General

Obtaining a second source of income all starts with an idea, one of the most potent forms of power that exists. I learnt from a TED-Ed that “power is the ability to have others do what you would have them do”. Is that not what all businesspeople want: the ability to make others buy what they want them to buy? How do we achieve that? How do we get the power to make people purchase our services and products? Getting the business community to take actions in your favour can happen in a variety of ways. Here are some examples in line with the 6 forms of power that exists:  – Well of course you can’t do that. You can’t use violence to enforce sales. That’d be wrong and illegal in so many ways.  – There’s a popular saying in Ghana that “money stops nonsense”. Yes, your wealth can buy you sales or the influence to increase sales but if not structured properly, you would be spending more money to make less money.  – I remember buying books when I was in Primary School that was Government-sanctioned. We had no choice but to buy them. A democratic government can ratify and downright guarantee sales for a product or a service. In some cases, the product/service meets the needs of the people. In other cases, experts describe the act as “corruption”, “nepotism”, etc. so… … … you get the point.  – A lot of people do what a lot of people do. That’s how many people confirm that something is ok, not that the majority is always right. Social Norms are powerful and can make people change their minds on what to buy and what not to. – There is power in numbers. This seems close to social norms. Let’s assume it’s not a norm; just numbers; just people coming together as a collective to say “we want what we want!” That’s power! What you need, is a strong idea. I asked my team at Maxwell Investments Group (MIG) what their version of a strong business idea for passive income is. Dr Abigail T. D. Anyomi, President of MIG, wrote on our group platform, and I quote: “As the days go by, it becomes increasingly clear that having one source of income is highly insufficient to survive in today’s economic climate. Regular 9 to 5 jobs are simply not going to cut it if you want to live a comfortable life, not to even mention a luxurious one. The second source of income is not a second job. Passive income, which is when your money is basically working for you without you necessarily having to move a muscle, is the way to go to achieve financial freedom. And the more streams you have, the more money you earn and the more freedom you will have to live your dreams, be it a vacation to the Caribbean or a weekend away at a luxury hotel.” So, how do you get started on having another income stream? What avenues can we explore? The aim is to fully maximise and utilise the resources available to you. Here are some pointers to consider when determining what should qualify as a second source of income.  Flexibility – The last thing you want from a second income source is to have to squeeze time or to feel pressured for time to carry it out. A good second income source should give you the freedom to determine your work hours. Whether you are a nighttime person or a daytime person, you should be able to ‘work’ in your free time and it shouldn’t have to compete with your regular job. Sustainability – This is very key. The ideal second source of income should be self-subsistent and be able to function efficiently outside of you or with minimal input from you. It shouldn’t fall apart once you do not have sufficient time to work on or interact with it. It should basically maintain itself. Enjoyable – What is the point of another job if it’s just to slave away? The ideal second source of income should be something you enjoy doing. That way, it’s an avenue to destress and won’t add to the high stress levels you may be experiencing in your primary job. Pick something that makes you happy, explore a hobby, ideate around it and monetise it. Inexpensive – Your second income source should most definitely not cost you an arm and a leg to get it off your ground. Scalability – It should have the potential to grow from a small side hustle into something that can generate significant revenue. The best side-hustles almost always becomes the new 9 to 5, only that you start working 24hours on it because you begin to enjoy yourself. That is why it is important to ideate properly. It is important to sift through the many ideas that flood in and execute the one that has the highest chance of success, to choose a strong business idea. Rya G. Kuewor, the CEO of The RIO Corporation, also wrote on our MIG group platform, and I quote:  “The answer isn’t predominantly straightforward, unfortunately. More often than not, an idea, especially a business or a technological one, for instance, is only as good as its patronisers.  We can colour the grey areas by understanding that Facebook’s (or Meta’s) idea of connecting people would never have worked if the people had no desires of being connected to each other, or understanding that Adinkra Pie would not have been successful if Ghanaians had immovable resolutions about eating breakfast they hadn’t made themselves.  Knowing this, we can surmise that a good idea needs to be well-timed, culture or context-appropriate, simple enough that it does not feel like a chore, and appealing enough that it isn’t boring. We can use this formula and practice having more good ideas”. So now we need a strong business idea. What makes a business idea “strong”? The strength of the business idea is a prime factor in

The human was born free and has been free to do business to make a living. However, during this process, society expects compliance with certain standards and regulations to ensure the smooth flow of usual activities and socio-economic norms. The society also expects a certain kickback from the people because of their existence and usage of social space. Taxation is one of the most prominent examples of these kickbacks. Understanding Tax Basics Taxation is one of the social and legal obligations on people executing a profit-making process. However, the money raised through taxes is aimed to be used for public utility services and has been an effective tool to manage the cultural and socio-economic aspects of our community. Taxes are compulsory. Usually, when money leaves your pocket, you are exchanging it for a specific good or service. However, taxes are unrequited. This means that they are not paid in exchange for a specific public service or sale or purchase of public property. Nonetheless, sometimes there is some kind of connection between the taxes you pay and a particular service you enjoy from the government. For instance, paying road toll levies to help maintain the road network or paying taxes on motor fuel to help finance the construction of new roads or maintenance of old roads. The Government aims to collect taxes to enhance the socio-cultural and economic environment. This revenue is used to finance public welfare works like schools, colleges, hospitals, construction & infrastructure works, security & defence, and other projects to support life in our region. Countries around the globe have developed different regulations to collect taxes from individuals and corporations. Applicable Rules and regulations change with the change of country. For instance, tax-related laws in Ghana are different from applicable tax laws in the United States in terms of compliance and practical application. However, tax is generally calculated on profit, salary, capital gain, interest, dividend, etc. The taxpayer is required to take out a certain percentage from their earnings and submit it to the Government. The amount of tax one pays generally increases with an increase in earnings. There are different types of taxes: income tax, payroll tax, corporate tax, sales tax, property tax, tariff, estate tax, etc. These taxes can largely be described as being either direct or indirect. Direct taxes are charged on incomes and profits and paid by an individual or organisation directly to the Government. Its payment can’t be shifted to another person and must be borne by the individual or organisation, e.g. income tax and corporate tax. It’s difficult for the government to collect this unless it’s at the source. Indirect taxes are levied on products and services and can be transferred to the end-user or consumer. The Government charges these on manufacturers and suppliers for the import, sale and purchase of goods who in turn pass on this cost to the final consumer. An example of this is the Value Added Tax (VAT) and tariffs. The taxation system varies from nation to nation, and individuals/corporations need to thoroughly understand the taxation system and ensure they comply. From an African perspective, tax is progressive, which means that your tax liability increases with your increase of income. African Tax History The roots of taxation in Africa can be traced back to the Colonial days. Time has witnessed different rulers taking the power of tribes and introducing their own governance and tax collection system. One of the interesting instances from the pages of history is the introduction of the “Hut Tax” that Britain introduced in Africa, derived from its payment on a “per hut basis”. The hut tax was payable in the form of labour, grains, money or stock, and the tax collected was used to manage operational and strategic matters of an empire. Similarly, a poll tax was introduced by Britain in Africa somewhere in the 19th century where a fixed sum per head was charged from each citizen; it was also called “Head Tax”. This was charged usually on able-bodied men without recourse to their income levels. The purpose of this tax collection kept changing from time to time and included combinations of the following. To force people to work hard and lead to higher exports. Making financial contributions to support British Army during World War II. To support the welfare of colonies and contribute to the process of self-financing. To meet public administration costs and finance Government departments. The poll tax was effective in its conceptual simplicity. However, the problem with this system was the ignorance around the collection and that everyone was required to pay an equal amount irrespective of their earnings level. So there were improvements in the overall system of collection and rules from time to time that has resulted in modern-day taxation. Advantages of the taxation system Following are some of the advantages associated with taxation. Control of inflation – Higher product demands lead to product shortage and higher price, referred to as demand-pull inflation. Tax implementation can be an effective way to control such a type of inflation. It’s due to the fact that adding tax increases product price and discourages people from purchasing by decreasing their purchasing power. Hence, demand is decreased leading to stable pricing. Circulate money in the economic system – The government uses the taxes collected to meet public expenses, which boosts money flow in the economic system. Income redistribution – The progressive nature of direct taxes aims to charge higher from people who earn more and lower from those who earn less. In this way, it can effectively reduce the gap between the rich and poor classes. Collection of Government revenue – The Government needs money to finance the national welfare projects. This is only feasible if the country’s people ensure timely payment of taxes. Protection for local manufacturers – Usually and ideally, Governments impose higher taxes on the products imported into the country. It gives a competitive edge to the local manufacturers. Disadvantages of the Taxation System Following are some of

If you don’t want to end up like Kwaku Frimpong by year’s end, managing your personal finances should be a top priority skill on your to-do list. Personal finance management is about understanding your financial situation, being financially disciplined and taking control of how money comes and goes in your life. An important angle on personal finance management is the path to an effective way to keep your intelligence above emotions while making finance-related decisions. It is equally important to note that personal finance is not about knowledge to control cash movement but a feeling that you are responsible for securing the financial future for you and your family. A people’s financial freedom is largely tied to their individual persons’ financial security. That is why I feel that understanding how to deploy simple skills of personal financial management should be key in discussions on Ghana and Africa’s poverty alleviation goals. Here are some tips that will help you become financially sound and secure. Analyze your current financial position. It is necessary to thoroughly observe and understand your spending habits and patterns. Different people have different traits and show varying behaviour with money. So, asking the following questions to yourself can be very helpful: Do I consistently overspend? Can I easily meet unexpected expenses? Am I living paycheck to paycheck? Do I need to improve my financial habits? Answering these questions will trigger your financial sense and give you an idea of whether you seriously need to consider overhauling your personal finance management habits. If you find there is a problem, the next tips can be helpful in regaining control of your financial life. Always make a budget. Making a budget is a great way to control emotional expenses. It’s a great way to avoid emotional traps and ensure that your spending is controlled, expenses remain on track, and money is saved. Likewise, it can be an effective tool to make better financial decisions, crush prevailing debt, and achieve long term financial goals. However, it’s important to note that the budget only adds value when analysed with the planned approach. Financial mistakes made in one period mustn’t be made in subsequent periods. This makes making a budget the first step towards achieving financial discipline and serves as a building block for effective financial management. Tips to get the most from your personal financial budgeting process: Be realistic – do not set unrealistic targets Remain consistent Regularly track your finances Make your priorities clear from the start Always keep your financial goals in mind Make the budget well-detailed (map expenditure in different categories) Ensure a data-driven approach to spending (each expense must be well documented). Pay off your debts. There’s a saying that you don’t need pieces of finance but rather financial peace [I think I just made my first dad joke!]. Paying off debts is important for your financial health and emotional stability. One thing you need to do is ensure that your spending remains under your income. This simple adjustment helps you not enter into debt. However, if you have entered into debt, here are some tips that will help to get rid of it: List all of the debts by interest rate. For instance, there can be different loan types that include personal, home, car, secured and unsecured loans, among others. Sort all loans with perspective to interest rate, highest being on top of the list and lowest at the end. Repay higher interest loans first. Sell unnecessary items that have not been used recently. One simple guideline could be to sell items that have not been used for at least one year. It can be good to use proceeds raised by selling unnecessary items to pay debt with higher interest rates. Temporary downsizing can be a logical choice. It’s a good idea to re-evaluate your discretionary expenses. These include gratification expenses, dine out expenses, entertainment expenses, unnecessary subscriptions, depreciating assets, etc. Likewise, the removal of non-value adding objects can be a good option. Paying debt with a second income can be an excellent idea. Suppose there are two working members in your home. The salary of one member can be used to meet kitchen expenses and savings targets. On the other hand, the earnings of another member can be used to repay debt. Additional sources of income can be discovered. For instance, part-time work can be explored like content writing, photography, blogging, part-time teaching, etc. The establishment of emergency funds can be another move to avoid raising debt. Emergency funds should be carefully maintained to avoid a situation that compels you to raise a further loan. Pro-tip is that emergency funds can be invested in the liquid funds. So, it keeps generating value and can be reused in time of need. An important thing to understand is that you need to get rid of debt yourself. It’s true that you’ll need some form of inspiration. However, inspiration comes with an action that motivates your mind to remain financially disciplined to achieve financial peace. Start repaying debts today and make a mind to live debt-free life at any cost! Always look for appreciating assets. There are two types of assets in the world: depreciable and appreciable. Depreciable assets will always lead to a rise in your list of expenses. So, these should be minimized as much as possible. On the other hand, appreciable assets have the potential to enhance income and build further assets. So, these should be maximized. Let’s understand how appreciable and depreciable assets make a difference. Let’s say you have a car (depreciable asset). For each day you own the car, it gets old and decreases in value. So, it’s a depreciation expense for you. On the other hand, if you own land, its value is expected to increase with inflation and the increasing population. So, it can be a good idea to own appreciable assets rather than depreciable ones from a financial management perspective. Start investing today Investment is not about being able to