Nicholas Nefdt - Liberty Financial Adviser

Stay covered with insurance!

If money is tight, but you support family members, do everything you can not to let your life policy lapse. Although coronavirus deaths are low, they will be a reality for some.

If you cannot pay your premiums, check how long your grace period is and try to meet the payment thereafter. If you are retrenched, check for premium waiver cover. As a last resort, you could also ask your assurer to reduce your cover and premiums while you are in financial difficulty.

If you are self-employed and have income replacement cover, with cover for temporary disability and a short waiting period - especially if you are self-employed - you may be able to claim for days you cannot work.

Suspending short-term insurance for your car, home or contents is also not a good idea, unless you enjoy a "pause" feature like that offered by Naked, which enables you to pause accident cover when you aren't driving your car for a few days or weeks but continues cover for theft and fire.

https://www.businesslive.co.za/bt/money/2020-03-29-stay-covered-with-insurance/

Reviewing your cover is a key part of life:

Most people make the mistake of treating their policy with an "out of sight, out of mind" approach:

You would probably sooner do the chores you hate than book an appointment to review your life cover.

You may want to avoid this annual checkup because you are underinsured but can't afford to pay more for cover. Or you may not want to think about life with a disability or your family's life after your death. Or the complex trade-offs a good review involves may be putting you off.

But failing to do it could compromise your best plans to move ahead in your career, support or be supported by your life partner and family, start your own business and ultimately retire comfortably.

https://www.businesslive.co.za/bt/money/2020-03-15-reviewing-your-cover-is-a-key-part-of-life/

We work so hard to accomplish educational goals, that when we finally overcome that 3-11 year milestone we never think about "What if". Protect the assets that matter most to you, after all, you earned the right to.

Income protection policies now come with better benefits.

An informed financial adviser can be invaluable to ensure you obtain the right assurance for your needs:

Income protection insurance is crucial for anybody who depends on their monthly income. Policies offering these benefits have evolved and become more consumer-friendly, but you need to know what to look for to get the best benefits.

An informed financial adviser can be invaluable to ensure you obtain the right assurance for your needs. You should expect your adviser to recommend a policy that meets your needs and that will pay out when you claim.

If you are formally employed and "side-hustling" for extra income to make ends meet, you'll want to cover these earnings too under your income protection policy.
Kresantha Pillay, lead specialist for Lifestyle Protector at Liberty, says some people's dependence on their side hustle is quite significant at almost a quarter of their overall income.

As a result, Liberty has updated its income protection offering to cover two income streams under the same policy.
Previously, policyholders with two occupations would have had to insure them separately, resulting in more paperwork and costs, she says.
To qualify, your second income should be one you declare to the South African Revenue Service and should make up 20% or more of your annual income, she says.

https://www.businesslive.co.za/bt/money/2019-12-01-income-protection-policies-now-come-with-better-benefits/

Income protection policies now come with better benefits An informed financial adviser can be invaluable to ensure you obtain the right assurance for your needs

9 investment elements your parents wish they had
There’s never been a better time to be an investor:

Investing is hard. Let no-one ever tell you that simply putting money aside on a monthly basis without a proper strategy will solve all your retirement problems. It’s estimated that up to 80% of your retirement pot is likely to come from the growth in your monthly savings rather than the actual savings themselves.

As such, we need to give the appropriate attention to how this money is invested. Fortunately, the world of investments is constantly evolving and, in many ways, we now have more opportunities and tools at our disposal than previous generations had.

So how does the current landscape of investing stack up relative to the world of your parents?

Nine investment elements your parents wish they had:

1. Choice
2. Technology
3. Insights
4. Costs
5. Opportunity
6. Accessibility
7. Implementation
8. Expand asset set
9. Legislation.

https://www.businesslive.co.za/bt/money/2019-11-08-9-native-investment-elements-your-parents-wish-they-had/

Are you at risk with too little life cover?
Insurance body identifies R2.2m death and disability gap:

The average South African earner needs to spend about 7% of monthly after-tax income on topping up their life and disability insurance to avoid their family having to cut their monthly expenses by about a third should he or she no longer be able to earn an income.

The average South African earner is under-insured for death and disability by an average of R2.2m, says the latest Life and Disability Insurance Gap study by the Association of Savings and Investment SA (Asisa).

The study says the average South African needs to take additional death cover at an average cost of about 4.6% of after-tax monthly income, and 2.6% for disability insurance, to make up the shortfall.

https://www.businesslive.co.za/bt/money/2019-11-03-are-you-at-risk-with-too-little-life-cover/

Are you at risk with too little life cover? Insurance body identifies R2.2m death and disability gap

WOUTER FOURIE: Five risks to your chances of retiring well - and the antidotes.

While these conditions may be a risk to your pension fund, the greater risk to your nest egg and to you retiring comfortably is much closer to home.

1.• Lack of proper planning
The risks here are numerous, but many of them boil down to being overoptimistic. Being overoptimistic includes thinking that your lack of proper planning and investment in the first half of your career will be magically erased in the second half, and, once you start planning for retirement, thinking that you will fully understand all the complex calculations and fee structures of the various investment products available.

2 • Your poor investment history
Tied to poor planning, you must keep in mind your past practices and how they will affect your life after retirement.
If you have not saved enough because you have withdrawn some of your retirement funds when you changed jobs or lost money on an ill-advised investment, you may have to face facts and adjust your post-retirement expectations.

3 • Longevity
Each successive generation is living longer than the one before and by most estimates, babies born today will live to 120 years old. As we live longer, we will find ourselves relying on our retirement savings for much longer.

4 • Health
Do you know that most of your lifetime spending on health-care costs will come after you retire? Unfortunately, pensioners are faced with the double whammy of rapidly increasing health-care inflation and more visits to the doctor and hospital as they age, placing an increasing strain on their available income.

5 • Your choice of annuity
As most pension funds moved from a defined benefit model (that pays a pension related to your final earnings) to a defined contribution model (that pays only your accumulated savings), the responsibility shifted to you to decide how to invest your pension lump sum so that it would provide the necessary monthly income after you have retired.

https://www.businesslive.co.za/bt/money/2019-10-06-wouter-fourie-five-risks-to-your-chances-of-retiring-well-and-the-antidotes/

WOUTER FOURIE: Five risks to your chances of retiring well - and the antidotes While these conditions may be a risk to your pension fund, the greater risk to your nest egg and to you retiring comfortably is much closer to home

Nicholas Nefdt - Liberty Financial Adviser updated their phone number.

Goals alter the savings game:

A new study on savings behaviour highlights the critical importance and value of having a retirement plan driven by specific goals over a long period.

Research from the behavioural science team at US-based fund ratings house Morningstar makes the startling finding that people who look into the future, visualise the lifestyle they would like to lead in retirement and set specific goals, save on average 20 times more money than those with time horizons of less than a year.

https://www.businesslive.co.za/bt/money/2019-08-25-goals-alter-the-savings-game/

Nudging your weaknesses into strengths for a happy retirement.

Attempts to positively change people's behaviour without removing freedom of choice can have a life-changing impact:

https://www.businesslive.co.za/bt/money/2019-08-11-nudging-your--weaknesses-into-strengths-for-a-happy-retirement/

Nudging your weaknesses into strengths for a happy retirement Attempts to positively change people's behaviour without removing freedom of choice can have a life-changing impact

Train your brain to start saving right now.

National Savings Month presents a fresh opportunity to do a midyear audit of your finances to ensure you're on track to reach your savings goals - be it a holiday in December, a deposit on a car, or extra money towards your retirement savings.

If you don't have any savings goals, now is the time to set some. You can make excuses, or you can make a plan.

https://www.businesslive.co.za/bt/money/2019-07-07-train-your-brain-to-start-saving-right-now/

WHY DO YOU NEED RISK COVER?

The obvious reason for risk cover is to provide for your loved ones and other dependants if you pass away. Many, however, overlook the fact that your ability to earn an income is your largest asset and your expenses will not disappear if you are unable to work. Disability and critical illness cover should therefore be in place as soon as possible and before there are any dependants to protect.

Loss of income is dangerously underestimated:

You are nine times more likely to have a temporary disability than to have your car stolen or hijacked in SA, Brad Toerien, CE of life insurer FMI says.

Most people don't think twice about insuring their car, but few consider protecting the income that makes paying for it possible, he says.

It costs about R900 a month to insure a 2018 VW Polo but only R480 a month for income protection if you are a 35-year-old non-smoking woman who earns R40,000 a month.

https://www.businesslive.co.za/bt/money/2019-05-19-loss-of-income-is-dangerously-underestimated/

Choosing your waiting period.

It is important to select a waiting period on your income protection plan in line with how long you can manage without your regular income if you are unable to work.

A waiting period is the time you are required to be unable to work before an income protection benefit will start to pay out.

You get to choose the waiting period upfront when you take out an income protection policy.

https://www.businesslive.co.za/bt/money/2019-05-19-choosing-your-waiting-period/

Determining your investment risk profile involves more than a questionnaire:

A financial adviser may ask you to complete a questionnaire while determining your investment risk profile, but the outcome of that questionnaire should not be the main factor that is driving your investment decisions.

At times you may need to take a higher level of risk than your responses to a risk profile questionnaire indicate you are willing to take. A good financial adviser will have a difficult conversation with you about moving beyond your comfort zone.

https://www.businesslive.co.za/bt/money/2019-05-19-determining-your-investment-risk-profile-involves-more-than-a-questionnaire/

Should my retired mother be on her own medical scheme or be a beneficiary on mine?

The question becoming increasingly common but it might be cost effective to keep your elderly parents on their own medical aid, which you can downgrade and upgrade as the need arises.

https://www.businesslive.co.za/bd/life/2019-05-07-should-my-retired-mother-be-on-her-own-medical-scheme-or-be-a-beneficiary-on-mine/

With education being one of the largest expenses, it’s wise to start saving money for your children as early as possible. Share your tips on how you’ve prepared for your child’s future?

It's your funeral, so weigh these factors well.

We unpack the many considerations when buying this insurance:

Funeral insurance is the most popular financial product in SA and there is lots of competition for your business, but it isn't easy to compare policies to ensure you are getting a fair deal.

If you ask a number of providers for quotes, you will find prices vary wildly. This is because benefits, conditions, value-adds and how your premiums increase - all of which influence the premium you pay - differ from policy to policy.

https://www.businesslive.co.za/bt/money/2019-05-12-its-your-funeral-so-weigh--these-factors-well/

Five bases single moms have to cover to care for their children

Sound financial planning is all the more critical for single moms.

If you're a single mom, sound financial planning is all the more critical as your stretched income must provide for many needs and you have to have a plan for your children in the event of your death, disability or critical illness.

> Your risks:
We are all at risk of dying in an accident, becoming disabled, either temporarily or permanently, or succumbing to a critical illness.

> Your will:
"Having a will is crucial in deciding what you want to happen to your children," says Fourie. Ndlovu agrees: "In your will, you nominate a guardian for your children and state how you want your assets distributed for the benefit of your children."

> Your family's health
Medical scheme and gap cover will cost you, but can also save you a pretty packet.

> Emergencies
An emergency fund might sound like a dream, but it's key, says Fourie.

> Your retirement
Saving for retirement is a must, says Fourie. Single moms know better than anyone that "a man is not a financial plan". Well, nor are your children. They're meant to depend on you up to an age. You're not meant to depend on them, and they may be unwilling or unable to support you in your old age.

https://www.businesslive.co.za/bt/money/2019-05-12-five-bases-single-moms-have-to-cover--to-care-for-their-children/

The economy is not the market - don’t panic
Guard against making any rash decisions during the frenzied election news cycle.

How will markets react to the upcoming elections? Is your pension safe?

These and many other headlines have been popping up in recent weeks as the media try to make sense of the current political uncertainty and our upcoming national elections. Fundamental to their question is the assumption that negative political news will influence the economy and that the markets will follow suit, leaving your retirement savings at risk.

Speak to any market analyst and you will be told that the markets are not the economy and that there is very little, if any, correlation between the performances of the two.

https://www.businesslive.co.za/bt/money/2019-05-06-the-economy-is-not-the-market-dont-panic/

Self-employed? Your business is not a retirement plan.

Though it may be tempting to invest all your profits back into your business, it's wise to put some aside for retirement:

You're a successful entrepreneur and business is booming. Though it may be tempting to invest all your profits back into your business, it's wise to put some aside for retirement. Here's why.

The long and the short:

Sensible, measured investing doesn't often come easily to born entrepreneurs, so find yourself an experienced and qualified adviser and listen to their advice. There's no denying that diversification might slow the short-term growth of your business, but it will go a long way towards ensuring a more comfortable retirement, and you can regard the possible sale of the business as a bonus.

https://www.businesslive.co.za/bt/money/2019-05-05-self-employed-your-business-is-not-a-retirement-plan/

Know the real enemy of wealth creation.

There are bigger enemies to bear in mind when considering investment strategies:

Investors generally view geopolitical events, currency volatility and concerns around slowing global growth as the main enemies to wealth creation, but these should be the least of their worries. While these events can cause short-term volatility and uncertainty, there are bigger enemies to bear in mind.

> Saving too little, especially for retirement.
> Emotional reactions to market events.
> Ignoring inflation and opting for cash.
> Beware the real enemies of wealth.

https://www.businesslive.co.za/bt/money/2019-04-28-know-the-real-enemy-of-wealth-creation/

The benefits of an offshore endowment policy
What are some of the advantages of using an offshore endowment policy with a South African insurer?

> Ability to nominate a beneficiary.
> Tax benefits.

If you commit a large lump sum to an offshore investment, an offshore endowment wrapper can offer estate planning and tax advantages. However, be sure to check the costs and seek professional tax advice, as each case is dependent on its own facts. There should not be a "one size fits all" approach.

https://www.businesslive.co.za/bt/money/2019-04-28-harry-joffe-the-benefits-of-an-offshore-endowment-policy/

Investors have reason to be positive in the long term.

Last year ended with most investors despairing at their returns, but fortunes have improved greatly in just three months.

https://www.businesslive.co.za/bt/money/2019-04-21-investors-have-reason-to-be-positive-in-the-long-term/

Preservation funds: Which one’s the best and why can’t I access my money?

Asset managers have a fund for each likely objective while pension preservation and provident preservation funds have different rules for withdrawal of funds.

1. What is my investment objective?
2. Who do I trust to manage my money?

https://www.businesslive.co.za/bd/business-and-economy/2019-04-23-preservation-funds-which-ones-the-best-and-why-cant-i-access-my-money/

Retirees need investment funds focused on income certainty.

When you're saving for retirement and investment markets are volatile, the ups and downs in your retirement savings may affect you psychologically, but they don't immediately affect your lifestyle.

However, when you're in retirement drawing an income from a living annuity, it's a different story. Your income is subject to that volatility.

https://www.businesslive.co.za/bt/money/2019-04-14-retirees-need-investment-funds-focused-on-income-certainty/

Unpacking the complex and costly financial emigration process.

How much can you send offshore?

Exchange control in SA has been significantly relaxed, and you can now transfer R11m annually by using your foreign capital allowance of R10m and single discretionary allowance of R1m. These allowances are available to taxpayers in good standing over 18 years of age.

https://www.businesslive.co.za/bt/money/2019-04-07-unpacking-the-complex-and-costly-financial-emigration-process/

Five key ingredients to financial freedom!

Earning money is not enough — you need to give it leadership and direction, says the Wealth Chef:

> Money Management
> Creating Assets
> Blitzing Debt
> Protection

https://www.businesslive.co.za/bt/money/2019-04-02-five-key-ingredients-to-financial-freedom/

WARREN INGRAM: Investing offshore? Ignore those who sell fear as an investment strategy.

It is important to remember that local stock market is not a reflection of SA's economy:

https://www.businesslive.co.za/bd/opinion/columnists/2019-03-25-investing-offshore-ignore-those-who-sell-fear-as-an-investment-strategy/