You know the importance of saving money, but perhaps when it comes to starting your plan, you do not know where to find the money or where to invest it? Maybe this is why you have never started an investment?
If you have money in reserve for a rainy day, your child's education, that dream holiday, your child's dream wedding or your retirement, YOU are better protected, from life's curved balls financially affecting you.
YOU are in control!
And what about those who rely on your for a living? How will they cope?
Your first priority is to create a savings account that can help pay for around 5 to 6 months worth of your living expenses.
It is money you can immediately get to, when you need it.
This will help prevent you having to cash in some of your investments greatly reducing their future value.
It is the best tool to identify just where your money is going and where you can plan to allocate money for your savings.
You want to "pay yourself first" by savings around 10% of what you earn.
Set your spending goals, and allocate some of your monthly income into them.
Saving just R500 every month can add up to a substantial amount over time, especially if invested into a Unit Trust!
!-- Calculator Widget Copyright CalculatorSoup, LLC at www.calculatorsoup.com. Use is granted only if this statement and all links to www.calculatorsoup.com are maintained. -->
So you need to compensate for your savings to meet the threat of inflation.
Every year, you must increase the monthly amount you save by at least the inflation rate.
That way you cater for the effect of inflation and make your future money worth something.
3 to 5 years Saving - if you need to use some or all of your money at short notice, don't commit to a long-term plan such as an endowment or unit trust. These investments have costs and it takes time to recoup these expenses.
Ideally your savings should be in a bank.
The best product with a bank is a Money Market Account or Fund.
But, they do require quite high minimum balances.
Whilst you are saving towards that minimum balance use a normal savings account.
Bank accounts return interest and that is added to your total income for tax. Do not be too concerned as SARS have given us reasonable deductions from income tax, for interest earned. You need a fairly large amount in savings accounts before you are liable for tax. Check with a tax adviser if you are concerned.
5 or more years Investing - in order to grow your money, you do need invest it with a degree of risk. And to reduce the threat of poor returns, you need to invest for a longer period. That way the average of you return should be improved over time.
Endowments, Unit trusts and Retirement plans are all longer-term investment products to consider. The each have their own merits, both good and not-so-good!
You must consult the schemes/company product brochures and rules for comprehensive benefit descriptions.
We will offer you the BEST HELP FOR FREE!
Medical aid pays healthcare costs.
What if a disability STOPS your income?
Peter Pyburn - Authorised Financial Services Provider, fully licensed to render financial services since 1991. Death and Disability Planning; Retirement Planning; Investment Planning; Healthcare and Estate Planning. More...
Hosted by hostking.
Check out what this excellent ISP offers you!
You can get a 1-month FREE trial!
Last update: April 18, 2022
By submitting an enquiry you agree to us collecting the information in the fields above. Please refer to our POPI Manual.
Your data will be processed according to the Protection of Personal Information Act (POPIA) guidelines.