Generic selectors
Exact matches only
Search in title
Search in content
Search Posts
Search in pages
Search Products
Filter by Categories
B-BBEE
Blog
Company Secretarial
Featured
General Business
General Interest
Investing in Property
Marketing
Personal Growth
Personal Wealth
Tax
Trusts and Estate Planning

I had a 4 1/2 hour meeting with a guy who had about R50m investments and was worried that taxes on death would wipe out the investment income that he hoped would support his wife and daughters upon his death. He had received all sorts of investment advice and simply couldn’t get his head around it until he found us through an internet search. What he didn’t realise was that he did not have any investments! As part of this wealth management exercise, the first thing we had to do was list his assets : A residence that a daughter…

Read More

“I’ve made millions on my BitCoin investment!” “Really? Have you sold yet?” In the lead up to 1929, property prices in the States were skyrocketing. It didn’t matter what you bought, you could sell it next week and make a killing. Swamp land in Florida was changing hands at huge profits. Then Bam! The bottom fell out of the market. Wall Street crashed. “Investors” lost fortunes overnight. Here’s the graph –   In the lead up to 2000, so called dot com shares were skyrocketing.   It didn’t matter what you bought, you could sell it next week and…

Read More

There are three things in life that are certain – death, taxes and uncertainty! I spend lots of time advising about the first two, but what can we do about the uncertainty? I’ll frequently find myself in a meeting with a youngish entrepreneur, say 28 years old. We’ll be setting up a trust, planning his or her investment strategy, avoiding taxes on death, protecting assets against creditors and generally trying to avoid making the numerous mistakes that I’ve made in my life. Actually, planning…

Read More

How do you figure out how long it will take for the Rand to halve in value at a particular inflation rate? Use the Rule of 72! This remarkable “Rule” is very accurate, but is not mathematically exact. Let’s say that you expect inflation to average 7%. You have R1m under the mattress. How long before it is only worth R500K in buying power? You divide the number 72 by the inflation rate 72/7 = 10 years. Isn’t that clever? Say you expect inflation to average 9%, then your R1m will be worth only R500K in 72/9 = 8 years…

Read More

Did you hear that heartrending advert on the radio? It was a recently retired couple who finally found a bank that cares for them. Now they can take that dream cruise that they’ve talked about for years and they can retire comfortably knowing that their capital is guaranteed safe. Why? Because the bank guarantees them a whopping 7 1/4% return. Now, if real inflation was 6% (wishthink) that would mean that they have 1 1/4% available to spend, so if they want to retire on, say, R60 000 before tax (and the way they are talking about cruises etc. they…

Read More

So you are getting married. Congratulations! What are the essential things you need to know relating to tax, estate planning and asset protection? The first thing to consider is the nature of your marriage. There are a number of options – 1) A traditional marriage. In law this is a marriage in community of property. 2) Community of Property. The effect of this marriage is that the two separate estates (wealth) merge into one which is the shared property of both parties. On dissolution of the marriage, the two parties have equal claim to their joint estate and have to…

Read More

How can you plan to retire one day if you don’t know how much income you’ll need? You need to write a retirement budget. It’s actually pretty straightforward, but, in my view absolutely essential, unless you’re another Donald Trump with a few billion US$ to play with. Here’s how you get started. Ignoring inflation, picture yourself ready to retire. You have no debts and the kids are off your hands and supporting themselves. So all you need is enough after tax income to support your lifestyle and replace things like computers, motor cars and washing machines as and when they…

Read More

Why plan to live forever? We’re all going to die sometime surely? Well, yes, but when? That’s the million dollar question isn’t it? Could be tomorrow, could be when you’re 110! By the way the oldest living people ever all seem to have finally called it a day between about 113 and 117 years old, seems like that really is the limit, although one dear old duck in France made it to 122 (source: Wikipedia). The women seem to beat the men by about 2 years. Don’t Google “Images”, they will…

Read More

For most people, it doesn’t matter what they earn, they will always be short. Why is this? Why do so many of us go through life always worrying about money? One of the causes is what is called “standard of living”. All that means is that when you earn more you choose to spend more. Another is that the more we earn, the more we commit to spend and this is the kicker. If there was no commitment (to pay the bond, the rent, the car instalments, the private school fees), then if we found ourselves a bit short one…

Read More

This was part of the headline on the news after the last meeting of the reserve bank. The rest was “Bad news for pensioners” Now why would holding the Repo Rate steady be bad news for pensioners? It can only be because they fell into the grips of a financial advisor who sold them product which produces passive income based largely on interest. A bank, for instance. Do you hear those bank adverts? “My baby”, “Watch your money grow”, rubbish like that? If a bank pays you 6 1/2% interest (and most of them don’t), then they are offering you…

Read More

I explained in an earlier blog that we need to plan to live forever, because we don’t know when we are going to die. So what can go wrong? Quite simply, no investment is 100% secure, there is always an element of risk. It is a well known fact that the higher the return, the higher the risk, but even investing in a bank isn’t guaranteed to be safe (check what happened in the USA recently). You won’t remember the great depression which was triggered by the Wall Street crash of 1929 (I wasn’t around either).

Read More

Let’s stand back a bit and take a look at your life from a financial big picture point of view. I’ve already mentioned active and passive income. Active income is the stuff you have to work for (you know – eat, to live, to work, to sleep, to eat ……..). What should your active income be used for? Three things – to pay your way (food, kids’ schooling, the rent, …..) to enjoy yourself (movies, holidays, sport, ……..) to build your passive income! Why do we need passive income? (that’s the stuff we don’t have to work for, it just…

Read More

Intestate Succession If you die intestate (without having written  a Will), your estate will be distributed “per stirpes”. This means that your spouse and children get one equal share each with an additional share to your spouse. In the absence of spouse and children, there are per stirpes formulae that will eventually find beneficiaries amoungst your siblings, parents, grandparents, grand children etc. Your minor children’s shares will go into the Guardian’s Fund to be administered for their benefit by the Master of the High Court. Wills You can get a will from your bank at no or very little charge.

Read More