Growing up and helping them manage their finances
The happiness of your children often goes hand in hand with helping them to obtain a successful financial future. As they get into their early twenties, and they start to enter the working world or perhaps near the completion of their tertiary studies, you’ll want to help guide them when it comes to making the best decisions about their finances. For some, this entails buying their first car for which we’ve provided useful tips on how younger drivers can cut costs on their car insurance premiums.We also look at how young South Africans, by applying 5 essential rules, can achieve their investment objectives –  whether they are saving for that dream holiday or putting money aside for investing in property.  We’ve also sourced some great insights about the new Tax Free Savings Account – designed for the purpose of helping South Africans increase their household savings. With the growing concern about our water shortage, we’ve also supplied some water wise saving tips.
Five essential rules for investment success Investing is not rocket science, but succeeding at it requires a healthy level of knowledge and understanding.

According to Mark Lapedus, Head of Product Development for Liberty Investments, there are a number of tried and tested “rules” that have helped millions of young people to achieve their investment goals – and, if applied diligently, can help aspiring investors to do the same.

 “Investing money is the process of commiting resources in a strategic way to accomplish a specific objective.”         – Alan Gotthardt, The Eternity Portfolio

Rule 1: Always have a plan.

Rule 2: Diversify. Diversify. Diversify

Rule 3: Understand the principles of fear and greed, then manage or avoid both

Rule 4: There’s no time like the present.

Rule 5: Always invest in yourself first.

While there are obviously far more than just five ‘rules’ that apply to the attainment of investment success, Lapedus points to these as an excellent starting point for anyone wanting to unlock the untold potential benefits of a lifetime of effective investment. “The application of these principles allows for the establishment of a very solid foundation on which young investors will be able to confidently build their investment success throughout their lifetime.”

How to…..Cut premiums for young drivers                                              Insurance companies generally classify young drivers as high risk due to their lack of motoring experience resulting in younger drivers being charged higher premiums. The good news is that there are ways young drivers can improve their chances of getting lower premiums.

Some of these ways include choosing a vehicle with a lower power motor – higher powered vehicles are considered more dangerous, especially among young drivers. Another is paying as you drive.

If you take out a policy that limits your monthly mileage, this will lower your premium as the less time you spend on the road, the less likely you’ll be involved in an accident.

Not taking out insurance isn’t an option. If you damage another vehicle, you could be faced with tens of thousands of rands of legal claims.  To avoid being completely uninsured consider taking out third party insurance only.

7 Water wise saving tips

We are using more water than ever before. It’s important for all South Africans to re-use and recycle water, six to seven times if possible, in an effort to conserve our water supply.

 #1 Water your summer lawns once every three days and your winter lawn once                every five days.

#2 Take shorter showers – five minutes or less is best.

#3 Get an Energy Star labelled washing machine. Wash only full loads.

#4 Avoid flushing the toilet unnecessarily. Dispose of tissues, insects and other                  similar waste in the trash rather than the toilet.

#5 Avoid purchasing recreational water toys which require a constant stream of               water.

#6 Consider using a commercial car wash that recycles water. If you wash your own        car, park on the grass and use a hose with an automatic shut-off nozzle.

#7 Use mulch to retain moisture in the soil. Mulch also helps control weeds that            compete with landscape plants for water.

 Tax Free Savings Product From March 2015, the National Treasury has introduced a legislation that allows for the provision of Tax Free Savings Accounts to promote an increase in household savings.

The benefit to clients is that the growth on your investment is completely tax free. This means:

 You don’t pay tax on capital gains.

You don’t pay tax on dividends.

You don’t pay tax on interest.

You don’t pay tax on withdrawals.

 National Treasury has prescribed certain structures which all providers will be required to adhere to when offering a tax free product. Here are details:

·      Contributions are subjected to an annual limit of R30 000 and a lifetime              limit of R500 000. The annual limit will work on a ‘use-it-or-lose-it’ principle          and there will not be any roll-over for unused portions of prior years. For regular          investments, the annual limit equates to a maximum monthly premium of R2 500        over the full tax year.

·      If you have tax free plans with more than one company, the maximum of                        R30 000 per tax year applies across all your tax free plans, not per plan.

·      The South African Revenue Services (SARS) will levy a tax of 40% on all                          contributions which exceed R30 000 per tax year. Remember the tax year is from        the beginning of March to the end of February the following year.

·      Customers can disinvest at any time from their tax free savings.                                           Source:

Contact me to discuss these types of tax-free structures.

Please keep in touch                                                                                                   Remember to contact me if your circumstances or needs have changed and your financial plan needs to be updated.

Kiba de Klerk                                                                                                                 Financial Advisor                                                                                                                     Telephone number 023 342 5161         Cell 083 4400871                                                   E-mail :             Website :                Physical address : 107A High Street, Worcester, 6850                                                                I look forward to hearing from you!