Money Skills to learn that will help you on your money journey
Your money journey is a unique and interesting one. A journey that will take you from earning nothing to earning something and one day, to retire. However, how do you navigate such a journey?
You need to be confident in your own abilities to manage and delegate to professionals that are needed. You will need to learn skills to help you along the way. Here are four money skills that will help you along the way:
4 skills to help you on your money journey
Learn to read fund fact sheets
Fund fact sheets are the information statements provided by the asset managers of their funds. These are freely available on their websites and are updated periodically as per regulations. Now even if you are not managing your own investments, it is beneficial to learn how to read these statements so you can understand where your money is and have more in-depth conversations about your goals and plan with your advisor.
Learn to read a Bank Statement
A bank statement can look complicated. I sometimes think banks do this on purpose. But being able to read and understand these statements will help you in tracking your money and thus managing it. This is one of the great money skills to master.
Reading is a great way to learn new skills from others. Whether from a blog or from books. Read often to allow yourself to learn and grow. Two books I recommend are Ramit Sethi’s “I will teach you to be rich” and Robert Kiyosaki’s “Rich Dad, Poor Dad”. Both of these books offer different ideas and perspectives on money.
Make yourself earn things
We all know that we appreciate the things we earn. So do that to yourself. If you meet your savings goal, buy yourself a slab of Lindt chocolate or something you enjoy. If you want to buy a car set yourself a savings goal to reach before you can consider it. This will help you appreciate things more and avoid irrational purchases.
All our moeny journey’s will be different. But by learning some of these skills, you will make your life easier and be able to make more descions.
2020 has been a hell of a year with a pandemic hitting earth causing a worldwide shut down for a lot of this year. Moreover, even though it seems like things are starting to go back to normal, we still have some way to go.
One of the hardest parts for a lot of us is losing a lot of our income during this time. This has caused havoc in our lives and obliterated the savings what savings we had.
So I thought I would share some of the things I have been doing to cut down my budget to save money during COVID19. Watch the video below to see my thoughts:
As I said in my last article about Real Estate Investing, Real Estate Investment Trust or REITs for short, are a great way to invest in Real Estate.
Real estate has been a popular investment among many people over generations. The idea of owning a piece of something tangible excited people. However, this was often only something afforded to the affluent. However, that is no longer the case.
What is a Real Estate Investment Trust?
A REIT is a company that owns land/ buildings that generate income. They can also finance real estate and earn an income from the interest charged in some countries. These investment vehicles offer a way to invest in the property market with little money.
Benefits of a REIT?
REITs are often managed by good investment companies that offer diversification that you would struggle to get on your own. Their expertise helps make your life easier. They are also publicly traded on the stock exchange making them easy to buy and sell, unlike regular property that can sit on the market for ages. They also allow a stable cash flow in the form of regular dividends.
REITs tend to have low growth which can frustrate some investors. They can also charge high fees depending who is managing the portfolio.
How to Invest in Real Estate Investment Trusts?
Investing in a REIT is easy with many brokers and FSPs offering REITs. So the best way to invest would be to chat with your advisor about your options and what best suits you needs and goals.
Now you know how to invest in a Real Estate Investment Trust! With this option you can explore the possibility of investing in property with little money. Talk to your advisor today.Stay safe and Invest Wisely!
As much as an advisor or financial planner may seem like something for the wealthy, it is not! Financial Planners can help you identify your goals and help you reach them Wit their expertise, they can advise you on debt, investments and more.
So don’t run when you hear someone talking about personal finance, embrace it and your own journey. We are all different and have different journeys! Share yours and you could inspire others!
Fixed Income investing always gets a bad rep for being slow-growing and boring. However, it does have its place in the market. And in uncertain times it can offer safety that other assets can’t. But let’s get into the info so you can make a wise decision with help from your Qualified Financial Advisor:
What is Fixed Income?
Fixed income is a type of security that pays a set level of cash to its owners over a determined period. At the end of the period, known as the maturity date, the money invested is paid back to the investor.
Tax Free Savings Accounts are the new big thing! Being able to save on capital gains and income tax is a huge plus! But is it for everyone? What are the downsides? And what should you look out for?
What is a Tax-Free Savings Account?
Tax-Free Savings Accounts were introduced in 2015 by the National Treasury to encourage the low and middle class to invest. The investing product allows a person to invest up to R33 000 per annum of their after-tax income. This investment will not incur any tax for Interest, Income, or Capital Gains earned within the account.
What are the Downsides?
There are few downsides to this type of investment, but there are a few things you should be aware of when investing in a Tax-Free Savings Account:
You have a maximum Lifetime contribution of R500 000. Any more than this will be taxed.
You are limited to specific investments such as ETFs, Unit Trusts, and other funds. Your Advisor will be able to go into more detail on this.
If you take money out you cannot put it back. If you withdraw you cannot replace it, you will have to use more of your lifetime limit. It is thus often looked at as a Long term Investment.
Property Companies or Real Estate Investment Trusts
Property companies or Real Estate Investment Trusts (REITs) are listed on the stock exchange and can be bought and sold like other shares. These investments are made into properties and the companies that manage them. Property companies issue a Dividend on the profits made by the company. While REITs distribute all earnings from the properties held after they have deducted management fees.
Property Etfs are also listed assets that can be traded on the stock exchange. They are made up of a group of Property Companies and REITs offering you a diversified property portfolio without needing to lift a finger.
Easy Properties is a new product of the Purple Group. They offer fraction share investing directly into property developments. The owner will rental income and can sell the property when the value appreciates. This style of investing is very close to buying a physical property as it allows you to choose from available properties, without having the stresses of managing it.
Property Investing does not have to be expensive! If you speak to your advisor about these lower-cost options, you can invest in property too! I use Easy Equities as they offer great service and low costs but speak to your fsp about your options.
We all have bad months where the unexpected happens. And this is when we look to borrow some money to get us through the month. A very well advertised and often used option are payday loans. These loans lend you money on a short term basis to be paid back by the end of the month. These loans can seem like a attractive way to get through the month. But here is why you should avoid them!
They charge very high-interest rates! Because of the high risk associated with these loans, the lenders often charge very high-interest rates which can hurt your pocket!
Similar to point 1, the lenders often charge very high fees!
They are only a short term fix, not a long term solution. A short term loan can provide you with cash flow. But you need to look at why you need the loan. Are you spending too much? Is your emergency fund to small? Or is this a completely unexpected event?
Here are are 2 ways to avoid needing to take one of these loans:
Build an Emergency Fund! An emergency fund is an easily accessible, low-risk savings account that you keep for emergency purposes. This fund is often in the form of a savings or call account linked to your bank account. This account has usually has between 1-3 months expenses saved up for emergencies.
Have some cushioning in your budget. Although this is not always possible, try to keep a small amount for unseen things in your monthly budget. This will help you cover small expenses without needing to dip into your emergency fund or debt.
Life is hard and financial decisions are difficult. And with so many adverts around that make things look great, you need to read the fine print to ensure you are not paying more than you should! Use my two tips to avoid them and in time you will be able to avoid Payday loans altogether.
We can all agree that budgeting is vital to the success of your financial journey. But that being said, it can be daunting and hard! With a world filled with Credit Card Debt and Binge spending, it is important for us to budget properly and stick to it. This will help avoid impulse buys!
One of the ways that have been very helpful to me, is using a budget planner. This simple tool has helped me save lots of money, here’s how:
Know where your money is going!
Money can be big, but can also be small. And small money can add up! By recording and analyzing all your earnings and spending in a Budget planner you can find where you are wasting money and how much money you have coming in.
Brings structure to my spending
Structure is often given a bad rep. And as a person who is not fund of structure, I have found it to be beneficial in my finances. Emotions can run our lives, but should never run our finances. They can come into a decision, but so should logic. This is why writing it down and taking a factual approach can help you make better financial decisions.
Where do I find one?
There are many apps on the internet such as 22seven, a product of Old Mutual. This apps helps you by linking securely to your bank accounts and pulling out your statements. It then categorizes your spending and earning information into an easy to understand format. It helps you set a budget and notifies you of overspending.
Another Great way is using a Excel Spreadsheet. This cost effective way provides you with almost unlimited customization and reporting. If you are like me and like excel, do this! It does mean you will need to do some manual capturing, but sometimes that manual work has a deeper impact on you!
Getting a budget is place is a great first step in building a financial plan. It will help you work out how much you can invest in your future and how much money you could be saving!
Investing in Crypto or cryptocurrency is a massive buzz word. But is it all talk or is there something to consider?
What is Cryptocurrency?
“A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend.” – Investopedia
So Cryptocurrency is basically like a digital form of gold that is hard to fake or steal. It gets recorded on ledgers that are based on many servers making it almost impossible to lose records and hack. if you want a more in-depth read check out Investopedia.
Can I get a return on my investment?
Well, seeing as you get people known as Bitcoin Millionaires, I can assume so. With outrageous growth in short spaces of time, Bitcoin and other Crypto Currencies have shone over the last few years providing a high return for many, but a high loss for others.
That is something you will need to discuss with your financial advisor. The advisor will go through your investments and your risk factors to work out your risk rating. Due to the price of Crypto changing so quickly and often, it is important to have a high-risk factor.
Crypto Currency is new and exciting! It offers very good potential as an investment in the right portfolio. However it needs to be well researched and discuss with a registered advisor to ensure your investment is safe.