Coffee, makes you think

After owing its name to the mindful Fransciscan monks, the Capuchin friars, many of us overlook our daily cappuccino (or other frothy delight) and how much we spend on these little luxuries in life.

One of the best ways to add meaning to our money is to be mindful about how we spend it, and our financial well-being is closely linked to how we feel about our money and what it means to us.

If we use the example of buying a daily cup of take-away coffee (this could be from Woolies, Starbucks or your local hipster cafe) – we can learn a lot about our spending habits and bias.

Many people savour the flavour of this power drink each morning, and many caffeine addicts can happily knock back a few in a row. However, some calculations show that if you’re willing to give up just one of those daily cappuccinos, you could save nearly R40,000 in five years and over R90,000 in a decade. 

With the ominous effects of inflation and the cost of living on the rise around the world, it can often seem impossible to save more money without the help of a big bonus or salary increase. However, Hildegard Wilson, a member of the Actuarial Society of South Africa’s investment committee, is quick to ascertain “that you can save without compromising your overall standard of living. With the power of compounding, where growth on your investment earns additional growth, these kinds of ‘breadcrumb’ savings can turn into large amounts over time.”

If you buy a cappuccino from Monday to Friday at an average cost of R25, your coffee habit is costing you roughly R500 a month. If you opt to forego the cappuccinos, you could alternatively commit to investing R500 a month in a multi-asset high-equity unit trust fund. Over the past decade (calculated up until March 2017), high-equity funds have delivered average annual returns of 8.2%. Although this figure offers no guarantee of future performance, if your investment were to achieve an annual average return of 8.2%, you would have just over R37,180 after five years and R93,130 after 10 years.

Foregoing just one cappuccino a day, you could generate a significant lump sum, which could make a serious dent in your debts, or top up an education or retirement fund.

The goal is not to give up a cappuccino, it’s to be mindful of how you use your money and acknowledge that the little things all add up in the end. So… next time you order your beverage of choice, hopefully it makes you think!

The RA-minder

For many, the way in which we save and invest is not a daily conversation, so it’s easy to forget what we have in place AND WHY we have it in place. Here’s a quick reminder!

An RA… or Retirement Annuity is one such product that can often confuse many.

RAs have been around for a long time and are basically private pension plans that help you to save for retirement. As we near the end of yet another tax year, we move into a period that is often referred to as RA season, which is a good time to weigh up the advantages of this investment product

These investment products have evolved into much more flexible and affordable investment vehicles than they once were, and investors can now benefit from “new-generation” RAs on linked investments platforms (LISPs). These offer a vast selection of underlying unit trusts, and they allow contributions to be made at the investor’s discretion, without penalties for missed contributions.

The most significant benefit of having a retirement annuity is the tax deductibility of contributions. Exactly what these deductions and allowable contributions look like are dependent on legislation, so it’s always best to check in on your portfolio to ensure that you’re maximizing the benefits.

An investor can expect to receive an annual tax refund in line with their income, and this RA rebate can considerably boost your retirement benefit.

Capital gains tax normally needs to be paid for any discretionary investment, but this isn’t the case with an RA. Interest and dividends are also not taxed in an RA, which means that the entire growth of your investment is tax-free, which makes a significant difference over the long-term. 

When you retire after the age of 55 and are allowed to take up to one third of your RA in cash, you will have to pay tax on the proceeds taken. However, a portion of the lump-sum benefit is tax-free and the rest is taxed on a sliding scale. And, as you have deferred paying tax on the proceeds, a larger investment amount has had the chance to compound tax-free over time. 

Come retirement, the other two thirds of the proceeds from your RA will be used to purchase an annuity, which will then provide you with an income to sustain you in your golden years. You will need to pay tax on your monthly “income”, but many individuals’ personal tax rates decrease after they retire. 

An RA presents another advantage when it comes to estate planning, as it falls outside of your estate, so the proceeds from your RA will be paid directly to your nominated beneficiaries when you pass away, without the estate duty or executor’s fees. For the most part, your money is also protected from the claims of creditors, which is another great RA-minder! 

In spite of this list of positives, many investors feel uneasy when it comes to retirement annuities and are reluctant to consider them as an investment option. However, it’s important to understand that RAs have evolved significantly, become much more affordable, and new regulations have been implemented to minimise risk and force investors to diversify.

This may not be considered as a positive thing by everyone, as Regulation 28 of the Pension Funds Act does restrict investors to a maximum of 75% allocation in shares, which many people debate as shares have managed to outperform all other asset classes over the long-term. However, this risk management method was implemented to benefit broad spectrum investors in different environments, and it offers more investment protection when markets become volatile.

If your objective is to specifically save for retirement, a retirement annuity could be the best vehicle for you.

Share the love with your wallet

Is it time for some romance without the rands? You can sweep someone off their feet whilst keeping yours on the ground.

Valentine’s Day has gained the reputation of being a Hallmark holiday that promotes Lindt rather than love. 

Ahead of rushing off to the shops to buy a big bunch of flowers or box of chocolates, you may wish to take a moment to reflect on the meaning behind the day and how you can best show your affection. 


Valentine’s Day is thought to go back to a fertility festival held on 15 February that was dedicated to a Roman god the traditions of which were believed to guarantee fertility and ease the pain of childbirth. However, the rise of Christianity resulted in pagan rites being outlawed, and the festival was replaced with another annual highlight that revolved around the story of Saint Valentine.

He was a priest who secretly married young people during a time when it was forbidden, as unmarried soldiers were thought to be better fighters because they didn’t have the fear of leaving a wife behind. He was eventually imprisoned and sentenced to a three-part execution consisting of a beating, stoning and decapitation for his crime of defying the then-Emperor’s edict.

However, by remaining resolute in his belief about the sanctity of marriage (in spite of the risks and his eventual punishment), he is regarded by many as a martyr to his Christian cause; and 14th February the date of his execution is now celebrated as a day of love.

He also allegedly healed the judge’s blind daughter, and he ended a letter he wrote to her with the words “from your Valentine”, which has become a focal part of the modern love missive.


Nowadays, the amorous event is celebrated in a variety of ways across the world. In South Africa, for example, some women pin the name of their sweetheart to their sleeve, and this is how men can discover that they have a secret admirer. 

For the average South African, spoiling that special someone on Valentine’s Day can become quite a costly affair, but you can still be romantic without splashing too much cash unnecessarily. The key is to plan in advance and budget accordingly. Also consider more experiential or bespoke gifting options that are personal to your relationship.

Write a list of things that your loved one loves, along with how much each thing costs   be this a night out at the movies, or a gift of jewellery. Once you have an idea of prices, set a feasible budget and make a plan of action that sticks to this. 

Blowing all your savings on one day isn’t actually very romantic if it means you wind up begging for loans or eating plain pap for the rest of the year. It’s better to be realistic about what you can afford, and prioritise meaningful presents or experiences over sheer decadence. Alternatively, you may wish to consider skipping some luxuries now so that you can save enough to make your other half happy on the big day itself. 

You can also spread the love without breaking the bank by making a gift rather than buying one. For example, rather than getting into debt by taking your date for a seven-course tasting menu at a fine dining restaurant, try creating a romantic atmosphere in your home and cooking a delicious dinner that you both can enjoy by candlelight. 

Furthermore, if you want to do something particularly special, have a look for any deals that can make an enjoyable day more cost effective. You can still have fun at a low price, and a bit of effort and consideration can be worth far more to someone than simply picking up a large bill.

Breathe cleaner air in your home

Here’s all you need to know about houseplants!

We live in increasingly polluted environments – both inside and outside! Trees and plants remain the best ‘machines’ for pumping down carbon dioxide and supplying us with clean air.

Without good, clean air, we have less energy and are more prone to allergies and poor health. If you want to improve your home or work space, here are a few reasons why you could consider plants in your home and office.

Choose the plants wisely

If you decide to go for indoor plants, do your research around what different types of plants contain and where they can work best. You’ll find that some plants work best with pets whilst others are toxic to animals and children. Some too are better for the kitchen, others work well in living spaces and others are great for bathrooms and bedrooms.

Are you caring enough?

Caring for living things, like plants and pets, gives you a bigger sense of reward and develops your caring character. Be willing to take care of the plants when you introduce them into your home. As part of your research you can learn about the best ways to take care of the plants.

Don’t have more plants than you can manage, as you have to regularly take care of them.

Cacti and succulents are said to be good plants if you’re a beginner with indoor plants. Plants like Garden Mum, Peace lily and Aloe Vera are great options that are easy to grow and they come with serious health wins. Some, like lavender, release a beautiful aroma into your home whilst ferns are super for filtering the air.

Plants also jazz up your space

A nice looking plant is also a cool decoration for your home. Some say seeing greenery can make you feel more relaxed and calm – good for your everyday mood!

Group your plants together nicely according to different widths and heights. The size difference gives a more organic look than plants of the same size. Setting up plants of the same colour together can be a good idea too.

To make a well-informed decision about your plants and how best to use them as air purifiers, chat to your local nursery and remember, start with easy plants!

Breathing cleaner air doesn’t have to come at the expense of high-end air conditioners – use nature’s purifiers!

Setting goals and taking stock

How you finish your year is a powerful way to create momentum for the new year. How much you achieved (or didn’t quite manage) this year can inspire how much you aim to achieve next year. In the same way that an athlete pushes harder in every game, or an artist stretches their skills with each new work, so too can we set our sights higher for the year ahead.

And, planning for it now presents us with an opportunity of walking into the new year knowing what we want to achieve, right from the starting blocks!

Here are some tips to help you set next year’s goals.

Reflect on the current year’s achievements

What you want is most effectively framed by looking at what you already have. Reflecting on the goals achieved this year gives you an idea of what you could strive for in the new year.

Take some time to reflect on your current plans and check how much progress you’ve made. Reflect on what you drew motivation from, for example; consider the books you’ve read that gave you new insights, or flip through your playlists for music that made you feel productive, creative and positive.

Reflect on your hurdles as well; this can help you know what you need to work on in order to achieve more next year and complete the goals that you haven’t ticked off your list yet.

Think about your short and long term achievements

Seeing all these goals as part of your overall life plan will give the confidence to continue pursuing them. So, as much as it is important to attach a timeframe to your goals, keep in mind that 12 months can be a short time to achieve everything. Be kind to yourself and don’t be afraid to lengthen your timelines.

Set S.M.A.R.T goals

Many people love this approach to setting achievable goals.

  • Specific – Set simple and specific goals. Try brainstorming your goals and discuss what you want to accomplish, why it matters, who is involved, where it’s located and which resources are required.
  • Measurable – Measure your goals and keep tabs on your progress. You can measure your goals by asking yourself questions like, How will I know when it’s accomplished?, How much effort do I need to put in?
  • Achievable – Set realistic and attainable goals that are within your abilities to achieve. An achievable goal is something that you can easily figure out how to accomplish within your constraints.
  • Relevant – Set goals that matter to you and align with your life goals. Just because you see your friends swimming in the deep end, doesn’t mean you should start there when you learn how to swim.
  • Time-bound – Instead of simply saying “Next year I want to learn how to swim”, set a specific timeframe for you to accomplish that goal. Attaching a time to it, is designed to prevent you from being complacent and remember your deadlines.

Create a strategy for success

Have a plan of action for your goals. Write out the next steps you need to accomplish them. Develop a map and routine for your goals.

For example, if you want to lose weight. Your plan would look something like this:

  • Your why: To feel light, healthy and athletic
  • Action 1: Drinking at least eight glasses of water per day and substituting the Friday afternoon beer with a vegetable shake, for the next 6 weeks.
  • Action 2: Go running twice a week and do more chores – learn to be busier and active.
  • Routine: Weigh yourself at least once a week to keep track of your progress.

Have someone who will hold you accountable

This is powerful! Choosing someone who you trust and will listen to will keep you motivated and remind you of what you wanted to achieve. It’s as valuable as a snooze button in the morning… sometimes you need a second alarm to wake up properly.

Even if one of the ideas above helps you, remember, these are YOUR goals. They’re not a chore or an obligation; they’re your commitment to a better you.

Watching what you spend… and what you eat!

With all the treats at the social gatherings, watching both your budget and your diet during the festive season can be a challenge.

Whether we’re talking about savings goals, or weight goals, it’s easy to get a little carried away. It’s wonderful to treat your loved ones and enjoy yourself, and during a holiday it’s important to be kind to yourself and let loose a little. However, if you want to enjoy the season to its fullest, it’s helpful to have a positive mindfulness towards what you’re consuming.

An over-inflated tummy can be just as troubling as over-inflated expenses that need to be paid back in the months to come.

With the former… here are some tips you can use to help you keep to your health goals during the festive season!

Eat lots of fruit and vegetables

Whilst you don’t have to stick to every calorie (because that’s a serious buzzkill) use your current dietary goals as guidelines that you’re willing to be flexible with.

Fill out every meal and snack time with fruits and veggies. You can even bring your healthy meals to the social events you will be attending. Offering to bring your own dish of greens may be a good idea.

If you’re hosting, that means you have control of the menu. You can make healthier choices when shopping for the party, your guests may appreciate some healthy (and tastier) alternatives too. Healthy eaters are happy Peters!

Eat enough – check your meal portions

If that lavish roast on the table, with all that sauce, looks too good to avoid, don’t go wild on it. Have a glass of water before a big meal and you will be less likely to overeat. Don’t continue eating even when you feel full, you’ll regret it an hour later and enjoy the rest of your afternoon/evening far less.

If you have kids, or are celebrating with other people who have children, check how they feel about sweets and treats and don’t hand out chocolatey temptations without their consent.

If you go to restaurants with harvest tables, remember that the size of your portions equal the amount you will pay. So, being practical about your meal portions means being practical about your finances as well.

As the host, don’t over cater; avoid wasting food and don’t go over your food budget.

Keep to your exercise regime by changing it up a little…

Another key aspect to feeling happy and healthy is stimulating the flow of endorphins. It’s not always easy to keep up with a training schedule, or gym visits over the festive season, so why not consider mixing it up a little?

If you can’t run on the treadmill, ask your family to join you on a walk or trail. Spend some time on the trampoline with the kids, swim some lengths in the pool with a child on your back or play some pool games with your mates. Take the dogs for a run on the beach or explore a new trail that you’ve been dying to visit.

Remember, looking after your health doesn’t have to happen under the false-lighting of a near-empty Virgin Active.

Making mindful choices during the festive season is good for both your health and financial goals. Your holiday budget should align with your health goals, how much (and what) you eat will affect how much you spend.

You are in charge. You’re able to make healthy choices that will help you enjoy the festive season. Eat well and spend well!

The retirement gap needs a new rap

Retirement (as well as education and the job market) is one of our greatest future-unknowns.

We know it will happen… but we are finding it harder to understand and predict what it might look like. This doesn’t mean we should abandon planning for it. If anything, it simply means that we need to change the way we start to talk about, engage with and plan for retirement.

According to a global survey done by BlackRock, about 51% of the world’s working population, worry that their workplace pension will not cover the retirement life they want. This is why most people have a dim view of retirement. But this view is mostly framed by the conversation that retirement is meant to be a welcome reward following a successful working career. In other words, we work for about 45 years, and then we take a 20 year paid vacation….

The biggest problem with this picture is that very few people are able to save for that full 45 year period, and even fewer manage to avoid having to draw on these savings for unforeseen expenses ahead of their retirement.

That’s why we have a rap about the gap that’s not very helpful.

If we are to change this conversation and try to gain a more helpful understanding of retirement, we need to find out how to ask better questions.

How are you shaping your expectations for retirement?

A Schroders 2018 survey, showed that people usually receive less than what they expected their retirement income to be. It is important to know how much you will receive as this needs to align with your planning and your expectations. Whilst retirement is not only about how much you will earn, it’s important to know what you will have to work with.

If you would like to have the opportunity to study further, open a new business, pursue new hobbies, travel or live abroad, planning for a renewable income as well as new income sources is important.

The same Schroders survey also found that 43% of global retirees, who said their income was less than expected, still felt like their retirement income was sufficient to live off comfortably.

Some people continue working into their retirement years; not because they have to, but because they choose to. This is great as it’s part of reframing our expectations for retirement. Ideally, you don’t want to work because you are forced into it for financial reasons, but you also don’t want to avoid work opportunities purely because your expectations of retirement exclude those opportunities.

(Taken from Visual Capitalist.)

What does ‘planning ahead’ actually mean to you?

An Aegon 2019 survey says, 25% of global employees say they are on course to achieving their expected retirement income. This is often perceived as meaning: they’ve started early.

But what does ‘early’ mean for you and your personal plan? Planning for retirement even while in your 20s or 30s gives you more time to invest and grow your retirement capital. But that doesn’t mean you can’t start in your 40s. Yes, the later you start certainly poses more challenges, but not if you have other elements in your plan, or it’s part of how you perceive your retirement.

Defining your event horizon (ie. when you would like to retire) is crucial to both your mindset and your investment success. If you start with a positive and personally relevant view of what your retirement (not someone else’s) will look like, you are far more likely to achieve your goals.

How much are you willing to share with your adviser?

Help from a financial adviser has been proven to significantly improve the financial wellbeing of people – both before and after retirement. However, the level at which financial guidance and intervention can help depends on how much you’re willing to share with your financial adviser.

Building a relationship of deep trust, over time, is most often the best way to ensure open and clear communication in a financial planning relationship. Retirement should be enjoyed, not feared!

Effective planning for retirement helps you create expectations that enable you to look forward to retirement.

Earning more isn’t the answer

When it comes to building your wealth, it’s not about how much you make, it’s about how you work with what you have. You do not need a larger paycheck, you only need to invest and use your money wisely. Yes, more money gives you a larger budget to work from but that simply needs increased consideration.

Here are some tips that will make it easier to build your wealth, even if you do not have a large income.

Adopt better spending habits

Using your money wisely begins with controlling how you spend. If you earn more, and you land up spending more (often on things you may not need), your wealth building plans will never come to fruition. It will simply be: more money in, more money out.

Good spending habits have a positive impact on your wealth building ability. Practically, this looks like a constant assessment, and re-assessment, of your lifestyle choices in order to spend less on current expenses to save more for future expenses. Essentially, if you spend less now, you will have more to spend later! Remember, it’s not about saving for something random; wanting to spend more later is only beneficial if you have a good handle now and what you might like to spend your money on later (like a holiday, car, wedding etc).

Track your spending

To help you adopt better spending habits, actively track your spending. This can seem scary at first, but ultimately this will help you make empowered choices about how and why you spend your money the way that you do.

Automate your savings

Automating your savings is a powerful way to build a large savings pocket without it feeling like a trying chore. When you manually pay into a savings account, you are more tempted to postpone or miss a month. When this happens, it’s easier to miss next month too… and so a pattern develops. However, if it comes off automatically, much like paying tax, you’re more likely to stick to your savings goals.

Seek professional advice

Key to building your wealth is getting professional financial advice. No matter your income level, you can still benefit from consulting with a professional.

Professional financial advice is about more than helping you set up an investment portfolio or sell financial protection products. As part of your financial plan, this advice should assist you with tax planning, goal setting, establishing meaning for your money AND… help you work with what you have instead of ‘always wanting more’ to achieve your goals.

Building your wealth depends less on how much you earn and more on how wisely you use your earnings. This means that when the time comes, or opportunity affords you a higher income, it won’t be wasted but will instead help you build into your own life and the lives of those around you – providing deeper meaning and purpose for your wealth!

Four often overlooked steps to reducing financial stress

A lot of people are quite financially stressed right now. It’s understandable – it’s been a hard few years for most of us, and the uphill climb back to a bustling economy, both locally and globally, is far from over yet.

Does that mean that we have to be stressed with where SA has been in the past five years? Not necessarily.

You can reduce financial stress with the following tips.

Step 1: Communicate

One of the biggest stressors that comes from money is the negative impact it can have on our relationships. Some of us have been shown by generations before us to suffer in silence and not share the money worries with those close to us.

The effects of that have a deep impact.

Here’s the thing – our partner, kids, parents, friends will always know. We are usually not even aware of the tense face we pull when our child picks the most expensive toy in the shop, or the frosty reception we give when our partner speaks about anything with an expense. The problem is that it’s not easy for them to be sure of whether it’s them or money that we’re frustrated with.

Having an honest, vulnerable conversation with loved ones about finances can be healthy for both family bonds and your bank balance. You might be surprised at how willing your other half supports forgoing certain expenses in order to keep your budget robust. Remember, if you’re anxious about your finances, the people around you probably are too.

Step 2: Get advice

When money is already tight, it may seem unthinkable to get a financial adviser involved. It is important to realize that it means you could end up spending a little more to get access to wealth creation strategies, ideas and investment opportunities that you were completely unaware of and could significantly improve your emotional, mental and financial position.

Going to a financial adviser has the same effect on your spending as keeping a food journal for your diet. With an adviser, you can increase your mindfulness to eliminate waste and focus your expenditure into what really matters to you.

Step 3: Be honest

We need to be upfront and honest in financial planning meetings and conversations. Speak up when it’s hard and you don’t feel ready to make changes. It’s important to talk about what we can no longer afford and what we’d like to achieve. Any change that happens before we are ready for it is often not sustainable.

It is these kinds of conversations that bring value to our financial journey and makes financial advice come alive. We can respond with enthusiasm, find new ideas and forger stronger relationships.

Step 4: Use this time to fine-tune and keep honing

Instead of seeing a financially stressful time as a never-ending pit, rather see it as an opportunity for new growth. Economic downturns, bearish economies, recession and all forms of headwinds always come to an end.

What they provide is the opportunity to get our mindset and wealth creation strategy into a lean, mean machine that will skyrocket when conditions improve!

Diversifying happiness

The ancient philosopher Aristotle came up with a single word for what every person wants: ‘Eudaimonia’.
Eudaimonia means happiness but more than that it alludes to a sense of fulfillment.

Many people have viewed financial planning as the management of financial goals and resources. Typical conversations would include questions like: “How much will my assets grow, how can I get X amount by the time I am this age and what will my retirement look like?”

Whilst these have been helpful questions, we are learning that they are only part of a fuller conversation. There are different questions that are starting to emerge in our conversations that are focussing more on meaning and purpose. They are not as easy to answer (sometimes they don’t need answers just yet…) but they help us frame the bigger picture of how we’d like to use our wealth for a fulfilling life.

It’s not only our wealth strategies that need to be diversified for healthy growth but our happiness strategy too.

This Spring, we suggest these happiness diversification exercises.

Exercise your way to happiness

Now that it’s getting warmer outside, it’s time to get our bodies moving again. According to a recent research study, exercise makes people happier than money does. People who stay active are better equipped to deal with stress and have less days when they feel down or depressed.

That’s not too say that too much exercise isn’t a bad thing – it’s important to have a balance and not over-exercise. Either extreme can be detrimental to our experience of happiness, but a healthy balance is a powerful way to experience eudaimonia.

Prioritise experiences and people over possessions

Invest in making priceless memories in life. Instead of buying that luxury car you do not need, try saving up for a family holiday. Going out with friends or family to concerts, movies or picnics are just some of the happy experiences you can give yourself in life. Prioritise taking walks in nature, reading a book or playing a game with your kids.

Believe in something bigger than yourself

As we spend time with other people outside of a working relationship, it becomes easier to see and believe in something bigger than our own reality. It’s not about faith or religion, it’s about connectedness. If we want to find more ways to invest in our fulfilment we need to experience generosity to causes that are bigger than ourselves.

Fulfilment, happiness and productivity should grow when we contribute to others. It’s a healthy circle of sustainable growth that is not reliant on market performance or bank balances. Being willing to ask bigger questions and find deeper meaning to our wealth is where we can begin to experience eudaimonia.