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What’s Your Financial Plan?

Steel your nerves and hang in for the long-term

Bryan Hirsch




Why is it that investors feel anxious and want to sell when market volatility arises? After all, this correction has been expected for some time. Is it because investors suddenly forget about the wisdom of their long-term investment strategy or do they believe that in a few months, long-term economic growth in the world, and particularly South Africa, has come to an end?

Unless you are a trained financial professional or an active securities trader, investment decisions and choices are a challenging exercise and can lead to confusion, frustration and, the worst possible outcome, poor investment selections and unnecessary loss of wealth.

So how do you tackle your financial planning for 2009? As with most complex issues in life, you need to work from ‘the ground up’. In other words, identify the main concerns that influence your decisions, and prioritise them according to your own lifestyle and financial needs.

In my experience, it helps to begin this list by asking the question: ‘What will bring me and my family peace of mind?’ In general, the immediate response to this question has to do with being able to ensure your financial stability. To achieve financial stability, there are a number of issues and scenarios that we need to take into account.

1. Death too soon.

The contingency is to provide life cover capital for families in the event of premature death. You need to assess all of your debt as well as future events such as schooling, varsity, weddings, etc. Life insurance can be bought at a very reasonable cost, especially if you exclude any investment.

2. Death too late.

It’s good to have a large amount of life cover, but what if you survive to reach retirement without having provided sufficiently for it? Membership of a company retirement fund is usually no longer adequate. So often we believe that we will not need any extra plans because the dream of making large amounts of money is always prevalent. What if your dreams don’t materialise and you are left with inadequate funding for your retirement? You should have something else to fall back on.

3. The living death.

You do not die or retire, but sickness or disability, (permanently or temporarily) occurs. Medical aids will cover hospital procedures, but how will you generate income once you’re out of hospital? It is often difficult to substantiate a disability claim. The cover for dreaded disease (which includes ailments such as cancer, heart attacks and many more) must be included in your plan.

4. Factor in inflation.

Whatever you do today needs to be reviewed because of the effects of inflation, and no plans made today will ever be sufficient in the future, so reevaluate regularly.

5. Focus on health cover.

As it is your health that guarantees you the ability to purchase life and disability insurance, do not escalate life policies but rather purchase future guaranteed insurability.

6. Tax concessions.

Make use of the deductions allowed under a retirement annuity to provide a pension at retirement.

7. Plan for marriage and divorce.

In South Africa today, most families are joint-income generating. It is no longer sufficient for just one of the spouses to provide for both. Can you imagine reaching retirement and having to live on only one of your two salaries? In many instances, the one salary will not even be the full 100% prior to retirement, simply because in business today many of the benefits are not calculated into one’s retirement package. Many marriages do not survive and therefore both spouses should ensure that they plan together, but that each also has their own financial plan.

8. Diversify your interests.

The last principle relates to geographical and asset diversification. You can’t have all your eggs in one basket and you need to diversify between equities, properties, bonds, cash and hedge funds. On the geographical front, many families are faced with children living abroad and the cost of visiting them is quite restrictive due to the rand depreciation.

Not all of the above principles apply equally to everyone, but if you use them as a guideline in your financial planning structure, I can assure you that your foundations will be solidly laid.

If we agree that some of these points encompass the biggest financial concerns (which at some point keep most people awake at night), then we can also agree that any proper investment strategy must provide solutions.

Once you have addressed these needs, wealth creation is likely to be the next item on your financial priorities agenda.

You will need to decide what part of your investment portfolio will be responsible for income creation, and how much will be assigned to creating wealth. The income creation portion of your portfolio will need to be invested accordingly, using instruments that can provide you with regular income, based on your family needs.  Inflation is an important factor to consider while developing your income creation strategy.

In order to generate wealth, different investment avenues need to be explored. As a rule of thumb, long-term investments (10 – 25 years) in portfolios including equities and real estate have proved to be a good source of wealth generation.

The key is to understand that a fortune is not created overnight (usually). It takes time for the real gains to be realised, and therefore, the investor needs to be prepared to view these investments as long-term, and not fall into the trap of checking performances on a regularly and making rushed decisions to sell or buy based on monthly statistics.

BRYAN HIRSCH has been in the financial services industry for 47 years and is a director of Bryan Hirsch Colley & Associates. He has written two books, the first Bryan Hirsch’s Guide to Personal Finance and more recently, Steps to Financial Freedom. Bryan has written for many of South Africa’s top financial and business publications, has been a weekly guest on Radio SAFM for 18 years, and has his own weekly TV show You & Your Money on Summit TV.

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Personal Finance

(Infographic) The Financial Advice Millennials And Gen Zers Want To Know

Having a grasp on your financials is tricky, but it’s crucial if you want to be successful. And that starts with getting the right advice.




Whether it’s saving for retirement or paying off credit card debt, money management can be a challenge. Of course, different people have different concerns – and that often comes with age. While a 60-something baby boomer might be organising their savings for retirement, your 20-something millennial might be focused on paying off student loans.

In a recent study, financial intelligence company Comet surveyed more than 1 000 people to uncover the top financial concerns of various age groups, as well as the financial advice millennials and Gen Zers want to know and what they hear instead.

Overall, saving for retirement was the top concern across all age groups, with saving for an emergency and affording monthly bills following in second and third. However, it’s no wonder these are some of the most pressing worries – according to the research, 23 percent of people admit they don’t have a savings account, and 43 percent reported not being on track towards their retirement goals. Perhaps that’s because they didn’t hear the right advice growing up. At least that might be the case for Gen Zers and millennials.

According to the research, these young people want to learn things such as how the stock market works, how to manage an investment portfolio, how to invest in real estate and how to build credit. Instead, they’re simply told how to create a budget, save for retirement and pay credit card bills in full every month.

Related: 7 Critical Things Your Financial Advisor Must Meet

Having a grasp on your financials is tricky, but it’s crucial if you want to be successful and comfortable. To learn more, check out Comet’s infographic below.


Related: Financial Wellness Coach Nelisiwe Masango Shares Retirement Wealth Advice

This article was originally posted here on

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Personal Finance

14 Ways To Make Quick Cash On The Side

If you need money quickly, here are some solid ideas.



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Need to make some fast money on the side, whether it’s to pay off a credit card or to make your rent?

Keep in mind, making quick side cash isn’t about making a lot of money or getting rich. It’s about getting a shot of capital to help tide you over and put something extra in your pocket. However, some of these side-income ideas can build up your wealth over time. There’s many ways to accomplish this: By participating in the gig economy, the sharing economy, online sales networks, passive income techniques and more.

If you’re looking to make extra money in a relatively short period of time, check out these 14 slides.

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Personal Finance

Take Advantage Of Financial Democracy Made Possible By The New Stock Exchanges

Why should financial democracy matter to entrepreneurs?

Etienne Nel




Because it creates a society able to afford products and services. Without it, even the innovative products and services that are entrepreneurs’ bread and butter will fail.

What is financial democracy, exactly?

It’s both the right and the ability of the (wo)man in the street and business people to make the decisions that affect their financial circumstances.

Financial democracy does not automatically follow political democracy. For almost 25 years after South Africa’s political transformation, the exclusiveness of our financial markets continued to deprive the vast majority of South Africans of the means to invest, save, and build wealth. South Africa has, therefore, never developed a retail stock exchange environment. So, it has deprived the majority of small and medium sized business of access to capital.

For entrepreneurs to truly flourish, they need a mechanism that easily and seamlessly connects the investor pool with every size of business. And, they need affordable ways to enter both the retail and institutional market.

In short, they need stock exchanges. Ones on which listing takes weeks rather than years, doesn’t break the bank for listing fees, and provides the shortest route to the largest possible potential investor base.

That’s not been possible in the stock exchange monopoly that existed for six decades. Now, it is.

What’s changed?

We now have four new stock exchanges. The resulting competitive environment will significantly reduce the cost of listing – and the cost for investors of buying and selling shares.

Instead of restricting share trading to people or organisations who already have tens of thousands of rands to invest or millions to spend on listing, by licensing four new stock exchanges, the Financial Services Conduct Authority (FSCA, formerly the FSB) has recognised that most financial decisions do not call for high levels of education.

Related: The Role Of Foreign Exchange In The Economy

Most people know how to spend their own grocery money. Most know that it’s better to keep their R1 000 monthly income in a coffee jar than spend R50 of it on bank account fees. People who can barely read and write are immensely skillful at manipulating air time deals to their advantage.

There is significant financial savvy in all social strata.

In the same way, although the mechanics of bookkeeping and accounting may be unfamiliar territory to many entrepreneurs, most have a clear understanding of the difference between profit and loss.

The FSCA has therefore enabled democratisation of the financial markets by enabling the broadest possible spectrum of entrepreneurs and investors to use stock exchanges to participate in and contribute to the economy – on their own rather than prescriptive terms.

How do you take strategic advantage of this democratisation?

  1. Base your business strategy on people’s instinct for making decisions in their own best interests. Trust financial decentralisation, such as one sees in crowd funding and in digital environments such as block chain, where people would far rather trust one another than institutions and governments. This is democracy innately at work in the financial environment and it’s accelerating organically as digital technologies give people more means and the confidence to help themselves – to information and opportunities. Ride the wave.
  2. Tap into people’s desire to innovate. Consumer organisations have proved that letting people interactively help them develop products is a powerful growth engine. Apply the principle by letting people grow your business by buying shares in it, giving you capital and themselves a platform on which to build wealth.
  3. Remember, the ultimate loyalty reward is equity.

Your financial democracy business plan

Look to list on an entrepreneurial stock exchange; one that was founded by entrepreneurs on entrepreneurial principles.

That means: A stock exchange that is already built on financial democracy and decentralisation. One that has, at its core, a single operational concept that keeps things simple for you, automatically gives you an immediate competitive advantage, and, ensures that no matter what your business needs in terms of attracting capital, the exchange can provide all the options in the same, consistent way.

What does such an exchange look like?

It has fintech capabilities. So:

It slashes your listing costs. It achieves this, among other things, by enabling you to populate an electronic prospectus, demonstrating your financial viability, and self publish.

It gives you control by having the granularity and agility to impose relevant governance right down to the individual investor. You get to decide the types and quantities of investors you want to attract. This also enables you to achieve black economic empowerment in perpetuity.

It leads the world by clearing and settling trades in T+0. No-one in the value chain has to hold large sums of money for days following a transaction. Small transactions become profitable. Investors don’t have to risk their life savings on a single large trade. A retail market is opened. An investment and savings culture is entrenched. The economy expands. Your business grows steadily.

It enables anywhere, any time trading via a mobile app that allows investors to see share value in real time. See economy expansion point above.

It integrates processes and procedures, simplifying them and ensuring rapid onboarding of issuers and, therefore, speed to market with new concepts and alignment with the digital economy.

It operates a principles-based regime. So:

It treats you, as an executive, with respect. It’s not prescriptive. It does not insist on excessive oversight, allowing the Companies Act to guide you to sustainability.

It does not attempt to squeeze your company into a pre-defined business or listings format. It recognises and works with your uniqueness.

It obviates the need for expensive specialist listings advisors.

It focuses on financial inclusion and access. So:

Shares can be bought and sold for no more than R1 000. See economy building point above.

Related: 27 Of The Richest People In South Africa

The new world of stock exchanges is integrated, synergistic, holistic, organic, self-fulfilling

Decentralisation of financial control, democratisation of opportunity leads to a whole new economy. One in which, for instance, a taxi operator can finance a minibus through a company in which his purchase gives him shares. A single purchase gives him two benefits: a vehicle on which to found his business and a longer-term investment in shares that he can trade. The funding company gains liquidity through access to a wider base of investors while being able to control who buys and sells and the conditions on which trading takes place. Increasing black equity in business becomes an organic, natural, self-perpetuating process.

Everyone wins in a decentralised, democratised financial market. And it’s the stock exchanges that drive the process.

As an entrepreneur, can you afford to ignore the acceleration that listing could give your business growth?

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