In this blog I discuss a few pointers for my clients and those on this mailing list to take note of.
The Economic Yield - Yield Curves
When it comes to yields & interest
rates, we are getting used to low, or even negative returns in developed
economies. As this ‘cheap’ money continues to prop up our worlds economy one
has to wonder when it all has to come to an end? Has it become a ‘too big to
fail thing’ for our entire global financial system?
Here is an excellent 3D graph that shows
you what rates are like for the three largest global economies :
http://www.nytimes.com/interactive/2015/03/19/upshot/3d-yield-curve-economic-growth.html?smid=tw-share&_r=1&abt=0002&abg=1
Source - Cannon Asset Managers 'Making Cents'
Retirement planning:
We must be very aware of retirement planning as most of us
are not investing enough for this eventuality. It has been proven often enough
that your Company’s retirement fund will be insufficient and we must look to
supplement this with other plans and income generating assets.
Infographic on retirement: http://investor.moneyweb.co.za/2015/04/30/how-to-retire-with-more-money/
Although this is USD based & from an Irish company, it
shows how retirement is a worldwide concern. Longevity risk is compounded by
our better health older in life. I read an article in Time magazine that
purports to show that there are children alive today (like my 2 year old
daughter) that may be able to live to 140 years of age. Scary thought
considering our current (average) retirement age is 65. She would have to
provide for another 75 years thereafter. Over double her actual working life
and completely unsustainable on current retirement funding patterns. She will
probably work till much later in life and on a rough calculation it would be
approximately 90 years of age. That is another 25 years (from 65) which will be
a significant change to current outlooks.
I have also attached a nice tool for you all to use to
calculate your ability to retire. Once opened please enable it as well as hit
continue if it provides an error regarding to links. This is a simple
calculation but it is a good place to start. There is lots to consider in
financial planning so I would encourage everyone to consult an advisor. These tools
are handy but they don’t provide a full insight into what your retirement
planning entails.
Gap cover for medical aids – Specialist referral fees:
We have been informed of a trend that some specialists are
now asking for up-front payments from patients, before operations are
performed. They then usually submit a lower fee through to the medical scheme.
This puts you the patient at risk as gap cover will NOT cover this up front
pre-payment/deposit, so please be aware of this before you find out the hard
way. If this is requested, say no, and explain that you have gap cover to cover
any shortfall.
I still recommend that everyone with a medical aid adds Gap
cover to their insurance tools. This is an invaluable product if you want
complete freedom of choice when it comes to providers. It also provides comfort
that if there is ever a time when choice is not an option you can just go ahead
and get treatment from a provider without worrying about what your medical aid
covers.
Short-term cover:
Please always update your Short-term policies. Too often we
don’t update values of our goods insured. This is dangerous as exchange rates,
precious metal prices and other external factors can have large impact on
prices of goods. This may mean that when you claim for a replacement product
your insurance won’t pay out what is required and you may be out-of-pocket if
you need to replace with the same item (especially true for IT equipment,
phones and jewellery).
