Wealth creation is about building up a savings and financial surplus to achieve goals.

It’s about putting money aside to towards this goal. Savings is a habit.

There are many possible vehicles to use:

• Savings clubs / Stockvels
• Savings accounts
• Notice deposit accounts
• Tax fee savings products
• Shares & Unit trusts
• Govt bonds and Retirement Annuities
• Endowment policies

Start by thinking about what you might want to save for (such as a fridge, a car, a holiday, or further education). From there you can work out how much money you will need, by when, and what you are able to save each month. Then, you can calculate how long it will take you to save for your goal. Use our template to help you set your goals.

Remember: Your savings goals should always be SMART. Specific, Measurable, Attainable, Realistic, and Time-based.

• Save regularly, even if it is a small amount. These add up and with the power of compound interest, you may be pleasantly surprised by how much you will actually save.
• Invest for the long- term and carefully consider any suggestions that you change your investments as these changes may cost you
• Do your homework – seek investments that offer growth when you are young, and income as you get older. Young people can afford to take more risks while people who are closer to retirement need to be more cautious.
• Watch out for people who claim to be investment gurus as no one can predict what will happen to your investments with certainly.
• If an investment sounds too good to be true, it probably is. Be very cautious if you get promises of very high returns and remember that high returns involve high risks
• Do not invest in a product if you don’t understand it. Ask questions to make sure you understand where and how you are investing your money.
• Take responsibility for you investments – it is your money and your future you are taking care of.
• As your circumstances change you may need to reconsider your investments. Consult a certified financial planner to help you make choices that will meet your needs. They help you make sense of your financial goals and concerns
• Keep money aside for a rainy day – have an emergency fund that can help you meet unexpected expenses
• Do not forget about inflation – it will eat into your money and income. Look for investments that outperform inflation.
• Always make sure that the companies that you have investments and savings with have your current contact details – if you move and or get a new job or change your cell number, always inform your financial services company and your financial planner / advisor.    

• Save for short , medium and long term goals
• Discipline & determination ( save regularly )
• Set realistic goals ( SMART )
• Reduce unnecessary expenses
• Explore and find suitable saving & investing products
• Consult with a certified financial planner
• Interest is earned when saving
• The longer we save/invest the better the returns
• No need to borrow in case of an emergencies

Saving for retirement from a young age

When you first start working, retirement  might feel like a long-time away but that is  exactly why you should save for retirement from your very first salary.

The longer your savings are invested the more time it has to earn interest and grow.

Different ways of Saving for Retirement

When it comes to planning for your retirement, there are lots of different products you can consider depending on your situation and requirements.

Broadly there are 4 options:

1. Pension funds: are typically arranged by companies for their employees. With a pension fund you receive a third of your total saved in one payment on retirement and the balance is paid on a monthly basis as a pension.
2. Provident funds: also typically arranged by companies for their employees. With a provident fund you receive the full amount saved in one lump sum when you retire.
3. Retirement annuities: these are normally arranged by an individual when their company doesn’t provide a pension or provident fund or if they are self-employed. They save each month themselves and when they retire, they receive a third of the total saved in one payment and the balance is paid on a monthly basis as an annuity.
4. Preservation fund: these are funds set up to keep your retirement savings intact when you move jobs or are retrenched. You can transfer the full fund into a preservation fund tax free.

The current COVID crisis has reminded us of how important emergency savings are.

For some there was reduced income, others were still receiving an income and this time was an ideal time to relook budgets and assess the reason for having an emergency fund. 

Experts advise that you should saves up about  three times your monthly salary.

• Emergency savings help us in times of a crisis
• Acts as a buffer for people that have contract or irregular income
• Helps in times of medical emergencies or shortfall
  in medical aid
• Takes care of unexpected repairs
• It helps not to be forced to borrow in an event of an emergency

Experts advise that you should save up about three times your monthly salary

What is meant by “growth” when investing?

Growth factors in inflation, you would want to invest in a product that has an interest rate that is above inflation and invest in a way that you will be cushioned against the effects of inflation, and maintain the value of your money. Inflation means the general increase in prices of goods  and services, meaning that the same amount of money buys less as the years pass and prices rise.

Have to a financial planner assist you plan and structure your investments 

• Select a product that’s appropriate for you
• Start early and stay invested so that your savings can grow
• When changing jobs, consider moving your retirement savings into a preservation fund or a retirement fund of the new employer.
• Do not cash your savings as this has tax implications.
• Speak to a financial advisor