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Protect Your Nest Egg

Your retirement fund probably won’t be the only savings you’ll have when you retire, but it’s likely to be the core. How healthy is yours looking?

Paul Leonard



Retirement Savings Protection

Andrew Davison of Acsis stressed the importance of taking ownership of your retirement fund and compared it to owning a vehicle. For it to work for you, you need to get in and drive it.

Davison says too few people are actively thinking about their retirement funding decisions.

You should understand the way your employer’s fund works. Find out about the benefits and choices available to you and also consider the risks and costs involved.

Previously, most retirement funds were of the ‘Defined Benefit’ type. This means that if Maurice retired at 65 with an inflation-linked pension benefit of R8 000 per month, he was guaranteed that regular pension for as long as he lived.

But, due to poor investment returns and people living longer, this has resulted in a pension crisis for many of these retirement funds.

Owning your risk

Nowadays, most retirement funds are of the ‘Defined Contribution’ variety. This was driven partly by workers who felt they were more transparent and partly by companies who wished to mitigate the risks posed by their defined benefit obligations.

If Bob, for example, contributes 5% of his salary until he retires at 65, he’ll receive the total value of his contributions plus any investment growth over time as his accumulated retirement savings from which he needs to fund his income in retirement.

Whether Bob lives to 80 or 95 years, he’ll have to make that fixed amount last. Once that pot of money is gone, that’s it. The risk is entirely his.

Bob will have to manage his retirement fund carefully and ensure that the fund value at retirement will be sufficient to provide an income, increasing by around inflation, until his death, or possibly even until the death of his spouse, if she survives him.

Poor planning = poor funds

For many people, inadequate retirement funding is a serious problem. However, most only discover this when they are about to retire. And then it’s too late. A number of factors have combined to create a perfect storm for retirement funding.

Firstly, people are living longer and consequently enjoying a longer retirement. In 1965, the average French retiree lived ten or eleven years beyond retirement. Today, that same person could expect to live another 24 years.

What’s scary is that instead of preparing financially for more ‘golden years’, people are saving less than ever before.

When they do invest their hard-earned money, many people make poor decisions. When the market crashes, they sell out of fear and then buy back at a peak, losing significant portions of their savings in the process.

Aiming for comfort

You can’t afford to be conservative when it comes to investing for your retirement. Life-stage investment plans that put younger members’ money into high-risk investments and older people’s into low-risk ones, don’t necessarily work for everyone.

If you are a risk-averse investor, whatever your age, then you need to be contributing more to your retirement fund to compensate for the fact that your investment growth will be lower.

When it comes to your defined contribution retirement fund, the formula is relatively simple. Your contributions over time plus the investment growth will equal your retirement savings. But how early you start and how long you contribute are also key to a comfortable retirement.

Paul Leonard CFP® is an executive director of Consolidated Financial Planning. He runs the Eastern Cape region and is intimately involved in the Corporate Solutions division of the company. He has become well known throughout the Eastern Cape for his daily personal finance insert called MONEY TALK on Algoa FM, and was the national runner up of the Financial Planner of the Year awards in 2006. Visit for more information.

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1 Comment

1 Comment

  1. Bus Hire Johannesburg

    Apr 11, 2013 at 13:31

    In a society where people constantly “borrow” from there future, it is worrisome to think that the person sitting next to you could fall in “that percentage” of folks who have not and will not adequately prepare for their retirement.

    Its very easy to blow most of your retirement savings in a single month. ANALOGY: You work at an establishment for 10 > 20 years, resign and cash in your retirement/provident fund ( not investing it into another Fund ), and purchase yourself a new car cash ( a sporty new KIA or SUV as an example ) because you deserved it anyway right )?

    With some of the other remaining funds you purchase a state of the art Samsung SMARTTV for your “outdated” entertainment room ( lets say it costs between R35,000 > R45000 ), and the small balance of R20,000 left from your Retirement/Provident Fund you dump into your existing mortgage loan, and bang – your majectic Retirement Funds are gone!

    The above analogy might seem far fetched, foolish and unheard of – but its happening to some folks coming out of all industries. 21st Century living says, “I want it now! My Retirement will take care of itself!”

    Very scary.

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Personal Finance

10 Tips To Become A Millionaire This Year

Becoming a millionaire requires changing your mindset and implementing some changes.

Murray Newlands



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Becoming a millionaire may seem out of your reach, but it’s possible with the right attitude and guidance. The fact of the matter is your income can only grow as quickly as you do, so you need to change your mindset to achieve your goal of becoming a millionaire.

Once you have a millionaire mind, you can’t lose it, no matter what financial or business mistakes you make along the way. To get yourself there, you’re going to need some structure. To help you, I’ve outlined the top ten tips you should follow to become a millionaire this year.

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Personal Finance

If You Think These 5 Things, You’ll Never Get Rich By The Time You’re 30

Five common mistakes entrepreneurs make when starting a business and how to correct them.



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Last week, I had lunch with a millennial who wanted some advice about a business he’s starting. After the usual small talk, we got down to discussing his business plan. Within a short time, it was clear that his business idea was great, his plan for executing was fairly solid and he had gathered together a strong team to help him make it happen.

So far, so good. But, to be frank, this guy has no chance of being successful with his current mentality. What it takes to be rich (or successful in any measure) has a lot more to do with your mindset than your ideas and plans.

From the time we started in business at the ripe ages of six and seven, our Grandpa Joe taught my brother Matthew and me many lessons about the details of running a profitable business. Over the years, we learned about how to create a business plan; how to market our products and services; and how to take care of customers, vendors and employees. All this knowledge has been invaluable to us in creating and running successful businesses. But, what our grandfather taught us about attitude and mindset trumps all other lessons.

Without calling out the specific individual I spoke with recently, below are five “hypothetical” attitudes that will get you nowhere in your journey to success – and the attitudes that should replace them.

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Personal Finance

5 Habits That Lead To Millionaire Business Success

You need the right habits if you’re going to succeed.

Timothy Sykes




What do all millionaire businesspeople have in common? Well, a lot of things.

I found from a recent study that 80 percent of all millionaires still go to work every single day. They’re working people just like me. But, they have to keep themselves in work or it all grinds to a halt. So what are the habits you need to make your business a success?

1. Patience

Nothing is ever going to come easy. You can look at the likes of Steve Jobs and Bill Gates, as well as the other usual suspects, to realize that success didn’t come with their first venture. Many of them failed time and time again. It took patience for them to become successful.

I read an article recently about 36-year-old teacher Andrew Hallam who became a self-made millionaire on a teaching salary. But, in his spare time he invested smart and lived frugally.

It proves you don’t have to inherit lots of money or become an instant success to make a millionaire business.

Related: 4 Ways To Become A Millionaire Even When You Start With Little

2. Dedication

You have to be dedicated to your craft if you’re going to become successful. Going back to Bill Gates again, he started his business in the back of his garage. Now that’s dedication.

It’s what I tell all my students. If they’re not dedicated to this, then they should leave. You need to be able to push through the barren periods if you’re going to reach the oasis of success.

3. Ambition and big dreams

Have you ever heard the quote, “Shoot for the moon. Even if you miss you’ll land among the stars”?

I take that to heart because even if you aim to become a billionaire and miss you still might be a millionaire many times over. Take the Wright Brothers as an example. Not content with creating a successful glider in 1902 they went on to create the world’s first airplane in 1903, making four brief flights in Kitty Hawk. It demonstrates the importance of dreaming big because you never know what you might achieve.

Related: 12 Millionaire Habits To Start Making Serious Money Soon And Build Wealth In A Hurry

4. Learn from mistakes

Every good businessperson will mess something up. It’s inevitable. What’s important is how you learn from your mistakes over time. Do you adapt after making your mistakes?

Millionaire businesspeople always set some time aside to reflect. Then they create a plan of action for ensuring that it doesn’t happen again. Most failed businesspeople put it down to “bad luck.”

5. Focus on niches

This important! Try to take over a whole industry at once and you’ll inevitably get swallowed up by the competition. Start small and control your own niche before moving into another niche. When you master your small area, you can push on and expand.

Related: 21 Choices Millionaires Make That You Aren’t Making But Should Be

You’ll be amazed at how much easier it is to expand after you master your own niche/audience first.

Do you have what it takes? That’s the question I always ask novice businesspeople. You need a plan and you need the right habits if you’re going to succeed.

This article was originally posted here on

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