Category: Chartered Wealth Creation

It’s time to change your career

But can your budget bear the break?

Craig_TurtonWhenToJump The tagline of Mike Lewis’s book, When to Jump, is: “If the job you have isn’t the life you want”. Perhaps you have loved your job, but recognise it is time to ‘jump’ into a more challenging space. Maybe you want more life balance, with work currently too demanding. Or you are keen to find fresh career purpose, or to start your own enterprise.

Whether you have been working for one year or thirty, a career change has implications for your finances. How will it impact your cash flow and savings? Your family’s lifestyle? Will it be a temporary pay gap or permanent drop in salary? Lewis encourages readers to “Make a Plan”, and your Wealth Creation Specialist would certainly agree. So, if you want a career transition, here are four ways to plan for your money shift:

1. Check and challenge your budget
If you know that you will be living on less income for a time, or even permanently, give your estimated salary a test run. Live on that new amount for a few months – and get a picture of your new lifestyle … then decide if the professional change warrants the personal one!

Make sure your current budget is thorough: how is your salary being divided? Where are you spending?
Consider where you could shave your expenses. A similar income may require you to compromise only a little: do without Dstv, cut back on eating out, or join a carpool (given the price of petrol!). If you are facing a more substantial drop in income, try exploring more severe measures: delay expanding your family, change annual holiday plans, cut bond repayments by downsizing, or opt for more reasonable school fees.

Unwise trade-offs, such as cancelling your car insurance or life cover, can leave you or your family in debt. Before you shift, decide what level of income would just
be too low for you to manage – even with budget cuts. How much uncertainty would simply result in too many sleepless nights? What sacrifices would make your lives too colourless?

2. That rainy day fund
Making provision for unforeseen events or for an extended period of no or little income, can alleviate some of your anxiety. Financial Planners generally recommend
saving at least three months’ salary or expenses (six months is better!).

Save any discretionary money available from your budget cuts. Save your bonus, or your SARS refund. Declutter and cultivate an approach to life that savours  implicity rather than consumerism. Consider the WHY in all your changes – living truer to your values in your career – with personal benefits.

3. Plan B
Transitions are a great time to give yourself permission for some out-of-the box thinking. Allow your creativity to flow and give thought to what other options exist
for you to create meaningful work. Don’t neglect your physical exercise at this time in order to give your right brain capacity to express itself. And don’t forget the value of tapping into the wisdom, expertise and experience of your friend and colleague networks.

4. Those tough talks
A career change has implications for the whole family, or your dependents. I encourage you communicate honestly and regularly, as you will need the support and
understanding of your loved ones, especially when there is a potential for disappointment. Agree on where you could save money; be creative together in keeping family values alive without feeling you have lost out if you have to curtail some activities.

If a career change will mean greater contentment and the fulfilment of a dream for you, explore all your options and be optimistic about the outcome. A plan for your finances may give you the courage and confidence you need to make a move. Chat to your Wealth Creation Planner to guide you as you plan.

Warm Regards,

Craig Turton


Being good stewards of our money

Clever ways to keep yourself on track with your savings goals

I am having more and more discussions with clients who are finding it tough to make ends meet every month. If you are someone for whom examining columns of figures and sorting through receipts is akin to root canal treatment, then this newsletter may contain your solution.

I also share some ideas on how to participate in #MandelaDay, this being July and with many of our fellow citizens struggling to have just one meal a day.

An App to help budget and save on costs

Being a good steward of your money usually starts with a budget. I personally have found huge value in using an App called 22seven (click here). Powered by Old Mutual, it is a wonderful budgeting tool that nudges you from time to time to help you save on costs. It links to your bank account and other instruments you may select, and pulls all the information from each through.
I have found that 22seven really helps me in sticking to my budget and finding areas in which I can save, by keeping me up to date and informed. And you can be assured of safety as the app has banking security in the back end.

Stash and Save

Each month has its own budgetary demands, and sustainig your saving goals can be difficult. I love the App by Liberty called Stash (click here). This App opens a tax-free savings account for you, and also links to your day-to-day banking card. Each time you swipe your card, the App rounds up your purchase and puts the difference into your tax-free savings account. You can set the limits and amounts in the App. I would suggest using this as a long-term investment to benefit from the tax-free structure. Please consult with your financial planner to understand the regulations related to tax-free savings accounts, especially if you have an existing tax-free savings account.

#MandelaDay and me

When I feel overwhelmed by the extent of the need in South Africa, where we have such high levels of unemployment and poverty, the starfish principle reminds me that I can make a difference to at least one person. So, the call for #ActionAgainstPoverty offers many opportunities to participate in creating change. has initiatives to join, and here are a few ideas in addition:

FTFA: make Mandela Day poverty alleviation sustainable

As official food security partner of the Nelson Mandela Foundation, Food&Trees For Africa has earmarked schools and community gardens with whom they have worked for the past year, to receive support. Get involved and your contribution – big or small – will grow to have an impact for years to come. FTFA is planting orchards and expanding food gardens in schools and communities: email

Warm regards

Reaping rewards of disciplined saving

Craig Turton, Certified Financial Planner® and MD of Chartered Financial Planning, shares the wisdom of focused saving.

Julia is just the kind of investor a financial planner appreciates.

Julia is a single woman who holds a management position within a media business. She travels extensively for work and puts in long hours.

Having started with a R9,000 a month salary, and having been my client for 15 years she now has a balance sheet in excess of R5million.

How has this 37-year old client created such substantial financial security?

She has chosen to place the majority of her assets in investments rather than lifestyle assets. An investor will potentially live off the growth of the investment one day; a lifestyle asset usually depreciates and is earmarked for lifestyle use – it is not included her investment assets.

In my experience, many clients invest more heavily in lifestyle assets such as large homes, flashy cars and holiday homes. In contrast, Julia, from her first pay cheque, determined her level of comfort required to make her happy – this is her lifestyle ceiling. Once she reached this level, she began to invest in investments rather than lifestyle elements.

At a price …

At each of our financial planning meetings, and checking her new asset value, Julia gains confidence to keep doing what she is doing. She is often concerned that her friends don’t know how well she really has done through investing. She is happy to share but is seldom asked.

Julia is by no means ‘stingy’, and enjoys time out with friends, usually paying for more than required. An avid golfer, she has travelled to some top international golf courses. She has found the balance to live happily now but also save for the future.

Reasons for her success

  • Having been employed at the same business for 14 years, Julia has kept her Pension Fund contributions in place. This is called compulsory saving. Often, when leaving an employer, employees will cash in their Pension Funds to fund their lifestyles or an entrepreneurial endeavour. Julia has already determined, should she resign, to transfer her Pension fund so it remains a retirement asset, whether into a Preservation fund or to her new employer.
  • Her father convinced her to save from day one of work into a unit trust – it has now grown to R563,000. The key to the unit trust investment is being well diversified in the investment and never trying to time the market or change managers. She has stuck to investment strategy we selected.
  • Julia has lived in the same property since age 23. Purchased for R800,000, it is now worth R1,650,000, and was paid off over 14 years by transferring her bonuses every year and an extra few thousand every month. This was a focus for Julia.
  • Julia bought a rental property three years ago, knowing there was huge potential for a corporate rental; the property was in a growth area so she decided to invest. She bought for R750,000 and three years later it has grown in value to R960,000. The rental yields R7,000 per month in income which more than covers the bond. Julia has used all her surplus monthly cash to lower the bond to R344,000. I have advised her that settling her bond 100% would affect her taxable income as there would be no interest to offset the income. Sometimes having a bond on a rental property is a good idea due to tax. We have agreed to adjust her thinking by rather focusing on building up enough of a lump sum to transfer offshore. This is one area where she is lacking.

Through her employer, Julia has accumulated R747,000 in share options. She will have to realise these shares in 2018 as part of the share agreement. She will need to pay some Capital Gains Tax on the proceeds and once she has the funds in place, we will add a portion to her new offshore investment and a portion to a new well-diversified share portfolio.

She had a Retirement Annuity to which she was contributing and has built up to R344,000. We stopped these contributions four years ago as she was not getting the deduction on the premium. Even though she can now contribute again and get the deduction, we decided rather to focus on offshore and creating more liquidity in her portfolio. This forms part of her retirement strategy.

Julia spread her risk between assets. Her share portfolio and properties would be regarded as growth assets and ‘risky’ for some. But over the last 14 years, the ‘risk’ has paid off. She has invested in the most risky fund she can with her Pension due to her age and time to retirement, with regulation 28 a factor. This is probably regarded as a moderate risk. Her Retirement Annuity is invested the same way.

Her emergency fund is in a cash account as she understands there should be no risk associated here as she could draw on it anytime. Her unit trusts are invested in a strategy targeting 6% above inflation over a seven-year period. Since inception, this investment has performed according to its target, even though in the last two years it has performed below inflation.
With this is mind, Julia has stuck to her investment strategy and has not disinvested or thought of moving to something more conservative. She understands and is comfortable with this short-term underperformance, knowing that the markets turn, and these returns will improve.

Interesting notables

Over the past three years, in a tough economic environment, Julia’s balance sheet has grown on average by 14%. At every meeting she asks me if she is on track for retirement, should she buy a new car, and so on. Her salary is R47,000 per month before tax.

At age 65, her retirement assets will have a current value of just over R10,000,000 in today’s terms. This will offer her R50,000 per month with little risk of the capital depreciating. Julia loves what she does and may work to age 70.


  • Emergency fund: R110,000
  • Unit trust with a monthly contribution of R5000 to R563,000
  • Nissan: R67,000
  • Primary residence which is paid off: R1,650,000
  • Rental property with a corporate tenant: R960,000 (rental income of R7000 per month)
  • Company Pension fund: contributing 15% to the Pension Fund and value at R732,000
  • Share portfolio: R747,000
  • Retirement Annuity: R344,000 (no contributions)
  • Debt: R344,000 on rental property

Takeaways: remain invested, keep to investment strategy, understand the key component of diversity, use tax incentives.

Julia thinks about her investments but is not tempted to move or change. Her decisions are now around where she invests new money.

Of course, Julia is not married and does not have the expense of children. Her investment will need to be adjusted when this time comes but not for now. She has done the hard yards with her investment, and compounding on her investments will stand her in great stead even should the cost of parenthood arise.

What lessons are you teaching your children about money?

My son started grade one this year, and sport is becoming a big factor in our lives. Besides the obvious consideration of what sporting interests will cost us as parents (think of a full cricket or soccer kit, or golf clubs), I have been intrigued by the field-side interactions I have witnessed of late.

“Come on, Liam, for every goal you score I will give you R10.”
“Ethan, you will get R50 for each lap you swim.”

I wonder how this form of encouragement works. When the kids get in the car after the match or gala, do they ask for the money and do the parents then give them the money? And what do the kids then do with the money? What are we teaching our kids about money?

I tried this on my son, the goalkeeper. I said to him (in private), “My boy, for every goal you save, I will give you R10.” He did quite well, but at no point did he look at me and say, “Dad, I have saved six goals, so you need to give me R60.” En route home, he never asked and has never asked since. I now know that money is not a driving factor for my son. I believe my just being there supporting him is enough for him to want to try improve all the time.

For adults, I know monetary reward can be a motivator for harder work, greater innovation, better performance – and there is nothing wrong with setting goals in this regard. And I believe we are equally responsible for cultivating a positive attitude to money in our children.

Meaningful money lessons

Here are some ideas to help our children have a healthy relationship with money:

  • Money is often a hot topic for parents, and at times, our feelings can be quite negative, with costs adding up and the related stress increasing. Our kids pick up on these anxious chats and negative vibes and then associate them with money. Try to keep money conversations with your kids positive and have the hard discussions with your spouse when they are asleep.
  • We can teach our kids that it is not hard to make money; they must just find opportunities. There are lots of problems in the world, and we can teach our kids how to solve problems and reward them with money for being innovative. This way they understand by solving something on their own can lead to making money.
  • Quality schooling is vitally important but don’t undervalue the lessons in reading at home, listening skills, self education and talking to successful people to learn how they think and work.
  • “If you are doing what you love, you will never work another day in your life”. We have all heard this sage adage. Encourage your children from a young age to use their natural talents, abilities and passions to think of solutions to fix problems. Don’t be afraid to teach your kids to think big … the more we allow ourselves to think deeply, the more we are likely to get paid one day, or pay ourselves.
  • Encourage your kids to do as much as possible at a young age. But if they fail, they shouldn’t move on to the next thing automatically. Persistence is crucial and failure is not fatal. Success is reached by failing over and over again.
  • Teach your kids to respect people on all levels in society. A car guard is working to put food on the table for his family. Just because he has a different job and maybe earns less than us, doesn’t mean he is not a man. He is a man providing for his family and this should be respected.
  • Money makes you happy. We have all heard this. Money in your bank account can possibly make life easier or allow you to feel some degree of security, but no amount can create contentment. Happiness comes from family, friends and love. We should instill this value in our kids. We need money to survive for sure, but there are no guarantees of happiness – that’s up to us.

Enjoy the last vestiges of summer and embrace the promise of winter with lots of enthusiasm!

Warm regards

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