It’s Valentine’s Day this month, a holiday that doesn’t get much love for the way it costs plenty of sensible people a lot of foolish spending. This Valentine’s, why not take a more financially prudent stance?

First things first: have the important talks as a couple
The number of couples who get engaged or take their relationship to the next level around Valentine’s Day is significant… and it’s worth noting that those who talk about money beforehand save themselves stress later and enjoy better conversations around their future together.

This needn’t be a scary affair. Light some candles, pour some of your favourite drinks and talk openly. What would you like your future to look like and how do you feel about having the money for these dreams? What is important to each of you and how do you perceive value? How do you feel about debt and how do you feel about savings?

It’s not about obsessing over money (which is highly unromantic…) – quite the opposite. It’s about speaking about what is important to you and understanding how you can now achieve these goals together. It’s about how you can be more, together (which is considerably more romantic…).

Conversations like these are gold – for both your rands and your relationship.

Discuss the benefits of potentially skipping Valentine’s Day
If you’ve already had the big talks mentioned above, try having a relaxed conversation about skimping on the Valentine’s plans to save money for other things. Now that you have a better idea of what you value together, you can work together to new and bigger goals. Or, instead of splashing out on gifts, consider just spending on creating a special memory together that will outlast any trinket.

For a Valentine’s present, give the gift of empowerment
If you do want to spoil your loved one, try thinking out of the box. One romantic gestures I’ve heard of happened to a divorced woman with three young kids. She met a man and after being together for a few months, he gave her a gift: he’d invested in a Kruger rand on behalf of each of her children with a goal to having enough money for each of their tertiary educations.

Often, we think of perishable items when we think Valentine’s Day – flowers, chocolates and the like. But what message is that really communicating? By taking out an investment on behalf of your significant other, you are saying ‘you are valuable and worth investing in’.

As a couple, do you meet with your financial advisor together? Money is one of the most common stressors in the world and can cause enormous anxiety in relationships.

This Valentine’s day, why not think long term and have a new conversation?

For many of us, the first conversation any one has with us about our financial planning is around retirement. Either retirement is too close and is a tad on the stressful side to chat about (particularly if we’re a little behind in our investment strategy) or it’s just far enough away for us not to take it seriously.

This blog has been written as a conversation sparker for you, your family, friends and colleagues. Stats show us that over 90% of South Africans are not prepared for retirement – which means we have to be having better conversations around retirement.

Hopefully these thoughts will help!

Do you feel you’re 5-10 years away from retiring?
Are you aware of what type of annuity you currently have? Many people in this stage of life have had an investment vehicle in place for so long that it’s possible that they haven’t assessed how efficient it will be for their current situation.

Statistics from the Association of Savings and Investments South Africa (Asisa) show a whopping 92 percent of retirees currently invest in living annuities instead of guaranteed annuities because it allows for ‘leftover’ retirement money to go to loved ones after the client passes away.

The rising cost of living means that these living annuities are far more likely to run out of money before the client runs out of lifespan. Chat to your planner today about what type of annuity you have.

Do you feel you’re 10-20 years away from retiring?
This may be the time for a wake-up call – the vast majority of South Africans do not have enough money to retire with enough money for even a modest lifestyle for the rest of their lives. Just South Africa, a retirement income specialist, found that two-thirds of those surveyed in this category thought themselves to be good at financial planning but, in reality, less than a third had done any calculations about how much they would need annually in retirement. Start to think about your annual budget (not monthly) and see if it fits within your savings. A rough starting point would be to say that if, for example, you would need R250k per year, and have R3m invested; you have enough for about 12 years of retirement, not even taking escalation, losses or increased living expenses into account.

Do you feel you’re more than 20 years away from retiring?
The retirement game is changing and the conversations we initiate with our planner and friends need to change too. With increased longevity, changes in work culture and the ever-rising cost of living, 20-year retirements after 30-year careers are going the way of the dodo.

At this point in your life you need to think about how you would like your money to work for you should you wish to travel, study or retire. In the future, most people will either have a second, less-stressful career in their golden years (these people are currently known as ‘the silver surfers’) or they will work in cycles, taking shorter periods of some years off from working in more organic cycles, then going back to work or a different kind of work after a hiatus, rather than getting all their work and then all their resting done at once.

Either way, the world is changing at a faster pace than ever before and there are options available to virtually every scenario. Having constructive conversations about your expectations are powerful and helpful!

If ever there was a universal cheat-meal week… it must be the week between Christmas day and New Years day. And that’s for the most diligent – if we’re honest, most of us view it as a two-to-three week cheat…

Everyone could use a boost of healthy eating come January!

Here, we’ve rounded up the best things to eat – and how to eat them – to improve concentration, creativity and productivity.

Egg in your face
Pass on the sugary cereal and have that most traditional of breakfast foods early: eggs. Not only do eggs have a decent amount of protein and energy-enhancing Vitamin B, they also have something called choline. Studies have shown that choline can help improve your memory long-term and your focus short-term because it’s a vitamin that actually increases the size of the neurons in your brain, helping them fire the electrical signals across synapses needed for thought better and faster. The result? Your thinking is sharper, quicker and more agile.

Eat less, more often
After your egg-rich breakfast, make sure not to gorge on big meals for the rest of the day but instead snack on smaller meals more often than the traditional three ‘square’ ones a day. That full stomach feeling contributes to secretion of serotonin, which makes you sleepy, and bloating which directly affects cognitive function. It can also spike your blood sugar, depending on what’s in the meal, and therefore lead to a crash both physically and mentally long before office hours are over.

Pump iron
So what should you eat? Iron-rich foods aside from red meat (which most bodies find difficult to process and which can ramp up your cholesterol long term) are great choices for work lunch. Iron increases the amount of oxygen getting into the bloodstream, body and brain. The result is improved alertness, mood and energy.

Sup on salmon
Fish may be a bit whiffy for the office or first thing in the morning, but the so-called ‘oily fish’ such as salmon, trout and mackerel are among the best things you can eat for a great work day. While most foods boost your energy levels or general health, these actually supercharge your brain – they contain omega 3 vitamins, plus iron and vitamin B, all of which combine together into a powerful cocktail that optimises memory recall, mental focus and reasoning. Truly a smart food choice.

No matter how busy your day gets – don’t forget to eat healthily!

If your to-do list is stressing you out now that the holidays are over, worry no more.

Sometimes productivity is not about trying to squeeze even more things into each day, which is still stubbornly refusing to be any longer than 24 hours, but rather about working smarter. Not harder – especially so soon after you’ve left your sun lounger.

We all want to be more productive when January rolls around, but can we be? Here are five tips… just in time for the new work year.

Print out your big picture goals and hang them
… and then keep moving them around. It’s so easy to miss the forest for the trees when the minutiae of each work week becomes your main focus. Prominently display your larger goals in an attractive way that gets you fired up. Then, because we’re masters at getting used to our environments, move it somewhere different each month.

Use a productivity app
Using a great productivity app is like outsourcing, but less stressful. Check out the suggestions for the best ones in last week’s post!

Monitor meetings
Everyone’s pet hate is work meetings. We can each count on one hand the number that have yielded real progress and decisions, yet have countless ones each month. Entering any meeting, clearly state the objectives of that meeting and it’s end time. Even better – try to have as many meetings on Skype, Zoom or telephonically, as possible.

Try the ‘pomodoro’ technique
So named because of the inventor’s egg timer being in the shape of a tomato (‘pomodoro’ in Italian), this technique means switching of all devices and alerts for a 45 to 50-minute period and working as hard as you can in that finite time on one task only Then, for 10 minutes, you take a mandatory break. This technique harnesses focus and it’s truly amazing the difference it makes.

Drink more
… water, that is. Research has proven that dehydration – which most of us have, let’s be real – can impair cognitive functioning by as much as 30 percent! Purchase yourself a glass bottle that is 500-750ml, and keep it on your desk at all times – filled with water.

Productivity is not an easy skill to master, which is why brand new books on this subject line the shelves of every book store throughout the year. Take each day at a time and be kind to yourself.

We’ve all done it – made New Year’s resolutions and never fulfilled them. This January, why not get some little helpers instead? These apps will make 2019 a breeze.

The ‘be more mindful’ resolution substitution: Kyō
Most productivity apps help you try and cram more into your already busy day, but Kyō does the opposite. The Kyō app helps the user to reflect at the end of each day on what was truly important, what was truly accomplished in terms of what really matters in life and to be grateful for it all. Not everyone is into journaling, so a big plus is that you can record voice notes, add pictures and write stuff. There’s even help from the pros in terms of interviews with meditation experts, gurus and fellow entrepreneurs who’ve got it right.

The ‘exercise more’ resolution substitution: Done
The best way to create a healthier lifestyle is to cultivate a habit. Done makes this a cinch, with a visual and un-preachy interface that allows you to input your new desire habit or habits and then tick them off each day, getting a sense of accomplishment as you do. The best part? It tracks your progress and sends you reminders and reports.

The ‘better productivity at work’ resolution substitution: Forest
Sometimes, to get more done, we need to do less, by blocking out distractions while focusing on a task. The famous ‘pomodoro technique’ is a great way to do this, but no one really likes to hear an egg timer or alarm clock going off all the time and making you think you’re back in school. Enter Forest: a timer-based app that blocks your use of all other apps on your phone for that set time and, instead of ringing annoyingly, makes a tree grow while you work. Over the set time it sprouts branches and leaves that will die if you look at your phone too early. It’s a great reminder that you’re not just finishing that one report – you’re trying to cultivate a lifestyle and make something grow.

The ‘be more informed’ resolution substitution: Overcast
Experts the world over agree that being well-read is the number one key to thought leadership in an uncertain future. At least an hour a day. But who has time? You need audiobooks or, even better, podcasts. Get informed on your morning commute, at the gym or standing in queues at the grocery store. Curate all your best ones and find new favourites with Overcast.

You’re welcome.

A change is as good as a holiday, and a holiday is a good place to start a positive change. For those lucky enough to be going away at the end of this year, we’ve rounded up some of the books the world’s brightest sparks are raving about to get you feeling excited about 2019 while still on your sun lounger.

Anything you want: 40 lessons for a new kind of entrepreneur
This short book is jam-packed with horizon-expanding ideas and out-of-the-box thinking written in a simple way that’s not overwhelming. You’ll find yourself pumped up instead of daunted. It’s an enormous bestseller for a reason, and light enough on both your suitcase and your overtaxed mind.

The Happiness Project
A great pick-me-up but still a non-fiction book in which you’ll learn something, The Happiness Project is a sunny, upbeat book full of practical ideas on how to be more happy while living your best life. Author Gretchen Rubin speaks on practical things like how to fight in an emotionally healthy way, organising cupboards and singing even when you don’t feel like it in a non-preachy way that’ll put a smile on your dial.

The Motivation Myth: How High Achievers Really Set Themselves Up to Win
Sometimes we pummel ourselves to work harder, when productivity isn’t really the problem. If you like peering into the cogs of how things work psychologically, this one is for you. Ghostwriter, speaker, LinkedIn Influencer and author, Jeff Haden says you can make yourself more motivated in simple ways, no need to beat yourself up.

Essentialism: The Disciplined Pursuit of Less
If 2018 has left you feeling a little overwhelmed, this wonderful book is different to many productivity manuals: it’s not about cramming more into your day but discovering what truly matters in terms of productivity and doing that excellently.

However you plan to spend your downtime this season, remember these words from Confucious; “No matter how busy you may think you are you must find time for reading, or surrender yourself to self-chosen ignorance.”

Various factors, such as employment prospects, family situations, lifestyle choices and investment goals, come in to making the decision about whether to buy or rent a home.

In any market, there are different reasons for why you may choose to do one or the other, as there are good arguments for both renting and buying that depend on individual circumstances. Here is a brief overview of the options in today’s climate.

To Buy

In South Africa, there is generally a culture of preferring to own a home, as purchasing a property is widely considered to be a sound medium- to long-term investment decision. Furthermore, buying a property allows you to enjoy lifestyle benefits, such as decorating to your tastes, owning a pet, and generally doing as you please.

That said, South Africa is currently experiencing a stagnating property market in which the annual growth in house prices is slowing. Taking inflation into account, it would seem that the growth of property prices is actually in decline.

These days, people are understandably becoming more cautious when it comes to buying property. However, although the residential property market is correcting itself — most notably in the Western Cape where property prices had previously increased by 650% in certain areas in the past 15 years — some property managers believe that it is still best to buy, and to get a foot on the property ladder as soon as possible.

Interestingly, the Western Cape is still the top performing regional market, and had a 10.6% price increase from January to June 2018, while the national average was only 4.25%. Furthermore, the slowing of price appreciation in some of the hotspots has had the effect of boosting the market in other parts of the city.

It is important to gather as much information as possible on which to base your decisions, especially when it comes to investment properties, as margins have become much slimmer. However, if finances are tight, a potential option is to rent a house for you and family to live in, while investing in a more affordable apartment, which you should then be able to rent out at approximately 0.5% of the purchase price. This way, you can get a foot into the market, while enjoying a monthly income stream and long-term capital growth on your investment.

It is also possible to create further wealth by upgrading or refurbishing your property, then selling it and buying a more expensive property. However, it’s important to decide carefully what you spend on your home, as you need to consider what will add value for a potential buyer. It’s worth seeking advice from experts if you are unsure. Also bear in mind that, according to Dr Andrew Golding, CE of the Pam Golding Property group, “the old saying that it is better to purchase the cheapest house in an expensive suburb, than the most expensive property in a lesser area, remains true.”

It is also important to take into account the upfront costs involved when purchasing a property, such as the deposit, transfer duty, legal costs, homeowner’s insurance, bank charges and municipal rates. Not to mention the maintenance costs and any levvies that you may need to pay once you are a homeowner. You should also be aware that if you have a bond, the interest rate can fluctuate too.

To rent

An increasing number of people simply don’t have the means to buy a property, and the rental market has benefitted from a generation that is financially not yet able to purchase their first home. Renting can be especially attractive as it does not come with additional expenses, such as rates, taxes and maintenance, which fall on an owner.

However, there are other reasons for why you may choose to rent rather than buy, which are not related to affordability. For example, many people want the flexibility and ease of mobility that renting provides.

Renting can also be a good option if you are returning to South Africa, but are still unsure of where you are going to work or what your future plans involve. Furthermore, renting gives potential buyers a ‘recce’ opportunity so that they can first get a feel for an area, its security, and its access to local amenities, frequented places and transport links.

Renting also buys you the time to do a thorough property search so that you can eventually purchase a suitable home at an attractive price, without having the pressure of needing to urgently find somewhere to live. It will also give you time to analyse potential growth opportunities of different properties and locations.

If you do wish to rent, it’s important to ensure that you have a written lease that covers payment, duration, and all the landlord’s and the tenant’s obligations. Before you sign anything, be sure that you are happy with all negotiations, and that all agreements are clearly stated in the lease. Be aware that a rental contract will often be fixed for at least six months or a year, so be sure to stipulate if you require anything different.

If you keep the property in good condition and honour all your obligations in a timeous manner, you should have no issues in renewing a contract or being reimbursed your deposit. However, the downside to renting is that losing your deposit is always a risk, monthly rental can be expensive, and you will need to ask permission to make any changes to the property.

Whatever you decide, it’s important to do proper research on an area and a property before committing to renting or buying. And it’s also advisable not to over-extend yourself when making a decision — be aware that the rental costs are likely to increase each year; as will levvies, insurance and rates if you purchase a property. Don’t hesitate to arrange a meeting to discuss whether buying or renting a home would be best for your financial situation right now.
Information for this blog was sourced through Fin24.co.za.

A real estate investment trust (REIT) is a company that finances, operates or owns real estate that produces an income, and is a way for investors to have a liquid stake in the real estate market.

According to Nareit, which is the representative voice for REITs, more than 225 REITs were trading on an American stock exchange earlier this year. At the start of 2018, a quick look at diversified REITs suggested that 23 were yielding 5% or more, with market capitalisations of greater than US$1 billion. And that was only when reviewing one sub-sector of the industry — if you took into consideration other areas, such as retail and office, the number increased to 60 REITs.

Given the vast array of REITs available, it can be hard for investors to know which one to choose. However, while the attraction to REITs can be strong — especially as they are required by law to distribute at least 90% of their annual taxable income to shareholders — not every REIT is worth its salt. Even if one has a dividend yield of 5%+, it doesn’t necessarily mean you should want to own it.

To hedge or not to hedge?

Cross-border real estate investment is becoming more popular as more people develop their understanding of the role that real estate can play in a multi-asset class portfolio. Many investors have also become aware of the potential diversification benefits that can be gained from international real estate exposure.

However, it’s important to appreciate the complexity that currency can bring to the table when it comes to investing in property. Returns can be hugely impacted by currency movements, and performance can look very different when measured in different currencies. For example, over the course of 17 years, one global property index’s annualised total return was 7.4% in its local currency, but if measured in South African Rand, the total return would have been 11.2%, and in Swiss Francs, it would only have been 4.9%.

If you do have a foreign currency exposure, it is, therefore, important to carefully consider how you intend to manage your exposure. Certain risks can potentially be mitigated through currency hedging. According to an article published by the Pension Real Estate Association (PREA) “forwards, swaps, and options are some of the commonly used instruments for hedging currency risk in a real estate portfolio. Some investors may also borrow in foreign capital markets to reduce their foreign exchange exposure. However, the latter approach may simply substitute financial risk for currency risk, and the cost of borrowing offshore may be higher. Certain large global investors may also see their portfolios as sufficiently diversified to provide a natural hedge and not actively hedge at all.”

You may also wish to consider other factors, such as when is the right time to hedge and what should be hedged. And it’s also worth considering the cost and regulatory hurdles when it comes to managing currency risk. Many decisions are not always straightforward, but it’s important to be aware that currency volatility could become a source of investment risk as real estate becomes more global in nature.

Although many investors appreciate the unique nature of REITs, it’s important to only invest in REITs that you’ve thoroughly researched. In order to protect your principal, try to find a REIT that comes at a price that allows for a safety margin against market risk. It’s also advisable to not consider a REIT that could potentially cut its dividend, and be sure to pay attention to underlying cash flows.

If you’re interested in REITs that can serve you in good times and bad, you may wish to look for stocks that provide an income while minimising risk — for example, stable business operations that have good balance sheets. Although the yields from certain REITs may not make you super rich, they can still reliably contribute to your financial goals and wealth portfolio. Don’t hesitate to arrange a meeting if you wish to discuss the value of real estate as an income-generating investment and how to best manage your cash flow.

(Information gathered from Forbes and InvestorPlace)

According to recent statistics, 5.5 million South Africans travelled abroad in 2016, showing that travel has become a part of many people’s lives — be that for business or leisure. A vacation can be an enriching experience that allows us to step away from our daily lives to relax and, enjoying it with added peace-of-mind is an added bonus!

Remember, just because you’re on holiday doesn’t mean that you can’t avoid events that are outside of your control, and can occur anywhere in the world at any time. Travel insurance gives you the peace-of-mind that you are covered in the event of disaster so that you won’t be burdened with the extra stress of expenses you can’t meet.

Travel insurance will offer options to cover common travel issues, such as lost luggage, cancellations that are out of your control and, most importantly, medical emergencies. Think of it in the same way as car insurance, and protect yourself and your family when you travel in case things go wrong.

The cost of a small medical procedure abroad could easily deplete an entire holiday budget. Bearing in mind that hospital bills can easily run into (hundreds of) thousands of Rands if you are visiting countries without public healthcare, such as the United States. Travel insurance also provides a certain degree of protection against currency fluctuations, as any claims incurred will be paid in the currency of your destination, even though you pay for your policy in South African Rand.

What does it cover?

You may find that basic travel insurance is provided by your bank if you buy your flight on your credit card. However, this type of cover tends to come with some restrictions, so may not be sufficient depending on certain factors, such as your age or travel destination.

Most comprehensive travel insurance policies provide emergency medical cover; death and disability cover; legal assistance and personal liability cover; luggage cover; and losses incurred as a result of unpreventable cancellation.
However, do be aware that not all policies are cut from the same cloth, and a specific type of travel insurance — such as for business purposes, senior citizens, or groups — could better cater to your needs.

It is, therefore, important to do your research when looking for cost-effective cover, and to examine your insurance policy (and the small print) carefully to determine exactly what is included. Do also be sure to check how much excess you would have to pay if you did need to cancel your trip.

When comparing policies, it’s advisable to first decide exactly what level of cover you will need, and make sure that you won’t be left under-insured for the things that count. It may be tempting to opt for the cheapest insurance, but a few extra Rands could potentially save you a lot of money in the long run.

Depending on where you are going, you may also want to purchase extra cover to ensure that you are covered if, for example, an act of terrorism occurs that puts you at risk or changes your plans. However, do note that some travel insurance providers will refuse to cover you if you are travelling to a disaster-prone area, or a country where there is political unrest or a health epidemic.

Adventure activities, such as skiing, mountain biking and scuba diving, come with an element of risk so, if you intend to hit the slopes or the sea, it’s important to be insured for any accidents and injuries that may occur. Having the maximum amount of emergency medical cover is worth the investment if you are planning to do anything that could be dangerous. You may also have expensive sports equipment that is worth insuring too.

Domestic travel insurance

Don’t be complacent when it comes to travelling domestically, as accidents can still occur on home ground. South Africa is a big country (the Kruger National Park alone is the size of Israel!) and you can still end up in trouble when you’re a long way from your usual comforts and contacts.

It’s a good idea to tailor your insurance package to meet your needs, so that you can be protected and save money in the case of any unfortunate events. Residents travelling around the country stand to greatly benefit from a policy that is specifically designed to address the concerns of South African travellers, such as car rental excess waivers, and cancellation and curtailment cover.

Plan for the unexpected this holiday season, and purchase your chosen policy as soon as you have paid for your trip. This won’t cost you a Rand more, but, so long as cancellation cover is included, it will mean that you’ll be protected from the minute you’ve bought it. That said, if you still haven’t purchased travel insurance for your December leave, it’s not too late — as long as you arrange it before you step onto the plane! Don’t hesitate to arrange a meeting if you need more advice on the matter or information on your financial situation.

(Information gathered from all4women.co.za and moneysupermarket.com)

Many South Africans choose to take advantage of the public holidays and the warm weather by visiting loved ones or going on an adventure over December and January. However, expenditure over this festive season can quickly add up if you’ve planned a well-deserved break.

It, therefore, can be worth renting out your house for the season, so you can supplement your spending while you are away. Nowadays, short-term rental websites, such as Airbnb, make it relatively easy to rent out your home to holidaymakers, and receive an extra income for little extra effort. It’s a superb idea — however, take a look at these considerations before you open up your home.

Although ‘tis the season to be jolly, this period does, however, come with a few less-merry considerations to bear in mind.

For example, during these summer months, there tends to be higher risk of break-ins. Although there are numerous benefits to renting out your home while you’re away — such as earning an extra income and not leaving the property unoccupied so that it is vulnerable to a break-in — there are also other potential risks that you need to protect yourself against as a homeowner. For example, you could well come back to find items missing or damaged, or to see that part of your property has been vandalised.

If you do not have sufficient insurance to cover you, renting out your house could end up costing you dearly and setting you back for the new year. Be aware that typical home insurance may not provide cover for any damage or theft that could occur while your home is being rented to strangers. As theft cover on a standard personal policy requires forcible entry, it is unlikely that you would be able to claim for anything that is stolen by a guest. If you are planning to let out your home this holiday season, it is, therefore, crucial to carefully read the terms and conditions of your insurance policies to ensure that you understand the extent of your cover.

As short-term letting will generate a revenue, it is also technically considered to be a commercial venture, which means that you may require more comprehensive insurance for the associated risks. As well as protecting your physical possessions, you should ensure that you have liability cover in case a guest injures themselves on your property during their stay. Otherwise, you could be held liable as the owner, which may have some serious cost implications.

If you do decide to rent out your home while you’re away, bear in mind that you may be hosting travellers who have different habits to you. This could result in a nasty surprise when you return from vacation, so you should consider various ‘worst-case’ scenarios for insurance purposes.

Don’t hesitate to arrange a meeting to discuss how you can make this holiday season as financially viable as possible. Furthermore, be sure to have sufficient cover in place so that you can enjoy peace of mind, as well as a potentially greater income stream this holiday season.

(Info from fanews.co.za)