Wrap up your tax year with astute financial advice

image of tax work on a desk

It always seems to come upon us when we are not fully prepared for it, but the end of the tax year is here once again. Many of us are not keen on dealing with SARS and so we place our tax returns and possible issues firmly in the hands of our accountants and auditors.

They may well ensure that we are always prepared at this time of year, regarding the necessary documentation etc. but do they always ensure that we have maximised our potential benefits from a financial and investment point of view?

This could be where you find the assistance of your Financial Advisor to be critical, as it is they who are focussed on increasing your wealth, and your tax structuring is very much a part of that. Aligning your investments with the best possible tax benefits is an essential part of wealth building and so it is prudent to always wrap up your tax year with astute financial advice.

Things to do before the tax year ends

Your Financial Advisor will be able to guide you and go into detail on this, but here are a few examples of important things you can do before D day (or should we say T’ day!) is upon us…

  1. Be prepared – This is the one your accountant (if you have one) will probably remind you about. Have all your necessary logging of your expenditure up to date and calculated so that you know exactly what it is up to this date.
  2. Maximize your Tax-free savings account (TFSA) – We are all allowed a R36,000 tax-free saving per annum but this needs to be maximised as at the end of Feb or before then. The contributions are not tax-deductible, but interest income, capital gains and dividends earned from a TFSA are exempt, so make the most of it. You have a lifetime contribution allowance of R500,000 and this is seen as a long term investment, so your Financial Advisor will be able to advise on how it can best fit with your portfolio.
  3. RA’s are king when it comes to tax savings – Retirement Annuities are the best investments that can be made from a tax savings point of view and they generally yield impressive returns too. Before the end of Feb, it is a good idea to add whatever additional funds you may have to your R.A.’s to increase your tax efficiency and potential rebates. 27.5% of taxable income or R350 000 monetary value maximums are permitted. The higher your marginal tax rate is, the more advantageous it becomes to invest in an RA as the % tax rebate is based on your tax rate.

There are many way that your savings and investments can be shielded against unnecessary taxation, so we suggest you review your portfolio annually and let your Financial Advisor ensure that every area of potential tax benefits is explored.

Making money is your business – protecting and managing it is ours

At Hereford Group, we take pride in the level of proficiency of our Financial Advisors to always ensure that whatever wealth you have created is not eroded by unnecessary expenditure and will always yield the maximum benefit for you.

The payment of taxes is very necessary but it is a complex issue and our clients greatly benefit from our expertise in this area, so contact us today to make sure you wrap up your tax year with astute financial advice!

When romance is in the air – finances need to be on solid ground!

It’s that time of year again when Valentine’s Day is celebrated by many and woe betide husbands who don’t celebrate it if their wives do! Seriously though, often in the month of romance, the big question is popped and many couples set out to build a life together.

Many arrangements are made to stage the perfect wedding and honeymoon travels are anticipated and agreed on, but sadly many couples, so caught up in the idea of matrimonial bliss, fail to attend to some very important matters before they say their ‘’I do’s’’.

When finding love turns to sharing a life, just as important as choosing a ring is to choose an appropriate marriage contract and seek sound financial advice to examine common financial goals and structure mutually beneficial finances.

Certainly, it is not for us to tell anyone how to structure their marriage, but from experience, we have found that when romance is in the air – finances need to be on solid ground. So, a little advice may be useful…

The marriage contract

The best advice here is to seek the assistance of a good attorney who can advise on and draw up a marriage contract that is mutually beneficial to both parties. From a financial and investment point of view, which is our area of expertise, we strongly advise this, as if a marriage contract is not drawn up a married couple is automatically deemed to be ‘’in community of property’’ and this can be disastrous not only from the point of view of the kind of arguments it may provoke in terms of who is entitled to what, but it renders both spouses liable in the event of either partner-facing liquidation.

The better and most commonly opted for option, which is the fairest to both parties, is the Ante-Nuptial Contract (ANC) with accrual which protects the existing property of each spouse going into the marriage and provides for an equitable share of any assets accrued within the period of the marriage.

Financial considerations

Many failed marriages are a result of constant arguments due to not being financially aligned with one another. Just a few things to know regarding finances before you tie the knot so that you can have a better chance of shared growth and peace in the home are…

  • You must understand that your individual credit records going into a marriage do matter, tax returns are always submitted separately and S.A does not recognise a joint bank account
  • Meet with a Financial Advisor even before getting married to ensure your finances are in the right hands. He/she will encourage you to talk to each other about debt, spending, and short and long term financial goals.
  • Discuss currently owned property, insurances and investments with your Advisor so they can consolidate everything into the most beneficial wealth growth package going forward. This will always include not only pensions and investments to build a future but the protection of your family and finances as you grow.

Empowering the individual strengthens the collective

Hereford Group is renowned for our unique approach to financial assistance – that of recognising that every individual is different and through empowering the individual we believe we create better couples, teams and businesses, who all work and grow together.

Contact us to ensure that through setting a foundation of equity, shared growth and ultimately mutually accomplished aspirations in your golden years, your finances will always be on solid ground!

Insure to ensure a stress free vacation!

image of a caribbean resort

After the kind of issues we have had to endure over the last year (which followed on from one of the most difficult years in recent history) about the last thing we want is to allow our holiday this year to be stress filled as well.

We have had the pandemic which engendered a difficult economic downturn, job losses and the turmoil of adapting to an unfamiliar working environment. We have had load shedding which has thrown us into the dark and interfered with online meetings and production in our factories.

We had the horrendous events in Kwa-Zulu Natal and Gauteng that had us questioning our security and we have recently had yet another astronomical petrol price hike which will no doubt send prices rocketing across the board. Do we need a stress-free vacation this year? – you bet we do!

Leaving less to chance means less to stress about

Just as we ensure we have our visas in check and all our covid protocols in place if we are winging our way to foreign lands, and we have our motor vehicles serviced and safety checked if we are going to hit the open road (all vitally important things to do) we also need to create a checklist on the insurances we have in place to protect us against the things that could go wrong during this time.

By now we should be accepting the fact that the unexpected invariably does happen and to have peace of mind, we merely need to be ready for it. So, think about it – what do you need to insure to ensure a stress-free vacation? It starts at home, includes the journey and of course the holiday itself.

The home

Just as you make sure your alarm is working and backed up, hopefully, get a house sitter (the best idea if possible) or a neighbour to set out and take in your bins and collect post etc. Have you ensured that you are insured at least for fire and theft? These are the 2 most common areas of concern when people are away, and entire households have been cleaned out by professional thieves. Talk to our expert short term brokers to get you the best deals with the maximum coverage.

On the road

The death toll on the roads every year is a grim reminder of the fact that the road is a hazardous place to be at this time of year particularly in peak periods. Just as you know to keep your following distance, drive within the speed limit, rest regularly and most importantly have patience – you should also have the peace of mind of knowing that your vehicle is covered against accidental damages or breakdown and you and your family, of course, are covered too.

Our short-term cover can take care of the vehicle but do be covered too for personal injury, potential loss of income in the case of a bad accident and none of us like to think about it but we do also need to do a check on or life insurance and update our wills before going on leave.

At the destination

You may fancy yourself as a fit, sporty type and of course, we all want to get out on the waves or into the air to get that feeling of freedom that relieves us from the stressful year we’ve had.

We say go for it – but do it with the peace of mind of having the same accident cover, income protection and life cover that you need on the journey. For these last two, you can consult with one of our expert Financial Advisors who can ensure that personal and family protection is a part of your wealth-building profile, as it should be.

To be stress-free takes peace of mind

This article is not written to put you off having a great vacation or doing any of the things you love to do, but merely to remind you that your insurance checklist is as important as any of your other safety protocols.

Whether we care to admit it or not, it is what we fear that stops most of us from leading stress-free lives – so let Hereford Group assist you to insure to ensure a stress-free vacation! You deserve it – So, happy holidays and travel safely!

Will your wealth plan in 2022 be all it needs to be?

image of a man holding a savings jar

As we are just about to go into another new year, hopefully, many of you are taking a well-earned break and have allowed yourself some time to reflect on the past year and take stock of where you have come to.

You can be proud if you are wealthier than you were at the beginning of 2021, as we have certainly had to endure some trying circumstances. Your savings and investments may well have been eaten into by unexpected events like illness (the pandemic has continued to plague us throughout most of the year), market downturns, reduced productivity thanks to load shedding and unrest, and of course the recent astronomical petrol price hike.

Never has the old Boy scout motto of ‘Be prepared’ been more appropriate as we ponder what we are going to do to ensure we don’t encounter and succumb to the same pitfalls next year. The critical question to ask yourself, therefore, is ‘Will your wealth plan in 2022 be all it needs to be?’

It’s about basic factors – not specific products

As we at Hereford Group have always said about our wealth creation plans, we don’t see specific insurance and investment products as being the critical factors to building a great wealth portfolio. It is more about three very important aspects that you need to include – and then we choose the right products to make it work for you. So what are these critical factors?

Plan for both short and long term

A wealth plan should never be only about how rich you are going to be when you retire one day. Yes, sure this is a critical part of a wealth plan, but it is just the tail of what needs to be a plan for life that ensures you are covered all along the way.

Building wealth often entails drawing on savings at certain times to help you or your business take the next step. This means some investments need to be flexible so that you can do so. A wealth plan also needs to be diverse, never putting all eggs in one basket, no matter how good any product may look for the long term. Remember that when there are market downturns it is this diversity that saves a lot of investors losing the whole basket of eggs in one fell swoop!

It needs to provide protection

Any effective short and long-term wealth profile needs to give you protection against the unexpected at any phase of your life. This is where vital insurances need to be in place as part of your wealth portfolio. What is the point of having a great plan when one dread disease event could cripple your flexible investments and even clean you out of business if you are not covered for some sort of income protection?
Good medical, standard short-term cover, Dread disease with disability cover and income protection are your shield against losing everything you have saved and invested for long before you get to enjoy that pension. Good life cover to protect your family also keeps your investments intact so that they can benefit both from your legacy and the life cover.

It should be custom made

This is where Hereford Group really come to the fore as we have for many years focussed on ensuring that whatever wealth portfolios we devise and structure, whether it is for the individual or your business, we understand that everyone and every business is unique.
Contact one of our Financial Advisors for a no-obligation consultation to assess what your specific circumstances are and how we can best build a customised wealth plan for you in 2022 that will be everything it needs to be!

Thank you to all our loyal clients for your continued patronage throughout 2021 – we wish you happy holidays and a fabulous new year – and please – be careful out there and return to us safely in 2022.

Make the right medical aid decisions to protect your financial future

image of a man running

November is always a great month to be alive – Spring is melting into summer; we’re booking year-end vacations and all over the place and you see men suddenly sprouting ridiculous moustaches!

Generally, this sudden desire to grow a ‘Mo is due to the global initiative of ‘Movember’ which sees men challenge each other to grow the best one – and the proceeds all go to worthwhile charities supporting prostate cancer – and other serious men’s health issues.

Sobering facts

According to a Men’s Health article, In South Africa alone (A drop in the ocean when viewed in global terms) ‘1 in every 23 South African men will develop prostate cancer in their lifetime. On average 5 South African men die from prostate cancer every day and more than 4,300 South African men are newly diagnosed with prostate cancer each year. This is just prostate cancer – and testicular cancer and heart disease are also common men’s health issues.’

It is not only Men who have specific illnesses which are their nemesis either. Last month we were all made fully aware of the significant impact of breast cancer in women. The SA Government say “The incidence of breast cancer is increasing and it is one of the most common cancers among women in South Africa. It is the most prevalent cancer amongst white and Asian women and the second most common cancer among black and coloured women.’’

Add to these sobering facts about cancers the incredible impact a totally unexpected viral pandemic like COVID-19 had on so many people of both genders certainly makes one realise that the right medical cover is not just nice to have but an absolutely vital addition to every family’s budget. Without it, the impact of any of these illnesses could totally erode your wealth profile and badly affect your future.

Making the right decision

It is vital in our opinion that the decision to choose the right medical aid is best left in the hands of professionals who can walk you through the maze of choices that are available to ascertain what will be right for you and your family.

So much needs to be taken into account; Understanding the details of their plans and the nightmare of communicating through call centres to contest claims, as well as complex and constantly changing legislation, all make choosing the right health cover tricky.

Bridging the gap

You also need to remember that some medical practitioners charge up to five times the going medical aids rates so ‘gap cover’ which bridges the shortfalls that so many people are stung by after the event is also essential and our Medical Advisors can assist you with this.

We partner with the best

Hereford Group partners with Hampshire Independent advisors, one of the best in the industry, who accommodate both individual and group memberships and are renowned for developing healthcare strategies that prioritise your needs!

Their personal, individualised service helps you to decide which medical aid or gap cover plan best suits your requirements and with more than 25 years’ experience in the healthcare industry, they fully explain the benefits of each plan and help you find the right options.

Contact us today and make sure you make the right medical aid decisions to protect your financial future! Stay safe – and grow those ‘Mo’s bros!

Kickstart your children’s future with solid financial principles

image of silhouetted children with the word future written on them

Generally speaking, not everyone who makes money is from wealth or has some special gift for handling finance. The reality is that many people from poor backgrounds have managed to build a nice nest egg and retire quite comfortably. All along the way they have managed their finances well too and provided for their families come rain or shine.

The difference in most cases comes from the kind of financial principles that they learned as children. It’s never too early for you to start talking about and assisting your children to get an understanding of what money and building wealth are all about.
It can start at an early age with simple things like talking to them about financial goals you have as a family. Get them to try to understand that you are saving for almost everything you do – the next family holiday, buying the family car and of course how you bought the family home. Talking about finance should never be taboo, but something fun to discuss and making acquiring things fun to aspire to.

Practical examples

Then start bringing in some practical examples of handling money, like teaching your children to count money and help you at the shops. This is followed by giving them pocket money and this should always be as a reward for doing something. Let them know early on that money does not just happen but needs to be earned.

Having covered that, then start teaching them that the money they earn can be expanded upon. Give incentives to increase their pocket money if they do extra chores and even more importantly if they save some of it themselves.

Budgeting

Teach them to create a little budget for that pocket money – allocating a little for their immediate expenditure and allocating something for savings. At a very early age, they can be taught that something should always go to saving for something special that you want.

If your Daughter has her eye on a particular doll or your Son fancies that Lego kit, explain that they can save for it and when they do so you will pay them some extra, teaching them probably the most important financial principle – they will be rewarded for saving!

Delayed gratification

In doing these things you are also teaching the vitally important lesson of delayed gratification. Not everything you want should necessarily happen right now. You teach your children to wait their turn at the playground, or to stand in a queue for what they want, so teach them this valuable financial lesson too – that the longer you have the money – the more you’ll be able to get in the long run. This also starts to teach them the valuable lesson of compound interest!

Using financial institutions

As children get a little older, get them to use their own savings account and teach them that they can even begin to invest in managed savings funds. This teaches them that savings can be used in many ways and if given good advice from someone who truly understands money matters, they can increase what they have without necessarily having to know all the details of how and why.
Finally, never forget to teach them that to give is to gain and this is a lifelong principle they should always carry with them. Giving a part of what they have to benefit others will not only make them feel good but this is a principle of business too. Those who help others usually are, in turn, helped. It’s an age-old principle that will always stand them in good stead.

Speak to the professionals

It’s a great idea to kickstart your children’s future with solid financial principles and we hope this advice has helped. Remember though that the thing you need do for your children is to ensure that their education is covered and you are a good example for them financially, as they learn to make their own way.

For over 25 years Hereford Group has been assisting families to grow their wealth, be protected against unexpected eventualities and retire to their place in the sun, as they so richly deserve. Contact us today and let us do it for your family too.

Stay safe and stay invested in the future!

Health and income protection are a part of building wealth

It is a strange quirk of human nature that we don’t like to think about health issues as being a roadblock to building wealth. When we talk about wealth creation we tend to see it as a long term project, based on projections of living a long and healthy life and retiring to a villa in the sun somewhere to live out another 20 years or so.

Unfortunately, as the COVID-19 pandemic has all too clearly shown us, life is not that predictable and we can be severely side-tracked particularly with health issues. Financial Advisors would simply not be conducting themselves responsibly if they did not take the protection of their client’s income into account and advise that health and income protection are a part of building wealth.

The times- they are a changed…

More of our clients are starting to see and feel this too, as a result of what they have personally experienced themselves or to those close to them in recent months. People are understandably feeling vulnerable and anxious about forces that seem to be very much out of their control. We are experiencing in discussions with clients that they are in a frame of mind that makes them, rightly so, want to ensure that their cover is up to scratch in the event of unforeseen circumstances.

The Long COVID

One of the worst consequences of this scourge is that it is reported that many Covid sufferers experience what is known as the ‘Long COVID.’ According to a recent survey done by the Centers for Disease Control and Prevention in the USA, ‘’35% of non-hospitalized patients who had mild COVID-19 cases did not return to baseline health 14 to 21 days after their symptoms started. And this wasn’t just in older people or people with underlying health conditions. Twenty per cent of previously healthy 18-to-34-year-olds had ongoing symptoms.’’

Additional research shows that overall, as many as one-third of individuals who had COVID-19 and weren’t hospitalized will still be experiencing symptoms up to three months later!

No longer ‘just a ‘nice to have’

Certain major insurer’s claims alone over the past year are up a whopping 60% or more for death and disability, and this is largely due to Covid claims. We are also seeing that these long-term effects of Long Covid, i.e. lungs etc. are greatly hindering some people from working to full capacity, or working at all, which generates income protection claims.

As Financial Advisors, the last thing we ever want to have to say is ‘’I told you so,’’ because it may then already be too late. We have spoken often in our articles about protecting your wealth by protecting your health and income, so just to reiterate – to have full protection against unforeseen happenings in life, your profile needs to include…

  • Life cover – and it is a myth that it won’t pay out if you die of COVID!
  • Disability: Lump sum and income protection
  • Dread disease and critical illness cover
  • Standard Medical aid & gap cover.

The Hereford group difference

We know the difference that has rewarded Hereford Group with so many loyal and satisfied clients is that we treat every individual and business as a unique entity and subsequently customise a wealth plan to suit their specific needs.
You don’t need to spend all your earnings on protecting your health or your income, but they are necessary inclusions in a holistic and well-structured wealth portfolio. Talk to us and let us assist you to get the balance right for your distinctive circumstances.

In the meantime – stay safe, stay positive – and stay vested in your future!

Is wealth creation only about age and time?

We are currently right in the middle of the Spring season in South Africa. Spring is always said to be a great time to start new beginnings and look to the future. One of the most famous quotes in this regard was from Warren Buffet, which could almost be the Financial Advisor’s mantra – when he said, “Someone’s sitting in the shade today because someone planted a tree a long time ago.”

Well, this is true but also suggests that it is only with age that wealth can be created. Of course, time is probably the most significant factor in the planning and building of wealth, but there is however also an ancient Chinese proverb that says, ‘’The best time to plant a tree was 20 years ago, the second-best time is today!”
This begs the question ‘’Is wealth creation only about age and time?’’ The short answer is no – and here’s why…

The compound interest conundrum

Compound interest is a wonderful thing for many but for some it seems like a curse. On the one hand, for the young person, it is the Financial Advisor’s ‘go-to’’ reason for why wealth creation should be started as soon as possible – and that is unquestionably true.

From the day you make your first Rand, you are potentially on the path to creating wealth, providing you make saving and investing a part of your budget from that day on and by remaining invested you can harness this amazing power of compound interest very successfully.

On the flip side of the coin, because compound interest is so much cited as the key to building wealth, many people when they start reaching their middle age (and ridiculously many consider this to be in their 40’s when in fact most people only reach their earnings peak much later in life than that) already think they have missed the boat.

Well, nothing could be further from the truth. It may sound like a stuck record, but how can we ever forget that Colonel Saunders, the founder of the KFC empire did so when he was already in his sixties!

Altering mindset with age

At a young age, without a doubt, you want to be the person who planted your tree the day you started working, but you don’t go for planting just one tree and hope to be resting in its shade alone. As you grow you will want to plant a whole orchard. You will also want to plant in some different areas as you never know if the first tree you planted may simply have become eroded and died. This is why astute financial advice should be sought and revisited constantly throughout your life.

In middle age, you can still be planting and growing in many areas, looking at investments with shorter-term growth, or even use that powerful weapon you now have at your disposal, experience, to start a new business.

Financial Advisors often say to their clients, figure out how many paydays you still potentially have before retirement, and their clients are often surprised to see that they still have a lot of potential for investment growth.

In later years, even on the threshold of retirement, many people like the Colonel have used their knowledge to create something or used their wisdom and experience to create courses to teach others and gain residual income.

If they have taken the initiative to consult with a Financial Advisor they have found that a lot of the capital growth they have made in the past can be re-assigned, reinvested and utilised in a new wealth profile that may give them far more retirement income than they had expected.

A lifetime of astute advice

Hereford Group has for over 25 years been advising young and old alike to find better ways to make their money work for them and ensure that once they have stopped working their wealth will still be doing so. So, wealth creation is not only about age and time, it is about having the right mindset and receiving the best advice and guidance that you can get – at any time in life.

Talk to us, we are there for you as we have been for many clients with whom we have walked the road to a better future, regardless of their age. Wherever you may be in your life right now, stay safe, stay positive and stay invested in the future!

Financial solutions to the soaring cost of education

image of graduation hats being tossed

We wrote extensively last month about our youth and how vital their contributions will be to our future economy, but one important issue that still needs to be touched on is that of education, as without a high level of education they will not be an effective workforce for SA’s future anyhow.

It is with some alarm that we observe, through various reliable sources, that the cost of education in South Africa is soaring. Just one report estimated that the parents of a child a starting Grade R in 2017 could expect to have paid between R1.3 million and R3 million, depending on whether they attend public or private institutions, by the time they attain a three-year degree from a university in 2033!”

This is a lot of shekels, particularly at a time that people are so cash strapped from setbacks like COVID-19 and the resultant job losses and market slumps. Stats SA research, just looking at increases between 2019 and last year, showed that “Primary school fees increased by 7.3% in 2020 compared with 6.9% in 2019. High schools fees increased by 7.6% compared with 6.9%.and tertiary education institutions fees climbed by 4.7% compared with 2019’s increase of 6.2%.”

This was largely exacerbated by a shift to online learning last year as there were additional costs for schools to bear, but it is not thought that as we normalise we are likely to see a reduction in the fee hikes. Time has shown us that the rising cost of education, pandemic or not, has been a consistent one over time from many years back and is not likely to change.

Current projections are that in the 8 years from 2022 to 2030 even at a public primary or high school, intuition fees could go from R50,000 p.a to R105,000 p.a. At private schools you are more likely to pay double that at a high school level.

…and that’s not all

What many parents fail to realise is that there are many additional costs to the intuition fees too. It is estimated that with books, cell phones, computers and computer fees, residences etc, some parents have a total education package of a much as R350,000 per year!

The silver lining behind the education fees cloud

Fortunately with some pre-thought, working with a good Financial Advisor, some disciplined savings and utilising compound interest there are a couple of financial solutions to the soaring cost of education! Pretty much from the time a child is born, if the parents, with an understanding of these cost projections embark on certain investments they can contend with these issues and provide a great education for their children.

Two ‘savings’ graces

Two excellent choices that adequately provide for these specific requirements are Inflation based Unit trusts and Tax-free savings accounts. One of the great concerns for many who take a debit order to save and commit themselves is that they like to know they still have some flexibility.

With Inflation based Unit trusts, not only are they designed to outstrip inflation in the long term but they are flexible and funds can be drawn at any time. That is not the intention though and this will probably only provide great returns if not tampered with too much.

For those with tax issues or just more cognisant of saving on tax, a Tax-free savings fund could be the way to go. There are restrictions on how much can be invested in these, but they are also flexible and your Financial Advisor can advise and guide you accordingly. Possibly a combination of these 2 investments would be the perfect solution for you?

We understand and advise accordingly

We at Hereford Group are a family of Financial Advisors and complimentary financial management experts and administrators, all with families of our own and empathy with every one of our clients that have these hurdles to face.

We have 25 years of providing customised solutions for each of our client’s unique requirements and would love to be of service to you. Stay safe, stay positive – and let’s work together to get all our kids through these trying times with flying colours!

Financial peace of mind could save your life!

image of all team member hands in a circle

There is absolutely no doubt that Financial and bodily health are inextricably linked. Simply put, one of the greatest stress inducers is financial worry and we all know that stress kills. You can sugar-coat it in any way you like and many researchers say financial burdens lead to increased blood pressure, but the ‘silent killer’’ high blood pressure, is almost always stress-induced.

So it is a vicious cycle. Financial worries = Stress = high blood pressure and many other health disorders too. One of the biggest problems with stress is that it invariably leads to bad lifestyle choices too in an attempt to cloud over it. These would be things like drug and alcohol abuse and another known killer – smoking.

Poor financial decisions lead to more stress.

Financial worries are invariably a result of poor financial decisions and ironically the stress of these financial worries leads to additional bad financial decisions. The vicious cycle not only continues but grows!
A classic example of this would be the cancellation of medical aid and compromising on medical health insurances and top-ups. So many people think this is a great area to cut the budget but the stressed individual is actually at higher medical risk, so unconsciously they are exacerbating the stress by now knowing that they may not be covered if things go wrong!

What is the solution?

Well, I think we have clearly made the point that financial stress is linked to health issues, but simply knowing this is not going to provide a solution, so how do we avoid this kind of stress? Here are just 3 essentials to look at…

Budget to include ‘cushions’

Just as you will be told by any good Business Coach if you want to start up a new business you need to have several months of capital put away for bad months. A personal budget is no different – without allowing for savings you are setting off on the wrong foot at the outset. From day one, always have that cushion.

Several savings plans offering very good dividends are also flexible and allow you to draw on them when you need to, so as you are saving you are also being cushioned. That brings peace of mind and alleviates stress.

Don’t compromise on protection

Remember part of a solid financial plan is protection. As we have had to reiterate so many times when the COVID-19 pandemic upset so many lives, the best laid financial plan cannot withstand the continual battering it will take if you have not allowed for medical, accident and income loss contingencies. Some things cannot be compromised and also have to be included in a budget for peace of mind.

Seek professional financial help

Many people reading this may say, ‘’well sure there are things I’ve done wrong, but it’s too late now, I’m already on the treadmill and living above my means – there’s no way I can save now’’.

You will be surprised at how many ways an astute Financial Advisor can assist with a recovery that could have you back on track and creating wealth again instead of stressing about it.

At Hereford Group, over the last 25 years, we have assisted enough people to achieve great wealth to know that where there is a will and great financial advice – there is a way. So talk to us today before making any more bad decisions that could just exacerbate that stress and keep you on the treadmill for a long as you can survive.

Remember it is not just about saving money to get rich – Financial peace of mind could save your life!