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3 Ways to Invest Interest-Earning Funds

Money market accounts have almost all the advantages of a fixed deposit account – and earn considerably more.

Eamonn Ryan



Falling Coins

There are not one but three ways in which you can invest your spare cash. The most obvious is a bank account. But for individuals who want a higher rate of return there is the wholesale money market, which may be accessed either indirectly via unit trusts or directly via a money market deposit account offered by a bank.

The underlying question is what you ultimately want the cash for – either investment purposes, or the working capital in your business.

A conservative investment

The major risk associated with money market accounts is so critical it needs to be well understood upfront. Candice Payne, head of retail at Sanlam, explains that the single greatest delusion when it comes to the money market is that your capital is safe.

“It is safe, of course – if you invest R100 you will certainly get your R100 back together with the relevant interest rate. But the real risk with money market accounts is not the threat to your capital, but that over time your capital fails to outperform the inflation rate, in which case you will be losing capital in real terms.” If this is the case, she says, the investor needs to look at taking on additional risk in his portfolio, because the reality is that money market accounts are meant for the conservative investor. “This is of even greater relevance at the moment because of the low interest rate environment we’re in,” says Payne.

So who are money market accounts for?

According to Lisa Macleod, portfolio manager: fixed income at Investec

Asset Managers, it is for those who have already made the decision to opt for a conservative or liquid portfolio and simply want a better return. It has particular relevance to small business owners as it is a vehicle into which they can place their capital while it isn’t working.

You can place your money in a call account with a bank, but depending on the amount, the deposit may earn up to 4% less than on the money market. With banks, the higher the deposit the higher the rate of interest. The higher rates only kick in at about R20 000.

“You can also lock it away in a fixed deposit but you lose the liquidity (it could be tied up for as long as 30 days), whereas you have 24-hour liquidity on the money market,” says Macleod. The improved rate on offer from the money market comes from the bulking of capital: Investec alone has R32 billion in assets under management in its money market fund, which gives it negotiating power with borrowers.

Related: Investment Insider Insights

How money market accounts work

The two types of money market accounts have different value propositions, though in reality they are not much different. You can buy a unit with a money market unit trust, in which case you get all the advantages of bulking, the diversification that comes from being invested across several funds, the benefits of the fund managers’ intellectual capital and expertise, and the security that comes with regulation.

After many years of resistance from the banking sector, which had a monopoly over the investment of short-term funds, money market unit trust funds were first introduced in South Africa in 1998. A money market unit trust fund is similar to other unit trust investments. Your money is pooled with that of other investors, and is then invested in various assets by professional investment managers.

Unit trust funds may invest in shares, bonds, property and cash or a combination of these assets. In the case of a money market unit trust, the underlying investments are money market securities. Money market fund managers specialise in placing your money, on the best terms possible, with institutions that wish to borrow money for short periods, usually less than one year.

The average duration of the portfolio may not exceed 90 days. (This is the average time within which all the instruments held by the portfolio must repay their loans.) Money market unit trusts are classified in the fixed interest category. You can also invest in the money market directly with a bank, which will offer similar advantages but without the benefits of regulation (they are not unit trusts) or diversification cross several banks.

Are banks riskier?

It may seem unlikely that any major South African bank would go under, yet it was the banks in the US and Europe that suffered the most in the 2007

financial crisis. Macleod says the rate offered between unit trusts and banks varies slightly from time to time, depending on whether a bank is aggressively trying to raise cash or not. Most banks offer money market accounts. It is advisable to shop around because the interest rates and the minimum investment amounts vary between the banks. Both options have minimum capital amounts that vary from one to another. Investec’s is R50 000, though the average is R25 000 – R50 000.

Investec, as an asset manager and a bank, offers both options: the unit trust, as well as its Investec Top 5 Money Market Fund. Investec’s rate at the moment is 7,37%, while the average return throughout 2009 for the money market was 9,07% compared to 8,36% on call account. “Entrepreneurs can use a money market account almost as a current account, but with a better rate of return. But it has to be stable cash due to the 24-hour withdrawal time – you cannot write cheques on the account or withdraw immediately, and they would need to identify their daily working capital needs and decide which capital is a little more stable and can be put into a money market account,” says Macleod.

Related: The Deadly Sins of Investing

Before becoming a financial writer and freelance journalist in 1997, Eamonn Ryan was a legal adviser, company secretary and alternate director at listed company Cashbuild Limited from 1988 to 1997. Since becoming a financial writer, he has focused on the business and financial sectors, as well as personal finance, writing for Finweek, The Star Business Report, Sunday Times Business Times, Business Day, Mail & Guardian, Entrepreneur, Corporate Research Foundation (which brings out a series of books each year ranking SA’s best employers and best managers), as well as a host of once-off and annual publications such as ‘Enterprising Women’ and ‘Portfolio of Black Business’. He also writes media releases, inhouse magazines and sustainability or annual financial reports for various South African corporates and financial services groups, including the Ernst & Young annual M&A book.

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(Infographic) The 10 Things You Should Cover In Every Investment Pitch

If you want to wow potential investors, you need to cover your bases.

Matthew McCreary




If you’ve ever watched Entrepreneur’s original series, Elevator Pitch, then you’ve probably seen smart founders make dumb mistakes while pitching their ideas to potential investors. They might flub an answer or get tongue-tied, or they might just be a little boring. Other times, you might notice that something seemed off about a pitch, but you can’t quite put your finger on why.

Investors are gambling every time they put money into a new project or idea. Your job when pitching is to prove to them that you’re worth the risk. That means you’ll need to not only show them the possible upside of what they have to gain, but also be clear about what they could possibly expect to lose and their odds. In other words, you need to give them a holistic view of what you do, not just the one good idea.

You might have pitched an investor yourself and thought you crushed it, only to hear that the investor isn’t interested. If that’s the case, there’s a chance the pitch was missing one of 10 essential elements.

This infographic by Buffalo 7 breaks down 10 slides you should have in your next investment pitch deck. If you’re not presenting formally, though, you can still keep track of these aspects in your head and make sure you cover each one. They include:

  1. The vision, where you concisely explain your idea.
  2. The problem. Why is your vision necessary or helpful?
  3. The opportunity. What is the market size, and how can you position yourself to earn a share of it?

Related: How To Pitch Your Business, Product Or Idea To Industry Experts

This is just the start, though. Check out the infographic below to see the rest of the slides you need when pitching investors.


This article was originally posted here on

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‘Shark Tank’ Investors Reveal Top 5 Tips To Make Your Business Famous

Is your business worthy of fame? If so, pay attention to what the Sharks have to say …

Eric 'ERock' Christopher



Shark Tank

Shark Tank enters its tenth season as popular as ever. Over the past decade, millions of people have watched fascinated as entrepreneurs pitched their business ideas and startups in the hopes of winning an investment and support from self-made millionaires and billionaires.

The multi-Emmy® Award-winning reality-based show has had a tremendous impact on the business world and has been a major influence on the increased popularity of becoming an entrepreneur. Over the years, the show has evolved into one of the world’s top platforms to launch a business and recently reached an astonishing $100 million in deals offered in the Tank.

I was recently invited to attend a private event hosted on the set of Shark Tank to celebrate their 10th season and met with all the Sharks and most of the guest Sharks for the current season. This year’s guest list includes luminaries:

  • Charles Barkley, Hall of Fame NBA star and TV analyst
  • Alex Rodriguez, legendary baseball player and businessman
  • Rohan Oza, an iconic brand builder and marketing expert
  • Sara Blakely, founder and owner of SPANX brand
  • Matt Higgins, the co-founder and CEO of RSE Ventures and vice chairman of the Miami Dolphins
  • Bethenny Frankel, TV celebrity, author, and founder of Skinnygirl brand
  • Jamie Siminoff, the CEO of RING, who rejected an investment offer in season 5, but went on to sell his company to Amazon for a whopping $1 billion.

My better half was also invited, and we arrived promptly on time at Studio 24 inside of Sony Pictures Studios in Culver City, CA. We were greeted by the cordial staff who informed us that the Sharks were still filming the last takes of the day. After several minutes, we were invited to chat with the Sharks on the main floor where nervous entrepreneurs excitedly pitch their companies to the investors under the bright lights of the studio set.

I was curious to know what excited the Sharks the most about their tenth season and what they believed to be the best advice for an entrepreneur to help make their business famous.

1. Create an ingenious product

When asked, Lori Greiner said, “It’s a mix, right? Of smart marketing and ingenious product. For example, Scrub Daddy was a technology. So, taking that one sponge, which was revolutionary, changed the whole sponge arena. We now have, to date, 20 different SKUs, and we have 30,000 new retail locations and 170 million in sales. That’s what takes it from one idea to a global brand.”

Of course, skillfully promoting your product on a platform like QVC is another excellent way to make your business famous. The day after the Scrub Daddy episode aired, Greiner helped CEO Aaron Krause sell their entire inventory of 42,000 sponges in less than seven minutes on QVC.

Related: 6 Great Tips For A Successful Shark Tank Pitch

2. Leverage social media marketing


During my chat with Bethenny Frankel, she stressed, “Social networking is so important. Also being a little bit disruptive now … and you have to be creative. You have to be creative. The President was the most disruptive candidate that there’s probably ever been in history. He got people’s attention, and young entrepreneurs need to get people’s attention in some way. So be a little disruptive.”

Matt Higgins responded, “I’d say that you have to understand social and digital marketing. You can’t survive unless you understand Instagram, Snapchat or all the tools out there. You have to be contemporary.”

Barbara Corcoran claimed, “Every one of us successful entrepreneurs, for the last two years, were phenomenal at social media. It’s true. No exceptions.”

No smart entrepreneur will deny the power of social media when it comes to making your company famous. With more than 2 billion people worldwide using some form of social media, any business can put their business in front of a large audience, especially if they can create content that goes viral.

3. Build a community

Daymond John stressed the value of building a community. “You’ve got to build a community,” stated John. “Nobody needs to buy anything new in this world. They only buy it because there’s some form of community and/or need that you are supplying for them.”

John speaks from experience. He built a successful clothing empire by creating a vast community of his own via his clothing brand FUBU. John wisely invested in celebrity endorsements, making him an early pioneer of modern influencer marketing.

If you lack the resources to build your own community from scratch, you can leverage the power of others. Partnering with influencers who have cultivated their own communities allows you to introduce your product or service to larger audiences. In fact, some consider Shark Tank to be the world’s largest business influencer platform.

4. Devise a publicity hook to win earned media coverage

Barbara Corcoran also said, “I’d say you need a publicity hook. Some hook, angle or gimmick that grabs the attention unfairly from your competitors.”

Remember, Shark Tank is a unique combination of reality television, business acumen, and entertainment. Doing something unique, different, or disruptive can get you significant media attention and abundant free publicity… especially if you’re able to leverage that publicity and captivate the show’s producers, who decide your fate as to whether you’ll appear on the show.

Regardless if you want to appear on Shark Tank or not, being featured in the media is a way to differentiate your business from the competition and reach a broader audience. Be creative and willing to take educated risks when it comes to getting noticed by the media. You should always be actively building relationships with media representatives and ask for their insights when formulating your plan.

Related: Shark Tank Funded Start-up Native Decor’s Founder on Investment, Mentorship And Dreaming Big

5. Know your strengths and stay focused

When I asked for billionaire Mark Cuban’s insights, he thoughtfully replied, “Knowing your unique advantages, play to that, and your strengths. And focus. You know, what happens is very often people start with an idea, get a little bit of traction, then it gets hard. And when it gets hard, they start looking for other things to do as opposed to playing to their strengths. Because businesses aren’t supposed to be easy. You know, if they were easy everybody would already be rich, and we’d all be sitting on a beach somewhere. And so, when it gets tough, you gotta dig in and work hard. I’d say the final thing I’d add is that sales cures all. There’s never been a business that succeeded without sales. So, if you focus on selling … if you’re able to sell … and that’s something that is one of your core competencies, then you’ll be okay.”

These are wise words from one of the world’s few billionaires.

This article was originally posted here on

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The Best Way To Get Your Teenager To Start Investing Right Now

Jeff Rose advises a young fan on where to start his investment journey.




In this video, Entrepreneur Network partner Jeff Rose talks about receiving a letter from a young investor, who is looking for advice on how to begin investing.

Rose talks about the act of actually doing the investing versus worrying about reading books or asking others about the process. Taking action gets the most results, since you are able to make mistakes and start the learning process. Taking action also leads to more experience, which is to say if you begin investing as a teen, you will be much more savvy about investing as a twenty-something.

In answering this young investor’s concern about investment direction – the fan hopes to balance short-term gain and long-term gain, as well as to establish some padding for a future business – Rose turns him in one specific direction: A Roth IRA. When he was younger, Rose didn’t even know what a stock was until far into his college years; during this time, he discovered the Roth IRA and learned of its compounding power, as well as the accessibility of an initial investment.

As another route, Rose also mentions starting a business. This path, Rose explains, will help you achieve the most return on investment.

Related: Making International Investing Simple And Transparent – CybiWealth Digital Platform

Click on the video to hear more tips for a younger investor.

This article was originally posted here on

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