how to save money ?
For every five years you defer to invest money, you need to put three times more than someone who started earlier to end up with the same amount coming out, the experts found.The South African savings rate is only 16.4% and this rate continues to drop, head of Liberty Life's investment division value for customers.
"We do not really have a culture of savings in South Africa. Very few people teach and guide their children from infancy to spare. "Minnie said South Africans would rather spend their money immediately to put it away for later."It just gets worse. In the 1960s, the savings rate was approximately 24%, which was not terribly high."And it continues to come down."
Peter Atkinson, a technical portfolio manager of the association for financial intermediaries (FIA), said another reason why people invest their money, is because few people have a period of general financial depression or war experienced and not realize what misery it can cause you have no money.
He adds advertising and the availability of products and services makes it difficult to say no and people grow up with a deep desire for immediate satisfaction of needs.
Why should I invest?
Due to rising costs of living and working conditions increasingly uncertain, you also can generate an income from investments, says Atkinson.Although a part of the population in South Africa is a pretty big risk to die young, can expect a different part increasingly to a "ripe old age" to live, says Atkinson."It puts a considerable strain on the income you can expect to earn during your working life."For example, someone who left school and then studied at a university, start at 25 and can expect to work until the age of 60 or 65.
"With a reasonable expectation to live up to, say, 90 or 95, it does have enough income generated during 25 to 30 years of work to provide for up to 35 years of retirement."Hereby expensive medical costs for many people one of the biggest expenses after they retired.Minnie said compound interest is another good reason to invest."You'll grow to something you did not put."Suppose you invest R100 and get a return of 20% per year. You earn R20 interest in the first year. Next year you earn interest on R120, he explained."The bigger the risk you venture, the more growth you can get your 10% to 20% return per year. For example, if you R100 sitting in a bank (low risk), you will earn about R5 per annum. "
When should I start?
The earlier you invest money, the better. The longer you wait, the more money you will have to put in to achieve the same goal, says Minnie.
"To put this in perspective, let's look at the difference in the value of an investment in the all share index started ten years ago for R50 per month, compared with five years ago.
"The first got almost R14 000 and the second one about R4 000.
If you first investment will overtake you R50 per month more than tripled. In other words you first investment just R6? Lay 000 in ten years, you should lay more than R10 500 with the second one - just to break even. "
A good time to start investing is when you get an increase, said Minnie. "By simply investing half of your monthly salary increase you can build substantial wealth."
How do I start?
"It's not about making a decision about an individual investment, but rather to develop a comprehensive program that makes sense to the person," said Atkinson.
Minnie says anything is better than nothing if you do not know where to start.
"You just have to decide what is affordable for you. For example, there are mutual funds where you just need to save R50 per month. It is very easy and your money within 48? Hours available. "
Long-term growth better than in a bank account, he adds.
the duration is almost always the investment class shares do best.
"In the long term, the stock market returns of about 18% per year. Other assets such as property is closer to 11% and around 8% cash.
He set a minimum period of three to five years, so the risk of fluctuations in the stock market management.
"The more time you give your investment the better your returns will probably be."
how to save money
