This morning I thought I would share an article I read last week written by Sizwe Dlamini, published via IOL. The article contained some key points of wisdom supplied by Emma Heap, managing director of retail at 10X Investments.
The article entitled, Understand difference between saving and investing highlights some key elements:
- “Saving’ means putting money aside for future use. It is spending postponed.”
- “With few exceptions, we all need to save for retirement. Although the state does provide an old-age grant, this is currently a mere R1 600 a month, insufficient to maintain an acceptable standard of living.”
- “Ideally, you should save 15% of your monthly wage or salary in a retirement fund over your entire working life.”
- “Investing is what you do with your savings in order to earn a return.”
The article is very simply written and makes a great point: We all need to save & the government pension at R1600 per month is not enough, by far.
In discussing financial wellness with my clients, I usually start with two very basic points (client dependent as always):
- Wealth Protection: You are your most important asset & therefore we need to protect YOU first.
- Wealth Creation: This would include looking at savings, investments & retirement planning as well as education planning if needs be.
The two steps above would allow us then to correctly identify & prioritize our financial planning process.
I trust you will enjoy the article and feel free to comment.