Understanding unit trusts before you buy

Investments are a complicated minefield of hopes, dreams and confusions. Even the smartest people enter ignorant and leave confused, sometimes striking it big when making particular decisions. Financial experts study for years to have some understanding of how markets work and what it means to have a sense of financial security. Yet, in these turbulent times, we must be more proactive than ever when considering what our money is doing.

To that end it’s worth considering the security of unit trust investment.

What are unit trusts?

The stock market is notoriously incomprehensible, yet powerful. Everyone knows it can change the fate of countries in a heartbeat, with little idea of how it manages this magical feat. One way the average person engages in the stock market is through investments. A popular investment vehicle – i.e. a way to invest – is a mutual fund. As Investopedia defines it:

“A mutual fund is an investment vehicle made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets.”

These are operated by money managers, who take the fund’s capital “and attempt to produce capital gains and income for the fund’s investors”. One popular type of investment that uses mutual fund structure is a unit trust investment.

Unit trust outlined

As indicated, unit trusts follow a mutual fund outline. Except, the major quality is that with these kinds of investments, the funds go to individual unit owners, not reinvestment into the fund. This also allows for control. As What Investment notes: “Investors can buy or sell units at any time. As people buy units, the pool gets bigger; as they sell them, it gets smaller.”

The goal of the unit trust is to obviously provide a return to investors. This happens “either in the form of capital growth (an increase in the price per unit) or income (dividends paid to the unit holders in proportion to the number of units they hold).”

Unit trusts are also known for being secure, since it’s managed by experts but also overseen by others (trustees). They’re also known for being open-ended, allowing investors to focus on those areas they believe most benefit them. Security and ease of access make unit trusts ideal investment vehicles for those wanting a gateway into the world of investments.  Before that happens, though, investors should begin learning what different categories of unit trusts means.

(Photo credit: Tristan Martin / Flickr

Core business skills necessary for success

Whether we’re students or experienced business managers, everyone involved or interested in business must have a core set of skills. Businesses are of course different, operating in multiple industries, delivering a range of services or products. However, uniting almost all of these are core categories – customer care, quality service and others – which means there are qualities every business-minded person should focus on.

This matters in terms of personal education as well as how we hire.


Unfortunately, no one will look at us twice if we have nothing to show. While having an extensive list of jobs on our CV’s might be somewhat impressive, it’s nothing alongside actual qualifications. Showing we’ve studied fields important to our industries goes a long way to being taken seriously. When trying to form relationships with new people, they can already trust us to be competent about subjects we’ve studied. They know independent evaluations – degrees or diplomas, for example – certify our experience. Whether we’re studying management or doing marketing courses, certifications go a long way to enhancing our standing with others.

While this is certainly not the only way to show our expertise, it’s universally regarded as a safe way to do so. As the BBC noted:

“Research found, for instance, that in Brazil, having a tertiary education offered workers a 200% premium in lifetime earnings compared to those who hadn’t finished high school. In Greece, Korea, and Turkey, the premium gap was 70%.”

Tech skills

Understanding  the tools we work with goes a long way toward enhancing productivity. Businesses should look out for tech-minded people and managers should continue learning about the latest tools and trends within their industries. This keeps us ahead of curve in a rapidly advancing world.


There’s no point providing excellent, knowledgeable service when no one knows about the business. Marketing can make or break any business, regardless of size. However, standing out above the crowd is hard work – especially when new technology presents unique ways to be creative. With online tools, social media, 24-hour news cycles, the eyes of the world are always watching – this means, though it might be easier to get our name out there, it doesn’t always lead to the attention we want. We must be able to present our business and services in desirable ways, leading to more customers.

We must develop effective marketing skills, regardless of what industry we work in.  

What South African businesses can teach the world

There’s little doubt, on a number of levels, South Africa plays on the world stage. With world-renowned authors, scientists, business people and even Hollywood performers, South Africa has offered a lot to the world. Yet, a lot of stigma still shrouds South Africa and the continent in general as being far behind. While in some respects, this is of course true, in many ways stereotypes can be harmful. One way might be to reconsider the various business lessons that South Africa can teach the world.

Challenges as ladders, not walls

South Africa does not have a strong currency and has numerous problems when it comes to infrastructure and service delivery, according to experts. Despite this, the country still manages to have some of the best education in the world, as evidence by numerous major international places recruiting from South African universities every year. However, Instead of moving overseas, many South Africans embrace their circumstances and make something positive out of it.

One famous example is Cyril Ramaphosa. Growing up during the harsh times of apartheid, Ramaphosa qualified as a lawyer, became an MP and then chairman of the constitutional assembly, drawing up the post-apartheid constitution for the country (one of the best and most liberal documents in the world). Then, he left politics altogether. As the BBC reports:

“As white businessmen tried to accommodate him, Mr Ramaphosa acquired a stake in nearly every key sector – from telecoms and the media (where he rarely interfered in the editorial independence of newspapers he owned) to beverages and fast-food (he owns the South African franchise of the US chain, McDonalds) and mining.”

He’s now one of the wealthiest people on the continent. This shows the challenges he faces he used to lift himself higher. These obstacles are like ladders, rather than walls that block him. This is an ideal every business person can embrace.

Space matters

Two of the most well-known South African-born business people are Elon Musk and Mark Shuttleworth. Both men have a vested interest in space. Musk created SpaceX, which is aiming to revolutionise space travel, so that people can live on other planets. Shuttleworth famously became the “first African in space”.

Shuttleworth is also prominent for his developments in terms of the the internet. He showed local businesses why they could and should consider website hosting in South Africa. His company focused on security, primarily, which was often a concern for local businesses.

Regardless, Shuttleworth then spent time and energy getting himself into space. Both these men showed this is where our investments should be aiming. Certainly, if people from a country in Africa can realise this importance, other more prominent countries should be doing so, too.    

These are just some of the most powerful examples of business people who lead by example. Hopefully, by having a broader understanding of South African entrepreneurs’ success, more people can see South Africa as leader rather than one being left behind.

What businesses must consider about staff wellbeing

No one likes being sick – especially when it means losing out on work. Of course, employers make allowance for sick days, since people are human. Unlike vacations, taking a sick day means not working because of forces beyond our control. At least with vacations, we’re choosing not to work and have the option to do so in emergencies. Sick days can remove that option of working.

However, sometimes being sick doesn’t have to mean we’re not working. Rather it can mean making allowances so that work can continue. This is what businesses need to consider when it comes to sickness and work.

Don’t go for the extremes

Instead of responding to sick days by writing those days off, we should consider alternatives. As one business expert Martin Brewer notes: “It is … possible to feel too ill to get into the workplace but fit enough to sit in front of a computer and work.” The problem is employees need to know what the policy is regarding this. Brewer suggests: “You may well want to introduce a formal rule or policy (perhaps it can be included in your sickness absence policy) about home working and illness.”

Of course, this is dependent on the nature of the work itself, whether the employee has internet access at home and so on. Sometimes the best thing we can do is find a compromise. This benefits the business and the employee, since work is not missed and the employee doesn’t have to worry too much about whether they have to play catch up, will receive verbal warnings and so on.

Home work

This highlights another area worth considering: health experts have warned, for several years, that long commutes are bad for health. And no less a magazine than the Harvard Business Review recommends letting employees work from home. There’s evidence to suggest increased, not less, production. If employees do work less, then these are not employees we should be hiring in the first place.

Backup plans

Sometimes work must be rescheduled and meetings shifted. This means we must always have a backup plan to cater for sick employees or other emergencies. Indeed, we should rather consider staff sickness as we would any other unforeseen hindrance to productivity. However, unlike loss of electricity or robbery, staff sickness can be managed in terms of compromises.

Reach out to staff

We should also create environments where staff don’t feel obligated to work through sickness. We don’t want them producing work while in a drug-fuelled or pain-riddled haze. As a business, we should always be reaching out enquiring about their current and future state – everything from their daily health to their plans for retirement annuity, savings and the like. We need not be invasive but we have every right to ask since this concerns the business’ ability to operate.

2 cognitive biases hindering good business decisions

Everyone has biases preventing them from making the best decisions. This is not so much a criticism of people’s abilities as it is a description. People are not robots or computers, meaning are human aspects infringing on the ability to look at situations purely rationally. What matters is recognising what these are and what people can do to reduce their impact in decision-making processes.

What are cognitive biases?

As Very Well defines it: “A cognitive bias is a systematic error in thinking that affects the decisions and judgments that people make.” Science writer George Dvorsky calls these “glitches”. A common example is how people use memory to make decisions, yet memory recall is notoriously faulty. This means making decisions on issues based on shaky foundations.

For example, some people tend to remember when things go wrong, not when things are going according to plan. It means misremembering the actual number of times, say, a business fulfilled their end of a contract. Disgruntled customers focus on those times they were upset, disappointed, complained and so on – not when the business satisfied them, which could often be more. They’re left with viewing the business from an inaccurate, skewed standpoint. This is the result of cognitive bias.

People’s behaviour having an impact on business is the focus of a lot research, especially in psychology and behavioural finance theory.  

Two examples of biases are worth considering, especially for people operating in the business sphere.

Confirmation bias

In summary, this is the well-known bias of “remembering the hits and forgetting the misses”. As noted above, people tend to recall specific aspects of situations because it fits with a particular narrative. This can be anything from how good a business is to political views. People dismiss or downplay those aspects with conflict with their perspectives. Instead of reconsidering alternatives or challenges to their views, people make these views seem more grounded by only remembering, finding and recalling other situations confirming the views they want to hold on to.

This is bad for business because it provides an unclear basis on which to make good decisions. Instead of making the best decision based on evidence and reasoning, people make decisions that best suit a long held belief. This makes it irrational and therefore bad for improving business.

Gambler’s Fallacy

When we put too much emphasis on past unrelated events to predict future ones, we commit the Gambler’s Fallacy.

A classic example is a coin toss. If it’s flipped nine times and lands heads, many will say the tenth will also be heads. Yet, this is incorrect: the increased number of heads has no impact on whether the next toss will be heads. There is no causal connection. The problem is people tend to make connections to events which are unrelated.

In terms of business, this means we might invest in particular areas because of their past success – yet we must evaluate whether past successes are indication of future. Naturally, there could be connections, but we should never assume as such. This would be committing the Gambler’s Fallacy.


All biases are connected by virtue of skewing the best decisions, by virtue of human behaviour. No one can escape these biases, but it is possible to recognise when they occur. Minimisation, rather than eradication, is the best outcome when trying to engage with cognitive biases. This increases chances of making the best decisions, for ourselves, our business and anything else requiring the smartest thinking.  

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 secure finance for your startup

Startups require funding in order to facilitate growth. The paradox however is that growth is required for further funding. No investor wants to put money into areas that won’t result in benefit to them. They need to see how they will prosper from injecting their cash in your venture. To that end, businesses should consider ways to make themselves more likely to get funded. Sometimes making a profit isn’t sufficient. These are some ways to help secure finance for the business.

Consider what we need

Sometimes we should think about funding in more specific terms. These days we can acquire financing for specific business items. For example, we can get machinery asset finance, helping us acquire equipment we otherwise could not afford. In this way, we can use the best assets to benefit our business in the short and long term.

This also helps present ourselves as capable and show potential investors we are worth focusing on.

Don’t be greedy

While we can’t dictate how much we’ll need, we should still be aware of overreaching in terms of obtaining finances. As the Financial Times points out:

“We all recognise the risk that we might borrow too much if, by increasing indebtedness, we bring too much demand from the future into the present and create inflationary pressures.”

We don’t want to contribute to overall debt and we don’t want to obtain more ourselves.

Honesty first and foremost

We must be willing to convey all information to potential investors or financial institutions, where necessary. This might be slightly embarrassing, but it’s also an opportunity to get our affairs in order before doing so. Indeed, we want things sorted out because we will be presenting ourselves in full view of investors – they don’t want to invest in a lie, but in a possible reality.

Find a place to work

It’s also incredibly important we have a place of work. Working from home is not encouraging to anyone, unless we’re already showing significant success. Having a central location confirms to everyone we’re a serious business. It’s also encouraging to other organisations and governments. People are more likely to take us seriously, provide us with investments and become potential customers.

These are just a few aspects to consider for making our business more likely to receive favourable impressions by investors – and what we should do when considering financing.

How to avoid life inflation

People get sucked into the idea that having more things means they’re more successful or wealthier than most. However, material things don’t equal wealth (anymore). Most understand this, but spending money is fun.

In fact, with the festive season right around the corner, everyone is giving one last push towards the end of the year, for their bonus or thirteenth check or profit share. And why? So that they have more to spend. The harder they work, the more they achieve, the more they want to spend money and spoil themselves with stuff. Especially when they’ve spent a great deal of time living on the bare necessities while studying or during their first job. However, spending all expendable income on luxuries is really irresponsible. Yes, even during the holidays it’s simply not a good idea.

Lifestyle inflation is a new term being bandied about. It refers to increased spending whenever salaries increase. This is a problem. It means getting out of debt becomes near impossible and accruing actual wealth is an unattainable goal. If everyone increases their spending after each salary bump they’ll stay in the same financial situation for years. People must avoid lifestyle inflation and be realistic about the expendable income they currently have and what can be expected after their next increase.

Here’s how everyone should remain cautious and make an effort to end up financially confident with a prosperous future.

Keep it real

Whatever the increase is people need to calculate how their budget is realistically affected. If debt is being paid off then that extra income should go straight into extra debt repayments. Clearing up debt quicker than expected won’t result in anything to show off right now but in a couple of years time there’ll be more disposable cash. What’s more, the amount of money a company is willing to give and the amount of money awarded after tax is very different especially if the increase happens to bump earnings into a new tax bracket.

It’s about the experience

People must forget about stuff and spend money on lifestyle improvements or incredible experiences. Joining a gym, taking on a new hobby and going on vacation are all an investment in happiness and an upgrade of lifestyle. These all have a lasting positive effect and the result is incredible memories or a new activity that can broaden horizons, friendship circles and perspectives.

If it ain’t broke, don’t fix it

When one receives a bonus or salary increase and their day-to-day living is secure they must send the extra money away, keeping it for a rainy day. It’d be a good idea for a person in this position to start a savings account, invest the money or set up a retirement plan. Essentially people should do whatever it takes to save the extra money until they really need it or until they’ve something viable to spend it on (see point above). This curbs needless spending and offers a lot of security in the knowledge that the money is there in case of an emergency or an adventure.

Have a goal

Everyone should have a goal no matter whether they’re up for a promotion or increase. One day, when more finances do eventually come their way, it’ll be worthwhile to have an idea of how they plan to spend it. Without that goal in mind most are likely to just spend the extra money recklessly. For instance, going overboard with gifts and outings during the holidays. In reality, the bigger flat screen TV or new pair of designer sneakers will pale in comparison to a parent being finally able to afford private schooling for their kids. Or, a stressed out entrepreneur taking a month long sabbatical or a young new employee being able to afford to trade in their  old, used Nissan for a smarter, more reliable car.

3 top tips for new managers

Being promoted into management is such an enormous step in the right direction for career growth. But it can be a bittersweet affair. You’ve definitely done everything right, to the point that you’re now in charge of other people. While this is a powerful position to be in, your success now lies in the hands of other people. This is why many new managers are sent on HR management courses or communication skills courses. Your performance is ranked on how your team performs and so being a manager is tricky, sensitive business. You must have a handle on dealing with people of all sorts.

Here are the top three must-know tips for all new managers.

Find your empathy

You’re likely a fairly empathetic person already. It’s probably been noted (by your superiors) that you’re able to handle people properly and with the right amount of sensitivity and firmness. But as you move into your new role you should pay close attention to things becoming a little weird and awkward. Some people who you’ll be managing have more experience than you and some have been at the company longer than you. Also, be aware that sometimes it’s not the top performer who’s promoted but rather the best suited personality. If you’ve been chosen make an effort to understand why you’ve been put in the position to manage. Then, follow through with paying attention to the attributes you possess that have landed you in this role and make sure you use these in your daily dealings.

Take on a mentoring role

When you’re a manager you’re the bad guy. No matter how you look at it, at some point one (or more) of your employees will not enjoy your management skills or will disagree with a decision you’ve made. They might even take you to task about something they believe is wrong. Firstly, train yourself to understand that this is okay and you’re not there to be liked but to be trusted and respected. Then, take your managerial role further into a mentoring role. This means you’re guiding each of your team members in realising their own success. You’re working on each team member’s strengths and developing them accordingly. You become trusted counsel to your team. Even if they don’t agree with you because you’ve developed this type of relationship there’s more trust embedded into the relationship and a disagreement is easier to handle. As a manager you’re entitled to identify what’s wrong and what’s right but as a mentor you offer constructive criticism and positive affirmations and this is a far easier relationship for your team to be a part of.

Always be transparent

You’re about to be privy to the innermost workings of the company. You’re becoming involved in the inner sanctum accessed only by managers and company executives.You’re going to have to know and understand the boundaries that are needed and when information should be shared. Ultimately, if there’s top secret information being made available to you find out whether or not it can be shared with your team. The information that may be shared is invaluable. By giving your team a heads up about a change in strategy, new budgets or client feedback sessions you’re including them in the bigger picture. This is motivating to them as they’ll have a better understanding of the role they play in the team and the company as a whole.