Nine important elements every woman must include in her savings and investment strategy
1. Always use your own bank accounts when saving and investing
Now you might think that I am a little crazy with this tip. But according to Statistics SA, a large number of South African women still don’t have their own banking and savings account. They leave their cash in the accounts of husbands and male family members.
I can’t stress enough how important it is to have a separate bank account for day-to-day living, saving and investing. It doesn’t matter if the man is the sole bread winner or the head of the family. Separate bank accounts are an essential part of your future financial planning.
If your husband dies unexpectedly, or you decide to get divorced, you will need a separate bank account to collect life insurance payments or divorce settlements.
While a separate bank account is important, a separate savings and investment account is essential too. Nobody else in your family should have access to these accounts. A separate saving and investment account is the first step t become truy financially stable. You don’t need to ask permission t access your money you can save and invest for you personal goals and you don’t have to ask a man for money.
2. Learn everything you can about saving and investing your money
As a single woman, you need to give yourself the best chance at financial success by educating yourself on the savings and investing environment. You don’t need a financial degree to become rich because there are many financial resources available in the market that you can access free.
Start educating yourself by reading financial newspapers, magazines and publications. A quick online search can help you find savings and investment options that best meets your personal financial needs.
Sign up to daily investment e-letters like MoneyMorning
where you get daily updates on the latest investment and wealth building trends explained in simple English and no investment jargon.
3. Don’t be afraid to ask for investment advice
A recent survey by VISA shows that only 27% of South African women have looked for expert investment advice. That’s a scary statistic to stomach. What’s even more concerning is 35% of women looked for investment advice from their husbands and partners – 22% looked to their families for financial advice.
If this sounds like something you’ve been considering – STOP!
Once you have a basic understanding of the investment markets, you need to find an independent financial advisor you can trust. Make sure that the financial adviser is qualified and registered with the Financial Services Board (FSB). These trained professionals can help you invest your money so that you can achieve the financial goals you’ve set for yourself.
Speak to the advisor about your personal goals, tell them what is important to you and together you can plot an investment journey that will help you to achieve your personal goals.
Your family members, husbands and partners are not financial planning or investment experts. While their intentions might be good, they are certainly not qualified to help you invest for maximum success.
4. Don’t wait for marriage – Start investing your money as soon as possible
A concerning amount of South African women don’t save any money until they get married. This is serious problem. As soon as you start earning an income, you need to start saving at least 10 to 15% of your income.
The earlier you start investing, the more time you have to grow a big enough lump sum of cash to start investing on the Johannesburg Stock Exchange (JSE). You should also make sure that you structure your savings and investing exploits on a long-term horizon.
Another reason that you want to start saving and investing as early as possible is retirement! The average retirement age for a man is 65. For a woman, the average retirement age is 60. That means that you have five years less than a man to prepare for your retirement.
You have no time to lose... start saving and investing today.
5. Don’t invest all your money in property – Diversification is key to investment success
The VISA survey also revealed that 54% of women believe that property investing is the safest investment choice. Investing in property is an excellent way to grow your money, it’s important that you diversify your investments.
When you invest your money your goal is to increase your investment returns. If you decide to put all your eggs in one investment basket and that basket falls, you’ll lose most of your investment capital.
The best way to protect yourself from this happening, is to expose your investment capital to a variety of instruments, industries and market sectors. This means that when your investment returns in one sector of the market is low, you’ll earn better investment returns to offset your losses in other areas.
Important Note: Buying a house is not really an investment. Your home’s primary purpose is not to make you rich but to gives you somewhere to live. It’s a basic necessity. Investing isn’t.
When you have the ability to control the timing of buying, holding and selling an asset to maximise your investment returns, then you’re investing. Think about investing in stocks. You buy these stocks according to your investment strategy, hold them until the value increases and then sell them to maximise your investment returns.
6. Include children in your investment planning – Even if you don’t have any
As a woman you have a gift that men will simply never have – The ability to have children. Even if you don’t plan to have children in future, it is important to include children in your investment planning. There’s an important reason for this...
According to research by Statistics South Africa, 64% of mothers that gave birth last year had no information on the fathers. More than 50% of the women that gave birth were single. This means that there’s a very real chance that these mothers will have to raise their children by themselves, carrying the full financial burden.
While you are probably thinking, “this will ever happen to me.” You can’t discount the fact that having children is a very real possibility in your saving and investment journey. If you’re prepared financially for the possibility of having a child, this will reduce the financial stress of raising a child alone.
Raising children is not cheap. When you consider that it costs the average parent around R50,000 a year to pay for their children’s food, education, entertainment and medical bills, the importance of saving becomes clear.
Remember, children can come into your life unexpectedly too. One of the ways this could happen is if your siblings die unexpectedly and leave their children in your care. This is a common occurrence in South Africa and around the world. So, make sure you’re financially prepared for this happening to you.
Even if you never have a child, the money that you’ve put aside still belongs to you and could be used for other emergencies. So you’re in a win-win financial situation.
7. Include your parents in your long-term investment plan
You are the sandwich generation. That means bt the time your parents retire, they will not have enough money to look after themselves, you’ll have to step in and assist financially. Youre part of the sandwich generation, because while you’re supporting your parents, you’re also supporting your children at the same time.
If you don’t plan for this in your aving and investment journey, you’ll be trapped like a piece of cheese slowly melting between two pieces of hot toast. The financial demands of caring for your children and your parents is concerning. If you start saving and investing with this in mind now, by the time your parents retire and you have children, you will be in a financial position to support them.
8. Invest for divorce – there’s a 50% chance your marriage will fail
I don’t want to sound like the harbinger of doom, but 50% of all marriages in the country fail. Given this statistic, as a woman it is important to be able to protect yourself financially if your marriage ends in divorce.
Even if you have a happy marriage, there are other factors that could result in you being alone managing a household. If your husband dies unexpectedly, or is permanently disabled due to an accident, you will need this extra money to pay for lawyers, cover rent or even general living expenses, while his estate is being sorted out.
On a lighter note, a separate savings and investment account in your name will also allow you to become more financially stable. You can save for the things you want to buy for yourself when you need it. You won’t need to rely on a man to fund your lifestyle and most importantly, if your relationship with a potential partner fails, you’ll have money that belongs to you and you alone.
9. Accept the power to control your investment future
When you decide to take control of your own financial situation, you might find people trying to dissuade you from taking your financial future into your own hands. Why wouldn’t they, historically, men managed money, women were made to cook and clean.
Don’t allow yourself to be discouraged. Accept the fact that the money you earn, save and invest is yours to do with like you please. Accept your role as a financially powerful woman that plays a pivotal role in the financial health of your household.
Don’t be swayed by naysayers. As a woman, you are powerful, influential and smart. So accept your financial responsibility, encourage others in your community to take control of their lives and lead by example.
I want to help you kick-start your journey to financial freedom
If you believe that you have what it takes to become the financial head of your household, then i want you to join me on 27 August 2016. I want to give you all the tips, tools and tricks you need to create multiple streams of income from home and show you the best way to start investing that money on the stock market.
I’ll personally walk you through my favourite home business income generators.
After I show you what it takes to become a master of your own home business, I'll spend the rest of the morning showing you how to go from 'well off' to wealthy investing your “Home Business Income” to build a lifetime of wealth...
Here's a quick preview of what you can expect...
Part One: Get what it takes to become a home business tycoon
Six Principles to Build a Home Business Empire
Why now’s the best time to start your home business empire
How a home business can help fund your retirement
How much income should your property generate?
Part Two: Kick start your home business empire with these proven home business income generators
The best low cost/high profit business I’ve ever seen
How one man is making R57,600 extra a year from parking space
Renting your space for storage – Unlimited income potential
Your blueprint to BIG biltong profits (My all time favourite income generator)
Part Three: How to invest your “Everlasting Income” to build a lifetime of wealth
What to do with your cash once it starts pouring in
Five ways to re-invest your money into your property to increase its value
Three of my favourite ETFs that you can start investing today
How to invest in these ETFs through a tax savings account – Tax Free
As an added bonus I’ll also show you how investing your cash in the Real Wealth
portfolio can reap exceptional rewards.
Al you need to do to reserve your seat is click here.
Let’s build your wealth together,
Contributing Editor, Real Wealth