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Economic Update

SAFE FOR NOW, BUT RATINGS RISK REMAINS DAVE MOHR & IZAK ODENDAAL, OLD MUTUAL MULTI-MANAGERS2 After a round of credit ratings reviews by the three major ratings agencies, South African government bonds will remain part of the Citigroup World Government Bond Index (WGBI), but only just. The immediate risk of forced selling as a result of being excluded from this index has therefore abated for the time being. While each of the agencies has its own specific methodology for assessing creditworthiness, the common thread through all three reviews is that economic growth is too low, leading to pressure on Government’s finances, worsened by underperforming State Owned Enterprises (SOEs). Fitch kicked off the much anticipated (or dreaded) round of ratings reviews by maintainin

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Gap cover 2018 Demarcation fact sheet

2018-Demarcation-Fact-Sheet-Final

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Gigaba gives us a reality check

The one thing Finance Minister Malusi “Gigabyte” Gigaba cannot be accused of is giving off a false pretence that all is going smoothly on the fiscal front. Presenting his maiden budget speech (in an uncharacteristically boring suit), Gigaba departed from tradition and laid out the full extent of the state of South Africa’s fiscal position. And while this may not be welcome news to us all, it is far better to acknowledge one’s problems than pretend that they do not exist. Only seven months into the job, the old cliché of “do not shoot the messenger” may be apt. Focusing on the numbers, a couple of statistics presented in the Medium-Term Budget Speech immediately stand out. The fiscal revenue shortfall for 2017/2018 is an eye-watering R50bn, due to a lack of economic grow

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The key to a successful relationship with a financial advisor

The biggest risk to any investor’s money is often their own behaviour. Many studies have shown that, on average, investors receive lower returns than the funds they are invested in because they chop and change instead of sticking to a plan. “Investors know they should hold diversified portfolios, but many chase past performance and end up buying funds too late or selling too soon,” research house Morningstar noted in a recent study. “As a result they suffer from poor timing and poor planning.” Mostly this is a result of making emotional decisions or succumbing to personal biases. When the market falls, for instance, investors may panic and sell out at the bottom, locking in their losses. They then sit out until the market is up again, and only buy at the top. In

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What compounding can do for you

By Wanita Isaacs 'Compound interest is the eighth wonder of the world. Those who understand it, earn it... those who don't, pay it.' – Albert Einstein Compounding is when the interest on a sum of money, either a deposit or loan, is added to the original amount so that the interest also earns interest. Albert Einstein's popular quote highlights the impact compounding can have over time, and also cautions that it can work either for or against you. Wanita Isaacs explains. When you invest, time allows your invested money to grow and compounding makes your money work harder for you. Given a long enough period to work, compounding can dramatically multiply the value of your investment so that less of your total investment will be from your contributions and more from growth. On

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It is worthwhile starting to save early – a little can go a long way

By Jeanette Marais   You can substantially improve your financial situation if you start saving sooner rather than later and you will be a step closer to being financially independent when you retire. A little really can go a long way. It is interesting how most of us are reluctant or unable to make the sacrifices needed to save more than 10% of our salaries towards retirement, yet we expect the amount we save to be able to pay us 75% of our final salaries – often for as many years as our saving years. Sadly there are no genies waiting in lamps in this lifetime; the only way we can hope to achieve this replacement ratio is through long-term commitment, decent returns and sensible investor behaviour. Time and commitment If you start early and save consistently over long pe

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RETIREMENT PART 3: When to start saving for retirement

By Jeanette Marais   The accepted wisdom is that you need to start saving for retirement as soon as you are employed, but if you are late it is worthwhile to start as soon as possible. A century ago Albert Einstein shook the foundations of our understanding of the universe when his theories of relativity changed the way we think about space and time. His theories reframed time as a relative and subjective experience. Although science may now think differently about time, our everyday experience continues to tick over in a clock-like fashion. And it is this constant stream of future becoming present becoming past that gives time its economic value. Time is an irreplaceable resource You can’t buy or sell it. And nowhere is this more apparent than when you need to make a lon

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Discovery Health Key highlights 2018

Please find below some key highlights from the 2018 Discovery product update. High level summary of key updates: Weighted average contribution increase of 7.9% Enhancements to our Executive Plan and Smart Plans Introduction of the Young Families Offering, with significant risk benefits for pregnant moms and their babies for the first 2 years of life Day-to-day Extender Benefit Updates Updates to our HIVCare Programme Introduction of an Industry leading digital health technology platform -  DrConnect Significant enhancements to Healthy Company and Discovery PrimaryCare Introduction of Discovery Gap Core Additional detail regarding key updates: 2018 Increase Weighted average contribution increase of 7.9% for 2018 Plan specific increases range

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Let SARS help you pay for retirement

By Carrie Furman Allan Gray The South African Revenue Service (SARS) wants to help you pay for your retirement. The way in which they do this is by offering generous tax deductions when you make contributions to your retirement annuity (RA), pension or provident fund. On 1 March 2016, the tax deductions for retirement savings increased from 15% to 27.5% - which means you can now save more for retirement and get back more from SARS. What else has changed? You are now able to deduct your contributions to all retirement funds, with the maximum tax deduction you may make in a tax year limited to the greater of 27.5% of taxable income or remuneration, subject to an annual ceiling of R350 000. Contributions above this limit made directly by your employer are also now taxable as a fri

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RETIREMENT PART 2: Why saving for retirement makes sense

By Jeanette Marais   Starting your retirement savings is as much a mental battle as it is a financial one. Whatever your excuse is for not saving for retirement, you may very well find that you are stuck in a self-fulfilling belief: I think it’s true, therefore it is true. Confronting your mental barriers to saving for retirement is your first (and most difficult) investment. To help you take the first steps towards making your future a priority it helps to understand why saving for retirement makes sense – even when you think you can’t. You may not be in a position to start saving immediately, but mentally preparing yourself can make the process easier when you have the income to save. …the future needs to look after itself; I’ll cross that bridge when I come

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Rudi Bouwer joins The Wealth Room

Over the past 2 years I have been on a journey of discovering my purpose. Not the easiest of tasks I must say, but certainly a journey that has been the most rewarding thing I have ever done. In this journey, I have discovered that our greatest gift in life is our relationships: our relationship with God, our families, our friends and our acquaintances. It is in these relationships that we discover our purpose. I firmly believe that the birthplace of opportunity lies within relationships. I say this because a true relationship is never one sided, it will always be a two-way streak, meaning that one party should never benefit from the relationship more than the other. Now this may seem obvious but putting it into practice may prove far more challenging then you may think. You see, I have co

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RETIREMENT PART 1: Why save for retirement?

By JEANETTE MARAIS from Allan Gray Step into the future to find out why you should save for retirement. The South African government’s old age grant is R1500 per month. Could you live on that? This amount is less than many of us currently pay towards our cars, or a monthly grocery shop, or a weekend getaway. Unless you think you can survive on this meagre amount, there is no time like the present to start saving for your retirement. While retirement may seem like a goal too far in the future to affect you if you are under 30, or you may feel like you have missed the boat if you are over 40, our 10-part retirement savings series will answer the question of why you should save for retirement and aims to help you to get started – regardless of your age and life stage.

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RETIREMENT – The trick to retiring with enough

By THANDI NGWANE from Allan Gray When magicians perform they often draw your eyes away from the simple sleight of hand or hidden trapdoor that makes the trick. This skill is called the prestige: without it, tricks often fail to captivate. Tricks can be entertaining but in the world of investing it is much better to rely on the mundane. Thandi Ngwane explains the wonderful but boring ‘magic’ of investing. We are often asked by clients and prospective clients what the magic trick is that can turn a portion of your income into a comfortable retirement. It is hard to accept an extraordinary result by ordinary means. This desire is a fault in human behaviour that can have devastating consequences when it comes to saving for retirement: we rely too strongly on a ‘wing and a prayer’

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PLANNING: THE KEY TO WEALTH

Advice you were never given at school By Rudi Bouwer, The Wealth Room There’s a simple principle at play when it comes to saving and investing: the more you plan your finances, the greater your chances of being wealthy are. Now basic financial planning is not as complicated as it seems. If you start with a simple budget and stick to it, you will eventually get to the point where you are building up savings. You can then use these savings to build your cash safety net (usually 3-6 month’s salary) and once that is established, start your investment planning. Like your budget, your investment plan can be very simple, such as a monthly investment into an ETF (Exchange-Traded Fund), shares or money market. However, once you have some money to invest, deciding on an investment ca

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How do I help my clients navigate turbulent markets?

Yvonne Kilian, Financial Planning Coach at Old Mutual Wealth South Africa has experienced good returns across nearly all asset classes for some time. Currently, investors are faced with the reality that we are now entering a difficult (normal) time, in which targeted returns are under performing relative to their average over the long term. Clients who have expectations(substantiated by good returns and even periods of above-average returns) of consistent positive performance may feel uncomfortable by the current situation. During periods of uncertainty, many clients panic and question whether they should remain invested or switch to a better-performing fund. This reactive behaviour is emotionally charged. Your role as financial planner is to manage your clients’ expectations to help

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South Africa back in junk territory

  Dave Mohr & Izak Odendaal, Old Mutual Multi-Managers Following last week’s dismissal of Finance Minister Pravin Gordhan and his deputy, S&P Global Ratings downgraded South Africa’s foreign currency credit rating to BB+, into speculative grade or so- called junk territory. The local currency rating was also downgraded but remains investment grade at BBB-. Around 90% of government borrowing is in local currency and there is little risk that the government will be shut out of capital markets, unable to borrow or maintain interest payments. Risks to fiscal and growth outlook S&P noted that President Zuma’s Cabinet reshuffle put South Africa’s fiscal and growth outlook at risk. It is particularly concerned

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Tax implications for 2017

Using a mobile device? Click on the image to view in its entirety:  Content sourced from PSG: https://www.psg.co.za/news/Budget-Speech-2017 

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Budget 2017: What you need to know

Significant announcements New 45% tax rate for those earning more than R1.5 million per annum (around 100 000 taxpayers are affected) Dividend withholding tax increased from 15% to 20% No increases in VAT or Capital Gains Tax No new allocation for nuclear Budget deficit to decline from 3.4% in 2016/17 to 3.1% in 2017/18. For the first time since 2010, tax revenue growth did not match economic growth Tax changes Government will raise an additional R28 billion during the new tax year New 45% marginal tax rate for those earning more than R1.5 million per annum Other taxpayers will not receive full relief from fiscal drag – the impact of inflation on tax brackets Tax on dividends increase from 15% to 20% Taxes on fuel to rise by 39c a litre. (Fuel levy

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Let SARS help you pay for retirement

The South African Revenue Service (SARS) wants to help you pay for your retirement. The way in which they do this is by offering generous tax deductions when you make contributions to your retirement annuity (RA), pension or provident fund. On 1 March 2016, the tax deductions for retirement savings increased from 15% to 27.5% - which means you can now save more for retirement and get back more from SARS. What else has changed? You are now able to deduct your contributions to all retirement funds, with the maximum tax deduction you may make in a tax year limited to the greater of 27.5% of taxable income or remuneration (see Definitions), subject to an annual ceiling of R350 000. Contributions above this limit made directly by your employer are also now taxable as a fringe benefit

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Retirement Annuities VS Tax-Free Investments

  Access to your cash Your investments in an RA cannot be accessed before the age of 55, except in very specific circumstances. You can access your TFI at any time. However, withdrawing from a TFI account impacts negatively on your lifetime investment limit of R500 000 – you cannot replace money that you have withdrawn. Tax savings The main difference between the two products is when you get the tax benefit. An RA offers tax savings now, i.e. you pay less tax now because you make contributions with earnings on which you have not paid tax, but you will pay tax later, i.e. you defer paying tax. Apart from deferring tax in an RA, a further tax saving may come from paying a lower average tax rate on the benefits withdrawn from the RA at and after retirement, v

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Another shock political event as Trump sweeps US election

2016 has turned out to be the year when politics shook markets, both domestically and globally. In many ways, Donald Trump’s victory in the US presidential election is a repeat of the “Brexit” shock, when the UK voted in a June referendum to leave the European Union. As with Brexit, markets were volatile in the weeks leading up to the vote, but surged prior to voting day as the final opinion polls indicated that Hillary Clinton would win. Despite a decades-old tradition of fairly accurate polling in the US, the polls were wrong, and markets sold off – - The Mexican peso was hit hardest, falling to a record low against the US dollar. - Asian equity markets closed sharply lower, with the Japanese market worst hit. - The US dollar weakened against other developed m

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LIVE ON EXPRESSO: Economy Update

Part 1 [embed]https://youtu.be/xFqMlql1wGo[/embed] Part 2 [embed]https://youtu.be/2p91nRRN_u4 [/embed]

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Gap Cover has become a non-negotiable

Increasingly we are experiencing gaps between what doctors charge and what medical aids are prepared to pay, with some doctors charging up to 600% (or 6x) the medical aid rates. The last thing you need is to get caught off guard with a bill your medical aid is not prepared to pay in full. Fortunately Gap Cover offers a solution to this problem, regardless of the medical aid you belong to. The product does exactly what the name implies: it covers the gap between the doctor's fees and medical aid rates. Gap Cover only comes into play when you go for a planned procedure (elective operation). In an emergency, you should be fully covered by your medical aid. After a planned procedure, you will receive three bills. The first bill will be approximately 60%-70% of the total amount and wil

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How important is medical aid?

Can you afford it? Medical aids have changed over the years. Traditional schemes used to cost an arm and a leg and covered everything, but today you can select the cover you need or can afford. You can choose from hospital cover for planned procedures and emergencies to hospital cover with a small savings facility towards day-to-day costs. In my experience of helping clients select the right plan for their needs, I have seen far too much focus on day-to-day expenses and an ignorance of emergency costs. Worst case scenario your dentist bill will be a few thousand rand (and 90% of the time you can make a payment arrangement). However, the cost incurred in an emergency could set you back millions. In 2013, Discovery Health's biggest medical claim was over 6 million rand. On average, the

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Short-term insurance 101

The more you know about insurance and how the industry works, the better prepared you will be, and the more money you can save. The following are key factors that insurers use to determine the price of car insurance: • Age: If you’re young, your risk of being in a vehicle accident is statistically much higher. You can’t do anything about your age, but some insurers may penalise you less than others. • Claims history: Safe drivers are rewarded with lower insurance premiums. Your history of making claims will directly affect the cost of your insurance. The more you use insurance, the more your insurance will cost. • Credit history: Insurance companies have determined that there is a direct correlation between your credit history and your risk. • Use of vehicle: The

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Saving for something special?

With so many short-term investment options to choose from, saving for something special like a new car, dream wedding or overseas holiday can be daunting. Leaving your savings in a bank account may feel like the safest and easiest choice, but leaving it there for too long without earning any (or very little) interest can result in it losing its purchasing power over time. How can my savings lose its purchasing power? Each year the cost of goods and services increases by a certain rate, also referred to as inflation. For your money to retain its purchasing power, it will need to grow by inflation or more over the same period. To put this into perspective, if you are saving towards a 10% deposit on a car that costs R240 000, putting aside R2 000 a month over the next 12 months would

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LIVE ON EXPRESSO: How to Retire Wealthy

Part 1 [embed]https://youtu.be/027VAwuWzPg[/embed] Part 2 [embed]https://youtu.be/FXzoFF9NleM[/embed] Part 3 [embed]https://youtu.be/W8d2UhcVmzM[/embed]

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Awesome tips for effective and stress-free budgeting

We've hit the half-year mark and this is a good time to stop for a moment and reflect on your spending habits. Is your budgeting still on track? This article by Rob Berger shares five tips to keep that budget effective and stress-free. We've highlighted the key points. Spending less than we make is often cited as the most important personal finance goal. It helps us get out of debt, save for emergencies and stash money away for retirement. It’s the primary habit that enables us to achieve some level of financial freedom. It can also be really difficult to accomplish. In some cases, it’s lack of income that creates the financial strain. In many cases, however, the problem is overspending. With those who overspend in mind, here are some tips for more effective and stress-free bud

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LIVE ON EXPRESSO: How to Afford Children Part

Part 1 [embed]https://youtu.be/sYyDrtPQhgQ[/embed] Part 2 [embed]https://youtu.be/q_fRqO-EIOo[/embed] Part 3 [embed]https://youtu.be/0bBJsLNWV1c[/embed]

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How inflation affects your buying power

Let’s assume you are currently 35 years old and want to retire in 20 years time at the age of 55. You believe that, based on your monthly budget, you could easily survive on R10 000 per month. However, we understand that you will not 'buy' the same value for your R10 000 when you do retire in 20 years time, at age 55. Let’s assume that we have an average inflation rate of 8% per annum over the next 30 years. The million dollar question you need to ask yourself is: How much income will you need to maintain a reasonable standard of living in retirement?   YEAR AGE TODAY'S INCOME REQUIRED INCOME 20 55 R10 000/m R47 000/m 30 65 R10 000/m R100 000/m 40 75 R10 000/m R218 000/m 45 80 R10 000/m R506 000/m   To put the above

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The magic of compound interest

This is how big corporate companies, banks and wealthy people make their money: they let their money work for them by earning interest on interest. Otherwise known as 'compound interest'. The illustration below gives you an idea of how effective this is.  If you were to pay yourself 1 cent today and double it each day for 31 days, what will you have at the end of the month?   The sooner you start, and the longer you stay in any investment, the better the results become over the longer term. It is like a snowball. It eventually runs away with itself. So, start saving NOW and don’t stop for anything. Set yourself goals and go for it. Let's look at another scenario. If you invested R100 000 today at 10% compounded interest, how much will it be worth after 31 years?

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LIVE ON EXPRESSO: Buying to Let

Part 1 [embed]https://youtu.be/6yiM_g1NW6I[/embed] Part 2 [embed]https://youtu.be/Kj6CbaDzR1I[/embed] Part 3 [embed]https://youtu.be/LMp8dYR9oks[/embed]

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LIVE ON EXPRESSO: Teaching Kids About Finance

Part 1 [embed]https://youtu.be/S1ingWiH4uE[/embed] Part 2 [embed]https://youtu.be/xQJUuHhbodw[/embed] Part 3 [embed]https://youtu.be/CHLhkkZhZrM[/embed]

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LIVE ON EXPRESSO: How to buy a car

Part 1 [embed]https://youtu.be/JRTBTdwxMn4[/embed] Part 2 [embed]https://youtu.be/0SUEajfTk68[/embed]

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What is the best investment option for you?

The first thing that you need to establish from the beginning is what your investment objective is, once you have established that, you can go through a process of elimination to determine what the best Investment Product or Investment Vehicle will be for you to achieve your investment objective.     Once you have determined what vehicle you will be using, you can then determine what sort of risk tolerance you are willing to take off with the underlying unit trust. The longer your investment time horizon (interment period), the higher the amount of risk you can afford to take.   How do you choose the right products that meet your needs? In some cases you might have more than one product that might meet your needs, so you will then look into what your personal p

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Gap Cover a non-negotiable today

The event of experiencing gaps between what doctors charge and what medical aids pay is becoming more and more of a reality for us in todays times. I am sure that you, or at least somebody close to you, has been victim to this “GAP”  and we know now that some doctors can charge up to 600% (or 6x) of medical aid rates. The last thing most of us can afford is to get caught off guard with a bill that is thousands of rands and possibly more than what your medical aid is prepared to pay. BUT DON’T WORRY THERE IS A SOLUTION TO THIS PROBLEM IF YOUR MEDICAL AID ONLY COVERS YOU AT MEDICAL AID RATES! So let’s talk about the solution to this problem (no matter what medical aid you belong to)! The solution to the problem is called Gap Cover and it does exactly what the name of the product i

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Blair Taberer interviewed by Grant van Zyl

Blair Taberer shares his insight as a successful businessman, discussing the highs and lows of owning your own business, starting up businesses and developing your passions. He shares his wisdom with us, shows the importance of learning from each endeavor and building on your knowledge through every experience that life may throw at you. Blair also discusses the importance of balance and finding your true happiness in life, be it in business, people, relationships, experiences etc. Enjoy this interview and learning from his handy tips.

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Is it better to rent or buy a house?

Today we are going to touch on the subject of renting VS buying. This topic came about after I put together a piece on is buying property a good investment. If you haven’t read that article it might be worth your while to skim over it or just re read it to get a little more context for this post. However, if you do not have the time to, then I think the principles will be self-explanatory in the post below. I must also add a disclaimer that you will have to look into each individual situation and do the maths to see how it turns out, as there are just too many variables for me to cover in a short post. Let’s touch on buying property with a bond VS renting, which is your worst case scenario. Buying property for cash VS renting is a no brainer in my opinion as long as you make su

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Is South Africa that bad after all?

Can you believe that we are in the year of 2015 already and how fast the years seem to be flying by?! I am sure that over the holiday season, you had at least one conversation with someone regarding the state that South Africa is in, and I am sure that that conversation didn’t have a very positive tone to it, after all that South Africans have had to endure in 2014. Let’s have a quick recap of the kind of year South Africa faced in 2014. For starters Eskom taught us how to be way more romantic, with candle light dinners every other night. We have learnt (or at least it seems so) to accept our president for all of his flaws and corruption charges. We learnt that the best way to combat a fire on your property is to build a big swimming pool. We found out that our president has spent ov

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Buying property as an investment

One of the questions I get asked on a daily basis is, whether property is a good investment or not. This answer has so many variables, it’s really something you would have to look at on a case for case basis, but let’s look at some guiding principles that can help you make the right choice. Let’s say you find a house at a MARKET VALUE of R1000 000 and you take out a 90% bond (with a 9% interest rate) on the house, as most banks are not giving a full 100% bond anymore over a period of let’s say 25 years. First off you are going to have the following costs: Transfer cost on R1000 000 will cost you about R33 000 Bond Registration cost of R900 000 will cost about R20 000 Let’s look at the future costs of the house: The R900 000 bond over 25 years at an interest rate of 9%

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Making tax work for you for retirement

Now that we have been through the foundations of investing, through understanding how important asset classes and asset allocation is in setting up the right Unit Trust that will best suit you. We can now move our attention onto retirement investing and what options are available for us all to invest into regarding this. Before I start, I want to just point out that many people start investing or planning for this process without an end goal in mind, and I find this to be counterproductive. The reason being, is if you don’t know how much money you need every month during retirement, how do you know how much money you need to save every month towards retirement. So the first thing I would like to point out in this post is, before you read any more investment advice, first determine in

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Understanding Unit Trusts

Today we are going to discuss Unit Trusts and how Unit Trusts work. If you haven’t read my last 2 articles on Asset Classes and Asset Allocation, I recommend that you have a quick read through those first as they form the foundation for this post and for your best understanding of Unit Trusts. I assure you that understanding Asset Classes and Asset Allocation, will change investing for you forever. I am going to start at the very beginning and break down what Unit Trusts are. Unit trusts are when companies like Allan Gray (Asset Managers) buy Asset Classes on behalf of us in bulk and at a much lower price or a better interest rate on bonds etc. They then take the different Asset Classes and combine them into what we call Funds. For example all Asset Managers will have what we ca

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Investment Value

How do you know if the investment has any value? The value of your investment is determined by the value of the underlying assets in your investment and the asset price change or if you buy or sell off units during the period of the investment. Your investment value can change depending on the underlying assets in the investment When the price of the units you own changes, this can affect your investment in a positive or a negative way. However the scenario that you are optimistic for is for your unit trust to earn returns through capital growth, which will then effect the value of your investment in a positive way. If the underlying assets are volatile, then the price of the units can fluctuate during the investment period. The most important thing to keep in mind is as long as

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Understanding Return & Unit Price

Understanding Unit Trust Returns Maximize your capital growth in your investment Some investments focus purely on getting the best possible capital growth by investing in assets that the fund managers feel will grow over time. How they do this is by looking for assets that offer a great value for money, or that they feel they are getting at a discounted price to what they are worth. The fund managers will then hold onto these assets for some time, until the underlying assets get to a point that they are worth more than what they were purchased for and then sell them off at a profit. Maximize your possible income growth on an investment Certain investments or unit trusts main goal is to not necessarily achieve capital growth, but rather create a reliable or steady stream of income thr

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About Unit Trusts

Key Benefits of Investing into Unit Trusts Investing in a unit trust is a pretty cost-effective option When you invest into Unit Trusts, you are able to put your funds together with other investors in order to purchase units or shares in other companies. By doing this you no longer have to fork out big amounts of money to buy shares and get the same diversification. Asset Managers will also be able to pool all Investor’s funds together and negotiate better rates for shares in companies or the different asset classes. You can spread your investment risk By buying into Unit Trusts you increase your exposure to a wider range of investments at a much lower price. Not only do you get a lower price, but it also simplifies your investing opportunity into various asset

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Become an Investment Specialist Today!

Yes you can become an investment specialist today! After going through Asset Classes last week, there is just one quick thing we need to look at before we move on to investing into Unit Trusts. I touched on Asset Allocation briefly in the last post, so in this post I will go through Asset Allocation in a little more detail so that you can build a better understanding and knowledge base. Asset Allocation:  Asset Allocation is how you divide your investments between the Asset Classes. So it is deciding how much cash, bonds, property  and equity you want in your investment. Asset Allocation is, in my opinion, one of the most important decisions you make when it comes to investing and achieving your investment goals. Before you go ahead and select which bonds, equity etc you want

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