Leave a Financial Legacy this Heritage Month

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23 September 2022
Not only is the month of September amass of excitement with the change of season but it is also the month in which we South Africans unite to celebrate our heritage on the 24th September each year.

South Africa is arguably among one of the most culturally diverse yet complex countries in the world. Eleven official Languages, numerous religious beliefs and traditions, a plethora of political parties and a richly diverse landscape, no wonder we are aptly known as the Rainbow Nation!

Heritage day in South African is a day set aside to celebrate our truly diverse Rainbow Nation. It’s a day for South Africans to pause and gain a deeper understanding and respect for the various cultures that play a part in driving and shaping our unique country.

Heritage day is not just about understanding cultures but also about creating and preserving a heritage for future generations upon which they can build their futures. It’s about building and leaving a solid and strong legacy for our youth and those that depend on us.

Despite our various cultural, religious and traditional differences unfortunately one aspect common to most South Africans is a generally poor savings and investing culture. Unemployment and poor planning for our retirement years is currently a dark gloomy cloud that overshadows our bright Rainbow Nation.

As much as we pause to celebrate our heritage during spring, we should also give the same time and attention to our financial position and investing money to ensure we leave our dependents a lasting and stable financial legacy.

Here are six simple questions to ask to test the current strength of your financial legacy:
1. Is your Life Covered?

In the event of your passing do you have dependents that will be left destitute with nowhere to turn and no money for support? A lasting financial legacy and peace of mind is a priceless gift to leave to those that would literally be financially ruined by your absence. Life cover is good option to help give your family a lasting financial legacy.

Is your life covered and will your life give life to others?

2. Is your Income protected?

If you were to lose your ability to earn an income now due to an unforeseen disability, is your income protected? Do others rely on you for financial support and security and if so will you still be able to earn an income if you were to become disabled? Disability cover is a great way to help protect your income.

Is your income protected for your sake and that of your loved ones?

3. Is your Emergency Fund in Place?

Building a lasting financial plan and legacy starts with a solid emergency fund. Just think of the financial devastation caused by COVID for those that did not have emergency money to see them through.

Do you have emergency money to withstand life’s little curve balls?

4. Is your Retirement Plan on Track?

Planning properly for retirement should not only provide a sustainable lifestyle during retirement but also enough to leave a legacy for your family and dependents when you pass on. These days retirement planning extends way beyond just having retirement funds (Pension, Provident, Preservation Funds and Retirement Annuities) in place. Tax free investments, property and voluntary investments all play a vital role in creating a sound outcomes based retirement plan and investment management strategy.

Are your retirement plans on track?

5. Are your Investments Modern?

In this current age advances in technology, efficiencies in investing and greater fee savings to name a few can enhance and improve investment outcomes. When dusting off your investments take a closer look and ask yourself:

  • Are your investments doing what they promised?
  • Are your investments cost efficient? Do you know what you are paying in fees? Ask for your Effective Annual Charge (EAC) from your service provider to see the full fee picture
  • Are your investments Tax efficient?
  • Are you investing with purpose? An Outcomes Based investment philosophy keeps you focused on the end goal while ignoring short-term distractions
  • Are your investments positioned to take care of you and leave a legacy for your future generations?
  • Are your investments seamless, adaptable and flexible enough to match your lifestyle goals?
  • Are your investments accessible and do you know how they work?
  • Are your investments modern and keeping up with the times?
6. Are you teaching your kids (dependents) to work smartly with money?

One of the greatest gifts to give your kids (or your financial dependents) is the gift of education. Education about their heritage, education as to how to earn a living and education as to how to work smartly when investing money.

Creating an investment culture is a heritage and legacy that can improve the financial future of our entire nation. Nelson Mandela summed it up best when he said “We can change the world and make it a better place. It is in your hands to make a difference”.

What’s your financial legacy?

 

 

Gareth van Deventer CFP®

Technical Advice Service Manager

OUTvest is an authorised FSP. Views expressed in this article is that of the financial advisor and not a full representation of OUTvest’s stance. All investments are exposed to risk, not guaranteed and dependent on the performance of the underlying assets. Ts and Cs apply.
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