Nobel laureate recommends changes to Australian super system

Robert Merton, who was awarded the Nobel prize for economics in 1997, has recommended that the Australian superannuation system needs to rethink the way that it communicates with people about their retirement savings. Merton, who has spent the last decade studying retirement savings systems, believes that the Australian system is too focused on lump sum amounts, and should be regarded to make investors think about their future income streams.

“We are teaching people to look at the wrong number,” Mr Merton said in an interview. “What is a good retirement is measured by the standard of living you want in retirement, and standard of living is not defined by a pot of money but a stream of income. A good amount for retirement would be to sustain the standard of living you have become used to enjoying in the later part of your working life. That is an income goal; it’s not a wealth goal.

Merton also claims that the Australian super system needs to improve services in the pension phase of retirement savings.He claims that too many products that are classified as low-risk investments actually have highly volatile income streams, and retirees are given insufficient information from superannuation funds in regards to deciding when and how to withdraw their super.

Make the most out of your LinkedIn profile

Make the most out of your LinkedIn profile

LinkedIn is usually the most important social media platform for B2B marketing and can also be a valuable way to recruit and network. It is also a great educational resource, and you can learn a lot from interacting with other business owners.

Like all social media sites, LinkedIn is a pretty crowded platform, so putting in a little extra effort to stand out can go a long way. Here are some tips for making the most out of LinkedIn:

-Get your photo right: You profile picture should be current, high-definition, and representative of your business persona. You should not use a photograph of you in a social situation if it does not accurately reflect what you do in the business world.

-Make sure your recommendations accurately depict your achievements: Do not be shy about asking people for recommendations, that is what LinkedIn is there for. Similarly, going out of your way to give people deserved recommendations will help you to boost your network.

-Be vocal: Write posts or start groups to talk about the things you are interested in. An active and presence is the best way for you to increase your exposure, and it is likely that you will learn something in the process.

Making smart investment choices in your SMSF

One of the most exciting things about self-managing your superannuation is the ability to make your own investment choices. In SMSFs, there are also a lot more investment options available, and it can be tempting to get a little creative with your portfolio.

However, unless you are extremely confident and familiar with the investment, or have received trusted professional advice, it is advisable to be wary of unorthodox investment options. Especially if someone is making a hard sales pitch, because good investments sell themselves!

This week the ATO released a warning about telemarketers trying to convince SMSF trustees to invest in high-risk collectables, such as art. If you are considering investing in collectables, which can be a great addition to your portfolio, you should always have them independently valued.

If you are considering investing in unusual areas, you should also make sure that the investment meets the sole purpose test.

A guide to confidentiality agreements

A guide to confidentiality agreements

Confidentiality agreements, also known as non-disclosure agreements, are an important legal consideration for many business owners at some point in their career. A non-disclosure agreement is a binding legal document that prevents individuals or institutions from revealing information that is not yet public.
Confidentiality agreements can be extremely important during product development as they ensure that your competitors will not become aware of your work.
There are two types of confidentiality agreements: mutual and unilateral. In a mutual confidentiality agreement, both parties receive information and agree no to disclose it. This would typically occur in the case of a collaborative project.
In a unilateral agreement, one party becomes privy to sensitive information and aggress to keep it secret. For example, if you hire someone to work on a new product that your business in developing.
If you do not ensure that new product and business development ideas are covered by non-disclosure agreements, it can become extremely difficult to get the idea patented.

Australia’s superannuation system ranked world’s second best

The Mercer Global Pension Index, a comprehensive annual report that rates the quality of international retirement schemes, has placed Australia’s superannuation system as the world’s second best.

Denmark was ranked number one, with the Netherlands, Finland and Switzerland rounding out the top five. Australia, Canada, Chile and Singapore were the only non-European states to make the top ten.

Representatives from groups representing the interests of Australian retirees have expressed surprise at the finding, pointing out that the full pension rate currently sits close to the poverty line.

Australia’s position improved thanks to the recent superannuation guarantee increase from 9.25%-9.5%. Industry representatives have claimed that if the guarantee rises to 12%, as is the government’s long-term plan, Australia could reach the number one position.

ATO amnesty offer reveals over 1000 offshore tax evaders

As part of their project DO IT, the ATO have successfully uncovered over $550 worth of assets that Australians hold offshore.

The tax office is offering a period of amnesty that allows them to come forward and reveal offshore assets without the risk of heavy penalties. The ATO will only assess four years of income for those who come forward and this will be subject to a maximum shortfall penalty of 10%. The ATO is also guaranteeing that there will be no prosecutions.

However, for taxpayers who do not reveal their offshore holdings before the mid-December deadline there may be a hefty tax bill. The full amount will be assessed as income, meaning almost half will go to the ATO. On top of that, because the assets were subject to tax evasion, the ATO may apply an additional penalty of 90%, and this can be subject to interest charges.

The tricky business of cold calling

Nobody likes cold calls. Nobody likes receiving them, and nobody likes making them. If this is the case, then why on earth do businesses continue to make them?

Dispute resolution

If you are a business owner or manager, disputes are more than likely a regular occurrence. Customers, employees, suppliers and tradespeople are all common examples of parties you might have a dispute with. Dealing with these issues in a professional and sensible manner will help you to achieve the best outcomes for your business. Here are some guidelines for effective business dispute resolution:

Don’t let it get personal: As soon as a dispute crosses over into personal territory, it becomes significantly harder to resolve. If the other party is attempting to place a personal spin on things, take a deep breath and rise above it. Similarly, if you’re feeling tempted to say something personal, remember that in the end it will probably do you more harm than good.

Listen: Even if the other party is being completely unreasonable, you should always listen to their grievances. If they feel that they have been heard, they will be more likely to accept your perspective. Getting an insight into their frame of mind will also make it easier for you to propose a solution that will be acceptable to them.

Be open to suggestions: If the other party, or anyone else who is involved in the situation, has a suggestion for resolution, consider it. Even if it is a solution that it unacceptable for you, think about whether you could implement some aspects of it. At the very least aim to give an insightful explanation as to why it is impossible.

The dangers of competing on price

A lot of businesses have a narrow focus on reducing their prices to keep business going, holding the belief that lower profit margins will be offset by an increase in volume. Unfortunately, this is a strategy that works for very few businesses, and in pursuing ever lower prices you made end up inadvertently damaging your business.

Of course, you should remain aware of what your competitors are charging, and review your pricing structures regularly. However, you should remember that cheaper is not necessarily better and that there are a lot of other things that are important to your customers.

Here are some tips to help businesses that are trying to compete on price:

Think about what you’re sacrificing: If you want to compete on price, it’s natural to try to reduce your operating costs. For most businesses, the first areas to cut costs are wages, marketing and suppliers. Unfortunately, cutting corners in any of these three areas is a huge risk. Think very carefully about whether this is going to pay off for your customers.

Customers can be fickle: If you build a customer base on low prices alone, then these same customers will abandon you the moment a cheaper competitor arrives. Spend some time thinking about where competition may arise, and how you would be able to survive a price war. If you can see risks here, you need to think about other ways to keep customers loyal.

Value doesn’t mean cheap: Remember that value refers to quality for money, not just low prices. If your product or service is good value, it won’t matter if you’re not the cheapest. By targeting the right customers with a valuable product, you will put yourself in a great position to compete.

How to write a job ad

With such a large number of varied job ads online and in print, if you want to attract the best people you have to make your ad stand out. It is also very important to properly convey your workplace culture in the ad, so that you do not have to waste time interviewing inappropriate candidates.

Great job ads are appealing but also honest. If you oversell the job, your new employee will quickly become disappointed. If you undersell, you may reduce the scope or quality of applicants applying.

You should make sure that you write your ad in a way that clearly reflects the personality of your business and also conveys a message to your applicants about the type of person will suit the role. Getting a person who is a good personality fit to your company is equally as important as getting someone with the right skillset. If your ad is reflective of your company, applicants will be in a better position to judge whether or not they should apply.

You should always include a detailed list of duties that the role entails and the types of skills and qualifications that you are looking for. A little attention to detail here can save you a lot of time when it comes to sorting resumes.