your money ezine
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March 18, 2009TRANSCRIPT
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ECurrently Jamaica is experiencing one of the worst eco-nomic periods in its history. So much so, that business-man R. Danny Williams predicts that the economy will only begin to recover after 3 or 4 years. “We are in for a long one,” he states. As a founder and former Chairman and C.E.O. of Life of Jamaica (LOJ), now Sagicor Life Jamaica Limited, Williams has lived through at least one other finan-cial crisis - that of the financial sec-tor meltdown of the 1990s. How-ever, he holds the opinion that the current slump is far more serious. “They are totally different. The cri-sis in the 90s was a local situation, which was being addressed; and it was centered in the financial sector. This, however, is a worldwide recession. The impacts are harsher with bigger problems for the world,” he says.
Williams also explains that despite the banking pre-dicaments of the 90s, the country’s remittance level remained normal and the tourism sector was never af-fected.
On the other hand, during this present recession, re-mittances have drastically declined and there is less money in circulation.
Will the financial sector survive the recession?Amidst the numerous financial tragedies being experi-enced in the global banking sector, Williams is confi-dent that the country’s financial institutions will survive the storm. “Regulations put into place after the 90s en-sures that the sector is in a solid position,” he says.
Views on Stimulus Package, Lay-offs, Salary Cuts & Interest RatesGenerally, Mr. Williams views the government’s re-sponse of introducing a stimulus package to assist
the small business, agricultural and tourism sectors as commendable. “They (government) are doing all they can do and will continue to do all they can do,” Williams says, “However, G.C.T. and other taxes are down, hence government revenue is also down. We wish they could do a lot more but their income is low.”
“It is also understandable why companies are carrying out job lay-offs and salary cuts. They have no alterna-tive. There were lay-offs during the 90s crisis as well” he adds.
However, commenting on the Central Bank’s move to increase interest rates, Williams says, “A different way could have been found to stem the moving of foreign currency out of the country. The increase was like adding fuel to fire.”
LOJ’s Survival Faced with a li-quidity crisis, LOJ, now Sagicor
Life Jamaica was one of the several banks and insur-ance companies taken over by the government and placed on constant monitoring and support. None of the insurance companies that went under during the financial crisis of the 90s emerged impressively as the way LOJ emerged. Only LOJ, at the time came out as a recognisable entity, with its integrity still strong. “Truth of the matter, LOJ did suffer during the 1990s crisis. It was basically solid but there was de-preciation in assets. We managed to survive by going out and attracting new capital,” says Williams.
It (Life of Jamaica), however, was ultimately acquired by the Barbados-based Sagicor Financial Corporation, formerly Barbados Mutual Life in 2001, now Sagicor Financial Corporation
Danny Williams’ viewson the financial crisis
By: Latoya S. Hutchinson
Danny Williams having a talk with Your Money
Question: I’m having trouble finding enough money to save after all my bills are paid. I know that I’m putting my family at risk because I have no savings. What’s the easiest way to start and main-tain a savings habit?
Answer: While there are some persons that are nat-ural savers, the art of savings is actually a learned skill for most people. Let’s look at some basic prin-ciples that will help you to become successful at sav-ing:
1. Pay yourself first. It all starts with the decision that building your wealth is important to you. Con-sider savings as your first expense to be paid every month. Stop letting others – the landlord, super-market, utility company- be the only beneficiaries of your hard work.
2. Determine how much to save. It’s best to save a percentage of your income every month, prefer-ably 5-10%. Using an exact percentage helps you to increase your savings as your income grows.
3. Set savings targets: It’s easier to be disciplined at saving when you’re trying to achieve a target amount. Download the savings calculator at www.financiallysmartonline.com, under ‘Financial Tools’, and use it to estimate how long it will take for you to reach your goal.
4. Create a daily savings jar. Along with your regular monthly savings, deposit coins every day in a jar or piggybank. This process will help you to keep a daily focus on accumulating money. What you focus on multiplies!
5. Choose the right institution. Match your sav-ings goals – deposit on car or house, emergency fund - to the appropriate institution like a build-ing society, bank or credit union that best fits your needs.
6. Make it automatic. Remove excuses and make your saving effortless by using salary deductions or standing orders to transfer money into your ac-count.
7. Don’t lose when you deposit: Save regularly in an account that doesn’t have a deposit charge or minimum balance penalties.
8. Seek out higher interest rates: 1% more does make a difference over time. Ask your financial institution for the best interest-bearing account, and compare rates at different locations.
9. Make compounding work for you: Com-pounding is when interest earned is added to your principal, to create a new combined principal amount. The faster your money compounds, the more it grows.
10. Start early: Even if your savings amount is small, your nest egg can grow to a significant amount if you continue saving for a long time. Time helps to increase the effects of compounding on your money, so don’t delay!
...........................................................................Financially S.M.A.R.T. Services is Jamaica’s num-ber one source for practical, down-to-earth and independent answers for all questions relating to personal finance. Get more money smart advice at www.financiallysmartonline.com. Email [email protected] with comments or ques-tions.
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Saving SuccessMaintain a savings habit
Provided by: Financially S.M.A.R.T. Services
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Perfecting yourproduct
chieving business growth can be challenging for a small entrepreneur. How can you make more money without dramatically increasing your work load? Recently we discussed the importance of creating a business system that
will allow for the organized expansion and longevity of your enterprise.
T. Harv Eker, business coach and author of Speedwealth, describes a business system as a ‘repeatable process that produces a profit.’ Most small entrepreneurs rely heavily on their person-al efforts to create their products or services. The problem is that business growth can only come by expending more personal energy.
In my own business I carry out workshops to teach persons about financial principles. It quickly became obvious that providing this service was not going to be enough to create the wealth and freedom that I desired. I order to earn more, I would have to work harder, and there was a limit on the number of hours I could work.
Increase your valueTo solve this problem, I realised that I would have to find a way to systemize my service to offer more value to the public without increasing my personal effort. Eker declares “If you want to get rich, you have to deliver your value to a whole lot of people.” He explains that two of the ways you can achieve growth are to ‘clone’ yourself, or offer a product.
Replicating your efforts can be accomplished by hiring persons to do what you do. So if you are a massage therapist, to multiply your efforts you could employ other technicians. Introducing a product practically removes the ceiling on your income. You could create your own product, or sell a related product from someone else. Therefore, the massage therapist could sell body oils and nutritional prod-ucts, as well as write a book or produce a video on massage techniques.
I decided that everything that I offered in a workshop could be packaged and sold in various media. Once I understand the systemizing concept, I saw opportu-nities for financial books, CDs, DVDs, digital prod-
ucts, radio shows and more. I can now see how I can effectively deliver more of my value by focusing on the systematic delivery of products, not by increasing my personal workload.
Keep your product current In order to perfect your product you need to also focus on meeting the needs of the current market-place. Too often entrepreneurs get stuck in providing the same old service or product for years, while con-sumer demands have taken different directions.
It’s important to assess if your current offerings are really in line with market trends. It makes no sense to increase the delivery of something that people no longer want or need. This is why entrepreneurs must keep abreast of in ternat ional developments in their indus-tries. With the explosive in-crease in online shopping, de-signing prod-ucts and ser-vices that can be easily sold on the internet should be high on the priority list of any en-trepreneur.
Next, we’ll con-tinue our focus on systemizing your business when we consider how business owners can optimize their operations.
............................................................................Cherryl is a financial consultant and coach, and founder of Financially S.M.A.R.T. Services. See more of her work at www.financiallysmartonline.com. Email Cherryl at [email protected]. Please add this address to your email address book in order to ensure you receive a response.
ACherryl Hanson Simpson
Red Bull, a fast growing brand of today
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