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Companies & Businesses

World’s Worst Business Decisions

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The Great Financial Crisis of 2008 is by no means the first such event, as collapses and depressions in companies, businesses, industries – even countries and effecting the world – have occurred at almost regular intervals throughout history. The difference now is that such financial disasters are covered in depth almost instantly, and certainly graphically, by the media, and the sums of money involved appear ever more enormous and the effects often even more wide-ranging.

However, there have been many such calamities on a personal, and /or singular basis which bear mentioning, where decisions made, or in some cases not made at all, have been seen to be huge mistakes, sometimes because of lack of experience which can seldom be bought, and of course with the wisdom of hindsight. In some cases the specific monetary loss is impossible to evaluate, since popular TV shows also draw increased advertising revenue, but the red faces of some decision makers can well be imagined – perhaps as they were shown the door!

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Following in chronological order is a list of 15 of the worst business decisions of the last 150 years, most of them far more recent than that, and identifying that not only do you need to know your business, but also that you are able to recognize where the business or industry is headed, work out the best way of getting there, and in particular stay ahead of the competitive field, especially when the pace of IT research and development is proceeding at such a pace and effecting almost everyone in today’s world.

Edwin Drake – Oil drill patent


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There must be some sympathy for Edwin Drake, a name you may not have seen before? He was employed by Seneca Oil in the late 1850s, initially to explore Pennsylvania for oil deposits, and then to try and invent a way of retrieving it from depths, as opposed to surface seepage. This he eventually did, by shoring the drilling shaft with a metal pipe to prevent earth collapsing into the bare shaft, a system still utilized to this day. However, not being a businessman, Drake didn’t realize the significance of his invention, and so failed to patent his oil drill, even though by this time he was continuing as an individual. He was eventually granted a stipend of $1,500 by Pennsylvania, but compared with what he might have had… oh dear!

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Western Union – The telephone system


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In the 1870s, Western Union was so confident of their monopoly in the telegraph system that they didn’t see the need to invest in the growth – if any, in their opinion – of the telephone system. An offer of sale of his patent for $100,000 from Gardiner Greene Hubbard was rejected by president William Orton, and of course AT & T (an American multinational telecommunications corporation) subsequently became very rich from this drastic oversight!

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Decca Records – The Beatles


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In 1961, the still relatively unknown Beatles were keen to find a record label, but Decca were less than impressed, especially with a group from Liverpool! Director Mike Smith preferred instead to sign London acts, maybe a more secure move, except that The Beatles became the best-selling band ever in world music, and revolutionized entertainment in the process; EMI (Electric and Musical Industries) signed the group, and rejoiced all the way to the bank!

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NBC and CBS – “Monday Night Football”


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With the legendary Howard Cosell in commentary, how could “Monday Night Football” fail to be a winner – well, neither NBC nor CBS were buying it, literally. In the 1960s, TV and sports entertainment were still developing, usually on a local basis or with news-type programs such as “The Wide World of Sports”. The NFL had only merged with the AFL in 1964, and was nowhere near as commanding an attraction as it is today, still second in popularity country-wide behind baseball. NBC and CBS preferred to stick with the tried and tested “Doris Day Show” and “Laugh-In” programs respectively, however, with ABC third in the rankings, president of sports Roone Arledge saw the potential of American football as a prime-time spectacle. Debuting in 1970, “Monday Night Football” is now the longest-running program on American TV, and consistently at the top of the rankings, a big coup for ABC. More importantly for advertising, young male viewers are firm watchers, a key demographic for advertisers. Now on ESPN, the Super Bowl is the most watched single program on TV in the US, with advertising costs set appropriately!

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Kodak – Digital


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Despite Kodak’s corporate dominance in the 1970s, engineer Steve Sasson began experimenting with a charge-coupled device (CCD), eventually working out how to use it converting light into the digital language of 1s and 0s; the first digital camera was the result, producing a 100,000-pixel image. Although Kodak saw the potential and invested heavily in development, management were too conservative to take the plunge, forces within the company stalled the release of a digital camera, preferring to stick with their comfortably profitable film-and-paper product. Not until almost 20 years later did Kodak finally move to digital, far too late to match the competition. The inevitable happened – over the next 10 years, 50,000 employees were made redundant, and in 2012 the company founded in 1888 filed for Chapter 11 bankruptcy. Now it produces only printer cartridges and film for motion pictures.

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Ross Perot – Microsoft


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Ross Perot is known as a (generally) successful US businessman, and a sometime politician, however, he has not been immune from making mistakes in both fields of endeavour. In 1979, his Electronic Data Systems company needed to acquire computer software, and looked at the possible acquisition of Microsoft, then valued by (23-year-old) Bill Gates at a minimum of $40 million, Although Perot’s company was valued at around $1 billion, he thought this was too expensive, however, he later admitted in an interview with the Seattle Times that this was “possibly the biggest business mistake I’ve ever made.” As often the case, easy to be wise after the fact.

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IBM – Microsoft


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Microsoft has been smart and lucky twice; in 1980, IBM contracted Bill Gates for just $80,000 to develop an operating system, the result being PC-DOS. However, Microsoft was to retain the copyright, and subsequently the MS-DOS system was created by the company. This was such a gigantic step forward that Microsoft was able to dominate the computer software industry for the following 30 years, while IBM was … just OK!

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E.T. – M&Ms “colorful button-shaped candies”


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Another example of hindsight proving invaluable – in fact of course it cannot be bought! – is the decision by Mars refusal to allow M&Ms to feature in the movie “E.T”. Although director Steven Spielberg had had an enormous success with “Jaws”, apparently in 1982 no-one thought that “E.T.” would become one of the most iconic movies in film history. Similarly, on-line streaming rapidly overtook videos. The result? Hershey’s Reese’s Pieces were used, free, in “E.T.”, but mutual advertising was agreed, and Rease’s Pieces are reputed to have tripled in sales in the first week of the film’s release. M&Ms eventually recovered a portion of the lost market share, but at what cost?

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ABC – The Cosby Show


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Regardless of legal proceedings in 2016, “The Cosby Show” was top of the ratings on US TV for five seasons in the late 1980, ensuring that NBC was also in the network top spot. ABC – so quick to adopt the almost instantly popular “Monday Night Football” – had been given first refusal, but apparently president of entertainment Lewis Erlicht didn’t like the concept, and turned it down. Supposedly ‘you can’t win them all’, but what a chance gone begging.

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Coke – ‘New Coke’


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The Coca-Cola company was founded in the 1880s, and 100 years later, ‘Coke’ had become the dominant soft drink world wide, and also a significant marketing tool. However, in an attempt to widen the drink’s popularity even further, in 1985 “New Coke” was introduced, apparently confusing many “Coke” drinkers. The distinct taste was one thing, but supposedly an emotional bond had been formed with adherents which was lost, and caused millions of nostalgic complaints to the company. Eventually the mistake was acknowledged – despite the fact that research showed a mild preference for the new product – and Coca-Cola Classic was released, ‘Classic’ supposedly referring to the original, genuine article. Sales lost in the intervening three months are incalculable.

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Excite – Google


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Although, back in 1999, Google was still based on largely unproven algorithms, even today Excite still categorises the internet by subject, and posts the weather as well as the news. No wonder it is now a subsidiary of Ask.com. Conversely, if Excite had seen the real worth, value, potential of Google back then, it would now be valued somewhere in the region of $350-400 billion. Instead, the offer by start-up kids Larry Page and Sergey Brin to sell their company to Excite for $1 million – later reduced to $750,000 – was almost totally ignored by the Excite board. The title of the company certainly doesn’t reflect the actions it has taken over the last 20 years.

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Blockbuster – Netflix


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In the 1990s, Blockbuster had almost 10,000 stores, and revenue was close to $6 billion a year, quite a percentage earned from late returns! Efficient use of computers to ensure stores had ‘the latest’ and most popular movies. blinded executives to the growing influence of Netflix with its DVD-by-mail service. So much so that in 2000 when Netflix offered a joint venture to Blockbusters for $50 million based on their growing business, CEO John Antioco literally waved them away. Subsequently Netflix subscription and delivery service became so popular, that as of early 2016 it is valued at almost $25 billion. Blockbuster? It closed its last store and its attempted service a la Netflix in 2013, having filed for bankruptcy in 2010. If only ….

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The AOL – Time Warner Merger


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Having grown with the fledgling internet to command 35 million dial-up subscribers in the US by 2002, AOL was looking to flex its financial muscles. However, nothing is guaranteed in the business world – although money can still ‘talk’ – and AOL’s decision through CEO Steve Case to merge with Time Warner in an agreement with CEO Gerald M. Levin in 2000, was both ill-timed and ill-advised. The amalgamation of new with old media – at $350 billion the largest in the business world at that time – was decidedly lop-sided: as the majority shareholder, AOL needed to perform, in particular by attracting advertising revenue. Unfortunately, what is now referred to as ‘the dot-com bubble’ burst, internet stocks fell alarmingly wiping $100 billion off the merged value, and on-line advertising dried-up. Additionally, high-speed internet access rapidly overtook AOL’s now outdated dial-up offering. Subsequently, in 2009, Time Warner discarded AOL to become a separate company again. This ill-fated merger has become standard case study, as the worst merger ever, for today’s business schools.

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Rupert Murdoch – MySpace


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MySpace was actually the first social network, preceding Facebook, Twitter, LinkedIn and even YouTube, even registering over one million users in its first month of operation in 2004, in a very similar way to its eventual successors, becoming the fifth largest internet domain in the US. However, along came new owner Rupert Murdoch came along, buying the company for $580 million in 2005, and attempted to make even more millions by over-doing the advertising on-site. This one mistake lead to subscribers exiting in droves, to the aforementioned rivals with far less advertising. MySpace traffic actually peaked in 2008 with almost 80 million visitors, but then declined very rapidly, such that Murdoch sold it for $35 million in 2011. He even had the grace to use Twitter in admitting that “we screwed up in every way possible, learned lots of valuable expensive lessons”.

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J.C. Penney – ‘Fake Prices’


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Everyone has wondered, when shopping in the seeming plethora of retail ‘sales’ these days, what the real price of an article is. In 2012 the more than 100 year-old department store J.C. Penney’s newly appointed CEO Ron Johnson decided to ‘tell it like it is’, in an attempt to win back business from the likes of Wal-Mart, was to upgrade the stores, and do away with sales and coupons and advertise products at ‘everyday low prices’. Unfortunately, customers who had remained loyal to J.C. didn’t take to this psychology: apparently they liked the old system of believing that they were getting bargains at sale-reduced prices, and missed the ‘sales’ and coupons too. Internet complaints sky-rocketed, sales fell, and the old way of marketing was resumed. CEO Johnson left after just 17 months, and Sergio Zyman – the man who had set Coca-Cola right – was hired to restore customers faith in the old firm.

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Started with Net Worth Post in September 2014. Before that, Senior Writer at Creative Horizons. Earned a Journalism degree from Northwestern University.

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Companies & Businesses

The World’s Richest Self-Made Women Billionaires

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Contrary to popular belief, around three-quarters of today’s billionaires are actually self-made, and the percentage is growing, a complete reversal of the situation 50 years ago when statistics were first gathered, and proof if any were needed that hard work outweighs inherited wealth everytime. To put it another way, to maintain your net worth, you need to move with the times, not just leave your money in the bank, so to speak – interest earns you little at the moment anyway. In fact, the actual number of billionaires who inherited their total wealth fell by 75% in that period – in raw figures, around 75 are no longer billionaires.

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However, perhaps unsurprisingly given that, until relatively recently, ‘the woman’s place was in the home’ even in western societies, the number of self-made women billionaires barely reaches double figures, and the richest doesn’t rank in the top 300. Surprisingly though, given cultural perceptions prevalent around the world, four of the top ten self-made women billionaires are Chinese including the richest, and three are currently resident in China. The rest are American.

The following is a list of the top 10 self-made women billionaires in the world, as of early 2016. Co-founders have not been included unless the company or organisation where they made their start was at zero. This is a snap-shot, as you would be aware that figures can change very rapidly when based on share market valuations.

10. Sara Blakely – $1 billion


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  • Born: 27 February 1971, Clearwater, Florida, USA
  • Nationality: American
  • Residence: Atlanta, Georgia
  • Start in Business: 2000

With savings earned from previous jobs, Sara founded the hosiery company Spanx in 2000, partly out of personal need, registering patents too. Major stores soon took up her products, an endorsement from Oprah Winfrey helped, and Sara subsequently made her first billion in a little over 10 years. She is now also part owner of the Atlanta Hawks NBA team.

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9. Tory Burch – $1.05 billion


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  • Born: 17 June 1966, Valley Forge, Pennsylvania, USA
  • Nationality: American
  • Residence: New York City
  • Start in Business: 2004

Tory worked directly in fashion for such as Polo Ralph Lauren and for the fashion magazine Harpers Bazaar before launching her own designs. Oprah Winfrey was also delighted to endorse her, and she now has 160 Tory Burch stores worldwide, as well as merchandising through over 3,000 department stores. Several fashion awards have also come her way, and Forbes ranks her in the top 100 most powerful women in the world!

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8. Sheryl Sandberg – $1.7 billion


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  • Born: 28 August 1969, Washington DC, USA
  • Nationality: American
  • Residence: Menlo Park, California
  • Start in Business: 1995

Sheryl has been in management in one form or another all her working life, and is now the COO for Facebook which she joined in 2008. She is credited with developing the formal business side of Facebook, which has since seen it become one of the most profitable companies in the world, and herself a genuinely self-made billionaire from her efforts within the company. Her share options as part of salary should see her become very rich indeed within a few years.

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7. Meg Whitman – $2.1 billion


[one_half]Image:Hewlett Packard CEO and President Meg Whitman[/one_half][one_half_last]
  • Born: 4 August 1956, Cold Spring Harbour, New York State, USA
  • Nationality: American
  • Residence: Palo Alto, California
  • Start in Business: 1979

Meg has worked for Proctor and Gamble, Bain & Company and the Walt Disney organisation – becoming vice-president in both – then for Stride Right, before becoming CEO of Florists’ Transworld Delivery. She subsequently joined eBay as CEO, overseeing its rise to power over 10 years. Currently she has been CEO of HP since 2011, apparently not so successfully, but her previous track record has seen her wealth deservedly grow to its present impressive level.

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6. Xiu Li Hawken – $2.2 billion


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  • Born: 1962, Harbin, China
  • Nationality: Chinese
  • Residence: London, England
  • Start in Business: 1991

Xiu Li began as a journalist before moving into finance, she is the majority shareholder in Renhe Commercial Holdings which she joined in 1996, subsequently developing and operating malls across 15 Chinese cities. She has other investments in agriculture in China, but currently lives with her husband in London.

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5. Oprah Winfrey – $3 billion


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  • Born: 29 January 1954, Kosciusko, Mississippi, USA
  • Nationality: American
  • Residence: Montecito, California
  • Start in Business: 1971

Always being a good talker, but orator as well, Oprah began her career on TV at the age of 17, and the rest is a history of one of the most successful talk show hosts of all time in the USA. Her own show began airing in 1986, and was ever popular until she retired in 2011. She was a millionaire at 32, and a billionaire at 35, with yearly earnings approaching $300 million, all of which was very rare for an Afro-American woman, which makes her achievements all the more laudable.

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4. Zhang Xin – $3.7 billion


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  • Born: 24 August 1965, Beijing, China
  • Nationality: Chinese
  • Residence: Beijing, China
  • Start in Business: 1992

Following scraping a living in Hong Kong to save enough for an education in the UK – eventually Master of Economics from Cambridge University – Zhang Xin was hired by Barings in Hong Kong, then by Goldman Sachs in New York, before returning to Beijing and founding SOHO. The company is now the largest developer of office buildings in Shanghai and Beijing, testimony to the clever, hard work of this lady who began with nothing, and now with her husband being described by London’s Times newspaper as ‘.. the most visible and flamboyant tycoons in China’.

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3. Wu Yajun – $4.2 billion

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  • Born: 1964, Chongqing, China
  • Nationality: Chinese
  • Residence: Beijing, China
  • Start in Business: 1984

A foundation in government administration, and cultivating business contacts enabled Wu with her husband to register what became Longfor Properties, in 1995. This investment holding company has interests across the major cities of China, in real estate, property development and management, with market capital approaching $9 billion, and almost 8,000 employees.

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2. Elizabeth Holmes – $4.7 billion


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  • Born: 3 February 1984, Washington DC, USA
  • Nationality: American
  • Residence: Palo Alto, California
  • Start in Business: 2003

Elizabeth’s yearning to ‘…discover something new…’ led her to a research project developing a blood-testing device using only a stick, not a vial of blood. There is still considerable discussion over the validity of the testing procedures, but in the meantime Elizabeth has around 20 US and over 60 non-US patents registered to her name, and her current wealth in early 2016 is estimated at half her company, Theranos’ value of over $9 billion.

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1. Yang Huiyan – $5.1 billion


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  • Born: 20 July 1981, Guangdong, China
  • Nationality: Chinese
  • Residence: Foshan, China

The richest woman in Asia and youngest female billionaire, a relatively small gift from her father when she turned 25 has seen her invest heavily in real estate, through her majority share in Country Garden Holdings, but recent downturns in the Chinese economy have seen her wealth dwindle in the last few years. However, she is just 34, and informed speculation is that the Chinese economy still has a long way to go in its expansion.

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Job & Salaries

Endorsements can provide a significant boost to your Net Worth!

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Celebrities – particularly those in entertainment, sport and modelling – usually earn salaries that the average person can only dream about, but for many apparently this isn’t enough. To be fair, many are constantly pestered by companies selling all sorts of consumer products, to use their name, voice and/or face in endorsing particularly popular lines on sale, sometimes with rewards in excess of their ‘day job’ salary, sometimes for just one showing, but often stretching for years and even for ‘life’.

Clearly the celebrities are on to a good thing, and judging by results identified in the following selected list of the more notable and interesting endorsement deals of all time, so are the respective companies, but what do you think?

Brad Pitt

[one_half]Brad Pitt’s deal[/one_half][one_half_last]How would you like to be paid $4.5 million for appearing in a 60-second TV advert? Well, that was actor Brad Pitt’s deal with Heineken in 2005 – then, the American football Super Bowl is the most watched TV program of the year in the USA, so advertising slots during the show are famously expensive, but very widely viewed, so maybe the expense was worth it. Not content with that little earner, Brad Pitt was also paid $3 million by Cadillac, for advertising their product only in China![/one_half_last]

Julia Roberts

[one_half]Julia Roberts1[/one_half][one_half_last]A pretty face always attracts attention, so actress Julia Roberts endorsement of cosmetics marketed by Lancome should be a sure-fire winner, although costing the company $50 million over five years beginning in 2010.[/one_half_last]

Charlize Theron

[one_half]Charlize Theron's[/one_half][one_half_last]Likewise, actress Charlize Theron’s association with cosmetics producer Dior, worth $5 million a year to her since 2005, would seem to be an appropriate investment.[/one_half_last]

Catherine Zeta-Jones

[one_half]Catherine Zeta Jones[/one_half][one_half_last]Another actress, Catherine Zeta Jones‘ endorsement of T-Mobile – her smiling face next to the ‘phone – at $20 million over five years from 2002, is difficult not to admire on both sides.[/one_half_last]

Robert Downey Jr.

[one_half]Actor Robert Downey Jr.[/one_half][one_half_last]Actor Robert Downey Jr accepted a deal with HTC in 2013 of $12 million for one year of ads to promote their smart-phones and tablets, which judging by the Taiwanese company’s success was also a shrewd arrangement for both.[/one_half_last]

50 Cent

[one_half]50 Cent[/one_half][one_half_last]The rap music genre has gained a considerable following in recent years, so when 50 Cent – already endorsing Reebok sports shoes – was identified by Glacéau Vitamin Water on an add with their drink, they quickly offered him a contract to develop Formula 50, and including shares in the company. Coca-Cola acquired the company in 2007 for $4.1 billion, of which 50 Cent received $100 million.[/one_half_last]

Beyonce and Jay-Z

[one_half]Pepsi2[/one_half][one_half_last]Another rapper, Jay-Z spread his entrepreneurial wings to include an endorsement deal with Samsung worth $20 million, which together with his singer-wife Beyonce, whose contract with drink manufacturer Pepsi signed in 2012 and is worth $50 million over 10 years, makes the couple very well-off, thank you very much![/one_half_last]

Jessica Simpson

[one_half]Singer Jessica Simpson[/one_half][one_half_last]Singer Jessica Simpson is also a pretty face which has been put to good use – as the ‘after’ face – by skin care company Proactiv in an endorsement worth $3 million over three years. Maybe not as rewarding as some others, but if both sides to the agreement are satisfied, who’s to say that the arrangement wont be renewed?[/one_half_last]

Michael Jackson

[one_half]Michael Jackson with Pepsi[/one_half][one_half_last]One of the first and relatively most expensive deals was concluded by Michael Jackson with Pepsi in 1984, at $5 million for an indefinite period. However, Pepsi concluded a deal with Jackson’s estate in 2012 to continue using his profile on their drink cans.[/one_half_last]

Justin Bieber

[one_half]Justin Bieber[/one_half][one_half_last]Just 16 at the time, what was it about nail polish that singer Justin Bieber would be interested in? Well maybe $12 million from OPI to advertise One Less Lonely Girl – named after his song – in 2010, a considerable contribution to the net worth of the young star.[/one_half_last]

Justin Timberlake

[one_half]Justin Timberlake[/one_half][one_half_last]McDonalds is one of THE company’s of the world for fast food, but apparently a music video by Justin Timberlake in 2003 for a fee of $6 million promoted Maccas to even greater heights.[/one_half_last]

George Clooney

[one_half]George Clooney[/one_half][one_half_last]George Clooney began promoting coffee maker Nespresso in 2005 for $5 million pa, and is still going strong, and not just in the cup or mug! George is certainly one of the most recognisable big-screen actors in the world these days, but  just switch-on your TV and you’ll see him on that too![/one_half_last]

Nicole Kidman

[one_half]Nicole Kidman 1[/one_half][one_half_last]Australian actress Nicole Kidman would seem to fit in very well with perfume Chanel No 5 – in 2003 she featured in a film of just three minutes for $12 million which certainly did the product no harm at all, and further advertised the actress’ profile too.[/one_half_last]

Kim Kardashian

[one_half]Kim Kardashian-West[/one_half][one_half_last]It is difficult to know how to classify Kim Kardashian, who seems to be famous for just being famous, but her business acumen can’t be faulted. In 2014 she began sponsoring the Kim Kardashian: Hollywood game with Glu Mobile for 45% of net profits. So far the game is estimated to have earned $85 million in less than two years, which makes her cut …….?[/one_half_last]

LeBron James

[one_half]Lebron James1[/one_half][one_half_last]Sports goods manufacturer Nike is one of the most profitable companies in the world, regardless of goods produced, so clearly their endorsement contracts work extremely well. Sports celebrities are actually also famous for their involvement in endorsements, none more so than Cleveland Cavaliers’ basketball star LeBron James, whose deal with Nike beginning in 2013 is worth $500 million ‘for life’, actually estimated to be $30 million pa.[/one_half_last]

Michael Jordan

[one_half]Michael Jordan[/one_half][one_half_last]Fellow (ex-)basketballer Michael Jordan has been associated with Nike since 1984, for an initial $500,000 plus royalties ad infinitum – the current estimate is that his cut from profits amounts to over $60 million pa, including from his own, separate Air Jordan shoe brand.[/one_half_last]

Maria Sharapova

[one_half]Russian Maria Sharapova1[/one_half][one_half_last]That top tennis player, Russian Maria Sharapova, is also attractive was obviously not lost on Nike, which in 2010 signed her to a $70 million eight-year endorsement contract, working out at a base $8.75 million per year, but she also receives a percentage of sales from her product line.[/one_half_last]

Dwyane Wade

[one_half]Dwayne Wade[/one_half][one_half_last]Another basketballer, Dwyane Wade, was signed by Chinese sports shoe manufacturer Li Ning in 2012 to a $100 million 10-year partnership, as the Miami Heat star is very popular in China. However, a change is marketing strategy and increased competition from Nike and Adidas has seen the company suffer considerable losses in recent years, even in its home country.[/one_half_last]

George Foreman

[one_half]George Foreman[/one_half][one_half_last]Former world heavyweight boxing champion George Foreman has long been the face of the Salton kitchen appliance company, actually since the mid-90s for a 45% cut of the profits. However, in 1999 the brand had become so big that Salton bought Foreman out for $137.5 million, although he still appears in various advertising features to this day.[/one_half_last]

David Beckham

[one_half]David Beckham, who Adidas[/one_half][one_half_last]One of the most marketable sports personalities is now-retired English soccer star David Beckham, who Adidas had the foresight to sign to a $160 million lifetime arrangement in 2003, in a deal that saw him pocket $80 million up front, plus an estimated $20 million pa indefinitely.[/one_half_last]

So what do you think – are these endorsement arrangements justified from a business point of view, and who really profits the most – the company or the individual? Who else can you think of who may be worth recruiting, and by whom? Do let us know.

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Economy

Quality Of Life – Net Worth!?

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So in terms of quality of life, just how rich are you? What is your real net worth, your wealth, and not simply in money? How hard do you have to work to satisfy your need for what you want out of life? Perhaps as important – how many years are you likely to live for, to enjoy your hard-earned riches?

Firstly, how is quality of life assessed, and secondly, how many hours a year do you need to work to earn this standard of living? A third – but immeasurable – factor could be priorities in what any person regards as important to his/her quality of life; perhaps you are happy to have little disposable income left after paying essential expenses, if it means working fewer hours but spending more time with family and friends. Or perhaps you are asset rich but time poor? For example, Americans are generally regarded as ‘rich’, but only five countries’ populations work longer hours, and the USA’s standard of living is only in the middle of the table. So maybe you will live a little longer, because you haven’t needed to work too hard.

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Quality of Life Index is estimated by the OECD using a formula which includes purchasing power, health care, climate and safety indexes – the higher the better – and house price to income ratio, consumer price, pollution and traffic commute time indexes, the lower the better, all given weightings according to assumed importance.

Hours worked on average per year is the other side of the coin – a person may well have a relatively high income coupled with low or moderate expenses, but how much time is left for the person to enjoy his or her relative wealth? In the longer term, years of life expectancy depend on many factors, the most influential being diet and availability of medical care, except of course the negative effects of protracted conflict in which the country may be directly involved, perhaps partly borne out by Switzerland topping the list for quality of life – it managed to remain neutral during the two World Wars.

Efficiency would appear to be the key – that is, if the number of hours worked is relatively low, but quality of life is assessed as high, then in these times of increasing ‘free trade’ around the world, the country must be efficient otherwise it could not compete very well, with obvious consequences. This hypothesis may be born out by comparing the figures for Germany and Greece – the Germans would appear to justify their reputation for efficiency, and the Greeks for inefficiency, given that the latter spend 50% more time in working hours but manage to produce a score for quality of life 20% lower than the Germans. Only Mexico and South Korea of OECD countries work longer hours.

Quality Of Life

In the top 10 countries for quality of life, Denmark, The Netherlands and Norway also score well, and further down the table, French workers spend less than 1500 hours at work, so are apparently an example of being satisfied with a slightly lower standard of living. Switzerland would also appear to maintain a reasonable balance between work and play. Japanese live the longest, by some margin even over the Swiss, but are in the bottom half of the table in quality of life and hours worked – their diet is recognised as very healthy, however.

Following is a list of the top 25 countries, for which data is available through the OECD; the first column is a score which identifies the relative quality of life; the second column is the average number of hours worked per year by the population; thirdly, life expectancy should reflect the other two, and although the spread of years is relatively narrow, with just a couple of exceptions, Denmark and Germany surprise a little by their ranking – maybe a little too much beer and a few too many dumplings!? However, the bottom three in each criteria, Belgium, South Korea and Croatia respectively, are all in the bottom six in all criteria.

# Country Score

Average Hours

worked per year

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Years of

Life Expectancy

1 Switzerland 208.4                 1576                  82.5
2 Denmark 206.49                 1438                  79.25
3 New Zealand 201.06                 1752                  81.05
4 Germany 199.7                 1363                  80.57
5 Australia 198.79                 1663                  82.15
6 Austria 192.4                 1629                  81.39
7 Netherlands 192.4                 1421                  81.23
8 Norway 188.9                 1408                  81.7
9 Spain 186.41                 1699                  81.98
10 Sweden 185.81                 1607                  81.98
11 Finland 184.01                 1643                  80.77
12 USA 183.96                 1788                  79.68
13 Portugal 181.18                 1852                  79.16
14 UK 180.25                 1669                  80.54
15 Canada 177.23                 1708                  81.76
16 Japan 176.06                 1734                  84.74
17 Slovenia 175.93                 1550                  78.01
18 France 173.56                 1489                  81.75
19 Croatia 172.89                 1665                  80.68
20 Ireland 171.92                 1815                  80.68
21 South Korea 170.29                 2163                  80.04
22 Czech Republic 167.38                 1763                  78.48
23 Israel 166.63                 1867                  82.27
24 Greece 165.33                 2060                  80.43
25 Belgium 162.49                 1576                  80.88
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