ll often find that people who are unmotivated and always tired don’t have things set up around their office that allow them to stay focused. If that’s what’s happening in your office, then it’s time to bring about some change.

Try to create a more modern office space that’ll make employees excited to be there. Gone are the days when you used a silver key to open the main entrance. No more small offices inside one big space. Everyone’s sitting together in groups these days. Note that technology plays a big role in a modern office. It’s time to adapt and think of changing your office to a more updated style.

Here are a few things that you can do to give your office an upgrade.

Bring light into the office

Natural light in an office is the way to go. If you have the available funds to install more windows or a sliding door in your office, go for it. Employees that are exposed to light tend to be more productive. If natural light isn’t an option, then you should opt for bright lighting. Try to change the light bulbs of your office as often as possible. Brighter lighting can make a room look more cheerful and spacious.

Update security

If your business has a problem with security, you need to check this out. As mentioned earlier, people aren’t making use of the old silver key to access office buildings anymore. Technology has progressed in such a way that people now make use of tags and cards to enter their offices. Check out how turnstiles work and perhaps you can install this instead of a normal timber door with a silver key. This will cost you some money but it’s a good investment to make for your company. That way you can secure your office premises from any crime.

Create storage space

If you want to go for the more modern look and feel, then you need to declutter all unnecessary things. It doesn’t look great when you see an employee’s books and notes from last year’s presentation lying on their desks. Create storage space by adding two or three drawers to their desks. A modern office is all about space. Creating storage space will make your office look neat and professional.

Give it some colour

Going for one colour can work but it’s not always fun. You can paint the office walls white, have white desks and chairs and even have white computers. How boring is that? Be creative and add a pop of colour to your walls or desks. Try to create a statement wall that’ll catch people’s attention at the entrance of your office. Also, a plant or two and even potted plants on desks won’t do any harm. Choose a specific wall to display all your company’s photos or certificates. That’ll make the office look more homely and comfortable.

Update computers

Not giving your computers an update won’t literally blow them up but one day they’ll just become obsolete. The older hardware gets, the more likely a failure and loss of productivity will occur. Check with your IT specialist whether or not it’s the right time to upgrade your computers. The software can maybe be updated on an annual basis, while the computer itself can last you for about five or more years.  However, if you still have the old big computers, then you know it’s time for an upgrade. In today’s life, those computers aren’t being used anymore. Also, if you’re working in the digital industry you need to have the new ones as they’re faster and more effective.

Many people spend most of their time at the office. It’s almost like their second home. For a space that you confine yourself to for most of the time, it’s important to make it as practical and comfortable as possible. In order to do your best and make a success of what you’re doing, you need a workplace that’s tidy, up to date and has a professional atmosphere. It all comes down to motivation, so make sure to upgrade your office in a way that’ll keep you happy and motivated.

 

Best security strategies to protect your family and business

Security has been a concern since people had things they wanted to protect. Businesses in particular have had to consider what they want to keep safe. Before, businesses had to prioritise their equipment and books – these days, with everything becoming digital, priorities have had to change, too. After all, thieves are no longer of the mask and break-in variety. Today, we have to be more aware than ever of cyber security dangers. 2016 saw incredible examples of what happens when you don’t take security seriously. Let’s examine what we can do to help mitigate any threats to our business.

Creating a password

The most important realisation that many had during 2016 was realising that no part of being online indicates absolute safety. Even passwords on emails only stops hackers for a short while. It’s imperative that starting from the ground up, people take the idea of how to approach passwords as seriously as anything else. How then do we pick a password?

As PC Advisor notes:

Avoid using the following passwords, which a surprising number of people use: password, QWERTY, 123456, 00000 and Letmein. Also, don’t use information that can be guessed with minimal effort. For example, Fred Bloggs would be advised against opting for a username of “Fred” with “Bloggs” as his password. Similarly, avoid the name of your spouse, children or pets, birthdays and any other details that can be discovered from social networking sites and elsewhere. Some experts even suggest that passwords shouldn’t include any words of the English language or place names. Instead, they recommend that passwords include upper and lower case letters, numbers, punctuation and least least six or eight characters in total – the longer the better.

It’s also advisable for businesses to get their employees to change passwords regularly. We can implement this by preventing staff from logging in after, say, two weeks if they’ve been using the same password. There are various systems that allow for this. We must speak to IT department to find and implement such policies. In this way, we mitigate unwanted people gaining access and can have a proper understanding of who is going where.

Accessibility

Another important and related aspect is knowing who is allowed to go where. That means in business only allowing certain people access to specific files or folders. It also means possibly restricting them from, say, the server room. Passwords are not advisable since this just means they can be stored and therefore stolen by anyone. If possible opt for unique cards that let’s people access specific rooms. Data is essential and increasingly the most valuable aspects of a business. Monitoring can also be helpful here. This can mean installing cameras, working with a video wall controller system and so on.

In this way, we can properly manage what is happening on our business site and who is going where. It can reduce instances of insider malpractice, since people will know they are being monitored. Considering how much danger staff themselves pose to businesses, this can be an essential tool.

The problem with ransomware

One of the most pernicious forms of invasion is ransomware. This is software that is installed on computers without our consent, restricting access to important documents, folders and so on – until the user has met the hacker’s demands. This terrifying scenario was reality in 2016 in America, as CRN pointed out:

Several high-profile ransomware attacks, most notably an attack on a California hospital in February that left it unable to care for its patients. Also, there was an attack on the San Francisco Municipal Transportation Agency (SFMTA) network that forced the agency to allow passengers to travel for free. In the first quarter alone, there was $209 million paid to ransomware attackers, according to FBI data, putting the full year 2016 on pace for $1 billion in known ransomware payments.

No one is immune

Major corporations, like Yahoo and Sony, all found themselves the targets of hacking. Millions paid the price – in terms of figures and in terms of ordinary users. This means regardless of size, a business is always in danger. Indeed, small businesses believing themselves immune because they have nothing hackers want are prime targets for this reason – hackers know that if we don’t take our security seriously, we’re easier marks. We can’t allow that to happen. The point isn’t that Sony was target; it’s that, if Sony, as big and powerful as it is, can be brought down by hackers, we have a lot of work to do ourselves.

Picture credit: Blue Coat Photos / Flickr 

Starting your own small business

Starting your own business can be exciting. You have a lot of ideas and plans to make a success of whatever it is you want to do. And you like the fact that you don’t need to work for someone else anymore. You’re your own boss who is leading a team and making your own decisions. Finally, you can make your dream a reality. If you have an idea, the mindset and drive, and a well-detailed business plan, then take it away.

However, with all this enthusiasm, starting your own business can be quite stressful as well. There’ll be a lot of demands that are going to need your attention. You have to work extremely hard if you want to be successful. A dedicated and committed entrepreneur is what your business needs. Bear in mind that not everything will be perfect and you’ll make a few mistakes along the way. You have to go through that in order to learn.

Many start-ups don’t make it beyond their first two or three years because of inadequate planning, knowledge and lack of resources. Make sure your business doesn’t fall into this trap. Having perseverance in order to succeed is a must. Ask for help if needed, whether it’s for network or finance. You sometimes have to approach your acquaintances if you want to keep your business alive.

Here are a few things to take into account when starting your own business.

Register your company

As an owner of a business, every rand you spend must provide a return on your investment. One of those expenses has to be the registration of your company. It may seem like an unnecessary money waster but, unfortunately, this is something you have to do. You can’t run a business without it being registered. Also, if you want to take out a loan for your company you need proof stating that your business is registered. Registering your business is an investment made in your company.

Identify your market

At some stage in the preparation of your business plan, you need to conduct research on your target market. You need to know how big your potential market is before starting your business. Research whether or not there’s a need for the product or service you’re offering. Do consumers really want it? Also, check out your competitors and what exactly they’re offering. How many other companies are offering the same thing as your business? Are their products or services more affordable? If you’re not sure about that, then your business won’t succeed. You need customers to buy what you’re offering in order to make money. So be sure to check that out if you don’t want your business to fail.

Organise suppliers and equipment

What is a business without its necessary equipment? It’s important to understand your objectives and what you want to achieve. Make sure you have all the necessary equipment in order to offer or produce your product. You have a small business, so look out for suppliers that offer affordable but good deals. Make sure your suppliers are legitimate. You don’t want to find out that you bought stolen equipment. As a business, you’re also a customer. So make sure to shop around for great deals and don’t be afraid to negotiate.

Company premises

Deciding on your business premises is just as important as the registration of your business. This is something that needs to be included in the planning process. Consider all the available options for the premises. Check for the cost of the buildings, where it’s located and the safety of it. On that note, it’s also recommended to install a video wall controller to ensure that your premises are secure and being watched on CCTV at all times. As a startup and small business, you might be able to share your business space with another company.

Start an online platform

We’re in the 21st century and everything these days takes place on the internet. One of the first things you can do is create a website for your business and social media profiles. Many customers love to connect with companies online as it’s easier and saves time. If customers visit your website and social media pages they’ll be aware of what you’re offering and it’ll make the selling process easier. There you can also share the background of the company. It’ll simply improve your company’s image and target a global market. Having your business online means you can basically work and market your company from anywhere in the world.

Be patient and remember that success won’t happen overnight. It’s going to take some time before you make a profit. Don’t give up and work hard to make a success of your business.

 

What business must learn from 2016 investments

2016 provided a dramatic year for everyone, especially those concerned about their finances and future. World markets took a massive hit, as superpowers like America and Britain ended up going in directions no one thought they would. Even China watched as its economy weakened. The question you need to ask is what can you, as an individual and business, do to help reduce any negative financial impact that might happen. There’s no predicting the future perfectly, but you can begin taking steps to curb whatever negative impact might hurt you. It’s important then to consider what happened in 2016 that negatively impacted various markets.

China in 2016

After the last economic crash around 2008, the world was reeling from the sudden reduction in jobs and income opportunities. Banks closed, business people were taken to court and governments had to use taxpayer money to bail out banks. After all, if banks failed, then an entire country would find itself in a dire situation. China, however, found success after the last crash. As John Ross, a senior fellow of Chongyang Institute for Financial Studies, pointed out years ago:

“For the last 30 years China has enjoyed the world’s most rapid economic growth not by accident but because its policies conformed to the basic laws of economic development.”

Thanks to various policies, such as having largely state-owned companies, China could influence its own markets without relying on other, external factors. The country has unique aspects that allowed it thrive, such as a high proportion of exports. However, 2016 saw the opposite of success. As Forbes notes, this heavy reliance on state-controlled assets is what led to reduced growth.

“The bulk of the services sectors, such as transportation, healthcare, information technology and transmission, scientific research, education, and entertainment, remain mostly restricted to state-controlled firms, which are often uncompetitive and mired in inefficiencies. Even though China’s transformation to a service-based economy is in nascent stages, not enough energy has been devoted reforming the tertiary economy, resulting in ongoing lagging growth.”

The lesson here is relying too much one area, even if it’s complicated. China’s belief that it could rely on the properties which brought the country out of the recession in order to combat the international crisis was misplaced. Naturally, there was probably no way to change as rapidly as before – since, for example, it relies on exports but exports are determined by countries which are suffering their own issues. International (and Chinese) demand for construction materials and production inputs dropped off, leaving factories with excess supply. This slows production and has a domino effect.

Businesses must look at how Chinese firms have responded too slowly, too narrowly, and begin expanding their own outlook. Whether this means attempting to obtain more funds, such as machinery asset finance, or reducing supplies, anything should be considered to help improve business security.

Prepare for the worst

Too much of 2016 was a result of disappointment and disbelief. No one took Donald Trump seriously; few believed the majority of British voters would opt to leave the European Union, when no good reasons had been provided. Yet both of these subverted expectations of much of the so-called liberal media, resulting in a collective distant nightmare scenario uncoiling itself into a reality.

Businesses are advised to prepare for the worst, not what they think is likely to happen. This isn’t even a condemnation of optimism but rather pointing out even the “likely” scenario isn’t what happens. 2016 proved that all the smartest people’s opinions in the world won’t change the shape of the planet.

By looking ahead at what the worst outcome would be, you’re better prepared than anyone to help combat what might happen. This secures your and your staff’s future, in ways that benefit everyone. Your business can thrive while others, acting on a false sense of security, will suffer.

Even objective measures can be twisted into a narrative that fits our sense of security, as Fast Company highlights.

“Statistics, to many people, equal objectivity. And often business decisions are bolstered by a datum that supposedly speaks quantitatively to the issue at hand. But designer and writer Ash Huang cautions people to avoid using statistics spuriously, and make sure that numbers cited help the business long term. Additionally, some statistics people use aren’t the most illustrative of the goals at hand. We can even look at this year’s presidential election to see how statistical analysis went awry. Instead, Huang argues, data should be used as a tool and not as an end.”

2017 can be a better year for everyone, including you and your business. There’s no reason to give in to despair, when the future is unwritten. One way to do that is to learn from recent history. Even the strongest can have weaknesses they do not realise until those weaknesses are the very things that bring them down. To that end, you must look hard and reflect deeply – it’s only in this way you will succeed.

What should you spend your savings on

Wealth is the accumulation of efforts we’ve put into our financial lives. It’s essential that it is spent the right way or we’re merely putting it down the drain. There are multiple ways for us to acquire wealth and build it up from small amounts. The most popular way to build wealth is with a savings account, since this allows the bank account itself to simply work for our benefit. This doesn’t require active engagement, as something like the management of investment requires. Nonetheless, there are things to consider when it comes to what precisely we should spend our savings on. Merely having savings is meaningless in itself – it’s used to help us in the long term, providing a safety net and foundation that allows us to continue living comfortably. This is especially the case when income is uncertain.

Why savings is important

Managing a savings account is both easy and important on a broader level. A savings account’s primary purpose is to maintain whatever money you keep in it. But, by the mere virtue of having money in an account, we can generate interest. Even more impressively, we can benefit from the magic of compound interest. To understand compound interest, this is what Money Mini Blog says:

“Interest generally compounds annually, so that means you earn 6% on your principle. Keeping with the above example, the first year your principle is $100,000, but at the end of that year, you earn 6%. So that means the second year you’ll be earning 6% on $106,000.”

The famous definition of compound interest is “interest on interest”. That is, the new interest rate works on the increased amount that came about (because of interest), not the initial amount you had. That is, it keeps growing and growing, because it revises what the principal amount is. There’s nothing a person needs to do to make compound interest work – in fact, we need to do the opposite of “something”, letting the money stay where it is in the bank.

We might wonder how a bank benefits, when it seems obvious clients are the ones benefitting. But all transactions work on a basis of mutual benefit or else they would never take place at all. Banks benefit because banks need money to deliver on services and products. A bank without money is like a petrol station without petrol. People forget that they money doesn’t sit there untouched because clients themselves aren’t touching it. The bank uses our money for other clients. That doesn’t mean we should expect to suddenly see our bank accounts drop (though that can happen during a recession, when banks are not trusted, and so on.)

It’s not only good, but essential that people begin taking savings seriously. As Investopedia points out:

“If you have a high income and low expenses, you might accumulate enough to retire in 10 years. For most people, it takes closer to 40 years. But at some point, if you save and invest regularly, you should be able to live off the income generated by your investments – the saved money that’s working for you. The earlier you start, the more time a small amount of money has to grow large through the miracle of compounding.”

Investments

The most obvious items to spend savings on are investments that themselves net better returns. Whether that means high return short term investments, property or others, we must look at what would benefit us the most. There are so many options but we must approach an expert, finding out what is the most suitable option for us – given our income, savings, goals and so on. Of course, we could diversify, putting our money into all sorts of stocks and options so that we’re almost guaranteed to reap benefits. Everyone knows the problem with putting all the eggs in one basket.

Property: one of the best places to put our money is property. Whether this is for ourselves, a way to generate further income or simply to watch property rates increase, so we can sell higher, property is a good idea if we can afford it. As accountant and lawyer, Mark Kohler points out:

“I meet with a lot of successful entrepreneurs, and almost every one of them has taken profits from their businesses over the years to invest in rental property. Based on this fact and the list above, I have consistently urged my clients to buy one rental property a year and already have clients with rental properties earning them money they never imagined they’d have.”

Stock: Playing the stock market is obviously the road to success, but doing it well is a balance of luck, skill and timing. This is why we must know the facts early and work with the right people to get it done. Speaking to brokers and financial advisors, we can put our savings into the right investment vehicles to get the best returns.

Tips to reduce business expense

In order for businesses to generate a profit, the simple realisation is that their expenses must be less than their income. That means, what we spend money on needs to be less than the amount we get for services or products we provide. This is obvious to any business person, but doesn’t reduce how hard this can actually be. To that end, it’s worth considering small ways businesses can act to help reduce expenses they may not even realise they can reduce. Let’s examine what these are.

Go green

The idea of going green is often associated with more expenses, due mainly to stigma as opposed to reality. Businesses that opt for environmentally-friendly policies will start to benefit from reduced expenses. After all, it’s not merely about buying green items but a whole way of acting that is beneficial to the workspace and world as a whole.

As CNBC points out:

“One report from 2012 found that hospitals that reduce energy consumption and waste product could save $15 billion over a decade. Another study that year, by the UCLA and the University of Paris-Dauphine, found that employees at eco-friendly companies are 16 percent more productive than average. The authors wrote that these workers were more motivated, better trained and formed more than interpersonal relationships, which in turn increased efficiency.”  

Consistently, implementing environmentally-friendly actions benefits the individual and the company. For example, we should encourage employees to opt for public transport rather than vehicles – this uses less petrol, meaning employees save and are more likely to get to work on time. Additionally, we could encourage more days for staff to work from home. The Harvard Business Review highlights why, merely, from a business sense this is ideal. Speaking about just one company, one researcher highlighted the incredible benefits the business saw.

“We found that people working from home completed 13.5% more calls than the staff in the office did….meaning that Ctrip got almost an extra workday a week out of them.”

The researchers are quick to point out this doesn’t apply to every business. But many have the foundation in place to get workers to do their jobs, even from home. The point they make is that if someone isn’t doing their job, they shouldn’t be hired in the first place. Whether they’re in the office or at home, if there is work to be done, location shouldn’t matter (if they have internet access, computers and so on). In terms of the environment, the benefits are obvious: staff are not using vehicles. Triple Pundit points out:

“Driving a car is just about the most air polluting activity an average person can engage in (aside from air travel). And yet this is how the vast majority of workers commute back and forth to their offices every day. A study commissioned by Sun Microsystems pinpointed the daily commute to and from work as being responsible for more than 98 percent of an employee’s work-related carbon footprint. The same study also found that employees on average save more than $1,700 per year in fuel and wear and tear on their vehicles when they work at home just 2.5 days a week.”

Look at unnecessary expenses

If a business person does need transportation, they should examine exactly how does a business lease a vehicle. There are numerous expenses when it comes to deciding between leasing and buying car, if we’re doing it for a business. As Lifehacker highlights, just one point of consideration is taxation: “When you lease, a portion of the car’s depreciation and financing costs can be deducted on your taxes. Interest on loans to buy a car, however, aren’t deductible.”

Another unnecessary expense in today’s world is paper. There are few documents that require paper input. Businesses from all over the world can conduct themselves using digital markers and signatures. The law even recognises electronic signatures on forms. In South Africa, the Electronic and Communications Act of 2012 made allowance for e-signatures as legitimate. As IT News Africa points out:  

“The ECT Act specifically makes allowances for the legality of electronic signatures, and in fact the Supreme Court recently recognised an email signature as a valid electronic signature. This is because it meets the two most important criteria – there is an association or relationship between the document and the signature, and the person intended it to be a signature.”

Thus, even for signatures, there is no need for someone to put pen to paper. Paper costs enormous amounts to the planet from an environmental perspective and in terms of finance. Further, electronic data is more easily edited and managed – thus, if there are any mistakes, we can more easily amend any problems. This also extends to clients, since they do not need to print out papers, for example. This also speeds up production time, if we’re waiting on the go-ahead from managers since they can simply sign right away or point to what they need changed on the documents themselves. All this improves production time, meaning we do more work, earning us more profits.

All this shows that by eliminating unnecessary costs, we can expect to gain far more.

(Photo credit: Joe The Goat Farmer / Flickr)

The biggest factors that might influence finance in 2017

The financial world is complicated. Even those who spend years learning about how it operates won’t claim to be perfect predictors of what will influence the markets. All anyone can do is prepare. That doesn’t stop proper analysis, however. To that end, it is a good idea to think about the kinds of things already occurring that could influence the financial world in the years to come.

Politics is global

The nomination of Donald Trump, a TV-personality and professional inheritor of other people’s wealth, to the President of America shocked large parts of the world. Despite losing what Americans call the “popular vote”, Trump went on to take the office. This has had enormous consequences for the global financial market, both good and bad. As the Guardian points out:

“Trump could be good for geopolitical stability, at least in the short term. Trump’s preference for transactional realpolitik over Obama’s liberal interventionism should stabilise relations with Russia and China as the world is divided into spheres of influence. Trump could give Russia freer rein in Ukraine and Syria in exchange for restraint in central Europe and the Baltics. China’s inevitable dominance in Asia could be accepted, provided it avoids outright wars with Japan, Taiwan, and other countries whose security is, in theory, guaranteed by treaties with the US. The Middle East is bound to remain a cauldron of geopolitical unrest; but, even here, Trump’s preference for local strongmen over ‘democracy promotion’ could restore a degree of stability (at the cost of human rights).”

Of course, as with so much of human action, there’s bad news, too. Trump is a leader who has  a zero-sum game approach to trade. With incredibly protectionist campaign rhetoric, he promised severe curbing on international trade. Naturally, as the saying goes, when America sneezes the whole world catches a cold. To that end, any kind of financial moves from the new administration will have lasting consequences.

There’s also the shocking reaction to United Kingdom’s decision to leave the European Union. As the Financial Times reports: “According to officials at the Bank of England and the Treasury, the big concern is that the uncertainty of having no functioning government, no effective opposition and no plan for Brexit means households and companies will put spending decisions on hold, prompting a steep downturn that threatens to become self-reinforcing. They also worry about Britain’s current account deficit of 7 per cent of national income which requires the nation to rely on external finance to prevent sterling from sinking.”

This tells us that the future focus for global finance initiatives must look globally. No longer can you look at local markets. Everything is affected by everything else, some more than others. Superpowers like America and Britain are obviously casting a wider net than, say, African countries – but that doesn’t mean there aren’t complications that will arise regardless.

New South African tax laws

Recently, President Jacob Zuma signed new bills into law. These are all part of ongoing discussions regarding how people manage their finances. As Business Tech reports, one of these new laws is about unemployment: The Unemployment Insurance Amendment Act.

“The main purpose of the legislation is to amend the Unemployment Insurance Act so as to provide for the extension of the unemployment insurance benefits to learners who are undergoing learnership training and civil servants and also, among other things, to adjust the accrual rate of contributor’s entitlement to unemployment insurance benefits and to provide for the process of application for maternity benefits.”

Other legislation tackles finance in various forms, all of them therefore will have an effect on everything from insurance to corporate finance. It is wise then to speak to financial experts to figure out precisely what this means for you and your business. Even if you’re not a business owner, you will be affected by what businesses do and what the law says they’re now allowed to do.

Purchases

Cars are some of the most expensive items anyone owns. And recently the sales have not looked good for the industry. As Wheels24 notes:

“Naamsa says its 2017 projections for South Africa reflect an expected improvement in GDP growth to around 1.5% (from 0.4% in 2016). Local political tensions are likely to reduce business confidence and the expected increase in taxes in this years’ budget will erode real purchasing power. Internationally, volatile and uncertain conditions are likely to prevail during 2017.”

In America, the situation isn’t much better. Wallet Hub reports: “it is unlikely that the U.S. auto industry’s boom can continue much beyond 2017. So we can expect sales volume to begin regression toward the historical mean of just over 15 million vehicles sold per year.”