Weekend Witness - - Scene Around -

• UNIT TRUSTS Many peo­ple choose unit trusts for long­term in­vest­ments as there is a lot of choice as well as funds that fo­cus on beat­ing the rate of in­fla­tion by a cer­tain per­cent­age. This is im­por­tant be­cause ed­u­ca­tion in­fla­tion is higher than nor­mal in­fla­tion.

Unit trust in­vest­ments are ideal for peo­ple who re­quire flex­i­bil­ity and ac­cess to the funds. How­ever, you must be dis­ci­plined and avoid the temp­ta­tion of dip­ping into your child’s funds. • SAV­INGS POLI­CIES Th­ese are fixed for a cer­tain pe­riod, say five to 15 years, de­pend­ing on when your child will go to school or univer­sity. You can ei­ther pay fixed monthly premi­ums or make a lump­sum pay­ment into the pol­icy.

You have lim­ited ac­cess to the sav­ings and gen­er­ally have your sav­ings in­vested in a wider range of the lead­ing unit­trust funds of your choice.

You can also choose to in­vest in some of the avail­able life funds that of­fer min­i­mum guar­an­tees. Th­ese life funds are avail­able only from life as­sur­ance com­pa­nies.

Many poli­cies of­fer a pro­tec­tion of premi­ums in the event of the death or dis­abil­ity of a par­ent. This means that if you die or be­come dis­abled and un­able to work, the insurance com­pany will pay the premi­ums for the re­main­ing pe­riod. • FUNDISA This is a gov­ern­ment ini­tia­tive en­abling you to save to­wards an ac­cred­ited qual­i­fi­ca­tion at ei­ther a pub­lic col­lege or univer­sity.

You’re paid an an­nual bonus on the in­vest­ment, which can be up to 25% of the money you save an­nu­ally, up to a max­i­mum of R600 per child.

If you save R100 a month (R1 200 a year), you will get another R300 a year.

To re­ceive the max­i­mum bonus of R600, you have to save R2 400 a year. The bonus can be used only by the pupil or stu­dent. You can with­draw your own money but will lose the bonus. Start early, even if it’s a small amount each month. It will go a long way in the fu­ture af­ter some in­vest­ment growth.

Speak to your fi­nan­cial ad­viser, who will help you choose the ap­pro­pri­ate prod­uct and give you ad­vice on how much you should save. — Busi­ness Ed­i­tor.

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