How to get webcasts of results presentations

A quick mid-reporting season post from me on why you should listen to webcasts of results presentations during reporting season and how you should get them.

During reporting season you are more than likely to be inundated with information from the companies that you have shareholdings in and ones you are looking to invest in.  Later this week I will do a post on how to avoid making bad decisions when you are getting these constant flows of information.

In all reality most people look at the media release (2 page result overview) and the presentation which tends to summarise all the information in an easy to read format. One of the most overlooked (and valuable sources) is the webcast of the management presentation

Why you should listen to the management presentation of results

Most people that listen to the webcast of the management's presentations give up with 5 minutes because it sounds like a sales pitch.  Worse they often just read out the presentation slides (which you could probably do yourself more quickly).

However if you do this you are missing the most important part of the webcast.  At the end of the management presentation (which usually takes about half an hour) they open up the floor to questions and the people that ask all the questions are the research analysts that cover the stock.  This is some of the most valuable information that you can get!

Given that most people outside the professional investment community do not have the access, time or inclination to receive and read all of the big investment banks broker research, the fact is that people do not know what they are following, what they think is important and sometimes miss the big issues facing the stock. 

However with the advent of webcasts (previously you had to have dial in details) you can hear EVERYTHING the research analysts asks and the management's response to it. 

Why is this so valuable?

• All research analysts do every day their whole career is follow a particular sector and for the most part they are more attuned to those issues that are affecting the industry in which you are looking to invest
• You get to hear what they are asking (which is often more important than the answer itself). 
• They do not go easy on management and will ask them the hard questions - it is possibly the only time you will hear management give answers to hard questions that need to be asked

It is worth listening to the whole webcast for the Q&A session alone - it may take an hour of your time but if you come away with something you didn't know at the end of it about your investment which affects your investment decision then it is probably time well spent.

How to get webcasts of results presentations

Given that most results presentations are done during the work day, it was previously hard for people not in the finance industry to dial into calls and listen to this Q&A session.  With the advent of webcasts though and the general take up by companies and the investment community - this is easily remedied.  Here are a few ways you can get access to webcasts:

What you should do AFTER you have bought and leased out your property

This blog has gone through in a significant amount of detail all the steps involved in buying and leasing our your property including

• Deciding to invest in real estate
• House hunting
• Deciding how much to pay
• Things you should find out before you negotiate the price
• Negotiating the price
• Getting the finance for your property
• Should you go guarantor for your children?
• Should you invest with family or friends?
• Doing the due diligence on your investment property
• Using a property manager versus self management
• Picking your property manager
• Things you should do before leasing your property
• Getting depreciation reports
• Setting the rent
• How to choose the right tenants
• What insurance you need
• Specialist versus general insurers for investment properties
• How to control your home insurance premium
• What records should you keep

The initial phase of investing in your property is VERY time consuming and is likely to consume all of your investment time and almost all of your free time.  After this process is all done therefore people feel like they should be doing more and should continue to be busy...this could not be further from the truth.

After you have set everything up and everything is in place the key is to do close to nothing!

It feels wrong - it feels like with the amount you have invested in this property that you need to keep doing things - there MUST be something else to do.  In fact if everything is going to plan and you have set up everything correct you do not want to get a call from your property manager telling you that you need to do something.

Really the only things from this point on that you need to do is

1. Keep an eye on your finances to make sure everything is running to plan
• I do this once or twice a month (typically whenever rent is due)
2. Keep on top of repairs and maintenance - especially those requested by the tenants

5 Tips for Coming up with Ideas for Blog Posts

I have been dedicating one post a week to non- financial type posts (my weekend warrior series) and this week I thought I would do a post for all new bloggers out there.  There is plenty of good information and tips on the Internet for new bloggers but I thought I would share some of mine. 

As a quick background this blog has been going for approximately 14 months now and is getting ~3000 - 4000 page views a month (as at August 2012).  The blog originally grew very slowly as I only posted 5 - 10 times per month.  In December 2011 I increased this to 5 times a week and in July 2012 increased it once again to 10 posts per week.  I have found that the number of people reading and visiting my blog is exponentially related to how often the blog is updated. 

The hardest part about writing this many posts every week (as a sole contributor) is coming up with the topics.  This post therefore will give you 5 tips to improve your topic generation process and should help you come up with posts much faster.

5 tips for coming up with ideas for blog posts

 

1. Don't define your blog too narrowly
• This is a problem I had with a previous blog that I had started (Investor Book Review) which was dedicated exclusively to reviewing financial books.  There was no way I could read and do insightful posts on even a weekly basis.
• With this blog I found that having a 'broad mandate'  helps - even if you are stuck for ideas on a topic you usually cover, you can always do another topic and come back.  It is your blog so you can define it however you like
2. Doing posts in themes or 'series' helps with the idea generation
•  I found that if you have a certain pattern to your posts that coming up with ideas is much easier than you would expect
• This blog for example has at least one post a week on real estate, investment banking, shares, corporate governance, a book review and personal finance
3. Have a pad / paper / note taking app available so that at any time an idea pops into your head you can note it down
• Ideas will come to you at the strangest times.  You don't need to formulate your post then and there but as long as you can register the broad topic for use later you will have a list of posts that you can call on at any time
• This especially helps when you are stuck for ideas on one of your regular 'themed' posts.  Because your blog is flexible you can always revert to one of these 'back up' ideas
4. Post about things you know, understand or are learning about

How Many Credit Cards Should I Have?

Most of us are inundated daily by offers for credit cards, each with deals that seem better than the last.  In the last week I personally have received offers or seen advertisements for credit cards at the following locations:

• From the bank my home loan is with (which is separate to my everyday transaction account)
• While filling fuel (gas), the fuel company offered a credit card which makes it faster for you to go through the pump
• I went to buy a birthday present at a department store and when I was at the checkout the girl at the counter asked me if I would like to sign up to that store's credit card program
• I received an email from my airline frequent flyer program offering a dedicated credit card
• From another airline I received a credit card offer where I would get a free flight voucher upfront

Most of us would already have one (maybe two) credit card/s and the real question we have is whether we should sign up for another.  There are plenty of benefits and cons to signing up for multiple credit cards and I have outlined a few below.  I should note very early on that this, like so many other situations, is totally dependent on the individual and their financial circumstances and ability to control their impulses and debt.

Pros of getting an additional credit card

• Extra 'on demand' finance available should you ever require it in a hurry
• The benefit of being able to have extra funds available when you are in a pinch cannot be overestimated
• The up front deals or cash backs on some of these credit cards are actually outstanding 
• The Qantas Frequent Flyer credit card for example offers you 32,000 frequent flyer points if you sign up to their credit card.  You would normally have to spend $32,000 or higher or do some serious flying to get this number of points
• National Australia Bank (my home loan provider) offers a fee free credit card if you have your home loan with them with no strings attached

Cons of getting an additional card

• The temptation to spend on this card may be too much for some people
• If you are not the type of person that controls your expenditure well then getting an extra card is not for you
• For example some people I know have a very low limit on their credit card because they know they will spend up to their limit every month.  Personally I do not have this problem so my limit is well above $10,000 even though I rarely go above $2,000 in a given month
• It impacts your ability to get a loan

Before you buy with Amazon...c​heck out these two sites

I think almost everyone would realise how much money they can save when buying books online rather than in store.  The price difference is really astounding (the discount is often well above 50%) and the books are rarely out of stock (compared to going into your traditional book stores which actually have to physically stock the book.  It is no surprise therefore that many book stores are going out of business.

When we think of an online book store most people automatically think of Amazon and why not?  It was the first on the scene, it's prices are consistently low and it's reputation for shipping things on time is unbeatable.  However, especially for people outside the US and UK (where the big amazon stores are based) there are other options which you should consider.  The big problem with Amazon is that the shipping charges for customers outside the US and UK are really quite high which makes their books much more than the sticker price that you see.  Here are two other options you may want to consider

1. Book Depository

Book Depository was originally started as a UK site and it's big selling point was that it charged no shipping for customers ANYWHERE in the world.  Even if the book was slightly more expensive on book depository you could save a lot of money on shipping.

In 2011 Book Depository was acquired by Amazon but they kept the free shipping angle.  This means that you get Amazon's great price, service and range but do not get charged shipping at all. 

For some reason the prices do differ between Amazon and Book Depository so it is always worth checking both sites (remembering to including the shipping charges on Amazon's site) to see which gives you the better deal.

2. Fishpond.com.au

Fishpond is a site dedicated to Australians and New Zealanders who often pay the highest shipping charges from Amazon.  Like Book Depository, Fishpond does not charge shipping fees to customers located in Australia or New Zealand.  It is not Amazon however which means it's processes are not as good.  Often I have found that their ordering system means that I've had to wait an extra 2 - 3 weeks for a book to arrive (but on the upside occasionally I'll get two books instead of just the one). 

One of best aspects of Fishpond which they do not advertise (but really should) is that if they have a book in their warehouse you can pay $0.50 extra and get it within 2 - 3 days.  For Australian and NZ buyers this is almost unheard off as Book Depository and Amazon typically take a few weeks to deliver anything to Australia.  They tend to keep a lot of popular titles in their warehouse and for a nominal amount more you can get it much quicker.  I LOVE this aspect of Fishpond which is why they are normally my preferred site.

Always check all three before you buy
I ALWAYS check the prices on all three sites before I buy.  The prices vary a surprising amount between sites and you can really save quite a bit of money if you are an avid reader by going to all three before you buy.

Do you know of any other good websites to buy books?  Are there other country specific sites which you would like to share with people?  Please post below if there are.

How to choose a business name

Once you have gone through the business planning process and thought through the pros and cons of starting a business, and then this business and have a good idea of what your product is and who you are targeting - the next step is to choose your business name.

This may sound rather easy but as I found out when setting up my own small business, you spend an awful lot of time trying to decide what it should be called.  The fact is that although you can change it later down the track, as soon as you start operating you start building up goodwill in that business name and your customers will know you by that name from the start.  The name therefore is rather important. 

Here are some tips about what I think a business name should have:

1. Simple:  You want your customers to remember what your business name is and more importantly you want them to remember it when they are recommending you to their friends.  The shorter it is the more people will remember it
2. Easy to spell:  In the Internet age people are always going to Google your business name.  Make sure they are spelling it correctly the first time around.  You do not want to choose a name that is spelt in a weird or quirky way because the fact is that most people are going to type your business name into Google the way it sounds
3. Inventing a word is more hassle than it's worth:  People think they need a new and innovative business name (something that is catchy like Google - which is not actually a word - it is derived from the word Googol).  You don't.  There are many businesses out there that use a combination of real words that become synonymous with the company (e.g. Facebook)
4. It should have to do with your business in some way:  This is not compulsory however if people can get a general idea from your business name what the business does then you are one step closer to getting them in the door and buying your product and service.  Paypal is a great example of this.
5. Beware attaching your name to the business:  I know a lot of great businesses have done this but imagine the situation where you are selling your business - the buyer of the business then has the right to do whatever they want with that business (which still has your name on the door)

How to brainstorm business names

Now that you have the basic requirements in your mind it comes down to choosing your business name.  I suggest doing the following:

How much superannua​tion will I need when I retire?

For all of us who live and work in Australia, the superannuation system provides a thought free way of providing for our retirement.  Our employers are required to contribute a certain amount of our income (currently 9%, moving to 12%) to a retirement plan that will hopefully pay for our nest egg.

  

The problem many of us have is that we do not know

1. Whether we will have enough when we retire to keep us going right through retirement
2. How much we need to save outside of super

The key is to work back to front

  

Instead of working from how much you contribute today, expected rates of return and expected wage increases - all of which are VERY assumption dependent, the key is to work backwards from what you want when you retire.  This is totally subjective and there is no right, wrong or unrealistic answer.  If you want to live on a million dollars in today's money when you retire then you can work out what you need to do to get there.

1. Work out how much money you want per year in retirement
• The fact is that you don't actually need that much per year in retirement. 
• You do not have the same obligations as you do now - your house is paid off, you have no mortgage, the children have moved out
• You are not limited to travelling and holidaying during the peak seasons - holidays are cheaper
• Chances are that you are not as active as you are now so you will not be able to do the types of activities that you do now
• Try and think about what you would spend you retirement doing and how much this would cost and then add a bit extra - it is always good to have a bit of a buffer
• For the purposes of this example I am going to say that I will need $100,000 per annum in retirement (in today's dollars)
2. Estimate what age you are going to retire at
• I keep seeing people saying they want to retire at 40.  Honestly I do not know what I would do if I retired that early...I enjoy working and what I do so don't know what I would do by retiring that early
• For the purposes of this example I am going to say I retire at 60
3. Estimate how long you will need the money for
• This is quite subjective but I'm going to say I will need it until I'm 85.  Chances are I will not last that long but we can always home
• In the example that is 25 years of income required
4. This will give you your estimated required nest egg
• In today's dollars that's 25 years of $100,000 which is $2,500,000
• Calculate this at the point of your retirement (i.e. inflation adjust it until you're retirement age).  For me that is 36 years away.  I'm going to assume an inflation rate of 2.5% p.a.
• This yields a future value of $6,081,338

Don't be scared by the big numbers.  Keep going through the process

  

The future value of 6 million dollars looks HUGE.  But don't forget that you are just working out how to achieve it.  You are never going to get anywhere by paring back your expectations.

  

The next step is to see how much you will have in superannuation assuming you do nothing

  

Because superannuation is a government requirement of your employer - this is a savings number that you have no choice about.  Thus it should be the first part of your calculation in how to get to your goal.  Follow the steps below using your own numbers.

  

1. Take the super you already have as a starting point
• Most of us already have a super balance so use this as your starting point
• In my example I will sue $28,000 as the starting point
2. Work out your total wage and the amount of superannuation that comes out of it
• For the purposes of this example I'm going to say the wage is $150,000
• Superannuation is currently 9% p.a.
• Thus this year I will get a superannuation contribution of 150000*0.09 = $13,500
3. Work out the amount your wage (and thus super) is expected to increase each year
• Most of us get at least inflation increases to our wage each year (i.e. 2.5%).  If you are in an industry which typically gets more than this then put this down
• I am going to use 4%
4. Work out the expected return on your superannuation
• If you are in the high growth option in your superannuation plan then use a return figure of about 8%
• If you are in the cash only bucket then use more like 4% and if you are in between then use a number in between
• I am quite risk neutral so I will use 7.5% p.a.
5. Don't forget taxes
• Do not forget that earnings within superannuation are taxed at 15% p.a. so do not forget to include this in your calculations
6. Set up a spreadsheet to do your calculations (this should be fairly easy but if you want me to upload one just comment below)
• For the parameters listed above I get an ending value of $2,944,220

The extra amount is the amount you need to save / invest / contribute over and above your super amount

  

In my example the difference is $3,137,118 which is the amount I will need to come up with over my investment life.  This again seems like a large number but if you start to break it down over a long period of time (in my example 26 years) it is much easier.  For example the following ways can get you to your goal

• An extra $25,000 per year (or ~$2,000 per month) in superannuation will get you to your target easily.  This may seem like a lot of money but if you look at my savings plan I am doing more than that consistently every month
• If you vary some of your assumptions it becomes easier to get there.  E.g. if you include 12% contributions from 2015 you only need to contribute $19,000 per year (~$1,500 per month) to get to your desired target
• Note these additional amounts are not inflation adjusted.  I.e. even though your wage is going up every year the amount you contribute is staying constant.  If you do want to inflation adjust how much you contribute your contributions are even less

Your goal is achievable - you just need to plan early and work out what you need to do to get where you want to go

  

All goals are achievable - you just need to work out early what your plan of attack is and then let the power of compounding returns work over a long period of time.  The fact is that you are at a major advantage if you are doing this planning process in your mid 20s compared to your late 40s so start early and retirement can be easy.