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business planning master of business research

Do You Need A Degree to Start A Business?

Most of us have entertained the idea of becoming our own boss and opening our own business – but entrepreneurship can be a big, overwhelming decision, especially if you don’t have any experience or qualifications. Many entrepreneurs would recommend taking a leap and starting your company right away – after all, experience is the best teacher! However, business schools can also offer a lot of valuable knowledge and other perks.

But before you sign up for that Master of Business Research program, read our breakdown below on what you can get from getting or skipping qualifications.

Starting a Business Without a Degree

If you decide against going to a business school, you can save time, money and energy. Business courses can come at a significant cost and take years to complete. Furthermore, the formal educational structure may require you to take up impractical courses and tough assignments that don’t always translate to real-life business situations.

“Having graduated from the business school at University of Wisconsin-Madison, I’m grateful for the quality education I received — but none of the skills necessary to start and run a business needed to be learned in a classroom,” said Joe Sweeney, co-founder at 100state and CRO at GrocerKey.

 

Getting a Degree Before Starting a Business

However, there are many different benefits of getting qualified. Most business schools will cover the fundamentals, such as accounting, finance, marketing, management, logistics and so on. You may not turn out an expert in all these fields, but it’s always good to know a bit of everything.

Apart from gaining knowledge, you can also expand your network and find like-minded individuals which you can tap on for partnership, investment and hiring purposes. Moreover, as a business student, you have a better chance of finding mentorships and other opportunities of interest, such as incubator programs and special grants.

 

Will you be signing up for a business course? Whatever your choice is, it’s always wise to evaluate your options before starting a company. Consult this Starting your business checklist by the Australian Government to make sure you’ve got everything covered.

The Majority of Australians Are Not Saving Enough for Retirement

Roger Wilkins, University of Melbourne and Carsten Murawski, University of Melbourne

Only 53% of couples and 22% of single people are on track to achieve a comfortable level of retirement income, according to an in-depth study of the adequacy of retirement savings. The Conversation

The outcome of a collaboration between researchers at the University of Melbourne and Towers Watson, the study has found a significant number of Australians are not likely to achieve adequate retirement incomes, even when all sources of savings are considered.

The research sought to address the considerable uncertainty among policy makers and the broader community about the extent and nature of retirement savings deficiencies in Australia. To do so, we developed a set of metrics indicating the adequacy of retirement savings and applied those metrics to a large representative sample of the Australian population.

The clear finding is that most Australians are still not on track towards reaching a comfortable income during retirement, and will continue to draw a large part of retirement income from the age pension. The implication is that, despite superannuation reforms dating back over 20 years, the problem of inadequate retirement savings remains a significant public policy issue for Australia.

An important innovation of our study is that the metrics we developed take into account not only superannuation holdings (and projected growth in superannuation holdings through investment returns and future contributions) and the projected age pension entitlement, but also a variety of other household assets that could be used to fund retirement, including various financial assets and property.

Using this information, we are able to forecast a person’s expected income throughout retirement. We then compare this income to a “target” income, which is provided by the Association of Superannuation Funds in Australia (ASFA) Retirement Standard for a “comfortable” lifestyle. The ASFA standard for a comfortable lifestyle is a widely used benchmark, and specifies a minimum income of A$57,665 for couples and $42,158 for single people.

The ASFA benchmarks are very close to both current average income levels of retirees in Australia and the income levels that pre-retirement Australians on average believe they will need for a satisfactory lifestyle in retirement. While this concordance may seem reassuring, our findings for the projected retirement incomes of pre-retirement Australians were not.

We projected retirement income levels for a large, representative sample of Australians aged 40 to 64 ­– drawn from the nationally representative Household, Income and Labour Dynamics in Australia (HILDA) Survey – and compared our projections to the income required to sustain a comfortable lifestyle.

Based on our calculations, only 53% of couples and 22% of singles are on track to achieve a comfortable level of retirement income.

Our study also shows the relative importance of different sources of retirement income. If we ignore all sources of retirement income other than superannuation, only 15% of couples and 5% of singles are projected to achieve the target. Indeed, applying the OECD poverty benchmark of half median income, most retirees would be living in poverty.

Factoring in the age pension improves projected retirement incomes for many people, but still only 32% of couples and 11% of singles are on track to have a comfortable retirement income.

Our calculations have several implications. First, they show that, for most people, superannuation is not sufficient to fund a comfortable retirement, even if they have contributed to superannuation for most of their working lives.

Second, it is important to take into account all potential sources of retirement income, including non-superannuation assets, when computing the adequacy of retirement savings. Omitting any of these sources will likely lead to substantial under-estimation of adequacy.

Third, single people are particularly under-prepared for retirement, being three times more likely than couples to have severely inadequate projected retirement incomes.

Fourth, there is a gap between expectations about the importance of the different sources of retirement income and the likely reality. Data from the Australian Bureau of Statistics show that over half of men and two-fifths of women expect superannuation to be the main source of retirement income. However, our projections show that the age pension will provide 61% of the retirement income of single people, and 39% of the retirement income of couples. Moreover, 96% of single people and 89% of couples aged 40 to 64 today are expected to receive at least a partial age pension at some stage during retirement.

Our analyses show that most people need to think ahead to their financial situation in retirement and, if possible, make some changes – the sooner, the better. The first step is to find out whether your savings are likely to be adequate – and you can now do this easily on the ASIC MoneySmart web site.

The site offers a calculator based on a simplified version of the algorithm we used in our study. It takes less than 10 minutes to enter the required information and obtain an estimate of the adequacy of your retirement savings.

Knowing now whether you need to save more towards your retirement is an essential first step towards a retirement in which you don’t have to fear running out of money.

 

Professor Kevin Davis contributed to this study, which began prior to his appointment as a panel member of the Financial System Inquiry.

Roger Wilkins, Principal Research Fellow and Deputy Director (Research), HILDA Survey, Melbourne Institute of Applied Economic and Social Research, University of Melbourne and Carsten Murawski, Senior Lecturer in the Department of Finance and co-head of the Decision Neuroscience Lab, University of Melbourne

This article was originally published on The Conversation. Read the original article.