FINANCIAL LITERACY FOR ALL- SOWING FOR GENERATIONS

About two or three years ago, Pastor Mensa Otabil, a renowned Ghanaian Christian Statesman, delivered his annual 31^st December night Message, what he normally calls the “Crossover” and called each and every Ghanaian and every human being to be a generational thinker. What he meant was that we should think about the future well-being of our children, our grandchildren, our great-grandchildren. That we should think about the future of our environment, about the future of our water-bodies and think about the future of everything that will make our existence as human beings bearable, worth living and more enjoyable. If we refuse to think about the future of all that affect us and our children and begin to act with the end in mind and to do things that will prolong the enjoyable longevity of life, then we will be sowing seeds that will wipe away our existence on earth.

For us to be generational thinkers and to sow for generations we first need to realize that there is a future for generations after us; we can then do these below for them:

·        Knowledge management is “the process of storing, managing and providing access to the store of knowledge within an organization.”

The organization here could also mean your house or home or home office or your own organized recordings and storage of knowledgeable materials. Future generations can benefit immensely from present generation and past generation if knowledge is stored and made more accessible to them, they could then add or amend and improve upon what has been passed unto them. This means education is one number for the present generation to pass unto the future generation. Current younger generation can use classroom education as well as very practical education to equip themselves for the future. The classroom education alone does not provide enough preparation and do not equip people for real life situations. It is the day-to-day real life situations that people need to live life on earth not abstract unrelated life education. Education for current younger generation should therefore be like how the medical professionals do it, classroom plus fieldwork. All students should be made to face and endure practical real life experiences to condition themselves for the unexpected real life “weather conditions”.

If you are an entrepreneur, a business owner, a medical professional, an accountant, an architect, a lawyer and so on and your children or one of your children or your friends’ children or your nephews or nieces or your colleague human beings want to learn from you because they know very well you are good and that you can impart something knowledgeable unto them, it is always better to teach them the practical real life situations in the profession. These are what they will need when they get out there. They would need some theories, but they can learn those themselves if they so desire.

When the current younger generation has experienced the real life education plus the real life experience, everything else would follow. They would live happy. They would live life being well-informed and well-educated and experienced in real life situations.

They would then continue with sustainability development and the world shall continue to be a place to live in.

·        Business Ownership, after the children and younger generation have gotten the education from present older generation, we need to know that they might not have the opportunities to practice what they have learnt and get the real life experiences; present older generation should therefore own businesses and other money-generating ventures that younger and future generations could use for their future benefits and well-being. Education alone is not enough, if people get the education but don’t have systems and places where they could apply what they have learnt, they wouldn’t get the desired real life experiences, and they would be ill-equipped and not fully prepared to take life opportunities. Supposing, you just decide to give only education to your son or daughter in accountancy, but you don’t have an accountancy firm, and no one else has an accountancy firm, where would your son or daughter apply what he or she has learnt and get the necessary experiences to face life? If you set up a water factory and someone else also sets up a meat factory, etc, now, then eventually, future generation will come and add to these having learnt from you and your organizations.

·        Real Estate Investment, the value of land always appreciates and never depreciates.

Future generation would be in better positions to take life opportunities and turn them into achievements, inventions and discoveries if present older generation thinks about the future of future generation and prepare for them places where they could lay their heads and working tools.

If they are left to come and fend for themselves by paying so much rent to other land owners for their residential and business purposes, then present generation would have not thought generationally. Present generation would have not thought about the future of future generations. Future generation will then have to start from the scratch before they struggle to achieve their aims and objectives and if they are not able, then the cycle may continue unabated.

Investment in real estate could be in any part of the world, just that tax and other legal issues are different in all countries, the issue is to invest in real estate and when future generations come and take up the mantle, it would be up to them to change designs, directions, styles, locations, colours, types, etc for their own tailored made, all they need is continue for generations after them also to continue, till Thy Kingdom comes.

·        Portfolio Investment, to think generationally means to invest in other areas apart from business ownership and real estate now for future generations. Diversify your investment into other income generating ventures and activities. Invest in treasury bills, unit trusts, mutual funds, shares, bonds and others for future generations. It is not only the rich, who should invest, the poor and the middle class can all invest. Portfolio investment is good, because everybody could invest in mutual funds, treasury bills, unit trusts, shares, etc. You need just small amount like Ghc5.00 or more to start to invest in mutual funds and unit trusts in Ghana and it is like that in many countries. Once you start small, you build on it till you have a storey building of those products, you were buying, you could then leave them for your children, for charities etc but making sure to teach how and why it is good to invest, so they too would continue to play the game. You would all be winners from generation to generation.

·        Philanthropy, the younger present generation should be taught how to give back to society cheerfully and wholeheartedly. For me, money is worthless if it is not shared. That is why I belong to those, who define money as the ability to give. Therefore to be able to give more, then you need more of it. If we need more of it we can only get more of it if we give back to society at large. Money is gotten from societal setups and therefore once you get it from them, then you should be philanthropic more than enough to give back to them in various ways. Society would then continue to make you rich, else society will shun you one day, one time and the future will look bleak and doom.

Long term sustainable financial prosperity is maintained when there is philanthropy and the rich and even the middle class learn to give back to society.

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Think generationally, think about the future needs of humanity and do something now that will sustain the natural beauty of life.

©, 2011, Godwin-Xavier Ayeebo

Email: gayeebo@gmail.com
Blog: www.g-xavierayeebo.blogspot.com

ALTERNATIVE INVESTMENTS

Are you skeptical about investing on the Ghana Stock Exchange because of capital losses and small dividends? GSE Listed stocks like Cocoa Processing Company (CPC), Transaction Solution (TRANSOL), Clydestone Ghana Ltd (CLYD), Ecobank Transnational Incorporated (ETI), Golden Web (GWEB) have over the period remain less profitable to their shareholders as they return peanut dividends and capital losses to their shareholders. Most shareholders have regretted investing in such shares and often become hostile to the staffs that attend to them. All these can be avoided if investors consider the option of venturing into alternative investments.

Do You Want To Be A Cube Of Sugar In A River Or A Cube Of Sugar In A Cup Of Tea?

Do you want to be a cube of sugar in a river or a cube of sugar in a cup of tea? Do you want your taste to be felt? Do you want to have a real feel of what ownership is in a company? What does ownership mean to you? If ownership means providing capital for running a business and taking calculated risk towards the achievement of the business goals, then consider alternative investment. In theory, shareholders are the real owners of the business but in practice, do they really have a feel of ownership? (What happens during Annual General Meeting). Being a part owner, your voice has to be heard but that is not the case of investors whose shares are not many (minority shareholders), you end up being a cube of sugar in an river, you would be dissolved by so much water and you will lose your relevance. For instance with all your investment, the percentage of your ownership is little and insignificant compared to that of institutional investors. Mostly in the annual report, they give a list of top twenty shareholders, most of which are institutional investors.

Board Room Issues

There have been instances where minority shareholders of some listed companies on the GSE were intimidated by the decision of majority shareholders. These issues range from their decision to delist from the GSE with reasons that minority shareholders deem flimsy. Some shareholders alleged that their rights as shareholders are disregarded by management and Board of Directors. Consider the cases of CAL Bank, Accra Brewery Ltd and CFAO who are listed companies on the GSE.

CAL Bank: In 2009, there were issues with the corporate governance of Cal Bank. One majority shareholder wanted his voice to be heard, so he tried buying more shares of the company in order to get a good percentage to achieve his aim of making his voice heard. The resultant effect of this action was the artificial rise in the price of CAL Bank shares over that period. Thanks to GSE and SEC for their intervention. He also who demanded the removal of the Managing Director (MD) of the bank because the MD and his management had allegedly shown disregard for the rights of shareholders http://www.modernghana.com/news/168034/1/cal-bank-saga-afare-donkor-gets-support.html you can read the full story here. What if you have no extra money to buy more shares in order to get majority stake? How would you be heard?

Accra Brewery Limited (ABL): ABL tried delisting from the Ghana Stock Exchange. This decision was mainly influenced by SABMiller (majority shareholder with over 60% stake in the company). The majority shareholders of ABL (SABMiller) decided to delist from the GSE because SABMiller want to recapitalize to in order to be competitive. If a listed company wants more capital to remain competitive, there are many other options available like rights issue to its existing shareholders in the proportion of their shareholding but this was not the case. Mr. Joseph Abeka Biney, a minority shareholder, who was not in favour of the decision made known his disapproval but could do nothing. He further lamented benefits such as capital gains, dividend, bonus and right issues that accrue to shareholders would not be due them when the company gets delisted. http://www.ghananewsagency.org/details/Economics/Accra-Brewery-ready-to-delist-from-the-Stock-Exchange/?ci=3&ai=20122

CFAO Ghana: in my opinion, I would say shareholder of this company did not benefit from their investment in CFAO Ghana since they never paid them dividends and there were no capital gains either, no right or bonus issue. But finally, after getting shareholders money to expand their business and made enough return from Ghana the majority shareholders decided to delist. I know you will agree with me this is not fair. The CFAO group holds majority shares in CFAO Ghana and the suddenly decided to delist from the Ghana Stock Exchange. Read full story by clicking this link, http://www.ibrokerghana.com/news-and-market-information/press-releases/15-press-release-content/344-de-listing-of-cfao-from-the-gse.html since they were majority shareholders, they had their way.

Becoming the Cube Of Sugar In The Glass Of Water Instead Of A Cube Of Sugar In A River

There are several other investment channels you put your resources into apart form shares or bonds that comes with higher return on investment, quite an amount of risk (depending on the agreement signed) and a better level of control. If you lost a chunk of your money through the activities of the stock market, why not try the following alternative investments, such as buying an existing business (smaller companies that have shares on the Over the Counter), Angel investment and other forms of equity investment.

Buying a Business

Click this link to read more on buying a business. It is one of the articles I published http://www.ghanaweb.com/GhanaHomePage/NewsArchive/artikel.php?ID=201267

Angel Investment: An Angel Investor is someone who provides capital for start-ups or new businesses with prospects in exchange for a percentage of ownership. They do so by reviewing business plans of startups and give seed money with the condition that is favorable to them. Since most angel investors are experienced businessmen, they opt to groom these new businesses and direct management towards achieving set goals. The term angel investor started from the Silicon Valley in California. This concept was introduced to help develop businesses through the help of few rich people. The silicon value is the home of the world’s top notch information and technology software development companies like Google, Apple, Ebay, facebook, AMD, Apple Inc, Intel, Oracle, Yahoo, Sun System amongst others. It contributes about 40% to the GDP of the United States of America. Why can’t net-worthed African investors try this model to help young and enterprising people with viable ideas, invest in them and reap both monetary benefits while getting the opportunity to take part in decision making, an opportunity you may never have investing in shares.

Private equity investment: there are private equity firms who pull funds from net worth individuals and form funds with it. You must enter into an agreement with them on your on return on investment. With this you would worry less on capital market fluctuations. Examples of such firms in Ghana are Fidelity Capital Partners, Grofin Capital, Oasis Capital Ghana and so on. Grofin Capital supports Small and Medium Enterprises (SME) by providing more than just finance to help them grow their businesses. Grofin is a South African Company with a branch in Ghana, Nigeria and Kenya. If you have some money and want to support SME’s in Ghana and Africa, you can take your money there, and negotiate for a good rate. By so doing, you are helping SMEs and still making some good returns. Fidelity Capital Partners Limited was established in February 1997 and commenced business in November 1999 as a venture capital and private equity funds Management Company and corporate finance advisory services provider. They have diversified shareholders that include their management team, local and international private investors and development finance institutions (DFIs). Oasis Capital Ghana is also a private equity and venture capital fund management firm that provides capital to entrepreneurial businesses in West Africa.

Protecting your investment interest in alternative investment

You need a legal team: once you decide to be an angel investor, you need a legal team that will give you a professional advice on all agreements you sign. If you think you cannot pay for one, then look for a family friend who is a legal practitioner to cross check all agreements and tell you the legal implication of that. But if you think it is expensive to get one, then be ready for bigger mistakes that will cause you more money that losses made on the GSE.

Investment advisory: No matter your experience in doing business, you cannot understate the role of financial advisors in any huge and major financial undertaking. You need financial valuers who would use both financial and non financial data to determine whether or not it is a viable business to invest in. They would use industry data, macro and micro economic data as well to arrive at their decision and recommendation to you.

Do restructuring if the need arises as a qualification for your investment. Money is hard to come by. So if you are going to investment your hard earned money in someone’s business, they you should set your control parameters in place. Restructure the business so that cash would not leak through any unlawful means. You have to jealously protect it in order to maximize returns. The caution here is don’t over do it, give some reasonable room to the entrepreneur to explore and grow the business.

If you are really poised for action, then try Buying a Business, Private Equity Investment and Angel Investment. These are the investment options available to everyone that can afford it. With these alternative investments, you have less to worry about capital losses, small dividend and intimidation by majority shareholders. Watch out for more detailed article on alternative investment in my next write up. For more information on the few private equity firms mentioned in this article, follow these links, http://www.oasiscapitalghana.com/, http://www.fidelitycapitalpartners.com/live/en/?pg=119 and http://www.grofin.com/AboutGroFinGroup/Offices/Ghana.aspx

You can direct all comments, suggestions and additions to skafuiteye@gmail.com,

©2011, Sophia Kafui Teye

Email: skteye@gmail.com.

Blog: www.skafuiteye.blogspot.com

YOU NEED A PRIVATE PORTFOLIO MANAGER

Managing your own investment is complex, time consuming and too technical to leave to chance. When you invest over a period of time, you create so much wealth to yourself that you possibly cannot track it. If they are shares, you have to track to see if dividends are paid to you or whether there are capital gains or losses.

Bonds may also mature and must be redeemed or the interest payments on the bond may be available. These are different classes of financial assets you can own that have different returns on investment patterns and there is a need to keep an up-to-date track of what is happening to your investment.

Portfolio is a collection of investments held by an individual or organization. Your collection of investment could be bank accounts, shares, bonds, collective investment schemes; treasury bills, real estates, derivatives and so on. Private Portfolio manager or an investment advisor can be a professional of a Licensed Dealing Member of the Ghana Stock Exchange (GSE).

It could be a particular staff in the Asset Management Department of a brokerage firm. This private portfolio manager will assume the responsibility of coordinating transactions involving all your investments.

Why you need a private portfolio manager

You may be too busy: in this time of increased unemployment, people have to keep more than one job to survive (those in the medical field call it locum), those in the business or finance professionals are also chasing after professional classes such as CIM, ICM, CIMA, ICA, CFA and ACCA. Workers become so exhausted after a tiring day and all they think of is to have supper, wash down and prepare for work the next day. Businessmen are often found chasing after contracts; family men and women also often get entangled with family and other social activities.

You may not understand the market: The capital market is a market where listed long term securities are traded. There are so many factors that affect the prices of stocks in the capital market. The value of your investment is the closing price of the stock multiplied by your shareholding. It is often easy to say the market is influenced by demand and supply forces but there are more to that.

You need a seasoned investment advisor who understands the capital market and can analyze trends and both financial and non-financial information that can affect your investment.

Identify your investment objective: Most often, people invest without carefully analyzing why they are investing. Your investment objective is the reason for you investing. It can be for capital accumulation, unforeseen contingencies, to buy an asset or money to execute project. Your investment advisor through the asking of probing questions can help you know your investment objective.

Rebalancing of portfolio: Depending on your investment objective, some classes of assets must be taken out and new ones added to meet your new objective or needs. Your investment objective must change when you are nearing retirement or when you have a family or when one objective is achieved.

For instance, if an investor is nearing retirement, there is the need to sell out risky stocks and stocks that do not bring the investor regular dividends or capital gains. The portfolio manager can add Treasury bills or cash and cash equivalent so that the investor does not lose a chunk of his/her investment to market fluctuations or risks. All these are aimed at the investor having a regular stream of income.

Help reduce portfolio risk: There are different classes of investments that also come with different risk profiles. Your investment advisor or portfolio manager would help you develop a portfolio that would be less risky based on your needs and investment time horizon. Certain classes of investment such as shares are risky.

The portfolio manager understands the market and performs regular analysis that can help detect risk and prevent losses.
The portfolio managers have the systems in place: The portfolio manager works for a Licensed Dealing Member of the Ghana Stock Exchange. These LDM’s are required by SEC and GSE to have systems in place to monitor the investments of their clients.

What should you consider when choosing one?

Is the company licensed?

The company must be licensed by the Securities and Exchange Commission and it should also be a Licensed Dealing Member of the Ghana Stock Exchange.

Pay management fees: It costs the LDM some money to manage your investment to ensure you maximize returns. They use the internet at a cost, stationery etc. Besides, they have to make some profit in order to stay in business. For this reason, they must charge management fees. Adam Smith said “it is not for the benevolence of the brewer or the baker that we have dinner but for their own selfish interest.”

You have to consider how much return they are likely to make and how much is reasonable to pay them. Most of the Asset management firms have fixed charges; say 10% of the value of your investment and this can be reviewed annually. Try to personally investigate first before choosing one. The caution here is, don’t go for a private portfolio manager because they may charge you less, consider how much returns they make and other factors listed below.

Seasoned analysts: Investigate to know how good their analysts are and their ability to make good returns for their clients. You can also find out how abreast they are with world news, local news and business related news by giving them a “morning call” anytime you hear price sensitive news that might affect your investment.

If they are not aware of the obvious, then feel free to move your investment to another firm to manage for you. This is because price sensitive information is crucial to the return you make on your investment. You can further investigate to know how many of their staff are industry professional, how many of their analysts are licensed by SEC and go further to know if they are Authorised Dealing Officers of the GSE.

Their team should be made up of lawyers, financial analysts, insurance experts, business experts and with the requisite certification. With that you can be assured that your investment is safe and it is in good hands.

Good customer service: Find out if they contact their clients through telephone calls, SMS, email on how their investment is doing.

Are they responsive enough to client needs? Are their staffs dedicated to the satisfaction of their clients? How professional are they? It is always good to choose an asset management firm that has a good research department. Having a good research department is not enough; go further to find out how often they furnish their clients with information regarding the economy and their investment.
Author: Sophia Kafui Teye
Blog: www.skafuiteye.blogspot.com
skafuiteye@gmail.com

LAVATORIES BADLY NEEDED

Life is not complete for any human being till that being is able to have a feeling of living a dignified life. A healthy human being would eat and would need to expel out the waste in the system. In modern day life, human beings have devised very neat and clean ways of easing themselves and it is very nice and dignified that sometimes, one would even forget that human beings just life animals do expel excreta.

However, it is not every part of this world that every body enjoys use of the basic facilities that make life really dignified as modern human beings should.  In other parts of the world and in Northern Ghana, people living in rural communities hardly enjoy the use of these basic facilities. People in rural northern Ghana still practice the very old, outmoded, unacceptable, pure and raw of easing themselves, because they cannot afford the basic necessities of life and they have not been provided for them to even refuse to use.

All over, rural northern Ghanaian, one can easily see people, mature and young, men and women, boys and girls easing themselves in the opening, all because they have no better choice. They   have been subjecting themselves to crude and unacceptable ways of expelling the waste in exposed ways that something needs to be done to help solve these undignified practices.

As people do “own things” any where, the consequences are evident for all to see, feel and smell.

It is so disturbing during the dry season, when there are no shrubs, weeds and other plants to serve as covers or shield and it is so plain to see people even from faraway away distance easing themselves in the openings.

The indiscriminate ways of expelling human excreta among northern Ghanaian rural dwellers bring diseases that make people sick and some even die prematurely, yet solutions have been provided.

It is high time philanthropist, non-governmental organizations, (NGOs), the government came to the aid of these communities and the private companies should take up these as part of their corporate social responsibilities. It is greatly worth, more than could be imagined.

WHY ARE THE LAVATORIES NEEDED

·         Help make people lives dignified.

·         Help prevent and eradicate and reduce certain diseases and illnesses

·         People get a place to ease themselves

·         Men and women would have separate places for privacy

·         Constructing basic toilet facilities in rural northern Ghana is very cheap.

·         Cheap labour is available because of communal labour, once the natives know it is for them, they would volunteer.

·         Free land, the chiefs and elders of the communities would always donate land for good use.

·         It would be a great and a memorable contribution to that community’s development and improvement in the lives of the dwellers.

·         Society at large benefits and the impact is immeasurable

There are some particular villages in the Upper Eastern Region, near Bawku that really lack these facilities and need the support of individuals and organizations to help provide them with basic toilet facilities. These are Zaago Number 1 and Number 2, Gumyoko and Aporizua. These villages are about 15 minutes drive from Bawku, but the people go through hell and unacceptable ways of easing themselves, which needs to be stopped.

I entreat individuals, organizations to go to their aid. Directions could be given to whoever wants to help. I can direct them to see some chiefs and elders of these villages for further discussions.

© 2011, Godwin-Xavier Ayeebo

Email: gayeebo@gmail.com

Blog: www.g-xavierayeebo.blogspot.com