What to do with your money

The Sunday Mail (Zimbabwe) - - ADVERTORIAL -

Wel­come to Part 9 of the UBUKWAZI YINI, a con­tin­u­a­tion of the Life Of­fices As­so­ci­a­tion’s on­go­ing na­tional drive to make in­sur­ance eas­ily un­der­stood by all.

THIS week, we dis­cuss money and how to best in­vest it.

Last week we dis­cussed the male fac­tory worker and his re­tire­ment plans. We es­tab­lished that the male fac­tory worker needs to plan to­day for his re­tire­ment.

We also found out the male fac­tory worker must set aside for his re­tire­ment - and money is the sub­ject of to­day’s dis­cus­sion.

The role of money

Money is a strange thing. So many of us take it for granted, yet it is the sin­gle thing in life that buys a lifestyle. With­out money, with­out an in­come, we sim­ply can not sur­vive.

Money be­comes the start­ing point in the per­sonal fi­nan­cial well be­ing of the male fac­tory worker.

Now that we earn some money, the next ques­tion is how do we spend it, save it, and most im­por­tantly how do we in­vest it?

From the US$800 a month that the male fac­tory worker earns, he can set aside some for re­tire­ment, gro­ceries, rates, elec­tric­ity and more.

The male fac­tory worker should also con­sider set­ting aside some of his money for fu­ture use. Herein lies the con­cept of in­vest­ments.

Why in­vest?

As it is, the male fac­tory worker has a num­ber of rea­sons why he should in­vest some of his money:

1. Firstly the male fac­tory worker has got fu­ture com­mit­ments that he needs to take care of.

His last child, Rudo, is only twoyears-old. For the next years or so, the male fac­tory worker will have a very big fi­nan­cial com­mit­ment - school fees.

The male fac­tory worker may want his daugh­ter to go and study at one of the South African uni­ver­si­ties. As a for­eign stu­dent, she will be re­quired to make an up­front pay­ment.

For in­stance, if Rudo de­cides to study Medicine at a South African univer­sity, her fa­ther will spend no less than R500 000 for her tu­ition dur­ing her six years of study.

He will also need to pay an ad­di­tional R100 000 for her res­i­dence fees.

And he has to pay her fees up­front ev­ery time.

Un­less the male fac­tory worker starts in­vest­ing some of the money he earns to­day, he will not be able to meet th­ese fi­nan­cial obli­ga­tions.

2. Sec­ondly, the male fac­tory worker needs to set aside some­thing for re­tire­ment. We have dis­cussed in the past why the male fac­tory worker needs to save for re­tire­ment. The ear­lier the male fac­tory worker starts to save for re­tire­ment the bet­ter.

3. Thirdly, the male fac­tory worker might want to save money to meet a fu­ture com­mit­ment. For in­stance, the male fac­tory worker’s house is not yet com­plete.

He be­lieves that if he can in­vest some of his earn­ings, he will be able to raise enough in 10 years to fin­ish the con­struc­tion of his home.

4. The male fac­tory worker has al­ways longed to travel. He has made a com­mit­ment that he will take his wife to a well known re­sort such as Mau­ri­tius.

He has tar­geted to do that in the next 5 years. How­ever, to be able to do that, the male fac­tory worker must set aside some of his money to­wards this hol­i­day.

5. The male fac­tory worker is well aware that the world that we live in is full of un­cer­tain­ties - and that at one point he will re­quire large sums of money to be avail­able for use in emer­gen­cies. For in­stance, the male fac­tory worker or a mem­ber of the fam­ily might re­quire a big out­lay of cash.

If he does not set aside some­thing and in­vest it to earn some in­ter­est, it means he will not be able to meet th­ese obli­ga­tions.

The male fac­tory worker, there­fore, needs to set aside an amount for con­tin­gen­cies.

Thank you for join­ing us again and be sure to read next week’s ar­ti­cle in which we con­clude our dis­cus­sion as we look at in­vest­ment op­tions

Money is the start­ing point in the per­sonal fi­nan­cial well-be­ing of fac­tory work­ers

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