Take first steps to financial freedom
BOTTOM LINE: THE MORE INVOLVED WOMEN ARE IN FINANCES, THE BETTER One of the biggest misconceptions in the world of finance is that it’s ‘a man’s game’.
Financial planning is a skill every modern woman should possess. Women are generally more independent and financially savvy than 20 years ago, with millennial women especially more confident in participating in the investment world.
The bottom line is that the more involved women are in their own financial wellbeing, the greater their ability to not only become financially independent, but to recognise good opportunities.
One of the biggest misconceptions when it comes to the world of finance is that it’s “a man’s game”. There has been a strong growth in the number of female investors over the past couple of decades, and if the numbers show anything, it’s that a woman’s approach to investing is definitely different to that of males – and that’s not a bad thing.
Women may take longer to make decisions, but they tend to avoid unnecessary risks, and are often better long-term investors because they stick to their longterm goals instead of trying to beat the market. Don’t know where to start? Your first step should be to contribute to a retirement annuity (RA). You can contribute up to 27.5% of your salary to a RA.
Next, you can look at contributing to a tax-free investment account. You can contribute
The earlier you start to save, the better – the effect of compound interest is astonishing;
Take a long-term approach. Your goal should be to beat inflation, which is probably one of our biggest threats in South Africa;
Make informed decisions before you invest. You must understand R33 000 yearly – it does not trigger any dividend, interest, income, or capital gains tax.
After that, you can look at diversifying by contributing to an offshore investment. This can either be in your name, an offshore trust, or an offshore retirement plan in a zero-tax jurisdiction like Guernsey, for example.
The Sovereign Group offers various offshore investment vehicles in jurisdictions like Malta, Gibraltar, Isle of Man or Guernsey.
So, go ahead. Take the first steps to your financial independence today. It will not only give you higher returns, but the financial resources to deal with the unexpected.
Coreen van der Merwe is managing director at Sovereign Trust