Warren Buffett Says You Should Practice the 4 Habits That Separate the Best From the Rest

Lessons from the Oracle of Omaha that will yield good returns.

BY MARCEL SCHWANTES@MARCELSCHWANTES

Warren Buffett, the chairman and CEO of Berkshire Hathaway, turns 91 in August. Remarkably, at an age where most people’s cognitive functions have entirely regressed, where many are now at the hands of caretakers, Buffett still captures the world’s attention as the fifth richest person on the planet.

The greatest investor of this generation has amassed a following of millions who’ve learned, like Buffett, that long-term success is achieved by making smart decisions — in investing and in life.

Here are four Buffett lessons that will yield good returns when you choose to act on them.

  1. Master the practice of “boundaries”

With all the demands on him every day, Buffett learned a long time ago that the greatest commodity of all is time. He simply mastered the art and practice of setting boundaries for himself. That’s why this Buffett quote remains a powerful life lesson. The mega-mogul said:

The difference between successful people and really successful people is that really successful people say no to almost everything.

Buffett’s advice is a bull’s-eye to our conscience. We have to know what to shoot for to simplify our lives. It means saying no over and over again to the unimportant things flying in our direction every day and remaining focused on saying yes to the few things that truly matter.

  1. Invest in your personal development

What assets should you be investing in the most? In a 2019 interview, Buffett said: “By far the best investment you can make is in yourself.”

As Buffett has repeatedly taught us, it means to never stop acquiring knowledge — the kind of knowledge that betters yourself as a whole person, not just as an investor.

Buffett’s lifelong pursuit of learning, which he shares with his longtime Berkshire Hathaway partner and colleague Charlie Munger, is the secret sauce of his success.

  1. Model the leadership behaviors of the best managers

In Buffett’s 2015 letter to shareholders of Berkshire Hathaway, he summarized how one arrives at leadership greatness in a few words:

Much of what you become in life depends on whom you choose to admire and copy.

The quote was in reference to Tom Murphy, who taught Buffett everything he learned about managing a company. Murphy, who was Buffett’s biggest admirer, gave plenty of lessons on the best management practices that Buffett has adapted for his own companies, including:

  • Give autonomy to workers.
  • Delegate your authority effectively and wisely.
  • Hire for integrity.
  1. Build a positive reputation

Buffett’s reputation is founded on his principled and level-headed approach to his personal and professional life. When it comes to building a good reputation, these are some things worth prioritizing:

  • Establishing trust, transparency, and fairness
  • Offering good value and high-quality products and services
  • Treating people with dignity and respect
  • Communicating clearly and promptly
  • Providing a service to the community

You should treat your business practice as a reflection of yourself, and that means being thoughtful and considerate of how your decisions affect others. If you embrace professional opportunities as a chance to add value to your community, your reputation will reflect your own personal growth.

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Salvito’s Pizza Bar

When John Esposito opened a pizza bar named after his two sons (Salvi and Vito) he was determined to bring authentic Italian flavours that reflect his family’s heritage and he has done exactly that with spectacular success. The pizzas at Salvito’s are wonderful.

The Esposito name will be familiar to many Nelsonians, the family is part of the ‘Little Italy’ group of immigrants who established market gardens on The Wood four generations ago and who made the successful transition to living life in New Zealand with shear hard work. It’s fair to say the strong work ethic has rubbed off on the latest generation of Esposito’s, even if they no longer grow tomatoes in The Wood.

I have known John for more years than I care to remember and have watched the various businesses he established and owned flourish, businesses that have brought a touch of Italy to Nelson. He was one of the original investors who set up Mediterranean Foods in the region some 20 year ago, starting with a store on Halifax St before expanding into supplying Mediterranean food products to cafes and restaurants across the top of the South Island.

After selling the retail shop (now Prego and Comida) he and his business partner focused on growing the wholesale and distribution side before he eventually sold his shares to focus on his involvement in the tourism industry in Christchurch. We all know that when Covid hit last year, tourism was significantly affected across the whole country and as John says “we had to do something else to make a living – and fast.”

However this isn’t his first stint making pizzas, he was instrumental in establishing a wood fired pizza oven at the Italian Club in lower Trafalgar St and cooked up traditional food for their Friday night pizza nights where he worked as a volunteer for a loyal following of locals for some 12 years.

With his background in Mediterranean foods, his Italian heritage and pizza making experience it’s no wonder he and his sons have got the perfect recipe for tasty food at Salvito’s.

And it’s the food that people keep going back for. As testament to what people think of the pizza’s at Salvito’s just look at the five-star reviews they have on Google, Trip Advisor and Facebook – a perfect five-star record across all three platforms. “We don’t take these wonderful reviews for granted and do everything we can to maintain this standard” says John.

I wanted to know why the food is so good, “it starts with the very best ingredients we can source and then we take time to use traditional methods to make the pizzas.

“For example, we use Italian Caputto 00 flour from Naples and it takes a two-day slow rise to get the dough ready for baking. It has a 60% water hydration, and proves for 24 hours before we shape it into balls, and prove again for another 24 hours before its ready. It’s been a steep learning curve because water content, yeast, humidity, and oven temperature all play a part and we want to make it perfect, every time.

“We are committed to our food being authentic, introducing recipes and flavours we grew up with and are based on traditions that came from Italy 100 years ago. The flavours we have today might not be so common in modern Italy for example, but more based on our family heritage from those early immigrants.”

Lisa Molnar, (John’s cousin who helped a lot in the establishment) says it’s the simple things that last the test of time, for example “the pork sausage we make is made the same way our great grandfather would have made it and begins with a whole shoulder of pork that is hand cut on the premises, then ground, and mixed with spices. Some of the ingredients you can get on the banks of the Maitai River like our grandparents did, we aren’t allowed to do that now because of food regulations but the essence of using traditional ingredients is paramount.

“The flavour is the same as it was when being cooked when we were kids, we had tomato gardens and tomatoes were always being cooked and bottled. Like then, we add extra virgin olive oil to give our tomato real sauce depth, then garlic, basil and traditional seasoning.”

John says “the focus is on sourcing the very best ingredients including, oils, tomatoes, and specialty products. Lisa helped us experiment with various combinations to match the flavours of toppings for each different pizza, then add specially chosen cheeses to match.

“Our importer brought a mountain of ingredients to Nelson specifically to trial and we spent four days playing with old familiar flavours. Things like Truffle paste, Nduja paste, Gorgonzola and Taleggio cheeses, Friarelli, and Mortadella; it was amazing.

“We even grate our own parmesan cheese; we buy Italian Parmesan wedges that have been cut from a wheel and grate it ourselves rather than buying a standard pre-grated product that you might find in the supermarket. These touches make a real difference to flavour.”

And working with his two sons Salvi and Vito on this project has been the silver lining for John. “it’s like the fun and adventures we had when the kids were young have just continued on, morphing into a new and exciting era that we are enjoying together. But it can stretch them too and that’s a good thing. My job is to expose them to new challenges and pressure within the business, raising the bar gradually so they can more readily take on things that life throws at them. It’s a wonderful family experience for all of us.”

For me, the pizzas at Salvito’s Pizza Bar are the best in town, totally authentic flavours of Italy but made right here in Nelson.

Published in the Nelson Mail 05.05.2021

Residential Tenancies Amendments Act 2020

If you own a residential rental property you should be aware of the significant changes enacted last year, but here is a summary of the major changes and dates.

NOTE: – These are different to the Healthy Homes requirements that are covered under different legislation

Landlords and tenants need to understand the recent changes to tenancy law and how this will affect them.

All landlords, including boarding house landlords, must comply with various legal obligations as governed by the Residential Tenancies Act (the Act). Starting from August 2020, parts of the Act are being changed by the Residential Tenancies Amendment Bill.

The changes are taking effect at three key dates:

Phase 1: 12 August 2020

Phase 2: 11 February 2021

Phase 3: By 11 August 2021

Phase 1: Law changes take effect 12 August 2020

Transitional and emergency housing exempt from the Act

From 12 August 2020, transitional and emergency housing will be exempt from the Residential Tenancies Act where the housing is:

  • funded (wholly or partly) by a government department, or
  • provided under the Special Needs Grants

This exemption is applicable for all people (new and existing clients) in transitional and emergency housing that meets the criteria above.

Providers of transitional and emergency housing will still be able to opt into parts of the RTA if they wish, by agreeing in writing with the client which parts will apply.

Rent can only be increased every 12 months

From 12 August 2020, rent increases are limited to once every 12 months. This is a change from once every 180 days (six months). Any rent increase notices given to tenants from 12 August 2020 must comply with the new 12-month rule. If a notice was given before 12 August 2020, it is still within the 180-day rule.

Phase 2: Law changes take effect 11 February 2021

Changes to multiple parts of tenancy law

From 11 February 2021, multiple changes to tenancy legislation will take effect. More details will be available closer to the time. The changes will cover:

Security of rental tenure

Landlords will not be able to end a periodic tenancy without cause by providing 90 days’ notice. New termination grounds will be available to landlords under a periodic tenancy and the required notice periods will change.

Changes for fixed-term tenancies

All fixed-term tenancy agreements will convert to periodic tenancies at the end of the fixed term unless the parties agree otherwise, the tenant gives a 28-day notice, or the landlord gives notice in accordance with the termination grounds for periodic tenancies.

Making minor changes

Tenants can ask to make changes to the property

and landlords must not decline if the change is minor. Landlords must respond to a tenant’s request to make a change within 21 days.

Prohibitions on rental bidding

Rental properties cannot be advertised without a rental price listed, and landlords cannot invite or encourage tenants to bid on the rental (pay more than the advertised rent amount).

Fibre broadband

Tenants can request to install fibre broadband, and landlords must agree if it can be installed at no cost to them, unless specific exemptions apply.

Privacy and access to justice

A suppression order can remove names and identifying details from published Tenancy Tribunal decisions if a party who has applied for a suppression order is wholly or substantially successful, or if this is in the interests of the parties and the public interest.

Assignment of tenancies

All requests to assign a tenancy must be considered. Landlords cannot decline unreasonably. If a residential tenancy agreement prohibits assignment, it is of no effect.

Landlord records

Not providing a tenancy agreement in writing will be an unlawful act and landlords will need to retain and provide new types of information.

Enforcement measures being strengthened The Regulator (the Ministry of Business, Innovation and Employment) will have new measures to take action against parties who are not meeting their obligations.

Changes to Tenancy Tribunal jurisdiction

The Tenancy Tribunal can hear cases and make awards up to $100,000. This is a change from $50,000.

Phase 3: Law changes take effect by 11 August 2021

Tenancies can be terminated if family violence or landlord assault has occurred

The below provisions must come into effect by 11 August 2021, but may come in earlier if the Government agrees (using an Order in Council):

Family violence: tenants experiencing family violence will be able to terminate a tenancy without financial penalty.

Physical assault: a landlord will be able to issue a 14-day notice to terminate the tenancy if the tenant has assaulted the landlord, the owner, a member of their family, or the landlord’s agent, and the Police have laid a charge against the tenant in respect of the assault.

More information

Reform of the Residential Tenancies Act 1986 (Ministry of Housing and Urban Development) Residential Tenancies Amendment Act 2020 (New Zealand Legislation website)

Tenancy.govt.nz (MBIE/Tenancy Services have developed a factsheet that summarises the changes) Source: tenancy.govt.nz/law-changes

Xero Starter Plan update

Did you know Xero have recently made some big changes to their starter plan*?

No business is too small for this Xero Starter plan, whether you work alone or employ a whole team you can spend less time working in spreadsheets and more time working on projects.

What’s changed?

  • Unlimited bank reconciliations

Xero has removed the limit on bank reconciliations so you can keep a close eye on money coming in and going out

  • Send 20 invoices a month

Xero have increased the invoice limit to 20. That is roughly one invoice for each business day in a month

Xero’s Starter Plan has all the tools needed to keep track of your accounts no matter how small your business, including:

Online invoicing and quotes made easy

  • Send up to 20 personalised, professional invoices and quotes each month. Plus, set up automated invoice reminders and spend less time chasing payments.

Paying bills is painless

  • Enter five bills each month, see when upcoming payments are due, schedule payments and batch pay multiple suppliers in one go.

Simple bank reconciliation

  • Keep track of cash flow effortlessly with bank reconciliation in Xero. Save time on admin and get daily updates on your business.

Capture bills and receipts with Hubdoc

  • Automate manual bookkeeping tasks like entering bills and receipts. Hubdoc extracts key information from each bill or receipt so it’s ready to copy into Xero.

If you are thinking about making the move to Xero, give us a call or email and we will be happy to assist ?

Contact Ellie Harris for software support and training, she can tell you about all the options you have.

*Note that all other starter plan inclusions and limits remain the same.

Proper Crisps seed crackers

Any business owner will tell you that to succeed you need to keep moving your business forward; if you sell a service then you need to make sure you keep improving and delivering value for money, but if you make a product then you need to keep innovating because human nature means we get a little bored with the same old things and want to try new flavours.

One business that knows all about exploring new flavours is Proper Crisps, they started with a humble but perfectly formed salted potato crisp but have expanded the range of flavours they offer as well as using different vegetables to make their delicious crisps.

Mina Smith (Mrs Head Potato) dropped in to see me recently with some samples of a new product Proper Crisps have added to their range, and this time it isn’t a fried crisp.

Mina Smith (left) and Line Hart with freshly baked Crackerbread

Mina told me she met Line (pronounced Lena) Hart the owner of a business that handmakes Danish Crackerbread called knaekbrod, a traditional Danish seed cracker. “Line had won an award for her crackers and we tasted them and thought they were really good, so we introduced them to a Nelson City Fresh Choice to help her expand her market.”

After Covid-19 Line took a hard look at her business because her lease was coming up for renewal, “she was using a very labour intensive process that was just too hard for her to do if she was going to grow her business so she decided to close down.”

When Mina and Ned heard about the closure they contacted Line to find out why, because the cracker mix is hand rolled it is hard on the body and the lease renewal coincided with her running out of packaging so she decided she wanted to spend more time with her family.

In true entrepreneurial fashion Mina saw an opportunity to purchase the equipment used to make the crackers and add them to the Proper Crisps business. “What we saw in the product was that it is primarily just seeds, it’s a healthy, baked product made from seeds and oats with one flavour made using rye flour and one with regular flour.

“We had been wanting to add another snack line and had been exploring bars and other options. The downside of snack bars is that people want sweetness while these crackers are just healthy and tasty.”

Knaekbrod Avocado and Cheese

So Ned and Mina bought the production equipment from Line and set up a bakery facility in a building they had used for storage with the end result being a very tasty baked seed cracker that has had a proper makeover.

These crackers are perfect with cheese, loaded with things like tomatoes and cucumber for lunch or just to snack on any time of the day.

Published in the Nelson Mail 28.10.20

Wine Picks

Tiritiri  by Neudorf Pinot Rose 2020 – RRP $25 4.5 stars

Lovely citrus freshness enlivens the red fruits flavours (think cranberry, slightly under ripe strawberries) while the small amount that was fermented in old oak barrels (7%) adds roundness and complexity. A familiar streak of powdery minerality weaves its way through the palate.

The 2020 Tiritiri Rose by Neudorf is dry, yet juicy and packed with flavour making it a serious Pinot Noir Rose that deserves to be treated as a great food wine rather than a light quaffing wine – even though it is so dangerously easy to drink you can do that too!

Lake Chalice Plume Chardonnay 2016 RRP $49.99 4.5 stars

This is a powerful yet incredibly well balanced wine. Rich upfront with delightful lemon meringue citrus in the very long, juicy finish. A beautiful linear, chalky minerality with taut acidity provides the structure for the citrus dominant flavours to grab on to.

The age on the wine adds another layer of complexity, it is drinking beautifully right now but will also cellar nicely for another 5-8 years.

Xero – Saving Files in Xero

Did you know that Xero has an inbuilt online file management system? With Xero file library you can keep all your files (i.e. receipts, bills, images) organised in Xero.

The file library is located under your organisation name on the left-hand side of your blue taskbar.

Your Xero file library contains an Inbox and Contracts folder, and you can add any additional folders you need.

Using the Xero file library is easy, either:

  • upload files to the file library (left-hand option) or
  • email files directly to the Inbox folder (right-hand option, using your unique Xero inbox email address)

Whenever you see the attachment icon in Xero, you can then attach these files to individual transactions, items, and emails.

Follow this link for more information on how to use files in Xero: https://central.xero.com/s/topic/0TO1N0000017kqDWAQ/files-in-xero#business

Our In-House Software Training and Support Specialist

Ellie Harris – B.Com
Software Support & Training – ellie@savage.co.nz

Ellie Harris has been working for us for a number of years and as a recent B.Com graduate, with experience managing our tax system and working with clients on various compliance matters, she has now become our in-house software specialist.

Ellie has a number of Xero certifications, has experience working with MYOB products and has been developing her knowledge on all payroll matters – from employer payroll obligations to implementing payroll systems most suitable for your business.

Ellie can help you migrate from one accounting system to another, set up your new accounting software systems for you, advise on a range of solutions that will help you run your business accounting needs easily and efficiently and will be running training sessions for our clients in small groups so you get lots of one-on-one assistance with using your accounting software. She is also available for individual training in our offices or can even visit you at your workplace. Some of this is free to clients so if you need help or advice contact Ellie to arrange a time to meet with her.

Watch this space for upcoming free training courses.

Covid-19 update – 14.04.20

Well it continues to be an interesting time we are working our way through. The great news is that the Covid-19 lockdown appears to be having a positive effect by controlling the spread of this illness.

While all the signs are good we still have a long way to go, firstly to get through the immediate crisis and then a very long road to economic recovery. We are expecting some of the lockdown restrictions to be eased but not expecting them to be lifted totally for a few months yet.

Today’s Government Announcement re Level 3

The Government has announced general conditions for operating under Level 3 restrictions when they do drop the Covid Threat Level from Level 4 to Level 3.

It appears there will still be strict restrictions on who can open for business and how those businesses operate. The key point is the social distancing 2 meter ‘bubble’ must be retained. We’re uncertain how this will effect Savage & Savage and whether or not we are able to operate from our offices. We are expecting to not be able to operate from the office however we do want to get back as soon as we can and will be seeing if the detail in Level 3 lockdown rules allow us to. Watch this space.

Planning

With that in mind business owners need to start thinking about what their business is going to look like post Covid-19. Some of the things to consider are when will your business be able to be up and running again? Will your business clients still be in business? How will your general customer base have changed? What will your cash flow look like for the next two years? How many staff will you need? What is your tax liability for the next two years? And many other things.

There are many things to consider and every business owner is going to have to do some serious thinking and planning. We can help you with your cashflow forecasting for the next few years so we are happy to offer our clients an hour of time from either Anna or Libby, at no charge, to discuss what you need to think about when preparing a cashflow.  If you’d like us to prepare your cashflow for you we will give you an hours’ free time when preparing it.

Recent tax changes announced

The Government has announced some changes to various taxes and payments, in particular tax carry back changes (tax losses carried forward). When we get exact details about the implementation of these changes we will share those with you but in the meantime you will need to do some panning, both for your cashflow and future tax purposes.

So we can accurately estimate your future tax liabilities it’s important we have the most up-to-date information as possible so please don’t delay sending your annual accounts information to us. By having your tax position for 2020 established we can then look at forecasting 2021 for the loss carry back if you have one. The tax relief measures will be easier to use if books are up to date.

Attached is a factsheet from the Beehive – Supporting small and medium sized enterprises during the COVID-19 crisis. This is a summary of the latest support measures being rolled out by the government.

Annual Accounts

We operate on a first in – first out basis unless there are urgent business needs like refinancing business sale etc so the sooner you get your information to us the sooner we can get your annual accounts finished.

Tax payment relief

When it comes to IRD payment arrangements your tax position needs to be established first, this goes for all tax types. It’s better to get in contact with us to request an IRD payment arrangement rather than just not paying – even though IRD will be lenient and write off interest and penalties it is much better to have a formal arrangement in place.

Payment of our invoices

We understand these are difficult times financially for many businesses and we don’t want this to be a barrier to us doing work for you so if you would like to make an arrangement to pay your account with us over a period of time please contact Neil at neil@savage.co.nz . We want to make sure we help all of our clients as much as we can.

Please continue to think about your safety if you are out and about.

We’re working on how we will operate under Covid-19 Level 3 restrictions when they come into place, hopefully in the not too distant future.

Agreements for Sale & Purchase of Property

The Agreement for Sale and Purchase of Property that’s used for the vast majority of property transactions is the Real Estate Institute of New Zealand / Auckland District Law Society (REINZ/ADLS) Agreement for Sale and Purchase and the form is reviewed regularly to ensure it remains an effective agreement as times change. Changes take into account things like allowing for electronic (emailed) forms as well as forms sent by fax or posted and also various changes required as a result of law changes.

The latest update happened late last year and the current version of the agreement is now the 10th edition of the REINZ/ADLS Agreement for Sale and Purchase. (click this link for more detail)

The most significant change, and one that may catch buyers out, relates to using a finance clause to withdraw from a purchase offer. People who want to withdraw from a housing deal due to being declined finance now have to prove they are unable to get the money.

If a finance condition is inserted but money can’t be secured to settle the agreement the purchaser’s word was generally enough for them to pull out of a contract. But under the changes that took effect on 6th December 2019 purchasers must provide evidence, generally by providing a letter or email from the bank.

This is a significant change to the sale and purchase agreement with significant implications for prospective purchasers who rely on a finance clause as a ‘get out of jail’ card, if purchasers can’t provide evidence they were unable to obtain finance they could be forced to proceed with the purchase or face other legal action by the vendor.

In the older form you could specify a lender in a finance clause in the Sale & Purchase Agreement, this option has been removed in the new form. The new clause in the fine print in the REINZ/ADLS 10th edition form removes the reference to a particular lender. It now requires a purchaser to provide evidence, if required by the vendor, that they had taken reasonable steps to obtain finance on satisfactory terms.

Along similar lines to the changes to the Finance clause is the Building Inspection Report clause that many prospective buyers obtain, in the updated agreement if you cancel the agreement because of an unsatisfactory building inspection report you are required to share the report with the vendor. This removes another ‘get-out-of-jail’ option some people have used in the past.

Other changes include an optional toxicology report condition, a new process to resolve compensation if there are disputes between vendors and purchasers and fixtures and chattels have been removed and replaced with new definitions and warranties.

GST clauses have been revised, the time-frame for deposits being released has been clarified, references to fax machines are removed, tenancy documents must now be provided by the vendor on the settlement date and various other changes to language and formatting have been made.

It has always been essential buyers take legal advice before signing any sort of property sale and purchase agreement rather than relying on standard Further Clauses inserted by real estate sales people, this change makes it even more important.

The bottom line is to make sure you deal with a reputable Real Estate Agency so you are given good advice and don’t sign any agreement for the sale and purchase of real estate before you have taken legal advice.

Xero & MYOB updates

Xero now integrates with BP fuel card. If you have a BP fuel card you can set up the connection from the BP Customer Portal and when you get your statement from BP it will automatically create a draft bill in Xero. Pretty handy if you are allocating fuel costs and it will automatically match to the  bank feed.

Have you heard about Hubdoc? It’s a Xero connected app that:

  • Captures data – upload bills and receipts from any device
  • Automates data entry – key data is extracted from the uploaded document and synced to Xero as accurately coded transactions with the source doc attached
  • One-click reconciliation – the transaction is matched to the bank feed for a one click reconciliation
  • Your source documents can be easily to access from anywhere

MYOB has a new integration with Bunnings, if you have an account with Bunnings you can now get your invoices from Bunnings directly to MYOB, no more entering every bill!