South Africans still aren’t saving enough – and current economic conditions in the country mean that it is only going to get more difficult to save for the future.
This is according to Old Mutual Investment Group Economic Strategist, Rian le Roux, who said that the stagnant economy, with rising dependency ratios, means that saving for the long term is becoming ever more challenging.
He added that South Africa’s economic growth remains weak and this is cementing many of the country’s economic and social problems.
“The economic contraction in Quarter 1 of 2018 was a huge shock and there is no evidence of any material improvement in the second quarter,” he explained. “The consensus GDP forecast for 2017 is 1.5%, with the past five year average growth being 1.3% and a potential growth figure of 1.3% too,” he said.
“In the absence of a higher actual and potential growth pace, it is going to be extremely hard to consolidate the fiscal situation, with sustained weak tax revenue growth amidst heavy spending pressure. This will entrench weak investment and growth in the country as savings will remain depressed.”
Proceed to Source : Business Tech
Understanding your time horizon will help you get the most of your long- and short-term investment
The longer you can avoid dipping into your savings, the greater your range of investment choice. When markets are volatile, as they have been in recent years, you need to be realistic about the time horizon of your investments to get the most from them.
Knowing how the time frame of different types of investments affects savings outcomes can help investors choose the most appropriate investment vehicle to earn the best possible growth.
The savings levels of working South Africans are low at just 15% of their income. But according to the Old Mutual Savings Survey, savings for the entire population are even lower at just 3%, reflecting the country’s overall low savings rate.
Investors often choose bank fixed-deposit accounts and money-market funds, as both benefit from set interest rates and provide fairly easy access to savings.
Average 12-month interest rates for fixed-deposit accounts from SA’s four biggest banks are currently about 5.5% to 7.5%. Average money-market rates are about 7% to 8%. With money-market funds, investors can access their money within 24 hours, which is a significant benefit.
By choosing to move up the yield curve, which means investing in fixed-income funds, investors can get average returns of between 7% and 9%, immediately adding almost 2.5% extra in returns while remaining in a low-risk investment. Although these funds should be retained for at least 12 months, investors still have access to their funds within 48 hours.
Proceed to Source : BusinessLive
The petrol price broke the R16 per litre mark this month.
Combined with the fact that the rand is now 8.6% weaker against the dollar since the beginning of June, and a number of rates increases, it’s understandable that your wallet will likely feel a lot lighter at the end of the month.
While there’s usually no such thing as a quick fiscal fix, there are some smart financial ‘hacks’ that may just make a huge difference, says Madri Jacobs, a senior financial planner at Sanlam.
Below Jacobs outlined some of the tips she often shares with clients to immediately start turning their financial situations around.
Proceed to Source : BusinessTech
My partner and I are in a very fortunate position where we both own a fully paid for car. This is great and super convenient, but does it really make financial sense?
I’ve been thinking about selling one of the cars so decided to share the facts and figures.
This situation may not fully apply to you but hopefully some of the thinking can spark off ideas for yourself and you can evaluate your own situation.
Let’s just get this point out the way. Yes, it will be super inconvenient! One of us (probably me) will need to rely on public transport as well as ride-share services and it’s inevitable that I would take longer to get to places. I would need to plan trips better and would most probably spend a fair amount of time waiting for my transport or being delayed because of my reliance on others.
This is a huge factor that cannot simply be ignored, but it’s worth doing the financial calculations to determine the actual cost of my current convenience.
Proceed to Source : Take Charge of Your Money
I met a guy recently, I will call him Journey-Man.
Journey-Man is a guy who started asking himself some tough questions about savings and investments. At some point in the not too distant past Journey-Man started wondering if he had left things too late. He started thinking about this more and more and decided to take a journey of discovery.
Join us as we follow Journey-Man as he tries to answer that question ‘Have I left things too late?’
Proceed to Source : WellSpent
Albert Einstein is rumoured to have described compound interest as the 8th wonder of the world, the story goes that he went on to say, “He who understands it, earns it. He who doesn’t, pays it.” Whether this can be attributed to the great mathematician and physicist or not, the value of compound interest has been spoken about by experts in their fields. To understand the wonder of compound interest and how to make it work for you, see what a few experts say about it.
Proceed to Source : News24
South African Millennials are heavily indebted, says Elize Botha of Old Mutual Unit Trusts. Elize Botha, Managing Director, Old Mutual Unit Trusts, looks at how employed South African Millennials spend their money.
Proceed to Source : MoneyWeb
South African millennials are more likely to seek financial independence and personal fulfilment when compared to older generations, according to Old Mutual
The survey was commissioned to better understand the financial behaviour of employed millennials when compared to older generations surveyed in the 2017 Old Mutual Saving and Investment Monitor.
Proceed to Source : Destiny Man
There are many reasons to celebrate turning 50 – it also means retirement is just around the corner, and it’s time to get serious about planning.
Like every stage of life, your 50s brings certain steps you should take to begin preparing for retirement. By the time you’re 50 you should have laid the groundwork for retirement and have a growing nest egg. But what do you do if you haven’t been paying attention to your retirement fund? First, don’t panic. There’s still plenty you can do to get your retirement set up and enter your golden years debt free.
Here’s your retirement checklist for your 50’s:
Proceed to Source : News24
Once upon a time, economic writers and financial pundits decided to use the metrics of ‘income’ and ‘economic growth’ to measure the standards of living of people all over the world. It also, step-by-step, became the way in which we defined words like “Prosperity”, “Wealth” and even “Happiness”.
Proceed to Source : Wellspent