Retirement: save 20% of your salary
Seef Umhlanga under new ownership All you need to know about credit agreements
SEEFF Umhlanga is now under the ownership of local partners Gary Wentzel (principal) and Neil Butcher (director).
Their vision for the branch is to increase market share by attracting serious sellers who want to sell at the right price.
Wentzel says: “Seeff Umhlanga is currently the top-selling office within Seeff KwaZulu-Natal — and the opening of King Shaka Airport just 10 minutes away (although flight path configuration means we have little to no aircraft noise) is set to be a great new advantage to locals — and for property growth in Umhlanga.”
Wentzel is a high-profile property professional who has worked at senior national level for a number of well-known brands over the past 16 years. He is a registered principal with the Estate Agents Affairs Board and holds a number of qualifications in real estate.
Wentzel says both houses and apartments in Umhlanga that are priced between R2,5 million and R5,5 million are attracting serious offers right now.
“In May the price of real estate increased again, by a weighted 15,2% according to Absa. Activity levels are definitely picking up in Umhlanga — buyers are starting to put pen to paper, more are attending show days, and we are getting more inquiries through the web and other local and international channels. We feel very positive about 2010.”
His partner and director of Seeff Umhlanga, Neil Butcher, was involved in the IT business for over 20 years, and is a founding director of Dimension Data, one of South Africa’s leading IT companies. He has served on the boards of several companies as well as as an advisor to community-based projects. — WW Reporter. THERE is a belief that if you save 10% of your salary each month, either directly or through a company pension plan, you will be able to retire. This is in fact very wide off the mark, with ordinary South Africans needing to save at least 20% of their monthly salary to ensure a quality retirement.
Many South Africans’ retirement savings are in fact hopelessly inadequate, said Rian le Roux, chief economist at Old Mutual Investment Group South Africa (Omigsa).
To illustrate this point, Le Roux uses an admittedly unrealistic example of an environment of zero inflation, zero interest rates and zero investment returns.
“Say you want to retire after 35 years of work (at age 60) on 75% of your salary, and it must last 25 years (until you die at 85). How much of your income must you save over 35 years to be able to live on 75% of that income for a further 25 years? The answer is 54%.”
He adds that if you only work 30 years and need 75% of income for a further 30 years (you die at 85), the percentage you need to save goes up to 75%.
“In this simplified world, it means that if you save say 20% of your monthly income over 35 years, you will only have 28% of the income during your working years as a pension. In the second example, the percentage goes down to 20%,” Le Roux said.
Put differently, unless you get pretty high returns on your investments during your working life, you will have to save a pretty high percentage of your income to retire comfortably. In a normal world of inflation and positive investment returns, the focus must be on getting high real returns on your investments.
Warren Ingram from Galileo Capital concurred, saying that if you are depending on the 10% savings rule you would end up well short, particularly if that 10% is simply through a defensive pension fund with your company. You need to put away nearer to 20% per month, he said.
Old Mutual recently launched its Savings Monitor for South Africa, which showed that half of South African households are saving less this year.
Some 19% of households are saving for a deposit to buy a house, 31% are saving for their children’s and their own educa- tion, while 15% are saving to pay off debt. The data also showed that about 22% of households are saving to buy a car.
For Generation Y (people born after 1980) saving is a low priority with the majority saying that they need debt to fuel their material lifestyle.
Only seven percent of South Africans are saving to start their own business, the survey shows. This is interesting as Absa Wealth acting CEO Carl Roothman pointed out to Fin24 that many of its high net worth individuals had madeagreat deal of wealth through starting and selling their ownbusinesses.
However, investing in your own business then means that you may not have sufficient extra cash on hand in the early years to makemoretraditional investments in retirement and savings vehicles.
Le Roux concluded: “Understand the risk of your business and do not fully rely on the business as a nest egg. That’s the same as putting all your eggs in one basket — typically a stupid idea.”
— Fin24. THE Credit Information Ombud’s (CIO) office effectively resolves disputes between membersof the credit industry (credit providers, credit receivers and credit bureaux). Written credit agreements/contracts play an important role when the office makes decisions in resolving disputes.
Caroline Buthelezi, PROsays: “For us to assist in resolving disputes effectively, it is very important that credit receivers supply us with as much information as possible. In addition, supplying us with proof of facts is important because verbal agreements are always very difficult to prove.”
She provides a brief overview to give consumers a better understanding of credit agreements/contracts.
WHAT IS A CREDIT AGREEMENT/CONTRACT
AND HOW IMPORTANT IS IT?
It is an agreement between a buyer and a seller whereby goods are sold or services are rendered in return for money to be paid in the future over a specific period of time. This includes loans and other forms of credit from banks.
All credit agreements must be: • in writing; • read and understood before being signed; • completed before you sign it; • signed by all, both credit provider (representative) and credit receiver; and • credit agreements must state the description of the goods sold. If it is a loan, the amount of money you borrowed, rate of interest and finance charges payable, monthly instalment and period, etc. must be stated.
The credit provider in a credit agreement is called a creditor and the credit receiver is called a debtor.
It is important to read and understand the contents of the contract before signing it. If for some reason you have to sign a second contract, do not assume that its contents are similar to the first one. Treat it as a new contract, and read and understand its contents before signing it.
WHAT IF THE CREDIT AGREEMENT/CONTRACT IS
IN A LANGUAGE I DO NOT UNDERSTAND?
Do not sign it. Consult the credit provider (representative) for clarity. The National Credit Act makes provision for credit receivers to request contracts to be drawn up in a language which credit receivers understand. Furthermore, the act makes provisions for a five workingday quote to be provided on request by the credit applicant. This gives the credit applicant ample time to read and understand all aspects of the agreement.
WHY DO WE NEED WRITTEN CREDIT AGREEMENTS/CONTRACTS?
• verbal agreements are very difficult to prove; • for future reference, should a dispute arise later, after the contract has been signed; and • for you to know the terms and conditions of the agreement before you commit yourself.
SOMEONE IS CLAIMING THAT I HAVE SIGNED A CREDIT AGREEMENT I DO NOT KNOW ABOUT, WHAT DO I DO?
For clarity, request all supportive documentation from him or her (verbally and in writing). This is because credit providers sometimes use third parties, attorneys and debt collectors to collect debt on their behalf. Credit providers sometimes sell their book debt to third parties.
If you do not know anything about that credit agreement/contract: • inform that organisation or person immediately that you do not know anything about that contract (verbally and in writing – fax, e-mail, etc.); • supply him or her with your contact details, this is for them to contact you should they need additional information to finalise their investigations; • keep proof that you notified him or her of your dispute, such as a fax transmission; • request written confirmation that your message has been received; and • if they agree that you did not sign that contract, this should be confirmed in writing.
The CIO can be reached on 0861 66 2837 or visit www.creditombud.org.za
— Weekend Witness Reporter.
Neil Butcher (left) is the new director of Seeff Umhlanga and Gary Wentzel is the principal.