Category: Investments

So often we meet clients who tell us that they cannot afford to save because ‘school fees are really expensive’ and ‘looking after family members is derailing their savings goal’….and the list of reasons is endless. If we are really honest, life has changed dramatically in the past year and a bit. Things are not as black and white as they have been, and we cannot continue living as if death and financial insecurity is not a part of our lives.

Many of us are experiencing anxiety and real fear about our immediate and long term wellbeing and we cannot brush that aside. If this is you, know that you’re not alone in all of this. And your fear and stress are justified.

While we are trying to keep our heads above water, we need to consider a few things. In the event that we make it through the next week or year or decade, what will our financial situation look like? In the event that we make it to retirement, will we be able to sustain ourselves on what we have saved over the years? Current statistics suggest that we won’t as only approximately 6% of retirees in our country are financially secure. The rest are either forced to continue working or are dependent on family or the state for their survival. While our mortality may be in question, our survival is also very likely and we must try our best to plan effectively for it, if it happens.

So what can we do today to try and better our situations, given the mess the world is in right now?

Here are a few pointers that may help:

1. The first and really important step is to acknowledge your feelings. It’s ok to be feel the way you do. Be gentle with yourself because this is really a difficult time we’re in
2. Be honest about your spending habits. Many people think they know how they spend but don’t really. When we work with clients, we almost always find money they had no idea they had, simply because they don’t really keep track of every cent they spend. If you do anything in the next few weeks regarding your finances, understand where your money goes – ALL of it. You’d be surprised at what you discover during that process
3. TALK. Talk to your spouse, your children, your extended family members that you support – talk to them about money. Talk about what you have, what is possible and what is not. A lot of anxiety and financial strain can be alleviated through honest conversations. Try it

Once you’ve done all the above, you may discover that it is possible to start your savings/investment journey. Even if it’s with very little money. But the important thing is that you actually start. With time, and we see this often with clients, you gain momentum and are encouraged by the balance you build up which then gives you the desire and willpower to continue to accumulate more. Remember that there are two important ingredients of wealth accumulation and that is starting early and consistency. Both are in your control.

Be well.

Women are known to think more of and do more for others than themselves, in the process sacrificing their careers, money and general wellbeing.

In this women’s month, think about this: There is a very high likelihood that you, as a woman, will have to parent alone, will not save enough money to cater for your needs and will ultimately die poor and alone.

Study upon study shows the odds are stacked against women.

According to an article published four years ago by the UN’s Food and Agriculture Organisation, women “reinvest” up to 90% of their earnings in their households – that’s money spent on food, health care, school and income-generating activities to help break the cycle of intergenerational poverty.

In a research paper titled “Women and Retirement Security”, Nevenka Vrdoljak and Anna Rappaport make these important findings for women to note: You live longer, accumulate less money over the years, are more likely to be a single parent, are likely to spend your final years alone, and are 80% more likely to be impoverished from age 65 and above.

This article is published in Business Live. Please follow the link below to read the rest of the article.

https://www.businesslive.co.za/bt/money/2020-08-09-gugu-sidaki-women-do-something-for-yourself-for-a-change/

The beginning of a new year is a time for reflection, planning and new beginnings for many. Many personal finance writers have been giving extensive and very valuable tips regarding budgeting, saving and investing to kick-start the year. These are important lessons to learn and not having money is devastating on many levels. It is, however, equally important to note that money cannot give you all the happiness you require.

Jonathan Clements, an acclaimed personal finance columnist and author wrote an article in the Wall Street Journal titled ‘Nine Tips for Investing in Happiness’. This article was published in 2006 yet remains very relevant today. Interestingly, none of the tips he provides involve accumulating more money, budgeting or investing. These are the three that stand out the most:

Keep your commute as short as possible

According to this study, How commuting affects subjective wellbeing by B Clark, K Chatterjee, A Martin, A Davis, there is a negative correlation between a long commute and overall wellbeing. Not only that, the mode of transport used, and the conditions experienced during the journey exacerbate the issue. The study also found that those who walk or cycle to work were happier and more satisfied with their lives compared to those who used public transport to commute.

Using this metric alone in the South African context, it would be safe to assume that the bulk of the population are experiencing lower levels of subjective well-being, given how far they must commute in often very difficult conditions. [Spatial apartheid or the segregation of the population along racial lines is still a massive reality in post-apartheid South Africa].

Enjoy a good meal

According to StatSA’s Living Conditions Survey results released in April 2019, approximately half (49,2%) of the adult population surveyed recently were living below the upper-bound poverty line. That means almost half of the population is preoccupied with survival as opposed to enjoying the little pleasures of life that so many of us take for granted daily.

Volunteer

Life tends to get the better of us and we often believe we have far less money and stuff than we need. Oftentimes, that cannot be farther from the truth. Volunteering your time is one way to keep you grateful and makes you feel good, physically. A few studies have proven that giving helps to release endorphins giving you a mild high. This, in turn, reduces your stress levels.

Being able to reduce your daily commute, enjoy a luxurious meal occasionally and to give (whether it is of your time or possessions) means you already possess a few things that have been proven to contribute to overall well-being and happiness. When considering your investment portfolio and changes that need to be made it, consider adding ‘happiness’ as an asset class this year. Write down all the things that make your heart sing, that bring you joy, that make you HAPPY. Make it a daily practice to actively increase your allocation to these things at all times. Do this often, particularly during times of financial difficulty, and your preoccupation will become more about the things you have as opposed to those you don’t.

Happy new year!

In the past two blog posts, we dealt with budgeting and risk-profiling – two very important initial steps to take when formulating a financial plan.

Goal setting is the third vital step. During this process, it’s important to figure out what you need and what you want and to prioritize the former over the latter.  Often, the lines are blurred, and clients need to be reminded of the difference.

‘I need that sports car’, a client told me once, some years ago. I had to smile at that statement. The truth is that we all go through this at some point in our lives – when the ‘nice-to-have’s’ become a ‘must-have’. 

My bucket-list is a mixed bag of wants and needs and I’ve been slowly working through it – figuring out what the important, urgent and nice-to-have items are and categorizing them accordingly. The second phase to this is working out the financial implication of each item. An example, I’d like to travel on the Rovos from Cape to Cairo before I die – this one is a clear want and something I can defer until I’ve sorted out some urgent and important matters in my life first. It is accordingly filed under ‘wants’ and the time-line is ‘long-term’. The last time I checked, it was going to cost me R500,000 and a whole month off to traverse the continent. ????