A new era awaits - Ecsponent Limited€¦ · “thousandaire” and never become a millionaire. A...
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ecsponews Investing with the times Newsletter ▪ January 2018 Reform and a fresh approach should make South Africa more attractive to investors, launching a new era of stability in the country. The local economy will also be backed by strong world economic growth and low interest rates in America, Europe, Japan and China. South Africa will be favoured by the recovery in commodity prices and strong growth in the agricultural sector, owing to abundant production of summer grains, other crops, fruit and a recovery in the livestock industry. However, the consumer faces a difficult year that will be characterised by higher fuel and electricity prices, as well as higher taxes and interest rates which can rise by 0.75% in 2018. Furthermore, a difficult labour market, additional credit downgrades and low growth rates (the International Monetary Fund forecasts a growth rate of only 0.7% for SA) are also expected. The replacement of the ANC leadership is expected to be a driving force in the effort to eliminate corruption. If that happens, investments are expected to return to South Africa. South Africa has long been lacking in ethical and competent leaders to put the economy back on track and create an economically prosperous country that can serve its citizens. The latest Steinhoff scandal brings home the importance of ethics and is a sounding board for standard business ethics. The words “our soul is not for sale” by Pravin Gordhan in his media statement at the National Treasury’s headquarters after his dismissal as finance minister, is probably the most inspiring quote of last year. This is what ethically driven companies and people want to identify with. Business ethics is non-negotiable In business, ethics is about an organisation’s policies and standards, which is established to ensure that everyone complies with specific ethical codes of conduct. This is a moral anchor in the business world where complying with policies or assignments without ever questioning them on an ethical level is a great risk. Ethically-driven companies earn and maintain their clients’ confidence by acting decently and according to their core values every time they have contact with a customer. Ethics builds mutual trust and make business sense. Therefore, it is in the interest of companies to implement processes that ensure compliance with ethical standards. These include: ▪ establishing an independent ethics management structure which oversees the implementation of ethical practices at all levels; ▪ improving transparency and accountability through accounting and auditing practices; ▪ senior management members complying with the company’s ethical standards; ▪ punishing unethical behaviour and creating a system which recognises ethical practices, and; ▪ making ethical values visible in the way the business deals with all its interest groups. Unyielding professional standards Maintaining high professional standards and integrity are golden business rules that are strongly pursued and promoted by Ecsponent Financial Services. That is why the company recently became corporate members of the Financial Planning Institute (FPI) of Southern Africa. The FPI is the leading professional body for financial planners in Southern Africa, offering a code of ethics with rigid guidelines for members to meet continuously. By complying with these guidelines, the FPI ensures that its members are equipped with professional skills and are committed to deliver the best service at all times. The FPI also certifies financial advisors at different levels, of which the Certified Financial Planner (CFP) qualification is highest. The planner is required to complete certain courses, successfully pass exams, endorse the code of conduct and show appropriate years of experience. Ecsponent clients have peace of mind because the FPI standards serve as a benchmark for executing the best financial planning. Professional financial advice is indispensable for long term wealth creation because it ensures: ▪ better prospects for retirement ▪ effective solutions for taxation ▪ long term investment strategy ▪ cost effective products; and ▪ a hedge for investors against poor financial products. Investors’ financial needs change as they move to different life stages and it is only appropriate that a suitable financial plan be drawn up. Corporate FPI membership confirms Ecsponent’s long term commitment to professional standards and is aligned with the group’s growing market share as a significant role player in the investment industry. More on FPI - www.fpi.co.za A new era awaits 2018 looks promising in the face of political changes, which are set to benefit our economy.
Transcript of A new era awaits - Ecsponent Limited€¦ · “thousandaire” and never become a millionaire. A...
ecsponewsInvesting with the times
Newsletter ▪ January 2018
Reform and a fresh approach should make South Africa more attractive to investors, launching a new era of stability in the country.
The local economy will also be backed by strong world economic growth and low interest rates in America, Europe, Japan and China. South Africa will be favoured by the recovery in commodity prices and strong growth in the agricultural sector, owing to abundant production of summer grains, other crops, fruit and a recovery in the livestock industry.
However, the consumer faces a difficult year that will be characterised by higher fuel and electricity prices, as well as higher taxes and interest rates which can rise by 0.75% in 2018. Furthermore, a difficult labour market, additional credit downgrades and low growth rates (the International Monetary Fund forecasts a growth rate of only 0.7% for SA) are also expected.
The replacement of the ANC leadership is expected to be a driving force in the effort to eliminate corruption. If that happens, investments are expected to return to South Africa.
South Africa has long been lacking in ethical and competent leaders to put the economy back on track and create an economically prosperous country that can serve its citizens.
The latest Steinhoff scandal brings home the importance of ethics and is a sounding board for standard business ethics.
The words “our soul is not for sale” by Pravin Gordhan in his media statement at the National Treasury’s headquarters after his dismissal as finance minister, is probably the most inspiring quote of last year. This is what ethically driven companies and people want to identify with.
Business ethics is non-negotiableIn business, ethics is about an organisation’s policies and standards, which is established to ensure that everyone complies with specific ethical codes of conduct.
This is a moral anchor in the business world where complying with policies or assignments without ever questioning them on an ethical level is a great risk.
Ethically-driven companies earn and maintain their clients’ confidence by acting decently and according to their core values every time they have contact with a customer.
Ethics builds mutual trust and make business sense. Therefore, it is in the interest of companies to implement processes that ensure compliance with ethical standards. These include: ▪ establishing an independent ethics management
structure which oversees the implementation of ethical practices at all levels;
▪ improving transparency and accountability through accounting and auditing practices;
▪ senior management members complying with the company’s ethical standards;
▪ punishing unethical behaviour and creating a system which recognises ethical practices, and;
▪ making ethical values visible in the way the business deals with all its interest groups.
Unyielding professional standards Maintaining high professional standards and integrity are golden business rules that are strongly pursued and promoted by Ecsponent Financial Services. That is why the company recently became corporate members of the Financial Planning Institute (FPI) of Southern Africa.
The FPI is the leading professional body for financial planners in Southern Africa, offering a code of ethics with rigid guidelines for members to meet continuously.
By complying with these guidelines, the FPI ensures that its members are equipped with professional skills and are committed to deliver the best service at all times. The FPI also certifies financial advisors at different levels, of which the Certified Financial Planner (CFP) qualification is highest. The planner is required to complete certain courses, successfully pass exams, endorse the code of conduct and show appropriate years of experience.
Ecsponent clients have peace of mind because the FPI standards serve as a benchmark for executing the best financial planning.
Professional financial advice is indispensable for long term wealth creation because it ensures: ▪ better prospects for retirement ▪ effective solutions for taxation ▪ long term investment strategy ▪ cost effective products; and ▪ a hedge for investors against poor financial
products.
Investors’ financial needs change as they move to different life stages and it is only appropriate that a suitable financial plan be drawn up.
Corporate FPI membership confirms Ecsponent’s long term commitment to professional standards and is aligned with the group’s growing market share as a significant role player in the investment industry. More on FPI - www.fpi.co.za
A new era awaits 2018 looks promising in the face of political changes, which are set to benefit our economy.
ecsponent.com
South Africa: [email protected] • 087 8080 100 Fintech Campus, Corner of Botterklapper & Ilanga Streets, The Willows, Pretoria, GautengSwaziland: [email protected] • +268 2417 1616 • 7 The Gables, Ezulwini, SwazilandBotswana: [email protected] • + 267 391 8756 • Sixth Floor, Exponential Building, Plot 54351, New CBD, GaboroneAll content is for information purposes and should not be regarded as investment advice.
Who wants to be a millionaire?How do you become a master of your money and a millionaire within a few years?
Becoming a millionaire through saving and investing is a worthy goal. But is it achievable or unrealistic?
It is most definitely achievable! It’s easier than you think to reconcile yourself with the “six zeros”.
The secret lies in compound growth, which means you invest to achieve returns so that you start receiving growth on your investment returns.
The key to success lies in choosing the right investment instrument and a fixed return. Investment in shares can halve the time it takes to become a millionaire, especially when investing in preference shares that earn a fixed growth.
Fixed returns hedge an investor against volatility that typically occurs in portfolios exposed to ordinary shares such as unit trusts. A poorly performing unit trust portfolio and high costs can mean that you will stay a “thousandaire” and never become a millionaire.
A typical example is a single share like Steinhoff, which recently lost R134 billion in market capitalisation when the share price plummeted by 61% in one day. Excessive exposure to Steinhoff shares could have moved many investors’ targeted millionaire status to the never-never.
Remember Charlie Munger, deputy chairman of Berkshire Hathaway, saying: “Warren, if people were not wrong so often, we would not be so rich.”
Fixed and fair rates therefore make sense. An investment of R10 000 in Class B’s fixed rate of 11.2% per annum or 14% per annum after five years will make you a millionaire after 44 years. However, if you invest R50 000, you will be a millionaire after 29 years, while with R100 000 it will only take 22 years.
How do you become a multimillionaire? If you continue to invest R100 000 for example, it will reach the next million after a further seven years (coming to 29 years in total). Interestingly, the big leap is between 45 and 50 years. After 45 years, your investment value will be approximately R11 858 782 and five years later a staggering R20 159 929. This is where the true effect of compound growth is seen and the significance of long-term investments becomes apparent.
It is possible for a young person with an average salary to be a millionaire before age 30 by saving and investing. Just pay yourself a “salary” every month to cover the necessary expenses and invest the rest smartly. At age 50 you will no longer need to work as long as financial freedom is more important than a flashy car and an expensive lifestyle.
Invest as soon as possible after saving the first R10 000. Do not wait until you have a larger investment amount available. The sooner you invest and receive growth, the better. Remember, many small amounts make up a big investment.
Plan your investmentsUnderstand the power of investment and remember that your investments are your best friend. Successful investors are people with patience and who have a long term horizon.
Professional adviceCreating wealth begins with ideas for creating money and a clear strategy for implementing them. Make use of a good financial planner for guidance and support.
By following a fixed plan that nest egg of a million rand - and even more – is in sight. It puts you on a solid financial footing where money is not your boss because you are in charge of creating a carefree lifestyle for you and your family through thorough planning.
How do you save the first R10 000 or R100 000?
Start earlyGet started immediately - even if it’s only R50 or R500 per month. Make a habit of saving. Time is money and every day or month of delay means you lose thousands of rands.
Set targetsTargets must be in writing, measurable and achievable. Save and invest between 10 - 15% of your income, stay away from credit and live within your means.
Believe in your own successKnow that you will be rich and financially independent. Take the decision and keep to it regardless of what happens. Ditch the dreams and realise them in practice.
Learn how money worksMaster your relationship with money. Respect your money and understand its cost-effectiveness and vulnerability. The path to prosperity only opens if you are willing to change your mind-set.
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