News

I aim to share snippets of what I read, listen to, and pay attention to. It’s mostly related to personal finance, markets, and wine, but sometimes not. 

Recently, a few of our retired and elderly clients became victims of a new fraudulent scheme, targeting their bank accounts.

In this article, Nokwanda Msimang explains how the scheme works and encourages our clients to stay informed and vigilant to protect themselves from fraudulent schemes.

An early inheritance is typically a one-time or infrequent financial gift meant to be part of the child's eventual inheritance. Its purpose is to make a substantial impact, such as buying a home, starting a business, or funding education. This differs from ongoing financial assistance for daily needs.   Both are forms of wealth transfer, but the intent is different.

How can giving and receiving money be joyous and meaningful, yet it can also harm financial well-being and relationships?

Many retirement fund administrators/platforms will be adapting their systems and processes to the requirements of the two-pot component system.  With this change, it is vital to balance this new flexibility with a sound investment strategy.

Financial fitness goes beyond merely having a stable income. It also encompasses the ability to manage money wisely, make informed financial decisions, and build a secure future. It allows you to feel confident, comfortable and in control – both now and with what life might throw your way in the future.

Finding purpose in retirement is as necessary as it is rewarding. While retirement offers more free time, filling that time with activities that give your life meaning and satisfaction is critical.

What can you do to help you discover how you should direct your time and energy once you retire?

In financial planning, there are hidden, yet prevalent, enemies that can undermine our financial goals and well-being. You might think these enemies are volatile markets, economic growth, or inflation, but it's actually far more subtle than this. The enemy is, more often us, specifically, the financial behaviours we practice without even realising it. 

The first quarter of 2023 kept us on the edge of our seats. Globally, tight monetary conditions are starting to impact the stability of the banking sector. Locally, it was shades of grey. First a grey-listing and then more darkness for the country.

At the start of every year, forecasters cannot help themselves. Forecasts for inflation rounded to a decimal, appear like clockwork. We should know to ignore them by now. 

However, and somewhat surprisingly, longer-term trend forecasts are often more accurate.

As the world continues to evolve, so should we. And this includes how we invest.

What is sustainable investing, and are you happy with the choices you've made?

Holistic financial planning, specific to an entrepreneur’s circumstances, provides better results for a client. Even simple organisation, like having the correct documentation in place, can mean the difference between deriving value from your entrepreneurial effort or not.

What happens to your inherited assets in the case of a certain event, particularly death or divorce? As with any family law matter, the way you were married sets many of the rules that will apply. 

We have written various articles on wills and death before.  Why?  Because, as we have seen over the years, it is complex, especially when winding up estates. It is not enough to draw up a will and take out life cover. 

Estate planning requires thought and careful consideration because every family is unique, and each has its own complexities and challenges to address. 

An endowment policy is not a one-size fits all approach. It should be carefully considered, taking your specific needs and circumstances into account.

What is an endowment, and does it make sense for your investment portfolio?

Who gets the precious family heirloom, or the offshore investment that you worked so hard to protect and grow? How do you ensure that it ends up where you intended?

Let’s take a deeper dive into this practical element of estate planning, namely having an offshore will.

In the past financial planning has focussed on helping people protect and save their income or investments. We assumed a steady inflation tracking income in our retirement models and insured against disasters. However, we can no longer assume straight-line careers that will produce steady incomes. We must start to plan for frequent career changes, much longer working years and include discussions about career planning in our financial planning.

When we enter a marriage, we hopefully know that it will take consistent, hard work to make it work. With the knowledge that sometimes, it just doesn’t. How should you then approach the initial phases of separation, so that you are able to protect your personal and financial well-being?

Money can only hold as much power as we give it and as humans, we have given it immense power. In such a culture, where our relationship with money influences our self-worth, what happens if you suddenly get gifted a lot of money?

The last year has given us a fascinating case study of how returns can vary over short periods. Let’s delve into the underworld of investment returns so that the next time your friends brag about their superior investment returns, you can challenge with sceptical realism.

“The biggest risks you face on being retrenched are the short-term survival considerations. What do you need to do to get through the next year? What are the biggest pressure points?”

If your future depends on it, you should know about it. The lockdown has probably challenged most marriages. Some have been broken. Divorce attorneys are already dealing with the fall out as they report up to a 20% rise in divorce applications. The current economic climate will make these divorce...

Money is emotive.  The reason for this is because of what money represents in our lives. It represents status, power, opportunity and limitations.  For most, it represents a life they want to live.  So, when the market goes into the fastest decline in recorded history, it threatens our life goals.

The Great Lockdown is likely to be the biggest disruptor of the upward personal and global trajectory since the Second World War. Most of us have had occasional setbacks but this upheaval will cause economic hardship for many people who have never had much reason to worry about money.

The worst has happened. Perhaps it came unexpectedly, perhaps it’s been hovering for a while. The shock is the same…you’ve just lost a significant person in your life. Saying goodbye is traumatic. Apart from the emotional distress of the passing, there is the added anxiety of having to make funeral arrangements and handling personal affairs.

“At the beginning of every year, it is my custom to write a review concerning the last year in our business. I like to stand still and reflect on what has happened, but also on what we anticipate and want to happen.”

“As investors, we often try to limit the taxes paid and look for products and opportunities that are less tax intensive. Although this is a major part of investing, it is not the only thing to consider."

Risk is something that can be measured, and we, regardless of understanding the measurements, use it to make investment decisions. The problem is, we think we are concerned about risk, but we are not. Humans are much more concerned about uncertainty!

Is it still worthwhile to invest in a retirement annuity, pension or provident fund with Prescribed Assets on the cards? Our numbers conclude that the tax benefit outweighs the negatives, even taking a big capital loss into account.

What are the disruptive forces at play in the world? The world as we know it, no longer exists.

How can we respond to disruption to protect our capital? How to protect your capital against Trump, trade wars or climate change chaos?

‘The first wealth is health,’ is a popular quote by Ralph Waldo Emerson. Whilst we are working, we need health in order to earn, so that we can build capital. We are converting human capital into financial capital. Without health, it is difficult to build capital.

“Life will always be uncertain and at some point, you will undoubtedly face hardship. Yet some people manage to deal with adversity much better than others. Some people manage to transform that adversity into success. In talking to clients and people, I have been struck by recurring themes within their stories that have helped them ...

“We strongly believe in creating Wealth for Life. But, to do the things you want to do during your lifetime you need to have the capacity to do so. Therefore, we believe you need to control your needs and wants and save the rest in order to truly tick the wishes off your bucket list.”

“Retrenchment is an unfortunate event that can cause a lot of uncertainty and anxiety. With it come many financial and retirement implications.”

“The biggest risks you face on being retrenched are the short-term survival considerations. What do you need to do to get through the next year? What are the biggest pressure points?”

2018 was a tough year 2018 was one of the toughest years of my career. Not only did we see a decline in global share markets, but safe asset classes did not help portfolios either. Most asset classes declined in unison. But that wasn’t the difficult part – volatility is normal in markets. For our clients, ...

2017 was a dark time for South Africans. We were on the verge of being downgraded to junk status and it was impossible to see our way out of the mess Zuma had left us in. More than a year later, it seems we have made a lot of progress.

“Qualifications and great track-records go a long way, but what happens behind the scenes – in the mind of the advisor? Specifically, how do we at Foundation Family Wealth make our decisions and how do we decide on what the best advice is?”

“In my three decades of working in investments, I have rarely seen investor confidence as low and pessimism reign as we are seeing now. I suspect that many of our readers are questioning their financial planning strategies. We have identified three critical questions for making drastic changes to your strategy and even your advisor.”

“With the end of the year in sight, it may be a good time to get the administration in order for your tax clearance certificate…”

“This month we’re focusing on marriages outside of community of property, with the inclusion of the accrual system. This seems simple on paper, but can get technical and confusing.”

“The third quarter of 2018 was a tough one for emerging market economies. South Africa fell into a technical recession as economic growth contracted for the whole of 2018.”

“Planning for retirement can be challenging as there are many unknowns and uncertainties that you need to consider. There are a few financial risks that can have a significant impact on your capital and your ability to draw income comfortably for the rest of your life.”

“Treasury partially accepted the submission and the bill has been withdrawn. Government and industry has been given more time to find a solution that may have less of a negative impact on unit holders. These amendments will be considered in the 2019 legislative cycle.”

“Our fourth article focuses on buying a car. This topic is close to my heart as I believe this is the single biggest reason people are indebted for life with no material investments later in life.”

“We should refrain from getting too negative. This can become a self-fulfilling prophecy. South Africa is not like Zimbabwe. We have an active civil society, free media and a world-class judiciary.”

“Treasury recently published a draft Taxation Laws Amendment Bill, suggesting changes to the income tax treatment of disposal of assets within a collective investment scheme (CIS) or unit trust fund.”

“Understand that there are various types of debt, some good and some bad. Applying for a bond to purchase a house can be considered good debt. Applying for a credit card because “there are just too many days in this month” – not good debt.”

“…as South Africans emigrate and move to all corners of the world, it’s becoming increasingly important to understand our Excon-legislation for estate planning purposes, and whether a bequest will be subject to exchange control.”

Sometimes a will doesn’t blatantly contradict our law or good morals, but is still problematic for the testator’s survivors. We are taking a closer look at the Maintenance of Surviving Spouses Act.

-By Sunél Veldtman - I have been pondering what to write ahead of Women’s month. Today we welcomed a niece into the world and little Julia gave me a good reason to write about all the things I want her to know about money (and a little about life). She is too young now, but one day, ...

Property has long been considered a safe investment. There is even a Victorian saying about it: “Safe as houses,” supposedly meaning secure, with no risk of failure. In a continuation of his series for millenials, Thiart van der Merwe examines the relative attractiveness of investment properties.

“In this series of articles, we’re giving you the advice you need on how to set yourself up for financial freedom. Our aim is to give you practical steps each month – action points that you can take immediately. “

“…of all the different aspects of our lives and estate planning, anything that relates to our minor children demands particular care. Be very clear with your bequests in your will.”

We’ve had a few questions from clients on section 12J investments and whether it’s something that should be considered. Some advisors and tax consultants seem to be selling this as the next best thing.

“For those with massive estates, the implications of not having a will can be disastrous. But even the poorest of poor own a trinket or two, so let’s take a look at how an estate is dissolved without a will.”

“Sticking to the formalities doesn’t automatically mean that your will is valid. In addition, you must also comply with common law and the stipulations of your will must be practically enforceable. But first let’s make a giant stride to understand a few definitions and get the basics right.”

“Very few investors have the time, knowledge or skill to invest their own money. To suggest that investors can merely go straight to a passive product provider, select the correct product for their needs and live happily ever after, is ignoring reality. Even when investors have the skill, they most often lack time.”

Deciding when and how to retire from your retirement products can be complicated. It should not necessarily determine when and how you retire.

This month we are recapping what we know about the different types of marriages and marital regimes in our country. It’s first and foremost important to understand the legal definition of a spouse, because it has various legal implications – in particular on an individual’s estate.

-By Sunél Veldtman - In our Encore years – the new term used for those in later life, which is anyone after fifty and now includes me – we are faced with new challenges. For the corporate professional it could be looming forced-retirement or even unexpected retrenchment. For the entrepreneur, it could be the sale of your business ...

-By Elke Zeki - Over the years we’ve often come across the same issues affecting retirement when dealing with new clients. These common mistakes are not always obvious. Unless you run the numbers and do proper cash flow analysis, it’s not easy to see how your choices will impact your retirement. We hope that these practical examples of ...

-By Thiart van Der Merwe - A prolonged, low-growth environment and no real returns from our market were the main talking points as we entered 2017. With constant negative press on corruption and a deteriorating political landscape, one can understand the inclination to be pessimistic. Up to the midway point the pessimists were right. The stock market surprised ...

-By Elke Zeki - Many people believe that financial advisors add significant value by fund & product choice, asset allocation and budgeting. What concerns us is that research shows (and has for a long time) that there are algorithms that can do this much better than any human being can. Yet advisors are slow to embrace this ...

-By Elke Zeki - Planning for retirement is one of the most interesting aspects of financial planning. Despite our vastly different circumstances and financial situations, we generally have the same underlying goal: to retire happily and in good health. The desire for happiness and health is not just exclusive to retirees though. In our later years these things ...

-By Thiart van der Merwe - Bitcoin and cryptocurrencies are a hot topic at the moment. Everyone wants to know whether they should invest in Bitcoin. It is not surprising given that $100 invested 18 months ago, would be worth $1000 now. This kind of growth attracts attention. What is Bitcoin and what is the fuss ...

-By Michelle le Roux - It’s fun to be young and have big dreams. We leave school and the security of living under dad’s roof; we start working and have a lifetime of salaries and bonuses ahead of us. Retirement is far into the future – after all 40 years is a long way away. But ...

-By Sunél Veldtman - Recently, I have noticed how many conversations about the world lead to a conclusion that the world is a mess. We seem anxious and insecure about the future. If I look at my social media feed, it is no wonder. Bad news abounds. Korea is angling for war. Trump plans to block immigration. ...

-By Sunél Veldtman - Almost one out of three women believe that men are better at handling financial matters than women are. This is according to The Old Mutual Savings Monitor (2012) – one of the few surveys that have studied the attitudes of South African women towards money. Even worse though, is that 65% of men ...

-By Elke Zeki - I heard a great analogy the other day from world-renowned researcher and storyteller, Brene Brown. She explained how often Thought and Behaviour sit in the back while Emotion drives the car. There are few things in life that stir up emotion the way money does. Even experienced investors are at risk of letting ...

-By Sunél Veldtman - Our first Encore workshop was a huge success given the positive response from attendees. We covered all aspects about planning for the second half of life, including emotional well-being, purpose and health and we took a thorough journey through the financial preparation for retirement. We hope that the workshop contributed to new plans and ...

-By Elke Zeki - This month we launched our Encore workshop, specifically aimed at people approaching retirement and the challenges the “New Old” face today. There is a distinct phase of life (we argue between 55-70) where many of the old are still young. They are active, relatively healthy, want to work (although flexibly) and spend money. ...

-By Elke Zeki Financial - planning is not an exact science, nor is it about getting everything right. It is about creating a plan that accounts for uncertainty and allows you to adjust quickly and easily. One such area of uncertainly, especially when planning for retirement, is expected returns. When doing a cash flow analysis, we always assume ...

YOU ARE INVITED TO ENCORE! If you’re thinking about slowing down, exiting corporate life or retiring, this workshop is for you! This is the new retirement and we’ve called these years – “The Encore Years” because they start long before you finally take your bow. The traditional picture of retirement looked like golf days, beaches and books, ...

-By Elke Zeki -This debate is on-going and some are very passionate about it. In the South African market, quality active managers have been relatively successful in outperforming equity benchmarks over the long-term. However, recent low returns from the market (and active managers) has brought a renewed interest in passive solutions from investors. Why is this, ...

In a cabinet reshuffle that has been on the cards for some time, Zuma has finally pulled the trigger on Finance Minister, Pravin Gordhan and his deputy Mcebisi Jonas. He also changed 18 other positions. Late Thursday night the finance minister was replaced with Home Affairs minister, Melusi Gigaba. The Rand has plunged 7.5% since ...

Losing a spouse is always traumatic. What can add to the distress even more is the tying up of financial loose ends – especially if the deceased was the one who always handed those affairs.

A few interesting articles that we have come across this month.

Too many times I’ve sat across the table from a sobbing woman going through divorce. Divorce is always heart breaking – but divorce involving a woman who has sacrificed her career, her financial power and sometimes her identity is particularly traumatic.

This can be one of the best financial decisions you make. Make the time, it will be worth it.

The CERTIFIED FINANCIAL PLANNER®/CFP® certification is the premier financial planning accreditation in the world and is recognised in 26 different countries.

What Brexit & Trump and all that erroneous forecasting teaches us about investments and financial advice…

As South Africans we tend to look at our glass half empty. We over-exaggerate the bad stuff and gloss over the good. In light of this, we decided to look at seven reasons why we are in a better place as a country than we’ve ever been. So pour yourself a glass half full (at least) ...

We haven’t paid much attention to US elections in the past…Democrats, Republicans, Bush, Clinton or Obama – there has been a broad acceptance of neo-liberal capitalist policies supported by globalisation. Yesterday, that changed.

For many, investing can be intimidating. We tend to seek out people with more knowledge than we have, to sort out our finances and invest on our behalf. This is perfectly acceptable. But, why is it that people do not know what they pay for this investment advice?

Despite years of unprecedented stimulus from authorities all over the world, the global economy is sluggish. Global growth expectations are continually adjusted downwards and are still well below long-term averages. This year the World Bank adjusted its global growth forecast downwards to 2,4% from 2,9% in January. So, what’s happening with economic growth and why is ...

The taxation of trusts has been a grey area for some time. The proposed changes in legislation was published for comment recently.

Our Wealth Analyst Thiart van der Merwe writes the first article in our series on general financial planning for yuppies. Thiart is passionate about the everyday decisions we make, and how these affect our futures much more than our investment returns.

There’s much talk about jobs like financial planning and wealth management becoming careers of the past. Futurists like Graeme Condrington are even suggesting that by 2025, these jobs, as we know them will be gone. Replaced by algorithms. Read more

Since April 2013 most listed property companies converted to internationally recognised REIT structures from property loan stocks and unit trusts. This move brought South African listed property companies in line with global standards which also offered certain tax benefits to the structures. How does this affect the shareholder? Historically income distributions from property shares were primarily declared ...

Minister Pravin Gordhan managed to keep most parties happy with a sound budget that contained fiscal consolidation targets and suggested commitment to growth. While it is a step in the right direction, South Africa still faces a likely downgrade by a least one of the rating agencies by December. Treasury has opted not to increase top ...

PortfolioMetrix’s Brandon Zietsman wrote an interesting piece on the possible shift of power away from America to the likes of China, and whether you should look at size in isolation or is there more to a power shift than just the production numbers of a country. An interesting read. American exceptionalism has defined the way Americans ...

Earlier this month, the Taxation Laws Amendment Act was passed in parliament. The Act included significant retirement reforms. Although these reforms follow years of negotiations, it has still been met with resistance especially by labour unions. What do these reforms mean for high net worth individuals and families? We believe these changes go some way to simplify ... Read more

As the tax season is upon us and we see an increasing amount of assets being bought offshore we want to shed some light on the Capital Gains Tax implications of these assets.