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Daily Maverick
07-05-2025
- Business
- Daily Maverick
Build Wealth From Day One: A financial Roadmap for Young Professionals
Compelling evidence – both global and local – indicates that life is significantly more expensive for Millennials (Gen Y) than it was for Gen X or Baby Boomers. International research shared by the Journal of Consumer Research shows that Gen Ys are finding it much harder to finance homes and other large expenses than Baby Boomers did in the 1970s. Local research by Ipsos in turn indicates that due to historical inequalities, many South African Millennials do not have the advantage of inherited wealth, making it harder to build financial security. In the first episode of Citadel's new podcast titled The Wealth Journey, Citadel Advisory Partners Kirsten Smit and Elelwani Ravele share a financial roadmap that offers guidance to working professionals today. The Road to Wealth Starts with Your First Salary 'Your first salary sets the tone for your future financial habits,' says Ravele. 'From the outset, working professionals can calculate their fixed costs for items like groceries, entertainment and transport, to avoid the trap of lifestyle inflation.' Smit agrees: 'The goal is to enjoy your life but still create a deliberate surplus that can go into discretionary and retirement savings.' Ravele notes that working professionals need to caution against the temptation of 'emotional or impulsive financial decisions,' especially where it pertains to big-ticket items. 'A car is not an investment; it is a lifestyle choice. Vacations are great, but it is important not to pay for it out of debt or emergency savings.' Smit highlights that savings can be transformative on the wealth journey. 'An emergency fund, totalling three full months of salary, is one of the smartest moves you can make,' she says. 'It gives you financial resilience – whether it's for unexpected unemployment, a medical emergency, a burst geyser, or helping a family member.' Weigh Up Significant Spending Decisions While Considering the Economic Climate Ravele and Smit advise their clients to have transparent conversations with their partners and advisors when planning or undergoing any major life changes. 'Big life moments require big financial planning,' says Ravele. 'Whether it is your first car, a baby, or helping parents or siblings financially, you need a plan. Stress test your budgets in advance to see if it is truly affordable.' On the topic of property investment, Ravele cautions that 'Buying property can be smart, but it is not always the right move. Homeownership comes with levies, maintenance, rates, and taxes that potential buyers need to thoroughly consider. Renting in turn offers flexibility, particularly if there is still an open decision on whether to move or travel.' Regarding marriage, Smit says: 'Money values are shaped by your upbringing. When two people come together, they bring different habits and expectations. Talk about spending styles, income, debt, saving goals, and even prenuptial agreements. It is not unromantic; it is thoughtful. Financial transparency is the cornerstone of a healthy partnership.' Smit, a mother of four, advises: 'When it comes to children, factor in everything from school fees and sports tours to global investments if you wish to raise global citizens.' 'Ensure long-term savings for your children, including unit trusts and tax-free savings accounts for their education. It is also vital to invest in risk cover as parents, including life and disability insurance,' says Smit. The Value of Long-Term Financial Advice 'We're in a generation that loves Do it Yourself (DIY) solutions and digital apps,' says Smit. 'But talking to a professional advisor is different. Advisors are human, experienced, empathetic, and your co-pilot to help you map out your goals and avoid costly mistakes.' 'Start investing early, even with small amounts, to leverage the power of compounding – and maximise impact by seeking sound advice,' notes Smit, who recommends thinking about future goals, such as lifestyle expectations at retirement and where you will retire. Conclusion Considering that the cost of living is higher for young professionals today than for previous generations, the reality is that personal finance is no longer a skill younger South African professionals can afford to learn later in life. Ravele concludes: 'It is common for people to think, 'I'm young and healthy, I don't need to plan.' But your income is finite, and getting into the habit of saving – even small amounts – can drastically improve your wealth trajectory.' DM About Citadel Investment Services Citadel is a specialist wealth management company with 32 years' experience in providing holistic wealth management solutions. Citadel's expert advisors forge and maintain authentic relationships with clients based on trust; enabling them to understand each individual's unique goals and develop the best financial roadmap tailored to them. Citadel enables its clients to explore the true potential of their hard-earned wealth by presenting them with tangible advice and solutions. It's a client-centric and advice-led business, with an award-winning in-house asset management team. Citadel offers a variety of services including investment advice, asset management, philanthropy, local and offshore fiduciary services, forex strategy, and family office solutions. For more information about Citadel and its services visit or follow @Citadel SA. Disclaimer Citadel Investment Services Proprietary Limited is licensed as a financial services provider in terms of the Financial Advisory and Intermediary Services Act, 2002. Kindly note that this article does not constitute financial advice. All information and opinions provided are of a general nature and are not intended to address the circumstances of any individual.
Time of India
21-04-2025
- Business
- Time of India
How to profit from consumer trade-offs
'There are no solutions; there are only trade-offs'-Thomas Sowell. Our life runs on trade-offs. Brands are chosen on trade-offs. Even some of the negative characters portrayed in religious epics trade off on their positive traits before they decide to act. So, what's new about trade-offs? Recent research has opened many interesting insights into this domain; besides, these research pieces enable a marketer to think in an era where they are hard pressed both for time and strategies due to competitive pressures. Human beings seem to be created to make use of trade-offs. Perceived pleasure and loss of something that is traded off in almost every decision we make, and neuro research has established the importance of emotional feeling and rational thinking being useful in decision making, contrary to the widely held beliefs on completely rational decisions in decision making with respect to high involvement purchases. In 1847, the Governor of Gomm (Mauritius) issued a limited-edition stamps (500 red ones and 500 blue ones) to commemorate the fifth anniversary of his Government. The engraver made a mistake with respect to the stamps. Instead of 'Post Paid', the stamps had Post Office' on them. Subsequently after a century, two of these stamps costing 2 p each were sold to a collector, in an auction for US $3.5 million !Citizen the watch brand in Feb 2025, introduced a limited-edition Citizen 8/831 Mechanical model (restricted to 1800 pieces worldwide) at a price of US$1800. The examples reflect that trade offs associated with consumer behavior is not just limited to functional aspects of an offering ; they may also include social signaling value. Triggers on insights A paper published in Journal of Consumer Research (Dec 2024) , differentiates between two categories of consumers, one category consistently preferring quantity over quality in their purchases and the other category the other way over. We all decide on this simple criterion in various buying contexts. The paper found that consumers who have the quantity criteria exhibited behaviors like spending more, borrowing more and accruing more debt ( interestingly, such a direction of thinking could also be applied to the data on credit cards and huge data sets are available given the usage of cards in a retail context). Another research paper that was published in Journal of European Marketing (Dec 2024) suggests that whenever consumers perceive anthropomorphism with respect to objects /products having human like qualities , they are likely to compromise on monetary value . For instance , if a two-wheeler is given a smiling look by design ,consumers may compromise on the monetary value. Incidentally, providing human names is quite common these days. Cyclones are given human names. Celebrities who are important influencers provide human associations to brands. Basics of category development and the impact of culture In an interview with Economic Times, Sanjiv Mehta, the former Chairperson of Hindustan Unilever had underlined the importance of basics with respect to category development in India -the four approaches are raising the consumption, penetration, increasing the frequency of consumption and premiumization. A product line is a string of similar offerings that have distinctive segments of consumers who choose their trade-off. A shampoo category has the basic one to convert a non-user of shampoo into shampoo usage and ladders up with several levels of benefits at varying prices. Higher the price, more exclusive in the benefit. Demographic and psychographic data trends can identify inflection points in consumption that lead the marketer to acquiring consumers at higher price points. But the approach is not linear; the changes in consumer behavior reflecting trade-offs happen in a cultural setting. For instance, after the introduction of instant coffee during the seventies, filter coffee (the one prepared in a traditional manner) has declined and over the last five decades the penetration and consumption of instant coffee variants have diffused considerably. Recognizing the need for a quick process of preparing coffee (the convenience offered by instant coffee) and the trade-off made by consumers of instant coffee with respect to taste , Tata Coffee introduced a premium offering Quick Filter, that provides the taste of the traditional filter coffee and can be prepared instantly. But cultural practices may not always support products that bridge trade-offs. At one point in time, P&G's research showed Italian housewives used to spend 21 hours a week, on household chores besides cooking as compared to 4 hours for Americans. Italian women used to wash kitchen and bathroom floors 4 times a week compared to Americans who were doing it once in a week. Time taken for cleaning and the cleaning efficiency of a product are generally the two criteria for choosing a cleaner. Unilever's all-purpose spray Cif and P&G's best-selling mop Swiffer were failures, because consumers were not interested in trading off the performance of cleaners and use cleaners that will save time. In fact, Italian women who were using dish washers used to rinse the dishes before they were loaded into dishwashers because the users did not completely did not attribute reliability to the machine. Research also revealed that 72 percent of housewives at that point of time owned more than eight cleaning products to ensure that the cleaning job was completed to perfection. Cultural trends and lifestyles too drive trade-offs that consumers apply in situational contexts. During the sixties and seventies, consumers had relatively a conservative lifestyle and discretionary income too was limited to a few households. Despite limited options for entertainment, Indian Coffee House branches in cities (some of them also had a juke box that would play film songs from records for a charge, when a coin is inserted) attracted limited consumers. But after the new millennium, Café Coffee Day other cafes became a hit. The trade-off was on the socialising experience in a café Vs monetary value. Importance and Complexities of price-benefit relationships In a category like cars or mobiles, trade-offs can be complex. How do consumers go about making decisions using trade-offs ? Do consumers use trade-off amongst several attributes of the offering? Does more than one attribute appear important with respect to decision making? Are there primary and secondary attributes in the perception of consumers? How do consumers vary across segments? These interesting ways to approach trade-offs have several implications on brand strategies. Advanced marketing research and analytical techniques are used to resolve such challenges. Psychology on trade-offs will ensure that brands will use appropriate trade-offs with respect to their strategies. (The author was Professor of Marketing at IIM Bangalore from 1995 to 2022. Opinions are Personal. The article is for general information purposes makes no representations or warranties of any kind, express or implied, about the accuracy, adequacy, validity, reliability, availability, or completeness of any information. It does not assume any responsibility or liability for any errors, omissions, or damages arising from the use of this reserve the right to modify or remove any content without prior notice. The reproduction, distribution, or storage of any content without written permission is strictly prohibited.)
Forbes
02-04-2025
- Business
- Forbes
Should You Smile In Your Profile Photo? Here's What Research Shows
A smiling photo generally makes you more likable and credible. Whether you are building a personal brand or trying to connect on a dating site, your profile photo expression changes how people perceive you. The most common question is, should I smile in my profile photo? And, if I do, should it be a little smile or a big, toothy grin? Here's what the research shows… A study just published in the Journal of Consumer Research looked at the effect of smiles in Airbnb host photos by analyzing eight months of transaction data for nearly ten thousand U.S.-based hosts. The researchers found that Airbnb hosts who smile in their profile photos saw a 3.5% increase in booking demand. That may seem like a modest gain, but for the average host that translates to an additional $673 in annual revenue—just by smiling! The smile effect isn't uniform across all hosts. For male hosts, smiling boosted bookings by a whopping 8.7%, while for female hosts, the effect wasn't statistically significant. That's because there's already greater uncertainty when interacting with male hosts (who are generally perceived as less warm). A smile helps to overcome this uncertainty. The researchers, led by Shunyuan Zhang, then conducted a series of controlled, online experiments to confirm that smiling creates a "halo effect" that improves perceptions of both warmth and competence. The experiments employed subject counts ranging from 400 to 1,600 and served to establish the causal relationship between smiling and increased bookings. They also confirmed the underlying psychological mechanism. The Airbnb findings aren't surprising when you consider research from other platforms. According to data from PhotoFeeler, a website that crowdsources photo ratings, smiling with visible teeth in LinkedIn photos significantly increases perceptions of competence, influence, and likability. They suggest avoiding huge, laughing smiles. These can reduce perceived competence and influence. Smiling may even help you get more connections. One study analyzed tens of thousands of LinkedIn profile photos and found that individuals with 500 or more connections had significantly higher 'smile scores' than those with fewer. Of course, that's correlation, not causation. Perhaps the smiling people are happy because they are more popular? Interestingly, the gender divide in smiling effectiveness appears across other platforms too. Dr. Jess Carbino, a sociologist who has worked at dating apps like Tinder and Bumble, says that smiling profile photos lead to significantly more right swipes. An often quoted but perhaps apocryphal statistic quantifies that improvement at 14%. There is a difference, though, between the best smiles for men and women. A study from the relationship app Hinge found that women smiling and showing teeth were 76% more likely to get a like compared to those smiling without teeth. On the other hand, men smiling but not showing teeth fared better. They were 43% more likely to get a like than those with tooth-baring smiles. Not all smiles are the same. The best profile photos feature a Duchenne smile that involves the eyes ... More as well as the mouth. Smiling isn't just about looking happy—it triggers psychological responses in viewers: Before you paste on your biggest grin, know that authenticity matters. Research consistently shows that genuine smiles (known as Duchenne smiles, which involve the eyes) outperform forced smiles. To be effective, a smile should not be exaggerated or forced. It should, however, involve the whole face. 'Crow's feet,' those wrinkles at the corners of one's eyes, may not be attractive but they do signify a true smile as opposed to a pasted-on social smile. Based on this research, here are some practical takeaways: In a digital world where we make split-second judgments based on limited information, your profile photo can't be an afterthought. The research is clear: in most contexts, an authentic smile can be your secret weapon for creating positive first impressions that translate into real-world results.
