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: 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.  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 attracting business investors. It’s about pitching to them how strong your business model is and how you can multiply their investment. In this article, I’ll discuss different aspects of a business idea that make it attractive for investors. These aspects include but are not limited to market size, market share, unique selling proposition, background compatibility, innovation, adequate strategic position, scalability, strong problem statement, your strategic capability, understanding of market dynamics, product position, etc.  Let’s understand the details of these aspects. Market size and market share The market size refers to the total size of transactions taking place for the product in your target market. It’s simple science; if your market size of the product is larger, you will be able to earn higher revenue and vice versa.  On the other hand, market share refers to the proportion owned by different companies in the market. Sometimes market share is fragmented, which means different companies are selling the same product as you intend to. Likewise, if market share is concentrated, it means few companies are the main players in the market. Investors prefer to invest in a market with a larger market size. It’s because of the fact that there is more potential to earn revenue/profit within larger markets. Sometimes, operational feasibility is attached to market size. For instance, if the market size is larger, the business will be able to achieve economies of scale and lead to higher profitability. Economies of scale – It’s a concept that if you produce in bulk, you will produce at a lower price. That’s because the fixed cost is split among a higher number of units, and volume discount can be claimed on the purchase of material, labour, etc. An alternate strategy can be to look for a growing market. In fact, it’s comparatively easier to capture market share as new customers are buying new products. Unique selling proposition – (USP) A unique selling proposition means why customers should buy your product. Does your product offer something different from your competitor? Investors are always looking to invest in products that offer something different. In fact, USP is one of the favourite areas of any investor, and they are always looking to invest in a business that offers something unique to the customers. Background compatibility Investors like to check your background compatibility with the business idea. It helps them in understanding your capability to run the business. For instance, if you have a degree in medical science and your business idea is about medicines, investors are more likely to invest in your business idea. It’s because of the trust in your competence and ability to run the business

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. 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. Disadvantages of the Taxation System Following are some of the disadvantages associated with taxation. Understanding Free Market A free market is when traders are free to conduct economic activities without the Government’s intervention. The price of goods is merely based on supply and demand because of no Government’s stake in taxes, subsidies, and price regulations. Although, no market in the world is completely free. That is why economists have studied the degree of market freedom and economic well-being and the conclusion was a positive correlation between these concepts. Still, there is a need to analyse if the free market always brings economic well-being and if a country can survive without a tax collection system. To the extent of well-being, it can be considered to add certain value in the economic system by efficient allocation of resources, setting competitive prices, invention, innovation, better quality product, higher economies of scale, and help reduce domestic monopoly. Nonetheless, the problem falls in the area of Government interest to finance social projects and ensure the well-being of the society overall; this is not possible without a robust system of tax collection. On the other hand, the supporters of the free-market claim taxes to have a negative impact on economic activities by reducing the individual incentive to work hard and produce more and that the overall national output is expected to decrease with implementing higher taxes in the national economy. Advantages 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. 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: 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. 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: 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: 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! 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. Investment is not about being able to put millions and billions into gold, commodities, or financial instruments. Instead, it’s a name given to an attitude that needs to be developed from the very start. Often, people think only the rich and the affluent can invest. However, that’s a myth and not reality. The fact is, one single cedi you have can be invested to generate a return. I think saving money is good. I have nothing against saving. Nonetheless, let’s not mistake putting money in a savings account long-term as “investing”. From a basic mathematical standpoint, it’s not. The rate of inflation in Ghana is expected to be about 10.0% by the end of this quarter. Comparatively, the highest interest rate on a savings account now is around 5.5%, and that’s even on savings above ~GH¢500,000. Do simple subtraction and you’ll quickly realise that there’s effectively a loss of 4.5% (10.0%-5.5%) on that money in your long-term savings account. Do not depreciate the value of your money. If you want to save money long-term, put it into safe and secured investment opportunities, like Treasury Bills. Also, beware of the many Ponzi schemes that promise unrealistically high-interest rates. I asked the team at Maxwell Investments Group what managing personal finances mean to each of them. Our Director for Social Impact & ESG, Mr. Rya G. Kuewor, gave an interesting perspective on “savings”. “Optimising and managing one’s personal finances go all the way back to one’s future goals. Let’s work backwards on this and ask if our present savings lifestyles will create financial space for our future goals. Most of us these days know the colloquial rules of saving, or tithing, or setting aside, but we need to understand that if saving (cash) is not truly personal, I dare say even emotional, you’ll go month to month, and still emerge six pence none-the-richer!” And he’s absolutely right! We, therefore, need to find a personal or emotional reason to save and pay a non-negotiable tithe to ourselves but in a way safely tucked away in a secured set-up. The key here is to hold yourself passionately accountable for the future you. What should be done to achieve personal financial freedom in a nutshell? The science of