NOW IS A TIME TO LOOK PAST FLASH-IN-A-PAN FINANCIAL ADVICE!

By Fanie Jansen Van Vuuren CA (SA), CFP®

MY 10 BEST PRACTICES AND TIPS FOR PERSONAL FINANCE  (Continued).

  1. Devise a Budget
  2. Create an emergency fund and Save for Education
  3. Limit Debt and use credit cards wisely
  4. Protect your family in the event death, disability and severe illness
  5. Have appropriate Medical Aid Cover
  6. *Insure your most valuable assets – Vehicles, House, Contents and Personal Items
  7. Have a Valid Will
  8. Plan and Save for Retirement
  9. Maximize tax breaks and be tax compliant at all times
  10. Invest in Yourself and Give Yourself a Break

MAKE SURE YOUR FAVOURITE THINGS ARE PROTECTED

*Consumer tips to insure your most valuable assets – Vehicles, House, Contents and Personal Items.

Make sure that when taking out a motor vehicle insurance policy, you provide correct details about the regular driver or the nominated driver to the insurer. Ensure that you notify the insurer in the event of any change to the regular driver or the nominated driver.

Ensure that you update your risk address should you move house, or relocate to another city. Insurers determine premiums based on risk and the risk is determined in part by your street address. Should you fail to inform the insurer of a change in the risk address, the insurer could void the policy on the basis of misrepresentation or non-disclosure.

Provide the insurer with true and complete information to enable the insurer to correctly assess the risk. An insurance policy is entered into on the basis of good faith and an insurer is entitled to verify the information provided to it at the underwriting of the policy during the validation of a claim.

It is important to disclose your full insurance history when taking up a new insurance policy. If you have had a policy cancelled by an insurer on the basis of non-payment of premium, fraud or moral risk or multiple claims, disclose this cancellation to the new insurer.

Do not use the insured vehicle for business purposes if this was not declared to your insurer. If you make use of your vehicle for business purposes, then your risk is considered higher than if you use your vehicle for private purposes only and your premium for business use will also be higher. You need to pay the correct premium for the correct use.

If you disagree with the insurer’s assessment of your claim, you are entitled to appoint your own assessor and to submit your own assessor’s report to the insurer for consideration. Remember that you bear the onus of proving that your claim is valid.

MARKET COMMENTARY

The JSE started 2020 on 51 559 points. In the middle of March, the market crashed more than 30% when international markets fell, the coronavirus lockdown hit and Moody’s Investors Service cut SA bond ratings to junk – all within the space of a week.

By March 18, the Top 40 was down to below 36 000 points. Since then, most shares have recovered most of their losses and the index rallied a remarkable 32% to 47 343 points at the end of last week, just 8% shy of the levels at the beginning of 2020. The story generally holds true for most share markets around the globe.

We saw the rand fall from an already-weak R14 per dollar at the beginning of January to as low as R19, before recovering slightly to the current R18.36 per dollar. Prime interest rate reduced to 7.75% in April.

When we look at Thomson Reuters’ expected 12-month consensus price forecasts and adjust them according to the weight of the FTSE/JSE Top40 Index, you will see that IF they are  correct in their predictions, the index should be trading 24% higher than current levels (as at 14 January 2019) in 12 months’ time. I need to make two things very clear, though: Firstly, consensus forecasts are definitely not always 100% correct, but it does give us a good indication of the general views of investment experts.

WE ARE ALL IN THIS TOGETHER

I have again realised the importance of having an emergency fund, the importance of creating a savings habit, the importance of a well-diversified investment portfolio and the importance of solid financial advice.

We would love to hear from you!

Connect with Fanie Jansen Van Vuuren CA (SA) CFP® , Director of Wealth and Investments (Pty) Ltd  at fanie@fcfin.co.za

To book an appointment with one of our independent financial advisors, investment specialists or tax advisors please dial 012 807 1714.