Personal Finance Newsletter - latest Issue
Volume 2016, Issue 430, 2016
Author Magda WierzyckaSource: Personal Finance Newsletter 2016, pp 1 –2 (2016)More Less
The term 'fourth industrial revolution' is still largely unknown to the average South African, and yet it has the potential to change the way everyone learns, works, and lives. The most significant point about the fourth industrial revolution is the rapid pace of its progress the future is not 50 years away, but already on our doorstep. Unsurprisingly, this was the main topic of discussion at the World Economic Forum at Davos this year.
Author John HarmanSource: Personal Finance Newsletter 2016, pp 2 –3 (2016)More Less
In my experience, most South Africans are over-exposed to South Africa, under-invested in equities, over-exposed to single investment managers, and are not sufficiently exposed to different investment vehicles. The different ways in which investments should be diversified are discussed below.
Author Kobus EngelbrechtSource: Personal Finance Newsletter 2016, pp 4 –5 (2016)More Less
When drafting one's will, it is important to use unambiguous words. Something that now seems very simple and uncomplicated, may later cause big problems. To illustrate: Imagine that a farmer owns, amongst other things,a farm and a house in the nearest town. He bequeaths the farm to his son and the house to his daughter . As the farm is worth quite a bit more than the house, and given that he wishes to leave bequests of equal value to his children, he also leaves her an amount of money. In the will, the house is simply referred to as 'my residence'.
Author Inge LamprechtSource: Personal Finance Newsletter 2016, pp 6 –7 (2016)More Less
Despite a tendency to procrastinate and an allergic reaction to paperwork, I've always prided myself on the fact that my finances are well managed so when a financial wellness assessment gave me a score of 3 out of 5 and suggested that "attention [is] required" I was taken aback. The financial wellness tool in question has been developed by ZAQ Consultants & Actuaries (www.zaqfin.com) to evaluate the financial situation of individuals holistically. A free assessment, which requires you to answer four sets of questions about your debt, savings, insurance, and financial stewardship, is done online, and a four-page report flags areas of concern in each category (if any). An average financial wellness score is also supplied.
Author Simon PeileSource: Personal Finance Newsletter 2016, pp 8 –9 (2016)More Less
Readers of the previous four articles in this series will have seen that both living annuities and guaranteed annuities have their advantages and disadvantages, so which should you choose? A guaranteed annuity will provide you with financial protection against longevity, particularly if you include provision for annual increases that more or less match inflation. The annuity will continue for as long as you live, and will keep pace with increases in the cost of living. With a living annuity, you can decide how the underlying assets are managed, and you can choose the rate at which you draw on your assets. When you die, the assets remaining in your living annuity pass on to your heirs.
Source: Personal Finance Newsletter 2016, pp 9 –10 (2016)More Less
In South Africa, estate duty is currently set at 20%. In other words, when anyone dies, the revenue service is due 20% of whatever assets they leave behind. There are, however, two important exceptions. The first is that the first R3.5 million in an estate attracts no tax. Only amounts above that attract estate duty. The second is that any bequests to a surviving spouse or public benefit organisation will not be taxed. This is part of why it's so important to make out a will. Anything left explicitly to one's wife or husband will not be dutiable.
Author Stella MapenzauswaSource: Personal Finance Newsletter 2016 (2016)More Less
The end of South Africa's interest rate hiking cycle may be in sight if inflation conditions remain consistent with latest forecasts but the bar for loosening policy is high, according to the South African Reserve Bank's second and final monetary policy review for 2016, which was released on 3 October 2016. The central bank added that risks to the inflation forecasts were more evenly balanced since the previous review in April this year.
Author Ray MahlakaSource: Personal Finance Newsletter 2016, pp 10 –11 (2016)More Less
South Africa's hard-pressed homeowners may breathe a sigh of relief after the Reserve Bank's monetary policy committee kept the repo rate at 7% in September, and hinted that an end to the rate-hiking cycle might be in sight (see box below). However, consumers are not yet spared, as an end to rising interest rates hinges on the state of the economy, the rand, and inflationary pressures that the local unit might bring.
Source: Personal Finance Newsletter 2016, pp 14 –16 (2016)More Less
Imagine a company that has absolutely no track record, but wants you to buy its shares on the JSE. Why would you do it? There is only one reason you trust that the people behind it can make something good with your money. For many years it wasn't possible to list on the JSE unless a company had a solid history of operating successfully. That changed in 2014, when the JSE allowed what it calls special purpose acquisition companies (Spacs) to list and take money from shareholders.
Source: Personal Finance Newsletter 2016 (2016)More Less
Back in 2014, I wrote that investors on the JSE should start preparing themselves for, in the words of Monty Python, 'something completely different'. In 2013, the bourse amended its listing requirements to allow the listing of special purpose acquisition companies (Spacs). They may not enjoy the sexiest acronym in the world, but these vehicles are a fascinating addition to the market. A Spac is a company that lists publicly with a specific mandate to acquire or merge with other companies. It has no operations of its own at the time of going to market, so it is effectively a clean shell. "The best way to describe it is as a reverse initial public offering (IPO)," explains the JSE's business development manager, Patrycja Kula. "Currently one would list an already-formed asset or company on the JSE; however, with the Spac, you first raise the capital and then acquire the company or companies."