Peas and Carrots

I was watching one of my most favourite movies of all time, Forrest Gump on DSTV, for the umpteenth rerun, but one I enjoy time and time again – much more than all the new more sinister buy-ins on hauntings and violence.

Even though I am a man I am also a romantic and really enjoy a love story even though this one is a tragic one.  When Forrest met Jenny for the first time he tells us that they went “together like peas and carrots”.  A strange analogy remembered for the strangeness thereof.

Then I noticed this week that there are other things that also go together like peas and carrots.  The ones we will consider today in how to make sense are negative but may help us identify what we must do and sometimes choose what not to do, and who and who not to relate to. Continue reading “Peas and Carrots”

Lack of confidence in the current political climate

 

We often hear how the world do not want to invest in South Africa due to a lack of confidence in the political, labour and economic climate.  At ground level, we often cannot see the influence of these factors on investment confidence.  It is this lack of investment certainty that cause the lack of confidence.

Today I will illustrate how different small matters add up and eventually cause us to lose confidence and how to make sense of such matters, perhaps not allowing these matters to make us overly negative.

Then this happens.  At about 16h00 on the afternoon of the 15th June (the last possible moment before a holiday) we suddenly had no water in the taps.  We quickly thought and joked that this was a new way to also do ‘water shedding’.

The next morning, we checked on the water supply and found that the water meter was removed by Joburg water, claiming non-payment of account as the reason.

I investigated the account and found that the next payment was only due on the 22nd, yet the service was discontinued on the 15th – a whole week early.   They would only reconnect if the account was settled in full, a normal R3 800 account.  Continue reading “Lack of confidence in the current political climate”

Hedge your bets

Hedge your bets

After watching a program on TV the other day I realised the importance of hedging your bets.  The hedging of bets I will introduce to you today is different to the way that gamblers hedge their bets but, I believe, imminently better and more secure.

The gambler will hedge his bets by, after playing horse number 1 for a win, he will also play it for a place plus play a rank outsider for a place at good odds.  The logic is that one of the results will work and at least give him his money back if number does not win.  We do not all play horses but most play the lotto – where this form of hedging does not take place.

Some very intelligent people will work out a system and play their system.  I know such a very intelligent man and he developed a pattern of pay outs on numbers on the lotto and found that when the stakes are very high, one of two systems he developed pay out.  He only plays when stakes are high and will not play every week.  He is ahead on winnings over losses. Continue reading “Hedge your bets”

Beware of Opportunities

Beware of the ‘opportunities’ in 2010.

South Africa is a land of opportunity and every South African is an opportunist; and I am glad to be part of it. Everybody is seeing opportunities when the world cup for soccer comes to our shores this year.  Some have lead to exaggerated claims, when told that you can make R1 000 per night for letting each room in your house.  Some opportunists even went out and bought an additional property that ‘will be fully paid by soccer supporters’ rental income’, based on these claims.

You can lose it all in one opportunist moment, if you are not careful.

There is no harm in making extra income, but know that for each opportunity there is a risk that arises.  The biggest risk in letting a spare room (an opportunity each South African appears to be considering) is that your household insurance policy will not cover you for your tenants, their belongings and any liability claim arising. Your R1 million or even R3 million limit will not help, even if it could (and can’t) cover the risks.  You will need additional cover.

To give you a glimpse of the risks, I spoke to a long-standing friend and colleague who is an expert on liability insurance.  Peter Darroll from the 1Com group, when asked about the increase in liability, immediately drew my attention to the fact that foreigners visiting our shores will be claiming in their monetary terms, the Pound, Euro and Dollar – money that is 8 to 14 times more valuable than our humble Rand.  Continue reading “Beware of Opportunities”

How good is the free market system?

Power over price –  let us make 2010 the year of the consumer

Last week I was listening to a report about the Pioneer group being fined R160 million for price collusion and wondered: who pays for it and how will monies be recovered?  How do consumers benefit?  You see, the long and the short of it is that the shareholders won’t take the knock and will continue to expect their profits.  The company executives simply have to find ways of recovering the expense. They have to increase revenue to cover the cost of the fine and to continue showing profits; thus the ‘costs’ have to be added onto the selling price – meaning consumers of the product will pay!
Are punitive government measures working for or against us as consumers?  Will this influence our ability to save and fulfil our financial dreams and targets?
Last year it was the milk industry that suffered from hefty fines.  Notice that today milk is 30% more expensive than last year.  Take a closer look to see that different producers and distributors remain within 50c of each other on prices.  Did the penalty process work?  Is price collusion over?  In their defense, we must understand that they don’t have to collude to have prices in these ranges; they just have to look at shelf prices in any store to determine opposition prices before adjusting their own. Continue reading “How good is the free market system?”

New Years’ resolutions that work

New Years resolutions (and targets) that work.

Many of our readers are keen to pursue their new year’s resolutions.  Some others have already given up.  A colleague of mine recon that they do not work, yet I have met guys that gave up smoking 16 years ago, and more on a New Year’s Eve.  My question is, why does it work for some and not for others?  We will try and get some answers.

A new year’s resolution is no more than a goal or a target that we set.  Some fail and others succeed.  Why?  I like to regulate my weight around a target mass and am normally successful.  Here is what I do: Continue reading “New Years’ resolutions that work”

Recession is over?

Recession is over?  Says who?

While having lunch with some friends and colleagues the other day we were banding some statistics about.  One person then said that “75% of statistics are made up on the spur of the moment, including this one”.  This culminated after deliberation over the fact that someone had declared that recession is over.

So, when is recession over and how must I act in the meantime?  I am a bit of a conspiracy theorist and will first measure what people are saying against the evidence and if it does not quite measure I will declare it a conspiracy.  We will not look at the definition of conspiracy but adopt a variation for illustration purposes as: “the action performed by an individual or group to influence another group to believe in a manner not supported by evidence so that they will act differently so someone else can benefit.”

Here is some of the evidence: Continue reading “Recession is over?”

Role of Financial Advisor

The role of a financial advisor

No one will dream of diagnosing probable cancer in his own body or that of a friend.  There will be no question of paying the doctors’ fee, specialist and for all the required tests.

Why is it then that when people seek financial advice they are happy to get it from a friend or sibling for free, never contemplating that an incorrect diagnosis of a financial situation can be more devastating than a cancer?

Yet people are not willing to pay such a professional for their services.  Perhaps not realising what the professional financial advisor can do.

The role of the professional advisor has also been greatly tarnished by the financial services industry themselves, and in particular by the direct insurers who slandered brokers (equating broker with advisor).  The motivation for this is unclear but the most likely is that it helps them to peddle products better when done directly to a less informed consumer.  Continue reading “Role of Financial Advisor”

This morning I gave a balloon to a toddler

This morning I gave a gave a balloon to a toddler.  What joy and pleasure when she ran back to show her mother what she had gained.  The mother smiled and thanked me for the gesture.  This happened Sunday morning at the Wimpy at Bergview near Harrismith.

I had to spend the night there after a second breakdown enroute back from Pietermaritzburg.  The events of the previous day could have caused me to react far differently toward the toddler.  Many people see toddlers as a real bother, not I, not this morning.

I again realised that it is when we are under pressure that our true character shows.  What will come out of you?  Sweet honey or sour lemon juice.  I thank God that in this instance this morning it was good nourishing honey that was produced. Continue reading “This morning I gave a balloon to a toddler”

Solar Geysers

Just when we bring our budget under control we receive another setback.  This time it is a 34% increase from Eskom.  House owners and tenants who are paying R750 (and more) per month toward electricity will soon be paying R1000 per month for the same bill.

If you religiously switch off your geyser each morning before you leave for work and dutifully switch it back on when you arrive home, you can save R 2200 a year on your electricity bill – less than the increase of R3000 a year.  I did this but kept on forgetting to turn it back on.  What a bummer to have a tub full of cold water.

My question is how do we devise a plan for saving money and make it sustainable?   Is there not a better way?  Then I saw solar panels on the roofs of a new development in my area and realised that in South Africa we have a lot of sunshine. Sunshine is free. Why not consider solar power?

I did a bit of investigation. Continue reading “Solar Geysers”