Save wisely for nest egg
IMPORTANT rules for managing your investments and policies:
Avoid credit card debt
It is very important to always live within your means – only spend what you have.
It is not unusual for people to only pay the minimum monthly payment required to keep their credit card payments up to date.
If you owe R20 000, you end up paying the interest charge and not the original debt.
Always try to use cash for all your necessities and delay buying things that you can live without.
If you already have credit card debt, try to repay more than the required amount until you are debt free.
Take advantage of compounding
Compounding is often referred to as “magic” because it is one of the simplest ways to build wealth, yet takes the least amount of effort.
Compounding is when a sum of money invested earns interest, and in the following period, interest is earned on both the capital amount and interest previously earned.
To work, it requires two things: re-investment of profits and time.
The more time you give your investments, the more you are able to fast-track the income potential of your original investment.
Start saving early for retirement
The benefits of saving for retirement when you start working rather than later in life are significant.
There are many studies that show that if you start saving in your 20s you may have twice as much than when you start in your 30s.
This is because of the power of compounding.
It is advisable to always save more than the percentage retirement contribution determined by your employer.
You will be really happy you did this when you reach retirement age.
Buy life insurance
Life insurance is necessary to protect your assets and to provide for your loved ones after your death.
However, be careful of insurance brokers who sell life insurance that is not suitable for your personal circumstances.
Your life cover may include disability – and dread disease cover, and income protection to provide for all unforeseen circumstances.
This makes the future easier as it allows you and your family to face life without the added financial pressure that comes with hard times.
If you already have life cover, review it to make sure that you are still covered appropriately.
You must have a will
If you want to be sure your wishes will be met after you die, then a will is important.
Having a will and planning to protect and preserve your money is one of the most important things you will ever do.
If you die without a will, the state takes over your affairs and it may do things with your money that go against your wishes.
Be patient and disciplined
One of the recipes for investment success is establishing and sticking to a savings plan.
You must be disciplined and remember that you are saving for your future. If you do not have a disciplined savings plan yet, do not be discouraged.
It takes time to build the financial discipline necessary to save when you can.
To be a successful investor, you first have to be a successful saver.
The earlier you start, the better you will get.
Should you need assistance, call Inkunzi Wealth Group on 087-1600018 or e-mail