Holistic Financial Services is an authorised financial services provider
May 2015
SAVINGS:
What's holding
you back?
Everyone should be saving. Whether it is to have funds for a
rainy day or for a major purchase - developing the habit of
saving every month is a good one.
So why can’t you? Do you reason this way?
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I don't earn enough money to save: Really? Look at what you spend your money on each month, and if there really is nothing left at the end of the month, you are overspending, or over-indebted. Something needs to change. Speak to your financial planner who can assist you with your budget.
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I have too much debt to be able to save: If you are paying off your debts religiously, and are reducing your debt, NOT accumulating more debt, then you are in fact saving, as you are reducing interest charges and the length of the debt.
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I'm dumb when it comes to money: You're only as dumb as you allow yourself to be. If you can't create a budget by working out how much you spend and what you earn, then ask somebody you trust to help you. Do not hide behind this excuse and wonder why you never have money.
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I don't have the willpower to save: Then speak to a professional who can assist you in changing your habits when it comes to sabotaging your financial well-being.
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No one can save in this economy: As soon as you hear yourself saying this, you should review your budget immediately, make appropriate changes, and change some of your spending habits. If you're waiting for the economy to improve before you start saving, it'll be a long wait.
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My spouse makes it impossible to save: Well then you need to talk about it - together! It's impossible to save when your spouse is spending like there's no tomorrow. You need to both have the same financial goals in mind. If your spouse is still unwilling to get on board, separate your finances.
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I've never been able to save: Then speak to a financial planner who can suggest the right strategy for you to get your savings on track. Make use of a debit order payment method. In this way the money is invested without you having to lift a finger, and before you know it, you've got money to meet your needs.
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Too much tax is deducted from my investments: This was always a reason used by people who do not want to save. Since the first of March 2015 this reason was turned on its head. You can now save your money in a tax free investment plan. Find out more about this Tax free Savings plan by contacting the wealth and lifestyle planners at Holistic Financial Services.
Many people may find themselves in financial difficulty at the beginning of a New Year due to the lack of financial planning and over spending during the so-called festive season or rather silly season.
It is time that we stop this cycle of financial violence, before it has a ripple effect throughout the year and shift to financial freedom!
Whether you want financial relief or simply want guidance that will give you financial peace of mind – here are some essential tips:
1. Live within your means - no additional debt!
The first step is to make a resolution to avoid incurring any additional debt in 2015 - and stick to it.
Establish a habit of living within your means. Do not be influenced by negative instant gratification culture of: ” I WANT IT AND I WANT IT NOW”.
Do not be fooled with ideas that if you wear certain clothes, shoes, hairstyle, perfume, etc. that you will be happier than what you are or that you will be as successful as the soccer star or the film star.
It all starts with fostering a prudent and sensible mind set.
2. Budgeting, budgeting, and…budgeting! - the 1st step to wealth creation
Examine your income and expenses as well as all other financial commitments (e.g. school fees, legal fees, maintenance costs). Once this has been done, you will have a clear picture of how your money flows and how your money is being drained due to a lack of financial discipline.
It will also make clear how much is available for discretionary spending and saving. Viewing your income and spending in this way will help you identify unhealthy habits and find areas where you can free up money to establish an investment plan to create wealth and to be more prepared for financial challenges.
There are many useful budgeting tools and applications available on the internet to help you to establish a relevant and customised personal budget plan. You can navigate websites such as www.holistic7.co.za or www.fin24.co.za to find budget tools.
3. Manage Debt - There’s always a way out!
If you are already in debt, make sure you pay off the debt with the highest interest rate first. Prioritise paying off debt instead of spending. Creditors are willing to accommodate your amount which you are able to pay and are committed to. Paying with credit for the new fridge or tyres which unexpectedly needed to be replaced can all add up, and the interest rates you will be charged can significantly inflate the initial price of such purchases.
4. Save and invest money - Pay Yourself FIRST!
Saving should be viewed in the same light as paying one’s taxes, rates and electricity. It is important to maintain an Emergency Fund which you can access for the unforeseen expenses which may arise.
Apply the principal of “Pay Yourself First” – this means that you must invest at least 10% of your gross (before any deductions) income in an investment vehicle that beats inflation over time. Warren Buffet became one of the richest men on planet earth by applying this principle consistently in his life – you can do the same because the power is in your hands.
5. Review your situation - don’t be afraid to seek advice!
Reviewing your financial plan often (every 6 months) is the key to ensuring that your financial planning is on the right track. Financial difficulties and desire for wealth is a common yet specialist field - so don’t be afraid to seek advice. Speak with your financial planner when anything happens in your life that might impact on your financial road map.
As part of this annual review, you must ensure that your Will reflects your current circumstances, that your insurance cover is adequate for any changes in your life, and that your financial goals are still in line with your needs.
January 2015
Implementing these tips and speaking to your financial advisor could be the first step to financial freedom.
November 2014
Early birds catch their... INVESTMENT GOALS!
Put another way, which of these 2 money piles would you much rather prefer at retirement?
Most people would unanimously echo: “Give me the BIG PILE, please!”
One may be prompted to ask: “How am I able to achieve this?” The answer is quite simple.
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If Johan (aged 25) wants R5 million when he retires at age 65, and he starts putting compounding (i.e. the ability to let your money grow in multiples) to work as soon as he earns a regular income, all he needs to set aside is R200 to R300 a month.
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If Riyaaz waits until he is about 30 years old to start working on building a R5 million lump sum at age 65, he will need to save about R450 to R600 each month.
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Ethel, a 45 year old with about 20 years to retirement, would have to save R3200 to R3800 each month to reach her goal of amassing R5 million to live from in retirement.
What if someone were to tell you that “Making an early enough start in life, can help you build significant wealth as an ordinary salary earner or even as an entrepreneur”.
Here’s an interesting reality flash:
If at age 55 you only have 10 years to accumulate R5 million to live from in retirement, you would need to save about R17 500 a month for those 10 years.
The fact is this: Delaying instant gratification (i.e. the impulse to buy and want something now) will go a long way to make you financially independent sooner than you could imagine.
Savvy Saving: Is an Emergency Fund important?
The short answer is…YES!
Many people would agree that Investments are one of the most exciting parts of any person’s Financial Roadmap. Though, within this part of Wealth Creation lies one of the most neglected, yet arguably the most important, components – The Emergency Fund.
The Emergency Fund - what is it exactly & why is it important?
In simple terms it is a source of money that is available either immediately or within a few days to protect you from emergencies or “disasters” that happen in your life. These emergencies may be anything that threatens your well-being or survival. It serves to protect you from having to withdraw from your other investments, in this way keeping your Wealth Creation plan on track.
An emergency fund is especially essential for women. When one considers the high rate of divorce as well as women becoming the primary care-givers after a divorce, having a financial safety net is of utmost importance.
Key tips for an Emergency Fund
Build your emergency fund up to a point where it is able to cover your monthly expenses
during a period of income loss e.g. retrenchment; temporary disability or impairment; etc.
Ultimately your emergency fund should cover monthly expenses for six (6) to eight (8)
months, at minimum. There are other aspects/unpredictable circumstance to consider when
planning your emergency fund. With guidance from your financial planner, these can ideally
be addressed.
Concluding Remarks:
Until you have the financial muscle of a really strong investment portfolio, with a great deal of good fat built into it, YOU would definitely need the financial assistance and protection of an emergency fund. Start today by getting your emergency fund in place.
October 2014
September 2014:
Government and all other PENSION FUND MEMBERS take note
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Retirement fund members have the mistaken belief that they may be denied access to their savings in their retirement fund in the future.
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These members are confused by the Retirement Reforms that begin on 01 March 2015 that affects Provident Fund members only.
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Pension fund members are NOT affected.
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On retirement, pension fund members are entitled (before and after 01 March 2015) to take One-Third of their accumulated fund benefit in Cash and Two-Thirds will be used to provide fund members a Pension for Life.
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There are currently no measures in place to force provident fund members to preserve their retirement savings on resignation and retirement from their job.
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Next year, only when members retire will provident fund members be obliged to use two-thirds of what they have saved from 01 March 2015 to buy a monthly pension.
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However, whatever provident fund members have accumulated in their fund to that date will still be available as a lump sum on retirement.
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Members who contemplate resigning to withdraw their retirement savings should be aware that:
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On withdrawal, only R25 000 of their savings is tax free,
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Whereas at retirement R500 000 is tax free.
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So Keep Calm, and Carry on Investing in your pension.
September 2014:
LOYALTY IS emPOWERment:
How to Stretch your Wallet “SAVVY SAVER” Style
Presently South Africa has an excess of loyalty programmes offering their members the chance to save on everything from food to travel.
With purses coming under pressure year on year, everyone is eager to take advantage of any possible saving opportunity. So, which programmes does one choose to align with?
In order to answer this question let us unpack using some Savvy Saver loyalty programmes (LP) tips:
Savvy Saver LP Tip #1 – Focus Your Spending Power
Savvy Saver LP Tip #2 – Choose Loyalty Programme features to suit your lifestyle
Savvy Saver LP Tip #3 – Consider Flexibility of Loyalty Programme
Some of South Africa’s TOP LOYALTY PROGRAMMES are:
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Clicks Clubcard; Discovery Vitality; eBucks; Pick ‘n Pay Smart Shopper; & Standard Bank’s uCount
Final thoughts: Treat your loyalty points as a way to stretch your wallet. If you use the loyalty programme as intended, you will enhance your lifestyle and stand to win. The Power to be a Savvy Saver lies in your wallet.
Holistic hosted a motivational workshop for WCape Education AET Managers. Theme: "Beyond Motivation, I AM..."
Enabling managers to See and Explore their lives and work from a more enlightened SELF: SEE MORE; EXPLORE MORE; THINK MORE and; HAVE MORE. July 2014
Holistic at the ABSIP 2014 Budget Review with New Finance Minister Nhlanhla Nene Feb 2014
Hassan Adam of Holistic meets Finance Minister at 2014 Budget Speech review session 26 Feb 2014
