I hate being the guy that complains about South African attempts to “get” social media. I mean in a country with around 5 million Internet users it’s great that agencies are even bothering to target social media when in-fact a T.V. or radio advert is going to reach more people. However, it seems that locally being attached in some way to social media is reason enough to issue a press release. Apparently these days, if a bank has a Twitter account then it’s worthy of some form of hullabaloo. The problem is, while it’s great that the channels are being monitored, there is still the same mediocre customer service. However, the point of this post is not to bitch about the banks (more than enough space is wasted on that) but rather to look at small mistakes and pick on them with alacrity.

While leafing through this months Car Magazine there was a pullout poster of the new Golf 6. Now on that pullout there are “links” with arrows going towards the car. The problem with these links is that they’re “www.flickr.com/photos/363blahblah”. Now I’m a fairly advanced web user and I would never go to my PC and type in those long links. How hard would it be for the company that put this together to either use Tinyurl or create a custom Flickr url rather than individual pictures that have a random alphanumeric code?

It gets worse with the link to Youtube. The actual address they’ve printed on paper is “www.youtube.com/watch?v=IO6NynptJs8″. Yes, you read that correctly. All I’m saying is that the agency that put this together could have used Zoopy and had one of their short addresses or even better, paid for a Youtube channel account that would have been shorter and branded.

I don’t like being a “hater” but all this shows is that an attempt at social media is amateurish. In the same way that a Chef puts the extra finishing touches on a meal, the same should apply to social media. I’m not going to go brand this post: “How not to use social media links” but I do think it’s something to be aware of.

I’ll start off this message by saying that I really, really like your economic policies over the past few years and think that your choice in suits is quite excellent as well. For many years I’ve eagerly listened to your budget speech and enjoyed it. I’ve laughed at your little quips and applauded increases in spending on education and trying to solve the general issues of this country. However, this year I’ve got an issue with where you’re putting my tax money.

Why on earth did you give SAA 1.6 billion rand? I know SAA is the airline that represents South Africa but lets level with reality here: the company is both morally and economically bankrupt. My personal favourite story about SAA is when one of the last CEO’s sold all the companies spares, created a budget surplus and then got given a massive bonus for keeping the company in the black. When the next CEO was appointed the reality set in and millions had to be spent to buy spares for the company.

SAA isn’t even competitive in its flight costs. I can quite easily buy a return local flight off Kulula or 1Time for the same price as a one way ticket on SAA. The reality is similar with international flights. You can’t even justify these increased expenses by offering nicer air-hostesses or decent leg room. It’s the same rubbish flying experience at a higher price. There’s patriotism and there’s flogging a dead donkey. I’ll let you work out which one this is.

Do you know you’re actually supporting a call centre in Fort Lauderdale? I know America needs a lot of money at the moment but I don’t think it’s up to us to pay for SAA’s call centre in the States. Now you’re paying for their Khaya Ngqula to have a holiday while he is investigated.

So Trevor, what I’m writing to say to you is that SAA needs to be destroyed. I think you should take that 1.6 Billion rand and put it somewhere useful such as educating Julius Malema. I also think you should ask me where you want to put my tax money in the future. So next time you send me a tax return I want a survey with the list of places you’re putting more than, say one billion rand, and give me an option. I’m sure most people wouldn’t want you to prop up a useless government “parastatal” that just haemoraghes money due to incompetence, greed and corruption.

So that’s all I have to say to you Trev. Stop propping up useless industries. It’s anti-competitive and frankly you might as well throw that money down the toilet. I choose not to fly SAA for this very reason but ironically I might as well use them since my tax money is going that way regardless.

Keep up the good work Trevor and say hi to Maria

Regards

SaulK

Video games cost a thousand rand each; a cup of coffee costs over twenty-five rand and the cost of cars, locally produced or imported, have increased exponentially. However, despite all this doom and gloom the price of petrol has dropped substantially and we had a drop in inflation this week. Quite clearly the government is on the side of the consumer and trying to increase spending while at the same time lowering debt. What strikes me though is that there are companies out there that seem hell bent on ripping off the consumer.

I’m not going to mention any specific names as it’s quite a general problem at the moment but I do want to highlight the issue. The easiest way to explain things is the old equation of: Price * Quantity = Profit. If price goes up, the quantity desired goes down and vice versa. What South African companies are doing is ruining any chance of having a decent Christmas season by upping their prices. Now I understand that the exchange rate has gone to hell but we’ve already experienced a relatively instant price increase when the Rand/Dollar rate was 10:1. A certain coffee shop I frequent has raised its prices a massive twenty percent despite already having an increase this year already. What we have here is rampant profiteering with no remorse.

Considering salaries have not gone up (nor do they look like they will due to the aforementioned recession) increasing prices has a doubly negative effect for consumers. The moral of the story: this is going to be a bleak Christmas for retailers and it’s their own fault.

As such I started my great experiment and called the domain iPhoneNews.co.za. Now I’ve done minimal work on it and written something tiny like 11 rather mediocre posts. I’ve also got no incoming links from other sites and only rely on Google for incoming hits. Now I’m getting something tiny like 20-30 unique visitors a day so frankly the potential for clicks on the Google ads up there is tiny.

Now on this blog I get something closer to ten times the lowest amount of unique visitors and I wonder: Am I missing out on some money? My total earnings to date (less than a month since I’m yet to get a second invoice from my hosting company) are about $2.33 from the iPhoneNews site. This leads me to believe that I’m capable of roughly ten times that based on the amount of visitors I get on this site.

Now the question I’ve been asking myself is why haven’t I already put adverts on this site? My biggest concern is that I hate the look of Google Ads. I feel that it automatically cheapens any website and makes it look tacky.

I am however wondering why I’m not taking advantage of what could be free money and as such will be adding Google ads to my page. I haven’t worked out when or where I will put it on the site but I should do it when I have time. I think at the end of the day if I was writing these “articles” for a publication I would get paid so why not make some money off my intellectual capital.

Before I do this I open up to my loyal readers and ask your opinion? Do you think I should make some money and put ads on this site or does it cheapen my brand?

Since Grant & Anele suck so hard I can’t bear to listen to 5FM anymore so I had to do some channel hopping on the old radio while I was in the car today. I found myself on 92.7 which after some extreme Googling I’ve discovered is 702 Talk radio. The topic the presenter was talking about was the title of this post: “Would you rather work for yourself or be employed?”

I suppose the answer to this question is simple: Does the thought of where your next paycheck comes from stress you out to the point where you couldn’t leave your job? Do you choose stability or freedom?

I think for most people the issue is that education with regards to running/starting a business is for all intents and purposes non existent in this country. If you took a look at a large amount of entrepreneurs who are incredibly wealthy and successful they all had mentors or financial backing. My favourite, Steve Jobs, had a mentor and the mentors 250000 dollar (which in 1977 was a fairly large amount of money) investment.

In South Africa we have nothing of the sort. So many people ask my opinion on entrepreneurship and the biggest issue for them is where do they get funding? In our financial climate it is incredibly disconcerting to think of taking a loan with a 15% interest rate. Most small businesses cannot afford to take that kind of interest rate.

The fact of the matter though is whether cash flow, budgets and debt collection appeal to you then a life of an Entrepreneur is for you. I know I would never be able to flourish in a corporate environment as it’s just too rigid for my liking. I suppose I need the flexibility and challenge of Entrepreneurship.

My advice: start it on the side and if you can get your idea to a level where it’s feasible to quit then by all means go for it!

Lets talk about the positive aspects of the budget first:

-The economy has grown by five percent in the past year; this is generally a good thing. The downside here is that inflation is going to go up by 7.1% which means things will get more expensive. This is not so bad as inflation is only expected to grow by 4-5 percent in the next few years.

-Good news for business owners is that the tax rate has gone down a percent to 28% and businesses will only pay tax if their turnover is higher than 1 million rand. This should help promote small business ownership. Individuals paid less than 46000 rand a year will now no longer be taxed, a welcome relief for the poor.

-A large chunk of money has been distributed to areas such as job creation, social security grants including pensions and child support, sorting out crime problems, increasing housing and the health sector. The biggest winner of the 2008 budget is the education sector, which I think is a particularly critical requirement considering the low level of education in this country. It is only through educating the masses that we can grow and stem the current skills shortage.

Then lets talk about the negative aspects that I find frustrating

-Firstly there are the usual sin taxes. Cigarettes go up by a large 66 cents per carton and a bottle of wine will go up by twelve cents. While I’m not a chain smoking alcoholic so this doesn’t really affect me it strikes me as ironic that the bulk of the chain smoking alcoholics are in fact on the lower end of the income spectrum so while one hand gives them social benefits and lowered tax rates the other hand takes and taxes their vices.

-Drivers are in for yet another shock this year with the fuel levy going up 11 cents per liter. 6 of these cents go to government while the rest goes to the Road Accident Fund. The Road Accident Fund is a trust to compensate people injured in accidents related to cars. Firstly I can’t quite work out where this money would go to and secondly the Road Accident Fund is one of the most morally corrupt institutions in our country and is constantly in the news for embezzlement. I don’t like paying tax to supplement some thief’s new house/car/whatever.

-Then we get to the energy section of the budget and I get really annoyed with the situation. The government has given Eskom 60 billion (yes billion!) rand as a “loan” which will be paid back to the government over the next few years. The loan is to sort out Eskom’s cash flow to build new power stations. Considering the amount of money the Eskom directors were given in bonuses I’m not terribly surprised about there being cash flow issues. Now considering this is just under ten percent of the total budget amount it’s not an insignificant amount. Manuel also introduced a 2-cent per kilowatt-hour tax for homes and businesses that do not lower their electricity consumption by 10 percent. I’m really annoyed that the government is bailing out Eskom but considering the government is essentially the Eskom board of directors it’s probably a very good investment for them, as they will see that investment returned ten fold.

The rand dived about forty cents to the dollar after the announcement but has bounced back somewhat in later trading. This is quite scary as it makes you wonder what sort of investor confidence we have?

All in all I feel like this was one of the best budgets Trevor has delivered in the 11 years he’s been in charge. A 5 percent growth in GDP despite a very difficult year is quite impressive and lets hope that even if Manuel gets replaced after the 2009 elections his successor can do as good a job.

I’m sure you’ve heard of World of Warcraft; some of you might even have lost a love one to the phenomenon. For those of you who have had your head in the sand for the past three or so years then this is a brief synopsis:

World of Warcraft (commonly known as WoW) is a massively multiplayer online role-playing game (MMORPG). World of Warcraft takes place within the world of Azeroth, four years after the events at the conclusion of Blizzard’s previous release, Warcraft III: The Frozen Throne. Blizzard Entertainment announced World of Warcraft on September 2, 2001. The game was released on November 23, 2004, celebrating the 10th anniversary of the Warcraft franchise. It is currently the world’s largest MMORPG in terms of monthly subscribers.

As the description goes, it’s an online role playing game where you choose a character and complete quests while interacting with other gamers from around the world. The amount of players has always been quite staggering and as I mentioned earlier; many people have literally lost their family members to this game. The game has just managed to hit the magic 10 million players per month mark.

Apparently the breakdown of players is as such: Europe is responsible for over two million players, North America over two and a half million and Asia around five and a half million. The financial considerations are mind blowing in this case. If you average out the amount they make per month from subscribers (excluding the amount spent buying the initial game and expansion disks) at roughly $14; the monthly price depends on how many months contract you buy, then times it by 10 million you’re looking at one hundred and forty million dollars per month. That’s a lot of money by any stretch of the imagination especially considering they probably cover their development costs through the sale of the game disks. Servers and bandwidth must cost a maximum of 5 million dollars a month (a figure I feel is probably quite high). This means every month they make an absolute fortune.

The scary thing is that this year they release yet another expansion pack which will net them even more money and users. Good job Blizzard, you’ve created the greatest success in gaming ever

Right now, you like myself are thinking: “I don’t have 300+ years to make trillions”. This fact is relatively obvious, what you need to do is lower your expectations somewhat. Firstly, you can become a millionaire through saving. The second issue to remember is that this will take time. If you’re willing to wait and are averse to risk, this is a great method to get rich slowly.

Since I love doing mathematical calculations, lets look at a few small calculations. (Since I’m lazy I found this information here)

The current rate I get on my money market account is just under 10%. Due to the fact that I have no debt, the interest rates going up constantly is a good thing for me. Lets assume that I put R1000 away every month and a nine percent interest rate. Lets also assume I am starting on absolutely nothing (this is incorrect as a money market account requires a minimum amount but other accounts will require less). What this means is that it will take me just under 24 years to save up to a million.

If you feel that this is to much money, lets use a monthly payment of R500 with all the other variables being the same. To get to a million rand with take you 27 years. Now if you adjust the monthly payments for inflation rates you should logically have the amount that a million rand is worth today. Using that R500 calculation the total amount we spent to make that million was a meager R162000. By my logic you’re almost multiplying your initial investment by 8.

Now again you’re still thinking, who the hell has the patience to wait about 25 years to make a million? Put it into this perspective, if you put away R500 a month when your first child is born you will have a million rand to invest in them by the time they are 27. When I say invest you could help them start a business, buy a house or what ever they need.

The moral is the story: Save some money, it makes a lot of sense.

Go to this website, do the maths and consider next time when you spend R500 a month on something superfluous.