Investments - Momentum Financial Planning Irene

Financial Planning Jargon, Investments, Last Will and Testament, Life Insurance, Retirement

Did you plan for the road ahead?

April 22, 2018June 23, 2019 Momentum Irene

With 2018 around the corner, it is a good idea to take stock of where your finances are currently, and where you want to be in a years’ time. It is a great time to consider your bases, as well as if there are any shortfalls. ( https://www.linkedin.com/pulse/playing-catch-up-michael-pfister/ )

Here are a few points to consider:

Will: Do you have one? If so, does your family and relatives know where you keep it? Did you update it after your marriage/divorce/having kids? Is the will enforceable?
Emergencies: Do you have a safety net in case of an emergency? If not, do you want to start building a safety net? Do you know what your options are? Please visit the link to one of my previous articles: ( https://www.linkedin.com/pulse/how-prevent-playing-catch-up-michael-pfister/ )
Holiday plans: Will December 2018 be the same holiday as 2017? Will you make debt or save for it?
Children: Do you have a savings plan for them (or should I say to help you later…)?
Short term insurance: Do you have car and household insurance? When last did you update your values? Did you add your new camera, bicycle, Drone, Tag Heuer or any other item of value?
Long term Insurance: Do you have Income protection for when your unable to perform you job for longer than your chosen waiting period? If so, when last did you update your values? Do you have dependents, and did you make provision for them to live at the same standard as they do with you around, should you not be able to contribute due to a sudden demise? Will your family be able to give you a proper burial service or memorial?
Retirement: Do you have a plan? What does it consist of? What are your options?

We just tend to float by in life, year after year. Until we realize what we should have done….

Will 2018 be different? Or better?

Don’t regret the choices you make (or don’t make)!

Contact me should you need any assistance or advice Michael.Pfister@momentum.co.za

(Originally published on 20 December 2017)

Financial Planning Jargon, Investments

How to Prevent Playing Catch Up

April 22, 2018June 23, 2019 Momentum Irene

You read the article “Playing Catch Up”. (If not, read it here before you carry on: https://www.linkedin.com/pulse/article/6013723481605181440/edit?trk=pulse-edit-nav_artn )

And your head is spinning. Every time you get in your car you look left, right, left, right and left again, just to make sure you are safe, and there is not some crazy person trying to get you into financial trouble by crashing into you. You relook flight prices, compare them to driving to your dream destination. You read about Savings Accounts, 32 day accounts, Unit Trusts, Money Markets…and the list goes on and on. What to do with your hard earned money to ensure you can take care of the little pleasures (or pains) in life?

Let’s have a look at exactly what some of these options are:

1. Savings Account at your preferred institution:

Has a nominal monthly fee
Virtually no Interest
Minimum Balance required (normally over R50)

2. Term Deposit at your preferred institution:

The money is not accessible for a fixed period of time
You cannot add to the fixed amount
No Monthly Fee
Slightly better interest than a Savings Account
Higher minimum balance is required (generally over R1000)

3. Notice Deposit at your preferred institution:

The money is only accessible after a notice period
You can add to the initial amount
No Monthly Fee
Variable interest, the longer notice period the higher the interest rate
Higher minimum balance is required (varies between R1000 and R10 000)

4.Money Market or Similar Account at your preferred Bank:

Funds are available immediately, you have access to the account
You can add to the initial amount
Monthly Fees
Transaction Fees
Variable Interest Rates but considerably better than the above mentioned options
Higher Minimum Opening Balance is required (varies between R10 000 and R25 000) and has to be maintained

5. Money Market Unit Trust Investment at your preferred Financial Institution, other than your Bank:

Funds are available from 3 working days via your service provider ie Financial Adviser
You can add to the initial amount
Monthly Fees
Transaction Fees could be applicable
Advice Fees
Money gets invested for you by your chosen institution, and interest will depend on the underlying investment choice
Minimum amount payable monthly, starting roughly at R500 per month
No Fixed Term

Makes more sense now? It sure does.

Of course, depending on where you are in life, there will be a specific product that will work better for you, and fit into your lifestyle. All of the above are options, but you need to pick the one that is right for your needs.

Feel free to email me on michael.pfister@momentum.co.za for assistance in selecting the right short term savings method for you.

“Do not save what is left after spending, but spend what is left after saving” – Warren Buffet

(Originally published on 16 June 2015)

Financial Planning Jargon, Investments, Last Will and Testament, Life Insurance, Retirement, Short Term Insurance

Playing Catch Up?

April 22, 2018June 23, 2019 Momentum Irene

Since you were a little boy/girl, your dream was to drive a fancy car that gets noticed. Maybe it was a fire truck at first, but then became a Ferrari. In red. Of course. How about sipping cocktails on an island for 3 weeks, with the girls, instead of visiting the parents’ holiday house in Stillbay each December?

As you start your first job, you work towards that goal. With the first paycheck you get, you smell the leather seats, and you taste the sweetness of the strawberry daiquiri. After 10 odd years of slaving away behind a desk, your credit limit is of such that you can get the finance for the car, and the credit facility for the dream holiday you’ve been planning. And off you go. You made it!

You have accomplished BIG things in your life, and as human nature is, we need to share that with our friends. Thanks Facebook! We celebrate life. We go out, we toast to our goals being reached. We eat sushi, we braai, we pour wine and whiskey, we get a dog. We also get someone to help us maintain our gardens, and do the dishes. We get DSTV. We need Internet. So we get that. We need new leather couches. A king size bed. Egyptian Cotton bedding. Fluffy pillows. All on credit. Because we deserve it. And we are right. We do.

It has now been a year since you “arrived” and your Financial Planner sets up an appointment with you to review your policies. In this meeting you get told that if you are involved in an accident with your new car, Ferrari or not, the excess payable by you is R3500. Immediately you think to yourself: what if this happens after the 20th of the month? How am I going to pay this? By that time you have paid your car, rent/bond, insurance, electricity, DSTV, @ Home, bought some necessities for the fridge for the month, and have some spending money left to survive until pay day.

You are choking on the credit card repayment for the holiday that is long since forgotten.

No one ever told you this should be part of your dream! All of a sudden growing up is the worst thing you have ever done.

On top of all of this, you/your wife falls pregnant. According to Women24, it costs an average middle class family in South Africa roughly R90 000 per year to raise ONE child.

How do we deal with these scenarios? How do we prevent playing catch up?

Baby steps. That is the answer. Don’t ever think that you are alone in the situation. Statistics show that approximately more than 90% of South Africans fall in this category.

Start focusing on short term. If you only look at Long Term savings eg Retirement, it still doesn’t solve the problems of today.

Your goal should be to work towards having 3 months’ worth of income as a short term, easy accessible, risk free nest egg.

My advice will be as follows:

Register on www.momentum.co.za – you do not need to be a client of Momentum to use this facility.
Complete the Financial Wellness Questionnaire on the website to assess where you are in your current financial planning.
Get control over your finances. I am using a fantastic tool that has helped me greatly – Multiply Money. This is available via your App store. Here you can record your income and expenses as well as keep track of it.
Work a set savings amount into this new budget. You can start with R100, R300 or R1000. It will depend on your budget. But, start with something.

If you need ANY advice, do not hesitate to contact me on michael.pfister@momentum.co.za

A big part of financial freedom is having your heart and mind free from worry about the what-if’s of life ~ Suze Orman

(Originally published on 7 June 2015)