Accounting, Business, Tax, Ashdan Partners Pty Ltd, Windsor, Australia

Federal Budget 2019-20 Tax and Accounting Overview

Tue, 09 Apr 2019 23:00:00 GMT

An overview on tax and accounting aspects of the Federal Budget 2019-20.

So, what does it mean for you?

TAX CHANGES FOR SMALL BUSINESS Checklist 2017/18 year end

Sun, 03 Jun 2018 23:00:00 GMT

Company tax cuts from $25m to $50m

The 2017/18 corporate tax rate will be 27.5% for companies that carry on a business and have an aggregated turnover of less than $25m. This turnover threshold will be increased to $50m for the 2018/19 financial year.

Single touch payroll

Single touch payroll has been introduced into the Australian tax system to combat areas of taxpayer non-compliance of PAYG withholding and superannuation guarantee obligations. This new payroll system commences from 1 July 2018 and "substantial employers" are required to be compliant.

A "substantial employer" at 1 July 2018 is a business who has a headcount of 20 or more employee as at 1 April 2018.

Taxable payments reporting system for couriers and cleaners

The taxable payments reporting system for contractors will be extended to entities in the courier and cleaning industries from 1 July 2018.

Entities who engage contractors, or subcontractors, will need to provide additional reports to the ATO. This treatment has the same requirements as salary and wage employees.

GST on offshore suppliers of low value goods

The GST and customs duty exemption for imported low value goods less than $1,000 will end on 30 June 2018. From 1 July 2018, offshore suppliers of low value goods sold directly to consumers will be liable to pay GST on those supplies.

Company tax rate lower for 'base rate entities' only (not yet law)

New legislation that restricts the lower company tax rate to base rate entities only is still under the parliamentary process. Pending approval, from the 2017/18 income year the 27.5% tax rate will apply to companies who are considered base rate entities. A base rate entity is a company who has less than 80% of assessable income from passive sources.

ATO debts now sent to credit reporting bureaus (not yet law)

Businesses with a tax debt greater than $10,000 may have that debt reported to credit reporting bureaus from 1 July 2018 by the ATO. This may affect a business' credit rating and their ability to obtain future finance in an attempt to increase the transparency of tax debts throughout business circles.

Similar business test (not yet law)

Legislation surrounding extending the same business test for company tax losses is yet to pass the parliamentary process. A company will be allowed to claim a prior year loss against business profits as long as it satisfies the similar business test from 1 July 2015. This test replaces the same business test, which was less flexible to pass.

The Bill has been blocked by the crossbench due to be similar business test being linked with the proposal for self-assessment of effective life of intangible assets.

R&D tax incentive proposed from 1 July 2018

The R&D tax incentive will be amended for income years commencing 1 July 2018. Under the announcement, the incentive will be based on uplift of the entity's corporate tax rate in the particular income year.

Also, changes will occur to companies that have an aggregated turnover of $20m or more. The rate of the R&D tax incentive will be determined by the company's "R&D intensity percentage". The intensity percentage is the rate of R&D expenditure compared to overall expenditure for the year, where a marginal rate of offset will be applied.

Budget announcements - but not due until 1 July 2019

The recent Federal Budget has plenty of announcements which may affect small businesses. However, these following Budget announcements are not due to commence until 1 July 2019.

– Individual's fame or image

All remuneration provided for the commercial exploitation of a person's fame or image will be included in the assessable income of that individual.

– Cash receipt limit for businesses

Cash receipts for a business will be limited to under $10,000.

– Director Penalty Notice regime

DPN regime to be extended to include GST, luxury car tax and wine equalisation tax, making directors personally liable for the company's debts.

– Australian government tenders

Businesses seeking to tender for large Australian government contracts will be required to provide information on the status of their tax obligations. Under the proposed arrangements, contracts over $4m (including GST) will be affected.

FOR MORE INFORMATION:

CONTACT: ASHOK KARAN

DIRECTOR, MBA, CPA, ATI

PHONE: (02) 45 773800

MOBILE: 0415 076 032

EMAIL: ashok@ashdanpartners.com.au

TAX PLANNNG OPPORTUNITIES Checklist 2017/18 year for individuals

Sun, 03 Jun 2018 23:00:00 GMT

Deferral of income

Subject to cash flow considerations and anti-avoidance rules, consider deferring income to the following year, particularly if:

Capital gains

Where appropriate, consider realising capital losses by year's end so that they may be offset against realised capital gains of that year.

Donations

Donations or gifts of $2 or more to a deductible gift recipient (DGR) are tax deductible. A deduction is also allowed for gifts of publicly-listed shares that have been held for at least 12 months and which are valued at $5,000 or less.

Where spouses are on different marginal rates, consider ensuring that all deductible gifts are made by the spouse in the higher tax bracket so as to maximise the benefit of the deduction.

Prepayments

Subject to cash flow considerations, consider making deductible purchases by year's end in order to accelerate deductions. This applies particularly if the income in the following year is expected to be lower than in the current year.

In certain circumstances, an immediate deduction can be available for prepaid expenditure (eg interest on a loan relating to a rental property).

Personal super contributions

From 1 July 2017, an individual is able to make a personal deductible superannuation contribution regardless of whether they are self-employed or not. Individuals at a lower tax rate would need to make sure what contributions they can make before claiming a deduction. They can review their superannuation accounts to see their employer contributions to date.

Individuals need to be reminded that the concessional contributions cap is $25,000 for the 2018 financial year.

Additionally, individuals earning over $250,000 in taxable income need to be aware that Division 293 tax will apply to concessional superannuation contributions.

Spouse superannuation contribution rebate

A $540 tax offset is available for after-tax contributions (up to $3,000) to a complying superannuation fund on behalf of a spouse (married or de facto) where the spouse's annual taxable income is less than $37,000. A reduction of the maximum offset is available where spouse's income is between $37,000 and $40,000.

Superannuation government co-contribution

For low income earners, subject to certain conditions, the government makes a co-contribution of up to $500 if a taxpayer makes after-tax contributions of at least $1,000. The co-contribution begins to phase-out at a taxable income of $36,813, and is not available for taxable income above $51,813.

Individuals could also take advantage on increasing the amount that can be withdrawn under the First Home Super Saver Scheme. However, the co-contribution itself would not be included.

Proposed changes to HELP repayments

The MYEFO report from December 2017 announced that new HELP repayments level may exist from 1 July 2018. As a result, students with a HELP debt may need to start repaying the debt on earning $45,000. Delaying some deductions where appropriate may remove the repayment in the next financial year.

Nearing retirement

A taxpayer who is considering retiring near year end may find it worthwhile to defer discretionary income until after 30 June. In that subsequent year, their income will normally be smaller and the marginal rate may therefore be less.

When considering the timing of retirement, keep in mind the restrictions on the concessional treatment of employment termination payments that apply.

Property development and vacant land deductions denial

Using lead-time rules for non-commercial losses, as well as property development interest deductions, may only be available for this and next financial year. An announcement to remove these deductions from 1 July 2019 was announced in the Federal Budget. The proposal will also remove these interest amounts from the cost base of the asset.

Therefore, property development clients may need to act quickly to get their operations started.

Additional CGT discount available for investors

An additional CGT discount of up to 10% is now available for investors who invest in affordable housing from 1 January 2018. Conditions apply to get the additional discount, including holding the asset in affordable housing for three years.

FOR MORE INFORMATION:

CONTACT: ASHOK KARAN

DIRECTOR, MBA, CPA, ATI

PHONE: (02) 45 773800

MOBILE: 0415 076 032

EMAIL: ashok@ashdanpartners.com.au

Federal Budget 2018-19

Mon, 14 May 2018 23:00:00 GMT

Winners and Losers of the Federal Budget 2017-18

Click here to view our Federal Budget.

Federal Budget 2019-20 Political and Economic Overview

Mon, 09 Apr 2018 23:00:00 GMT

The Federal Treasurer, Mr Josh Frydenberg, handed down the 2019/20 Federal Budget at 7:30 pm (AEDT) on 2 April 2019.

Mr Frydenberg said the Budget is "back in the black", announcing a budget surplus of $7.1 billion, and forecasting a surplus of $11 billion in 2020/21, $17.8 billion in 2021/22 and $9.2 billion in 2022/23. The budget focuses on "restoring the nation's finances", further strengthening the economy to create more jobs and to "guarantee the essential services".

To know more about the federal budget and the economic and political overview on it. Click here .

Who Owns Australian Farms?

Tue, 27 Feb 2018 22:00:00 GMT

In its June 2017 audit of foreign farm ownership, the Australian Taxation Office found just 13.6 per cent of agricultural land is in in foreign hands.

The Australian Bureau of Statistics (ABS) estimates that foreigners own 12 per cent of farmland.

British owners are the biggest foreign landholders, with more than 9.7 million hectares, but Chinese come a close second.

The National Farmers' Federation estimates that 99 per cent of farm businesses are Australian owned.

Who owns Australian farm businesses?

Australian agriculture has enticing growth prospects and needs capital. Superannuation funds have money to invest for the long term. It should be the perfect marriage, but INTHEBLACK magazine finds underinvestment by institutional investors in agriculture.

Should you put more money into Super?

Thu, 31 Aug 2017 23:00:00 GMT

Do super funds still represent a safe bet for young Australians?
By SUSAN MULDOWNEY

Should young Australians put money into superannuation or do they risk investing in a scheme that might not be around by the time they retire?

Australia's superannuation industry is widely viewed as a secure investment. Personal contributions in the March quarter reached A$5305 million, up from A$3848 million last year. Super funds recorded their fifth consecutive year of positive returns in 2016, but do they still represent a safe bet?

Dr Elizabeth Ooi

Lecturer in finance, University of Western Australia Business School

The people who benefit most from super are those who are exposed to it for the longest. Compulsory contributions are an automatic mechanism for young people to save for retirement. As a financial goal, super is incredibly important, given the modern-day focus on omnichannel sources of income – investment and savings. Young people get the benefits of this without even having to be aware of the technicalities and advanced investment strategies of superannuation.

So the crux of this question is: How risky really is Australia's superannuation system and will it last?

The system has changed a lot since its beginnings and it's not unreasonable that some people may equate change with uncertainty. However, with each iteration or update, the goal is for the system to be stronger and more equitable.

"... the superannuation system is a cornerstone of our economy, thus money within the system is quite well protected." Elizabeth Ooi

We are lucky to participate in a super system that is internationally regarded as an exemplary retirement savings scheme. As much as we want people to have agency over their financial freedom, not everyone will be successful in their endeavours, and this is a safety net that many countries are envious of. More importantly, the superannuation system is a cornerstone of our economy , thus money within the system is quite well protected.

We should certainly expect – and encourage – continued evolution of the industry, but I believe we are unlikely to get to a point where the system will no longer be around. My answer, therefore, is yes, young people should put money into super.

Professional Development: SMSF Strategies: This course examines strategies that can be considered or used within an SMSF .

Paul Drum FCPA

Head of policy, CPA Australia

As Australia's super system is primarily based on enforced saving, the question for someone starting out is whether they should be putting more money into superannuation over and above what is compulsory.

Australia's super model is based on what could be best described as a 40- to 45-year long-term bet. A person keeps putting money into super over their working life in the belief, or hope, it will provide a better-quality lifestyle than they otherwise would have when they ultimately retire.

However, it is no sure thing. Whether the super system will be able to deliver better after-tax returns in 20, 30 or 40 years' time depends on myriad factors. For example, will super income retain its current tax concessional treatment or will this be changed by future governments?

Other legislative changes could also occur that would make super funds a less attractive conduit through which to invest, such as a reduction in the capital gains tax discount or an income tax discount on passive income derived outside of super.

"A super fund is not an investment in itself. It is one conduit through which to invest." Paul Drum FCPA

What is happening in the broader economy and the markets also ultimately dictates what investments are on offer, and impacts the rate of return your fund will be able to achieve over your life.

A super fund is not an investment in itself. It is one conduit through which to invest. Super itself is not a silver bullet either. It should be considered as one important component of a broader savings strategy – one that includes investing outside of the super model as well.

Noelle Kelleher

Chief financial officer, Vision Super

Superannuation in Australia is compulsory. Since the introduction of the super guarantee, superannuation has grown to A$2.3 trillion, rivalling the banking sector. It's not going anywhere.

The government can't afford for the system to fail – that's why funds are heavily regulated, and history shows very few have failed. Super fund trustees, by law, must act in the best interests of their members. They must ensure their funds are around when members retire, or that the members' benefits have been transferred to another fund that will be able to look after them.

Importantly, young people should be asking themselves how much they will need for a comfortable retirement. It may seem a long way away, but putting money into super is a smart way to save. The magic of compounding means the earlier you start the better the outcomes.

"It may seem a long way away, but putting money into super is a smart way to save." Noelle Kelleher

Even small additional amounts add up to enormous differences in retirement balances. Vision Super's super projection tool, for example, shows that a 28-year-old woman with a superannuation balance of A$20,000 and earning A$50,000 a year could retire with A$305,000 in super. If this young woman put in just A$25 extra per week (A$1300 per annum), she could retire with A$381,000 in superannuation.

Young people can take control of their super by being in a low-fee, all-profit-to-member fund like an industry super fund, making small extra payments, and making sure the investment option suits their stage of life.

The experts

Dr Elizabeth Ooi
Dr Elizabeth Ooi is a lecturer in finance at the University of Western Australia Business School. She completed a PhD at Monash University on the governance of pension funds. Her other main research interests are corporate governance, socially responsible investing and financial literacy. Ooi has taught courses in corporate finance and financial planning and, before becoming an academic, she worked in financial planning in Melbourne.

Paul Drum FCPA
Paul Drum has worked in the tax and business policy arena for over 30 years, principally in Australia but also in Malaysia, Hong Kong, Singapore, Indonesia and New Zealand. As head of policy at CPA Australia , his portfolio covers tax policy, law and administration, as well as superannuation, business policy and education, and also representation and advocacy to governments and core government agencies. He is a Fellow of CPA Australia.

Noelle Kelleher
Noelle Kelleher has over 30 years' experience in the financial services industry, with a particular focus on superannuation. Before joining Vision Super in May 2013, she was a partner at Deloitte Australia. Kelleher has been involved in the development of policy and legislation affecting superannuation entities, their employers and their members. Since 2009, she has been a representative on the Australian Financial Reporting Council (the government body responsible for overseeing the effectiveness of the financial reporting framework in Australia). She is also chair of CPA Australia's Retirement Savings Centre of Excellence and a member of the Victorian executive of the Association of Superannuation Funds Australia (ASFA).

16 Rich Habits

Wed, 07 Sep 2016 23:00:00 GMT

Your autopilot mode can make you wealthy or poor.

Intelligence, talent and charm are great, but more often than not these aren't what separate the wealthiest among us from the poorest.

Instead, the differences are in our daily habits . Do you realize that these subconscious, second-nature activities make up 40 percent of our waking hours? That means that two out of every five minutes, all day and every day, we operate on autopilot. It's true: Habits are neural pathways stored in the basal ganglia, a golf ball-size mass of tissue right in the center of our brains, in the limbic system.

This neural fast lane is meant to save the brain energy: When a habit is formed and stored in this region, the parts of the brain involved in deeper decision-making cease to fully participate in the activity. However, we all know there are good habits and bad habits .

I spent years studying the difference between the habits of our country's rich and poor, questioning hundreds of individuals. On the rich side, these were people with annual gross income north of $160,000 and net liquid assets of $3.2 million or more. I defined the lesser-off as those with gross income of $35,000 or less and no more than $5,000 in liquid assets. When I was done, I analyzed the results of my research and boiled down the responses to create a picture of what allows the wealthy to prosper where others do not. My ensuing book became a sort of instruction manual for how to become wealthy.

The gulf between Rich Habits and Poverty Habits is staggering. If you're well off already, chances are you already adhere to most of these Rich Habits. Integrating the ones you've neglected will push you further. But be assured: If you're doing fine now without minding these principles , it'll catch up to you.

Some of the differences between rich and poor are obvious, while others are a little more surprising. Here are the most important Rich Habits you can take up to reach and maintain your wealth potential.

1. Live within your means.

Wealthy people avoid overspending by paying their future selves first. They save 20 percent of their net income and live on the remaining 80 percent.

Among those who are struggling financially, almost all are living above their means. They spend more than they earn, and their debt is overwhelming them. If you want to end your financial struggles, you need to make a habit of saving and budgeting what you spend . Here are some sensible ways to budget your monthly net pay:

2. Don't gamble.

Talk about a sucker bet: Every week, 77 percent of those who struggle financially play the lottery. Hardly anyone who is wealthy plays the numbers. Wealthy people do not rely on random good luck for their wealth. They create their own good luck. If you still want to bet after knowing the risk, use money from your entertainment budget.

3. Read every day.

Reading information that will increase your knowledge about your business or career will make you more valuable to colleagues, customers or clients. Among wealthy people, 88 percent read 30 minutes or more every day. Just as important, they make good use of their reading time:

The reason successful people read is to improve themselves. This separates them from the competition. By increasing their knowledge, they are able to see more opportunities, which translate into more money. Comparatively speaking, only one in 50 of those struggling financially engages in this daily self-improvement reading, and as a result the poor don't grow professionally and are among the first to be fired or downsized.

Related: 25 Books for Success

4. Forget the boob tube and spend less time surfing the internet.

How much of your valuable time do you lose parked in front of a screen? Two-thirds of wealthy people watch less than an hour of TV a day and almost that many-63 percent-spend less than an hour a day on the internet unless it is job-related.

Instead, these successful people use their free time engaged in personal development, networking, volunteering, working side jobs or side businesses , or pursuing some goal that will lead to rewards down the road. But 77 percent of those struggling financially spend an hour or more a day watching TV, and 74 percent spend an hour or more a day using the internet recreationally.

5. Control your emotions.

Not every thought needs to come out of your mouth. Not every emotion needs to be expressed. When you say whatever is on your mind, you risk hurting others. Loose lips are a habit for 69 percent of those who struggle financially. Conversely, 94 percent of wealthy people filter their emotions. They understand that letting emotions control them can destroy relationships at work and at home. Wait to say what's on your mind until you're calm and have had time to look at the situation objectively.

Fear is perhaps the most important negative emotion to control. Any change, even positive changes such as marriage or a promotion, can prompt feelings of fear. Wealthy people have conditioned their minds to overcome these thoughts, while those who struggle financially give in to fear and allow it to hold them back.

Whether you fear change, making mistakes, taking risks or simply failure, conquering these emotions is about leaning in just a little until you build up confidence . It's amazing how much confidence helps.

6. Network and volunteer regularly.

You'll build valuable relationships that can result in more customers or clients, or help you land a better job if you spend time pressing the flesh and giving back in your community. Almost three-quarters of wealthy people network and volunteer a minimum of five hours a month. Among those struggling financially, only one in 10 does this.

One perk of volunteering is the company you'll keep. Very often the boards and committees of nonprofits are made up of wealthy, successful people. Developing personal relationships with these folks will often result in future business relationships.

7. Go above and beyond in work and business.

Unsuccessful people have "it's not in my job description" syndrome. Consequently, they are never given more responsibility, and their wages grow very little from year to year-if they keep their jobs at all. Wealthy individuals, on the other hand, make themselves invaluable to their employers or customers, writing articles related to their industry, speaking at industry events and networking. Successful people work hard to achieve the mutual goals of their employers or their businesses.

8. Set goals, not wishes.

You cannot control the outcome of a wish, but you can control the outcome of a goal.

Every year, 70 percent of the wealthy pursue at least one major goal. Only 3 percent of those struggling to make ends meet do this.

9. Avoid procrastination.

Successful people understand that procrastination impairs quality; creates dissatisfied employers, customers or clients; and damages other nonbusiness relationships. Here are five strategies that will help you avoid procrastination:

10. Talk less and listen more.

A 5-to-1 ratio is about right: You should listen to others five minutes for every one minute that you speak. Wealthy people are good communicators because they are good listeners. They understand that you can learn and educate yourself only by listening to what other people have to say. The more you learn about your relationships , the more you can help them.

11. Avoid toxic people.

We are only as successful as the people we spend the most time with. Of wealthy, successful people, 86 percent associate with other successful people. But 96 percent of those struggling financially stick with others struggling financially.

If you want to end your financial struggles , you need to evaluate each of your relationships and determine if they are a Rich Relationship (with someone who can help you up) or a Poverty Relationship (with someone holding you back). Start spending more and more time on your Rich Relationships and less on your Poverty Relationships. Rich Relationships can help you find a better job, refer new business to you or open doors of opportunity.

12. Don't give up.

Those who are successful in life have three things in common: focus, persistence and patience. They simply do not quit chasing their big goals. Those who struggle financially stop short.

13. Set aside the self-limiting beliefs holding you back.

If you're hurting financially, you've probably told yourself some of these untruths before: Poor people can't become rich. Rich people have good luck and poor people have bad luck. I'm not smart. I can't do anything right. I fail at everything I try.

Each one of these self-limiting beliefs alters your behavior in a negative way. Almost four out of five wealthy people attribute their success in life to their beliefs. Change your negative beliefs into positive affirmations by reading lessons from the greats of personal development, like Napoleon Hill , Dale Carnegie and Jim Rohn .

14. Get a mentor.

Among the wealthy, 93 percent who had a mentor attributed their success to that person. Mentors regularly and actively participate in your growth by teaching you what to do and what not to do. Finding such a teacher is one of the best and least painful ways to become rich.

If you know your goals, find someone who has already achieved them. You'll be amazed by how many people want to lend a helping hand.

15. Eliminate "bad luck" from your vocabulary.

Those struggling financially in life have a way of creating bad luck for themselves. It's a byproduct of their habits. Poverty Habits, repeated over and over are like snowflakes on a mountainside. In time, these snowflakes build up until the inevitable avalanche-a preventable medical problem, a lost job, a failed marriage, a broken business relationship or a bankruptcy.

Conversely, successful people create their own unique type of good luck. Their positive habits lead to opportunities such as promotions, bonuses, new business and good health.

16. Know your main purpose.

It's the last Rich Habit, but it might be the most important. Those people who pursue a dream or a main purpose in life are by far the wealthiest and happiest among us. Because they love what they do for a living, they are happy to devote more hours each day driving toward their purpose.

Odds are, if you are not making sufficient income at your job, it is because you are doing something you do not particularly like. When you can earn a sufficient income doing something you enjoy, you have found your main purpose.

Believe it or not, finding this purpose is easy . Here's the process:

As you can see, the differences between rich and poor are simple-sometimes intuitive-but not insignificant. Aim to take up all 16 of these habits, and you're almost guaranteed to become better off.

Related: Rich Man, Poor Man

Editor's note: This post was originally published in October 2014 and has been updated for freshness, accuracy and comprehensiveness.

Content provided by http://www.success.com

7 steps to mastering the business of superforecasting

Mon, 29 Feb 2016 22:00:00 GMT

Predicting the future isn't easy, especially in business. But Canadian psychologist Philip Tetlock says it's a skill that can be cultivated to provide a more accurate picture of what lies ahead.

Anyone who stays in business will face the problem of trying to see into the future. When you think about hiring a new employee, you ask: "Will we have enough new business to keep them occupied?" When you pitch for a new piece of business, you think: "How many hours will it take us to complete this job?" You have to forecast.

Forecasting can seem like a dark art. Psychologist and political scientist Philip Tetlock insists not only that it is a skill, but also that you can get better at it. Over recent years, he has spent his time creating teams of forecasters that compete in – and win – forecasting tournaments funded by the US Government intelligence community. In the process, he has become perhaps the world's leading expert on predicting the future.

Now Tetlock has set out his forecasting techniques in a book, Superforecasting: The Art and Science of Prediction, co-authored with journalist Dan Gardner.

Here are seven steps that Tetlock suggests can drive better forecasts – steps that any organisation can take to deal with its own forecasting challenges.

1. Break seemingly intractable problems into tractable sub-problems.

Superforecasters split problems into knowable and unknowable parts. They flush ignorance into the open.

"Expose and examine your assumptions," says Tetlock. "Dare to be wrong by making your best guess. Better to discover errors quickly than to hide them behind vague verbiage."

One of the surprising lessons we learn from the best forecasters is that very often "remarkably good probability estimates arise from a remarkably crude series of assumptions and guesstimates".

The physicist Enrico Fermi (designer of the first nuclear reactor) understood this. He used to love posing seemingly impossible questions like "How many piano tuners are in Chicago?". Then he'd chop up the problem. How many people are there in Chicago? How many will own pianos? How often do they get them tuned? How many pianos can one person tune in a day? Rough estimates of the answers to these questions can get you an answer surprisingly close to the right figure.

2. Strike the right balance between inside and outside views.

Superforecasters know that there is nothing new under the sun.

"Uniqueness is a matter of degree," says Tetlock. Superforecasters conduct creative searches for comparisons even for seemingly unique events, such as the standoff between a new socialist government in Athens and Greece's creditors.

Forecasting can seem like a dark art but being able to see into the future in business situations is a skill that can be honed over time.

"Superforecasters are in the habit of posing the outside-view question – 'how often do things of this sort happen in situations of this sort?'."

3. Strive to distinguish as many degrees of doubt as the problem permits – but no more.

While few things are either certain or impossible, "maybe" is not an informative response. Tetlock says nuance matters.

"The more degrees of uncertainty you can distinguish, the better a forecaster you are likely to be," he says.

"Translating vague-verbiage hunches into numeric probabilities feels unnatural at first but it can be done. It just requires patience and practice. The superforecasters have shown what is possible."

Another way of putting this is that at the poker table, the player who can distinguish 45/55 bets from 50/50 bets will probably win.

4. Strike the right balance between underreacting and overreacting to evidence.

Tetlock says updating your beliefs is as important to good forecasting as brushing and flossing is to good dental hygiene. It can be boring, occasionally uncomfortable, but it pays off in the long term.

"Skilful updating requires teasing subtle signals from noisy news flows, all the while resisting the lure of wishful thinking," he says, adding that superforecasters tend to update their beliefs in small increments, often moving from probabilities of, say, 0.4 to 0.35. These distinctions are too subtle to capture with vague verbiage like "might" or "maybe", but in the long run, Tetlock says these distinctions define the difference between good and great forecasters.

5. Look for the errors behind your mistakes, but beware of rear-view mirror biases.

Rather than trying to justify or excuse your failures, Tetlock says you should own them and conduct unflinching post-mortems to examine where you went wrong.

"Remember that although the more common error is to learn too little from failure and to overlook flaws in your basic assumptions, it is also possible to learn too much. You may have been basically on the right track but made a minor technical mistake that had big ramifications."

He suggests doing post-mortems of your successes, too. "Not all successes imply that your reasoning was right. You may have lucked out by making off-setting errors. If you keep reasoning along the same lines, you are setting yourself up for a nasty surprise."

6. Bring out the best in others and let others bring out the best in you.

Master the fine art of team management. This includes understanding the arguments of the other side, precision questioning so you can help others clarify their arguments, and learning to disagree without being disagreeable.

"Wise leaders know how fine the line can be between helpful suggestions and micro-managerial meddling … or between a scatterbrained group and an open-minded one," says Tetlock.

7. Focus on questions where your hard work is likely to pay off.

Certain classes of outcomes, such as oil prices and currency markets, are notoriously hard to predict. Tetlock says we usually don't know how unpredictable outcomes are until we've spun our wheels trying to gain analytical traction.

"There are two basic errors it is possible to make here," he says. "We could fail to try to predict the potentially predictable or we could waste our time trying to predict the unpredictable. Which error would be worse in your situation?"

Content provided by https://www.intheblack.com

10 Things Successful People Never Do Again

Mon, 23 Jun 2014 23:00:00 GMT

We all make mistakes but the people who thrive from their mistakes are the successful ones.

"Never go back." What does that mean? From observations of successful people, clinical psychologist and author of Never Go Back: 10 Things You'll Never Do Again (Howard Books, June 2014), Dr. Henry Cloud has discovered certain "awakenings" that people have-in life and in business-that once they have them, they never go back to the old way of doing things. And when that happens, they are never the same. In short, they got it.

"Years ago, a bad business decision of mine led to an interesting discussion with my mentor," Dr. Cloud says. "I had learned a valuable lesson the hard way, and he reassured me: 'The good thing is once you learn that lesson, you never go back . You never do it again.'

"I wondered, what are the key awakenings that successful people go through that forever change how they do things, which propel them to succeed in business, relationships, and life? I began to study these awakenings, researching them over the years."

Although life and business have many lessons to teach us, Dr. Cloud observed 10 "doorways" of learning that high performers go through, never to return again.

Successful people never again…

1. Return to what hasn't worked.

Whether a job, or a broken relationship that was ended for a good reason, we should never go back to the same thing, expecting different results, without something being different.

2. Do anything that requires them to be someone they are not.

In everything we do, we have to ask ourselves, "Why am I doing this ? Am I suited for it? Does it fit me? Is it sustainable?" If the answer is no to any of these questions, you better have a very good reason to proceed.

3. Try to change another person.

When you realize that you cannot force someone into doing something, you give him or her freedom and allow them to experience the consequences. In doing so, you find your own freedom as well.

4. Believe they can please everyone.

Once you get that it truly is impossible to please everyone, you begin to live purposefully , trying to please the right people.

5. Choose short-term comfort over long-term benefit.

Once successful people know they want something that requires a painful, time-limited step, they do not mind the painful step because it gets them to a long-term benefit. Living out this principle is one of the most fundamental differences between successful and unsuccessful people, both personally and professionally.

6. Trust someone or something that appears flawless.

It's natural for us to be drawn to things and people that appear "incredible." We love excellence and should always be looking for it. We should pursue people who are great at what they do, employees who are high performers, dates who are exceptional people, friends who have stellar character, and companies that excel. But when someone or something looks too good to be true, he, she, or it is. The world is imperfect . Period. No one and no thing is without flaw, and if they appear that way, hit pause.

7. Take their eyes off the big picture.

We function better emotionally and perform better in our lives when we can see the big picture. For successful people, no one event is ever the whole story. Winners remember that-each and every day.

8. Neglect to do due diligence.

No matter how good something looks on the outside, it is only by taking a deeper, diligent, and honest look that we will find out what we truly need to know: the reality that we owe ourselves.

9. Fail to ask why they are where they find themselves.

One of the biggest differences between successful people and others is that in love and in life, in relationships and in business, successful people always ask themselves, what part am I playing in this situation? Said another way, they do not see themselves only as victims, even when they are.

10. Forget that their inner life determines their outer success.

The good life sometimes has little to do with outside circumstances. We are happy and fulfilled mostly by who we are on the inside. Research validates that. And our internal lives largely contribute to producing many of our external circumstances.

And, the converse is true: people who are still trying to find success in various areas of life can almost always point to one or more of these patterns as a reason they are repeating the same mistakes.

Everyone makes mistakes …even the most successful people out there. But, what achievers do better than others is recognize the patterns that are causing those mistakes and never repeat them again. In short, they learn from pain-their own and the pain of others.

A good thing to remember is this: pain is unavoidable, but repeating the same pain twice, when we could choose to learn and do something different, is certainly avoidable. I like to say, "we don't need new ways to fail….the old ones are working just fine!" Our task, in business and in life, is to observe what they are, and never go back to doing them again.

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