Talk like Ted…and sell like Wendy


Seen the first couple and they were great videos

Originally posted on Tauranga City Libraries Business Blog:

Talk like TED…
Annoyed that you missed the recent TEDx Tauranga event? Never fear…clips of each speaker are being progressively uploaded to the website and are available for viewing.

It sounds like it was a great event so if you’re keen to attend next year, pencil Saturday the 25th July 2015 into your diary now. They’re also looking for speakers for the 2015 event volunteers to help run it so if you’d like to contribute get in touch with them here.

Naturally I can’t let this opportunity go by without pointing out the various books on how to give a great presentation that we have here in the library. Two that spring to mind are Talk Like TED and The Presentation Secrets of Steve Jobs but there are plenty of others. Come and check them out!

…and sell like Wendy
It was great to attend the August Chamber of Commerce

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‘W’ is for Welfare – NZ Initiative

ABC_s_of_economic_literacy_2_2_.1The ABC of economic literacy |

The biographies of top economists commonly indicate that they were motivated to study economics in order to be better able to contribute to the common good.

But what is meant by the common good and what policies contribute to it? After all, in general elections, voters are commonly confronted with at least one party advocating higher taxes in order to make New Zealand a better place for New Zealanders – and at least one other party advocating lower taxes in the same cause.

Welfare economics is a branch of economics that explores what might be meant by the common good and seeks to evaluate economic policies in terms of their effects on the well-being of members of a community.

As explained previously in the economic ABCs, an insight that has endured since Adam Smith (1776) is that competition, in conjunction with security in person and property, induces even solely self-interested butchers, bakers and the candlestick makers to serve their customers’ interests.  Otherwise we freely take our business elsewhere.

During the 20th century, welfare economics formalised this insight into the proposition that stylised competitive processes will produce a zero waste welfare outcome. It is optimal in the sense that no one person’s (self-perceived) welfare can be increased with reducing that of at least one other person (whether such a change is worth doing regardless remains a moot point).

This formalisation has clarified the many situations in which the same competitive processes will potentially fail to maximise welfare in this sense. These include problems of monopoly, public goods (such as national security and communicable diseases), environmental pollution, income distribution, poverty and malleable preferences.  Economists have formally shown in many of these cases how a well-motivated government might ideally use taxes or regulations to improve general well-being.

Nevertheless, related branches of economics have also demonstrated the many difficulties that confront government action, including problems of voting behaviour, inadequate information and political and bureaucratic incentives. The UK TV series, Yes, Minister, brilliantly depicted the difficulties. “Doing good” in government is subject to the Law of Unintended Consequences.

What about the welfare state? One of the earliest uses of this term was in the Beveridge Report (1942) that ideologically proposed that the state was responsible for individual welfare “from the cradle to the grave”.  A dramatic increase in taxes and social service spending in member countries of the OECD followed, albeit with significant national variations. Is effects on well-being will long be debated.

Loosely coinciding with this year’s election campaign, Insights is campaigning for economic literacy from A to Z. Coming up next week: ‘X’ for X-efficiency.

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‘V’ is for Volatility – NZ Initiative

ABC_s_of_economic_literacy_2_2_.1The ABC of economic literacy |

 Economics would be a pale imitation of itself without volatility, or at the very least about as stimulating as watching paint dry. Luckily the world is a complicated place, where prices fluctuate for various reasons, and this, for the most part, is a good thing.

On a microeconomic level, producers wouldn’t be able to discover demand if there was no volatility. Volatility is indeed an essential ingredient for commerce to exist, with entrepreneurs engaging in a process of arbitrage between the price at which they buy inputs and the price at which they sell output. Furthermore, there would be no way of allocating scare resources to their most efficient use if we didn’t have price movements to guide the market.

Price changes are also needed to encourage investment in a particular sector. Long-term trends in commodity prices, such as Asia’s growing demand for protein, tell farmers that the investment needed to convert their land to dairy pasture is likely to payoff in the end (though not guaranteed).

Although price fluctuations usefully steer production and investment, this doesn’t mean all types of volatility (or lack thereof) are equally desirable. The effect of politics on markets can stifle or increase volatility completely separate from fundamental price drivers.

International debt markets are a good example. The yield on 5-year Greek government bonds has been trading at a fairly consistent level of just over 4 percent for some time. Meanwhile Argentinian 4-year bonds (the closest comparable security) are trading at 7.6 percent. The difference has almost nothing to do with economic fundamentals, since both countries are in major financial strife.

An investor, who knew nothing about the political support being lent by the European Union, might conclude from the yields that Greece is responsible with its public finances compared to Argentina. In actual fact Greece’s public debt to GDP stands at 161 percent, whereas Argentina’s public debt is equivalent to 42 percent of GDP.

The opposite can also be true. Investors in New Zealand’s listed electricity sector know only too well how volatile share prices have been due to the Labour and Green’s proposal to restructure the market, when in actual fact the fundamentals of the industry haven’t really changed.

To conclude, change, or volatility is a good thing in economics, provided it is based on market fundamentals and not political hot air.

Loosely coinciding with this year’s election campaign, Insights is campaigning for economic literacy from A to Z. Coming up next week: ‘W’ for welfare.

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Save to Grow –

Sorted 155x47-badge-v5-orangeWe all fritter away small amounts of money – yet those amounts can add upto a lot overtime. So instead of frittering it away, get into the habit of regular saving. Independent money guide Sorted is running a ‘Grow’ campaign encouraging New Zealanders to start a savings habit – and it’s ok to start small.

The trick is to make it come direct from your pay – so you don’t even miss the money you’re saving. An automatic payment straight into a savings account makes it easy to save.

Use Sorted’s super simple Save-ulator at to calculate how much you could end up with if you saved just 1%, 5%, 10% or even more of your salary. Even with a small amount saved regularly, you’ll soon see your savings grow over time.

You might also like to think about three different purposes for your saving: saving to spend; saving for emergencies and saving for the future.

The ‘Grow’ campaign is the third phase of ‘Think, Shrink & Grow’:

Think – make a plan for your money and prepare for the unexpected;

Shrink – get out of debt fast; and

Grow – save regularly and invest for the future. If you’re doing something in each of these three areas, then the chances are you’ll be more likely to be on your way to getting sorted.

Thanks to the team at for this article.

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This gallery contains 3 photos.

Originally posted on kiwissoar:
curved bridge another dimension into the mist [gallery type="rectangular" ids="2761,2762"]

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Make this a debt-free Christmas – Sorted

Christmas can be stressful enough. There are all those projects at work to finish, in-laws Sorted 155x47-badge-v5-orangestaying longer than you’d planned, and of course there is the money.

Here are three tips to get through Christmas with your finances intact:

1. Give it some thought now

You’ve got a lifetime of Christmases under your belt, so it’s time to put what you’ve learnt into practice. Which were the best ones and why? Were the best presents the most expensive, the most thoughtful or the most original? Then fast forward to this year – what kind of Christmas would you like?

Get the most Christmas for your money

2. Save to spend

If you’ve started saving, don’t stop now. If you haven’t, now’s the time: putting aside $25 a week for four weeks will give you $100, and $50 a week will give you $200. If you know what you’ve got to spend and stick to it, you’ll be celebrating a Christmas that’s debt-free.

Start saving today

3. Make lists

Lists really are a big help. Start with who you’ll be with on Christmas and what you’ll do.

Put down the things you’ll need, including presents, and add it up. If it’s more than you’ll have saved, rewrite the list before you start shopping. Make it your goal to stick to your list no matter what.

Stick to your plan this Christmas

Thanks to the website for this article.

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‘U’ is for Utility – The NZ Initiative

The ABC of economic literacy |

ABC_s_of_economic_literacy_2_2_.1Economist John Stuart Mill saw utility as “the feelings of pain and pleasure”. The utility, or usefulness, of something depends on how much it satisfies a person’s needs or wants. Positive utility might be thought of as ‘pleasure’, negative utility as ‘pain’.

While utility is subjective (some people may hate music that others love), people reveal the utility of something to them by how much they are willing to pay for it.

The utility of water is high, because it is necessary for survival. So why is water cheap while diamonds, which are dispensable, are dear?

The Labour Theory of value proposed that the price of something is determined by the “toil and trouble” of the labour. Perhaps a nervous young man slipping a diamond ring onto his true love’s ring finger is thinking of nothing more than the workers in the diamond mines as he considers the two month’s salary just spent.

But the theory of Marginal Utility was revolutionary in resolving the water-diamond paradox.

Marginal utility is the additional utility to the same person from a tiny bit more of the same thing. If you only have access to one litre of water per day, you would likely drink it. With ten litres, you might also prepare food. With 100 litres you could also bathe your family. And with 1,000 litres you might fill your swimming pool.

Each of these activities – drinking, cooking, bathing and swimming for pleasure, is of less value than the preceding activity. The law of diminishing marginal utility proposes that the more we have of something, the less value we will put on having a little bit more.

When water is plentiful, the value of another litre (i.e. the marginal utility) is low. Conversely, diamonds are scarce and coveted, even at the margin. Water is cheap because its marginal utility is low; and diamonds are dear because their marginal utility is high.

That diamond rings are so highly desired brings us back to the subjective nature of utility. Studies show that when people are tricked by cheap wine in a fancy bottle, they will perceive that it tastes better than the same wine served in a plain bottle. Brain scanning technology shows that when participants drink the supposed fancy wine, “the parts of the brain associated with reward and pleasure light up like a Christmas tree”.

The smiles on the faces of the newly engaged pair suggest they are experiencing the same rush of pleasure chemicals. For her, perhaps this is because the diamond is her new best friend. And he is not likely thinking of the diamond mine workers.

Since he so highly values her commitment to him, the diamond’s utility is worth the price.

Loosely coinciding with this year’s election campaign, Insights is campaigning for economic literacy from A to Z. Coming up next week: ‘V’ for volatility.

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