Category: Chartered Blog

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Release what you can’t control

kim-potgieter-blog-imageAs always, it’s a choice

These days, most conversations I’m exposed to revolve around what’s going wrong. Whether I am at an investment feedback event or having a dinner party at home, the chatter eventually spirals down to the negative.

But is it any wonder? We are constantly bombarded by news of volatile investment returns, falling housing prices, unemployment, violence and load-shedding. The recent black-outs reminded us just how fragile we are, and the upcoming elections are clouded with uncertainty. We are literally surrounded by darkness.

So how do we stay optimistic and guard our emotions against the constant influx of bad news? We simply have to find ways to deal with our stress. You are of no use to yourself, or to others, if you allow yourself to become saddened and dispassionate by the events reported on in the media.

Start by analysing what is in your control to change. The truth is that you have no control over many things that happen in life. You also have no control over what stories the media covers, how they are reported and how often they are aired.

This presents you with a choice: do you want to be exposed to negative and bleak news on an hourly or daily basis? Do you want to be discussing the bad news over dinner every night? You can consciously decide what you will expose yourself to every day.

It is impossible to seclude ourselves from what’s going on in the world. A headline or tragic story will certainly catch your eye, but my point is: you and you alone get to decide how much of this you will entertain in your life.

Let go of the things you cannot control, and spend your energy on what you can.

Find a channel to contribute

For me, it starts with the right attitude. Limit your worry time on things you can’t control. Worrying does not change the outcome of events. We often get so stuck replaying negative news and fears over and over in our heads. Acknowledge that these thoughts are not productive and focus more energy on changing behaviour and setting healthy boundaries for yourself.

Be mindful of your health. To be negatively focused on a long-term basis will eventually lead to stress and ultimately impact your health. Instead, direct your energy to feeling good, finding joy and creating precious moments.

I was inspired by a discussion I had with a couple at one of our investment feedback events. Rather than being consumed with all the negativity and bleak news, they decided to engage in a project where they could actually make a real difference. This involves raising money towards building a workshop at their daughter’s special care facility. Their story will be featured in one of our upcoming Inflight publications.

Being positive amidst all the negativity is hard. It’s more than just feeling optimistic and practising positivity with intention. What works for me is doing regular exercises of gratitude. Make a list of everything that you are grateful for. This may just give you the mood boost you need. Another idea is to try starting each new conversation by sharing something that’s positive in your day. That will automatically trigger a more positive response from the person you are chatting to. Cultivating gratitude should always remind us to focus on hope and positivity.

May your gratitude lists overflow with hope this year.

Best wishes,
Kim

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SA and the world: slowing, but growing

SA and the world: slowing, but growing

Recently, I have witnessed my father grappling with illness. He has been in and out of hospital, trying hard to maintain his characteristic strength. 

It has been a unique experience for me to see him dependent on us and on medical staff. To our family, Peter Campbell has always been that man to whom we look for decisive action and a refusal to give up. 

Times of uncertainty tend to highlight our fears, and often prompt personal introspection.  I have been reflecting on my own example set for my children that will help them when they face their own challenges as they grow.

The reality of the South African situation

Uncertainty has certainly been a theme in my past year’s communications.  The passing of the presidential baton to Cyril Ramaphosa, the unearthing of so much dishonesty, the reports of how state-owned enterprises are buckling under the loss of revenue owing to corruption … all of these can leave us wondering where to from here: in the dark (often, literally!).

Another emerging theme, though, in the wake of this year’s SONA and Budget Speech, has been gratitude for the new leadership in contrast to the former Zuma regime – you can read my Budget Speech comment by clicking here

In the words of Investec Asset Management’s Jeremy Gardiner: “One shudders to think how angry and depressed we would have been if we still had Jacob Zuma as President, with the prospect of another five years of the Zuma presidency after elections. We would still have Finance Minister Gigaba running what would be an officially (across all three rating agencies) junk economy and similarly junk currency, probably around R25 to the US dollar.”

Jeremy’s economic update at Chartered earlier this month was entitled: Signs of Spring? (you can read his full article by clicking here). He suggests that many South Africans have reached their ‘capitulation point’ – angry and disillusioned.  Many may feel that they are powerless in the face of rising petrol and electricity prices and further evidence of the crippling of state-owned enterprises. 

The power of perspective

Unsurprisingly, you can find both positive and negative responses to our global and local political and economic context.  Biznews Editor, Alec Hogg, reported on 11 March that “Africa is back in fashion” among global investors, according to the most recent issue of The Economist.  This publication dedicated four pages, including its lead article, to “The New Scramble for Africa”. Hogg himself views the low South African share prices as an opportunity to buy, not despair.

South Africa will lead the pack, says Hogg, “if president Cyril Ramaphosa achieves his objective of making the country the continental gateway”.  Of course, fixing the country remains a priority, especially Eskom, and holding looters to account.

The power of choice

When it comes to that legacy of character I want to leave my children, I turn to the words of Viktor Frankl, Holocaust survivor:  ”When we are no longer able to change a situation, we are challenged to change ourselves.”

In the context of South African – and global – uncertainty, I want to model an attitude that demonstrates the power of personal choice.  We all undoubtedly will find ourselves in circumstances that we cannot control in the course of our lives (illness, the economic and political situation, the markets dipping, corrupt practices), but we still all certainly have the choice regarding how to respond.

In line with this philosophy, I will be casting my vote on 8 May, in the belief that we all have a role to play.  As a Financial Planner, I want my clients to know that there is always more value in having a financial plan than none, especially when there is market uncertainty. 

I am always grateful to clients who express gratitude for and confidence in Chartered and our approach to financial planning. We are committed to seeing each of our clients retiring successfully.

Warm regards,

John

Jeremy Gardiner of Investec Assest Management for Chartered Wealth Solutions

Signs of Spring?

Jeremy Gardiner of Investec Assest Management

A collapsing currency and equity market combined with a rocketing petrol price didn’t help

The point of ‘capitulation’ in economic cycle theory is generally seen as the bottom in any cycle, the point just before ‘things start to improve’. It is unfortunate, and indeed sadly, also generally the point at which most equity investors finally give up and sell, when stocks are at their cheapest, driven entirely by sentiment and emotion rather than investment fundamentals. The investment industry must be one of the few where people are inclined to sell when their asset is cheap, and conversely, when prices rocket, they buy more.

Anecdotally and deviating slightly from economics, the fourth quarter of 2018 for me felt like the point at which South Africans reached their ‘capitulation point’ with our country. Of course, a collapsing currency and equity market combined with a rocketing petrol price didn’t help. The level of political anger and noise seemed unprecedented: everyone was fighting with everyone and with it came a spike in talk about emigration and about having a ‘Plan B’. South Africans are angry, and many seem to have reached the point of ‘giving up’ on Brand SA.

So does that mean then, that things are about to improve?

The point of ‘capitulation’ in economic cycle theory is generally seen as the bottom in any cycle, the point just before ‘things start to improve’. It is unfortunate, and indeed sadly, also generally the point at which most equity investors finally give up and sell, when stocks are at their cheapest, driven entirely by sentiment and emotion rather than investment fundamentals. The investment industry must be one of the few where people are inclined to sell when their asset is cheap, and conversely, when prices rocket, they buy more.

Well, things do feel slightly better this year. It could simply be down to a good holiday and some sunshine. Also, don’t underestimate the impact of rising markets and a strengthening currency in terms of improving the mood. And conversely, don’t underestimate the negative impact of load shedding on ‘darkening’ the mood, so hopefully it doesn’t last.

While one doesn’t want to herald a ‘false dawn’, there are a number of factors that could work in our favour to certainly numb the pain, and perhaps even lighten the mood considerably. Could investors finally be rewarded for the five years of flat returns they’ve had to endure?

First of all, one shudders to think how angry and depressed we would have been if we still had Jacob Zuma as President, with the prospect of another five years of the Zuma presidency coming after elections. We would still have Finance Minister Gigaba running what would be an officially (across all three rating agencies) junk economy and similarly junk currency, probably around R25 to the US dollar

And while the various commissions currently playing themselves out are both fascinating and horrifying at the same time, be very thankful that they’re happening. They certainly wouldn’t be if the Zuma Dynasty were still in control. Hard as they are to watch, as they brutally expose the corruption ‘free for all’ that existed during the Zuma presidency, it is a very necessary process. If we are to right the wrongs of the past, it is important that we know exactly who and when and how everything was done.

Secondly, Donald Trump is in trouble. His government shutdown has – according to polls – plunged his popularity to 34%. He’s got elections in just over 18 months’ time, and stock markets are soggy. He is therefore being much friendlier to the Chinese this year – a reduction of the trade war, and even a discontinuation, would be very positive for emerging markets, including SA.

Don’t underestimate the impact of rising markets and a strengthening currency in terms of improving the mood.

The world is ‘slowing, but still growing’ seems to be the common theme out of Davos this year. The US and China should both remain firm and if the Chinese stimulate more, which they may well, then emerging markets, including SA, will see stronger growth.

‘Slowing, but growing’ means we shouldn’t see unexpected US rate hikes. None are forecast for this year, and some, including previous Fed Chair Janet Yellen, are signalling this may be the peak of the tightening cycle. In addition, a temporary reprieve from balance sheet normalisation should mean the US dollar has probably peaked. That, together with stable US interest rates, are both favourable winds for emerging markets like SA.

Across the pond, Britain will most likely stumble into some sort of deal, and then the world can move on from the noise that is Brexit. While there is an element of schadenfreude in seeing Britain or the US also suffering self-induced pain and political turmoil, we always have to remember that any significant instability in the developed world inevitably sees us (read emerging markets) being punished as well.

So, all of the above, coupled with the fact that emerging market equities, bonds and currencies are reasonably valued, have seen investors starting to shift back towards higher-yielding emerging market assets, including SA.

Some economic tailwinds (as opposed to the headwinds we faced last year), is exactly what Cyril Ramaphosa needs. Add to that a strong mandate from successful elections (and certainly most polls seem to be pointing that way), and 2019 should not only see South Africa lifting from the muddy waters of corruption in which the ‘Zuma lost years’ left us stranded, but investors hopefully finally being rewarded for their patience.

A few photographs of clients attending Jeremy’s presentation:

See more images on our the Retire Successfully Facebook page and remember to join our closed client group.

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The 2019 Budget Speech: planting seeds for a future

John-CambellFinMin Tito Mboweni made his goal for the annual Budget Speech clear by referencing Biblical agricultural imagery.  The message?  To create a prosperous harvest, you must plant anew.  Acknowledging the shortcomings of the past – “despite our best efforts, sometimes, ravages and risks such as pests or rot could attack our green shoots” – the Minister called on South Africans to persevere, reminding them that “we must take the bitter with the sweet. Today, I bring you a seed to prove that if we plant anew, we can return to those plum times.”

Let’s have a look at the detail of what that ‘seed’ is going to mean for us as taxpayers.

Personal income tax

No changes will be made to personal income tax brackets.

Tax thresholds (the amount of income you earn before you need to pay tax) will slightly increase.

  • If you are under 65, and earn up to R79,000 during the tax year, you will not pay any tax on this amount.
  • If between 65 and 75, you will not pay any tax if you earn less than R122, 300.
  • If 75 and older, you will not pay any tax if you earn less than R136,750.

By not adjusting the income tax brackets for inflation, the government will raise R12,8bn.

No adjustments to medical aid tax credits

Medical tax credits have been not been adjusted for inflation, so that means when you pay your income tax, you can still claim R310 (per month) for each of the first two persons covered by the Medical Scheme, and thereafter R209 (per month) for each additional dependent.

Interest exemption

The interest exemption amounts remain the same. If you are under age 65, the annual interest exemption is R23,800, and if you are 65 and older, the exemption is R34,500. So, for example, you have R690,000 in a Money Market fund, earning 5% per annum interest, and you are over 65, you will not have to pay any tax on the R34,500 interest that you earn.

Tax-free savings account contribution

You can still contribute R33,000 per year toward these investments, in which all returns are tax-free.

Dividends Withholding Tax

This remains at 20%.  If you hold shares and a dividend is declared of, for example, R120, R24 will be deducted by the company issuing the dividend, and you will receive an after-tax amount of R96.

Donations Tax

You can donate R100,000 each year to anyone you wish, without attracting Donations Tax.  Amounts in excess of R100,000 attract Donations Tax at a flat rate of 20%.  Donations between spouses are exempt from Donations Tax.

Retirement Fund contribution deductions

There has been no change to the amount that you can claim as a tax deduction towards your retirement funds. The deduction that you can claim is the lower of 27,5% of your taxable income or R350,000 per annum before the inclusion of taxable capital gains.

Capital Gains Tax (CGT)

There has been no change to Capital Gains Tax. Capital gains are triggered by the sale of an asset such as your home or a unit trust.  The maximum effective tax rates are:

  • Individuals and special trusts: 18% (inclusion rate of 40%)
  • Companies: 22.4% (inclusion rate of 80%)
  • Trusts: 36% (inclusion rate of 80%).

The capital gains exemption thresholds remain the same:

  • The annual exclusion stays at R40,000
  • The exclusion amount on death stays at R300,000
  • The primary residence exclusion stays at R2 million.

If, for example, you withdraw R100,000 from your unit trust investment, and you initially invested R20,000, you would have triggered a capital gain of R80,000.  The first R40,000 of this gain is exempt, and thereafter, 40% of the remaining R40,000 is added to your taxable income, and you will have to pay income tax on this.

Estate Duty

Estate Duty remains unchanged.  Duty is levied on the dutiable value of an estate at a rate of 20% on the first R30m and at a rate of 25% above R30m. The Estate Duty abatement (exemption) remains unchanged at R3,5ml for each individual.

Anything left to a surviving spouse does not attract Estate Duty on the death of the first spouse.

Changes to Transfer Duty

There have been no changes to Transfer Duty.

Tobacco, alcohol and fuel

A pack of 20 cigarettes will cost you R1.14 more.  Your can of beer will cost you 12c more, and your can of coke will cost you 0.11 more per gram (sugar tax).  A bottle of wine will cost 22c more, and whiskey is R4.54 more.

General fuel levy increases by 15c per litre and road accident fund levy increases by 5c per litre on 3 April 2019.

A new carbon fuel levy at 9c per litre on petrol and 10c per litre on diesel will be introduced with effect from 5 June 2019.

Conclusion

The burning issue for many South Africans has been, not personal implications, but what stance the government is taking on State-Owned Enterprises such as Eskom, SABC, SAA and Denel.  While R23bn has been set aside per year to support Eskom during its reconfiguration, the FinMin emphasised that the government will not be bailing out these enterprises, but rather curating them more carefully through the appointment of Chief Reorganisation Officers.

Warm regards

Warm regards
John 

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You are your greatest asset

Kim_Potgieter5It’s time to invest in yourself!

The festive season is approaching, and before you start making lists of all the wonderful gifts to buy for the special people in your life, set some time aside to think about your gift to yourself.

Dr. Seuss says it so well: Today you are You. That is truer than true. There is no one alive, that is youer than you!

I want to remind you today how important you are. You bring something completely wonderful to the world, something unique, something only you can bring. Have you ever stopped to think what your special skill or talent is? What is it about you that has shaped your life so far? And will shape your dreams ahead?

We all have a unique contribution to make, the real question is how to get the most value from your special skill or talent.

While we do, of course, encourage investment in various retirement and annuity portfolios, one of the best investments you will ever make is in yourself. And the sooner you do this, the more valuable you as an asset will become.

 

I love this drawing by Carl Richards: it explains that the longer you wait to invest in yourself, the less valuable you as an asset will become. Put simply, with every year that passes, you have less time to earn money.

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Here are my top three considerations to get the most value from yourself:

Invest time and money in your talent

It’s never too late to learn. If you are still in the Wealth Creation phase of your journey, it may be the perfect time to up-skill or even learn a new skill that could benefit you when you retire. Think about how your talent could add value to your life and consider new skills or qualifications that could support you.

I have some wonderful examples that Retiremeant™ clients have shared with me: learning social media skills to promote a new business venture; a bookkeeping course to support a hobby turned into a new career; or a coaching qualification to enhance consulting skills as a mentor coach.

  1. Make your money work for you

You have spent your whole life earning, and possibly still are. Now it’s time that your money works for you. It’s a good idea to keep investing and earning interest, or to use your assets to earn an income – perhaps renting out an extra property or flat on your property. This way your money grows while you are sleeping.

  1. Earn for as long as possible

Consider a parallel life as you near retirement age. Start thinking, and planning, how you can continue earning (even if it’s less than you’re used to) while doing something you love! Many Retiremeant™ clients have started new business ventures in retirement: cake decorating, knitting, building classic cars and even coaching cyclists.

I hope that the next time you look in the mirror, you see yourself through new eyes and remember: You are your greatest asset!

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2018: a good year that changed gear

2018: a good year that changed gear

John_Campbell_BlogLast week, I reviewed my first newsletter of 2018: Zuma out, Ramaphosa to be inaugurated, the rand strengthening 11.65 to the dollar (the best in four years) and our stock market at an all-time high. Sentiment was positive, and it looked like 2018 was going to be a good year.

Now, looking back, we wonder what went wrong …. Clearly, the rot caused by the Zuma era runs deeper than we imagined. Our economic challenges were already set to make a 2018 a tough year, but our local corporate issues have magnified the negative impact on our markets: Steinhoff’s share down more than 90%; Tiger Brands’ Listeriosis crisis; irregularities at Resilient and NEPI with a huge share price drop and impact on the Property Index; debt and sale of a division of Aspen Pharmaceuticals; MTN’s Nigeria woes;
and, more recently, the drop in Naspers share price on the JSE, amounting to 6% of the 10% loss we have suffered to date. (Naspers is the largest share on the JSE and it has lost
23% this year.)

Fortunately, our commodities have softened this blow, without which we would be close to 15% down for the year. The Global markets and South Africa have enjoyed the longest run of positive returns in the history of share markets, so a correction was expected – though it is never well received and timing is uncertain.

Where Financial Planning fits in
I attended the annual Financial Planning Association Convention in Chicago, the largest gathering of Financial Planners from around the globe with 35 countries represented … and one South African delegate! It’s my fourth global conference in a decade, and I apply the insights, practical strategies and knowledge in our business.  I noted a digital billboard stating that 837 lives had been
lost in road carnage since 2011, as a warning to drive carefully. I arrived at the Hyatt to find a large group of employees striking, playing drums and making a racket (we are definitely more vibrant!). I was reminded that every nation has its problems – often we think we have it much harder in South Africa. To top it, my hotel room faced a Trump hotel, so I was greeted by the word TRUMP in massive lights as I opened my morning curtains.

I thoroughly enjoyed the conference, listening to the most incredible speakers, many of whom are very highly qualified specialists in their fields – I met my first Doctor of Financial Planning! I learned from the Global Head of HSBC that their planners write over a million plans a year.

The Americans have the most interesting organisations; I met the founder of the Financial Psychology Institute, a researcher from the Stanford Centre of Longevity, and so it went. My takeaways are that our business, strategy and planning techniques are right up there with global standards and we shall continue to ensure that our Retiremeant™ Specialists and our business exceed this benchmark.

At Chartered House
I am excited to say that, on 1 November, Chartered Invest went live. This is a business we have formed to implement and consolidate your investments. For years, we struggled with clients having investments spread across various businesses like Old Mutual and Investec, with perhaps a few unit trusts at Allan Gray and Coronation. Every month they would receive from each business a different statement, difficult to read and understand.

We can now accommodate all your investments on one platform and give you one statement reflecting everything you have. This not only simplifies your life and removes clutter and confusion, but also allows us to access all your information on our system – no more dealings with numerous inefficient call centres.

So, you can receive one statement with your Living Annuity invested through Old Mutual and your tailored portfolio invested with PMX – all on one report. You will learn more about this in your next review meeting.

Warm regards,
John Campbell

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Caring for clients finds new expression at Chartered

I recently attended my 30-year high school reunion – what a bittersweet occasion.

I enjoyed reconnecting with former friends, reliving some fond memories and valiantly joking about those I would rather forget. What I did note is that time stands still for no-one, and the passing of time is evident in our hairlines (mine silvering, others gone!) and faces.

What has not disappeared is the very real sense of camaraderie that humans somehow create and sustain when they care about each other.

It put me in mind of the changes that are happening at Chartered Wealth Solutions … and the carefully considered rationale behind them. As always, our relationship with our clients is at the centre of them.

Here is a brief summary of developments that you, our clients, will be seeing:

New reporting

If you have been a recipient of the weekly Interest statement from us, you can expect to see a new and improved version, entitled Navigating the Tides, from 1 July. Our goal with this updated format is to ensure that you are informed regarding weekly market highlights, especially as they influence your investments.

“This new format is much more reader-friendly.”

For those who have previously unsubscribed from this communique (possibly because the method of reporting was too convoluted), we have resubscribed you in the belief that you will find this new format much more reader-friendly. Should you not wish to receive this communique, you are welcome to unsubscribe by clicking on the ‘Unsubscribe’ button.

In addition, we are developing a consolidated reporting statement on your investments – with the same rationale: to make potentially complex information much more accessible; this will comprise quarterly statements. You will be updated about this in time, but, you may chat with your RetiremeantTM Specialist in the interim, should you have any queries.

In-house suite of services

Many of our clients have engaged the services of our legal team over the years, in meeting their Wills and Trusts needs, and in resolving any Estate issues. Our Legacy and Trust team has grown and continues to give our clients excellent service.

In the latter half of last year, we welcomed Charmaine Prout and her team as Chartered Tax. As those clients who have worked with them can attest, they certainly go the extra mile … but you can read about them yourselves in the interview with Charmaine in this newsletter.

I have mentioned Chartered Invest in a former communique, and will continue to keep you updated on this part of our offering in the course of the year.

Finally …

In keeping with our mandate to help clients retire successfully, this issue of The Beacon includes a client story of Alex Isaakides, who, recently retired, has found meaning in a whole new area of interest. You can also read about our most recent client functions around the country.

Warm regards
John

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Rising Strong

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Living a brave life is not easy. It is impossible to be perfect; life itself is not perfect. Brené Brown’s book Rising Strong has inspired me in so many ways to keep trying, to give ‘living’ a chance, despite the inevitable challenges and setbacks that life brings.

My journey to rising strong has not been a once-off event – learning and growing is a process. Brené’s book is a very personal and practical guide to embracing fear and failure and living a more courageous life. It often gives me courage when I find myself at a crossroad.

Those curve-balls life sends us

If we truly want to live and embrace life in its entirety, we have to be prepared for the eventuality that everything does not always work out exactly as planned. Setbacks are inevitable, and at times, we all get stuck in a place of fear, self-doubt and regret. It may just seem easier to accept defeat and retreat into a space that feels safe and secure … but Brené’s message is one of hope, of perseverance and strength.

It is in the acceptance of our vulnerability that we recognize that we are not powerless. In the space of vulnerability, we Brené Brown quote – Rise up with renewed power and strength to rewrite your future have time to accept our setbacks, time to reflect on our experiences, embrace them and practice the art of gratitude for the opportunity to learn from them. This gives us the power to rise up with renewed hope and strength to rewrite our future.

This was so true for me when I entered the financial planning industry. I have always believed that you cannot separate people from money and that a financial plan should support a person’s unique and personal life plan. With this perspective, I brought a new conversation to the traditional financial planning industry which predominantly only focused on investment returns. I knew intuitively that conversations about the client, the life the client wants to live and what their relationship with money is, were equally important.

When swimming upstream, remember your purpose

Re-thinking and challenging the way that financial planning has been done for decades, brought its fair share of criticism. I was constantly questioned by planners in the industry who referred to life planning as the “softer” issues and felt that these did not belong in the world of finances and investment strategies. I had moments of self-doubt and uncertainty and had to remind myself every day to persevere, to stay true to my beliefs and to keep on swimming – even though I was swimming upstream!

What made my journey worth it, and motivated me to keep on following my purpose, were the clients. Every time I had a courageous conversation with a client and saw how they embraced the fact that money can indeed enable a life of meaning, I felt inspired. And watching how clients design their RetiremeantTM as a fulfilling and meaningful next chapter, encourages me to keep rising strong.

I came to coin the concept, RetiremeantTM and define it as having the freedom to achieve your yet unfulfilled dreams and goals, on your terms and in your own time. Despite the challenges along the way, I am truly grateful that in my small way, I have made an impact on people’s lives. I am constantly moved by the stories clients share in Life Planning meetings and have come to realise that our combined knowledge and experiences are powerful stories and lessons that need to be told. This inspired me to start writing a second book, with our relationship with money as its central theme. I am also busy writing a series of e-books, a compilation of stories and lessons that our clients share around unexpected life events in – the RetiremeantTM What If’s.

We find strength together

This newsletter contains snippets of client stories and learnings shared in their journeys to rising strong – more of those in my upcoming e-books! Kate Turkington recently visited us at a Chartered Wealth Solutions and gave an insightful talk on her life in Retiremeant™. For me personally, Kate is a role-model on living Retiremeant™ to the fullest and I hope that you find appreciation and inspiration in her story. If you do have any spare time this weekend, I recommend that you see Brené Brown quote – we don’t have to do all of it alone.“Finding your Feet” which is showing in cinemas now.

By sharing these stories, my wish is that you find comfort in the fact that you are not alone. Just maybe, one of these stories will touch you in some way, inspire you to live a brave life, through all your stumbles and falls, and give you the strength to rise bravely and strong.

Certified-Financial-Planner-Kim-Potgieter-Money-lessons-to-share-with-you-children

We teach what we learn – unintentionally

We have a wonderful opportunity to teach our children responsible and healthy money lessons.

Imagine the possibilities for your children if they grow up with a healthy relationship with money – one where they don’t measure their self-worth by how much money they have … or don’t have. Over the years, many clients have expressed to me their various regrets and happiness around unhealthy and healthy money lessons they had learnt from their parents, and in turn, taught their children.

Some are proud of, and others regret the money messages shared.

As parents, it is our duty to teach our children right from wrong, but at the same time, be aware of not teaching them to be just like us. I am sure many parents have deliberated on messages and behaviours they would like to pass on to their children. And I guarantee you that no parent wants consciously to teach their children bad behaviour and unhealthy habits. or to pass on low self-esteem.

If you had to ask most parents what their number one wish for their children is, the answer will most probably be “happiness.” So how do we teach our children and perhaps grandchildren about money to inspire happy lives?

You can teach your children unintentionally or intentionally. Most communication to our children is probably unintentional. Children learn from what they hear, see and experience while growing up, and if your relationship with money is based on fear, loss and anxiety, then this is the message that you are unintentionally passing on. And in all probability, these were the messages passed on to you by your parents.

Would it surprise you to hear that recent research tells us that children’s money habits are formed by age seven? And that, as adults, we operate on a subconscious level 95% of the time? This means that our conscious mind is really only working 5% of the time while our subconscious mind runs the show most of the time!

Intentional teaching is sharing thoughtful money messages. We as parents can only teach thoughtful messages if we are aware of our own money story, understand our relationship with money and have the wisdom to change the behaviours that don’t serve us, and keep the ones that enable our lives in a positive way.

Real-life examples

I recently participated in a Life Planning meeting with a father and son. The father reflected on the The first step in teaching your kids how to handle money is to be a good example.money messages he heard while growing up. His father taught him to work hard for his money, and with hard work, comes reward. You may consider this to be a positive money message, but reflect for a moment if the message would have been more powerful if it had been about “earning money by adding value”? This father, now 70 years old, is still working hard for his money. He fears that if he is not working hard, he is not adding value and therefore not deserving of earning.

The father unintentionally passed this same message on to his son. He also works incredibly hard but expresses the wish to be able work “cleverly,” so that he can shape a more balanced life for himself. Father and son wholeheartedly agreed that this is a cycle they would like to break. They don’t mind working hard, but recognise the need for balance: more time to laugh, relax and just living the life they were meant to live. I am sure that the constraining message will not be passed on to future generations in this family.

Ingrid is a client who reflects on a very positive and empowering money story passed on to her by her father. Her father empowered his girls to be independent; he supported and sponsored their tertiary education at a time when most women were not encouraged to study. He instilled a belief in them that anything is possible. This belief Ingrid’s father had in her capability and ability to succeed served her well. Because of this, Ingrid has had the courage and determination to follow her true purpose in life – and make a success of it!

It astonishes me how powerful father and son relationships can be. In honour of Father’s Day this month, I would like to share one more father and son story that has inspired me as a mother of two boys. The son shared with me that his father always asked, “How much pocket money do you feel you deserve for the time it took to do your chores?” This money message has had a wonderful positive impact on the son’s life.

Today, he sees earning money as an exchange for time. His most precious commodity in life is “time”. He will therefore always compare the value of his time versus the money that he is earning for his time. He is now planning to retire early from his formal career and re-invent his work so that he and his wife have more time to explore some of their unfulfilled dreams.

My parting thought on learning and teaching is a money message about saving and investing – the value of compound interest. This could be a fun activity to do with your grandchildren. My advice is not to just establish a savings or investment account for them, but rather to involve them in the process, engage with them on how it works – in this way you are helping them to take ownership from a young age.

Wishing you many happy – and intentional – courageous currency conversations in your family!

When-markets-cause-concern-John-Campbell-of-Chartered-Wealth-Solutions-retirement-planners

When the markets cause concern, consider context

When the markets cause concern, consider context

What is your burning question? If you were seated, face-to-face with your financial planner right now, what would be that top-of-mind concern that you would raise?

I got a sense of the answer at the most recent Retiremeant™ workshop, our third in Johannesburg, when I asked the audience, comprising clients and their guests, “What would you most like me to share with in the time we have together?” The unanimous response was: the flat market conditions.

It is the same question that has been emerging in our client review meetings, where the reporting cycle preceding it has reflected flat returns.

I thought, in light of this understandable sense of disquiet, that I might share some points to lend perspective.

The relevant reporting period
The reporting period is the period over which you measure your returns. For most people, it is the day on which you invest your money until the end of the most recent month.

I found the following stats quite interesting:

* If we go back three years from December 2017, we see that the JSE yielded an 18.5% return

* Three years from 31 march 2018, and the JSE only gave you a 6% return (this is why the last quarterlies statements looked so poor)

* Go back three years from the 31 May 2018, and we have a return of 10%.

So as you can see there is quite a difference in returns across these three periods which are within six months of each other.

The same applies to the currency, US$ to the rand. Looking at the three periods in rands, you either gained 7%, lost 2% or gained 4.3%. This variance can be quite significant. This is why the recommended term for investing in equities is seven years plus: over the short to medium term, returns are highly volatile. We are gratified by the fact that we have had no negative years since 2008, the longest period in history without any negative years. If we look at the five-year and seven-year performance, we are comfortable. It’s through these inconsistent returns that we must sit tight.

A local and global trend

Blaming the asset manager might be a valid response, were the markets going up and your investments were not. In reality, it’s the investment markets as a whole that have really struggled this year, both locally and globally, so it’s not fair to blame the asset manager.

Our JSE is down 6% this year and most of the global indicies are in the same space. Both PMX and OM Multi managers are doing the best they can, ensuring you have a well-balanced portfolio spread across various asset classes, and also across a number of world-leading asset managers.

We will share updates with you in your review meeting: information relating to market performance; we aim to give you a greater understanding of the current investment climate. It’s useful to remind ourselves that last year was probably the toughest year for South Africa in the post apartheid era: sentiment was at an all-time low, yet our JSE still delivered a 21% return.

Change in Chartered’s reporting to clients

At Chartered, we have been working on creating a reporting communique that is comprehensive and easy-to-read. We are happy to announce that, from the beginning of July, you, our clients, will no longer receive the communique entitled Interest. Rather, you will receive Navigating the Tides which is your new weekly economic market update. If you have unsubscribed before, you will find we have re-subscribed you, giving you the option to consider this new format. If you don’t receive it, please check your junk mail or spam folder – your server may be filtering it out.

As always, Chartered Wealth Solutions is hard at work to continue improving on the service we offer our clients, and to keep our relationship based on trust and reliability. I appreciate discussions with our clients, be it face-to-face at events or via email, so feel free to continue to communicate with me.

Warm regards

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