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Invest in your very own ‘place in the bush’

by Tania Griffin
written by Tania Griffin

The concept of investment typically conjures images of urban real estate, stocks and bonds. However, the allure of the African savanna, known colloquially as ‘the bush’, presents an unconventional yet profoundly impactful investment opportunity.

The rugged, untamed wilderness areas of the Mpumalanga Lowveld spring to mind when one hears someone say, “We’re off to our place in the bush”, and the visions those words conjure up often inspire a little envy, too. ‘A place in the bush’ offers so much more than just a piece of land; it comes with the promise of a wealth of memories of family and friends, wide open skies, incredible game sightings – and the opportunity to become a guardian of a legacy that must be protected and cherished.

With careful planning and consideration, investors can enjoy several advantages, including:

  • Financial returns: Bush properties can offer excellent financial returns, especially those located in areas with high tourism potential. For example, Simbini Lifestyle Estate, which is located on the border of the Kruger National Park, offers investors the potential to earn a gross return of 20%–22% per year.
  • Unique lifestyle: Living in the bush, or close to it, offers a unique and rewarding lifestyle. Residents, whether permanent or holiday visitors, can enjoy stunning scenery, abundant wildlife and a sense of community.
  • Sustainability: Bush property developments are often designed with sustainability in mind. This can include features such as energy-efficient construction, water conservation measures, and waste management systems.
  • Environmental stewardship: By investing in a bush property, investors become custodians of a natural environment that is important for biodiversity and conservation.

South Africa’s unique position as home to endemic free-roaming Big Five game places it on the must-visit list of international tourists. And the Kruger National Park is the crown jewel, with 96% of foreign visitors ensuring it is on their itinerary.

For the property investor, this translates into substantial tourism-related returns, especially considering the favourable exchange rate with currencies like the US dollar and euro, which makes South Africa a cost-effective destination for international travellers.

Investments in bush properties are not mere transactions but are akin to securing a stake in a living, breathing entity and an excellent investment.

Let’s take Simbini Lifestyle Estate as an example. It is situated on the Crocodile River, looking directly into Kruger, yet close enough to the town of Malelane for easy provisioning. The developers are committed to environmental stewardship, and it has been designed to minimise its impact on the surrounding environment.

With a promise of gross returns within five years, and an annual return rate between 20% and 22%, an investment here looks robust against the backdrop of current global economic trends and is likely to outperform traditional investment expectations.

A sustainable investment

The sustainability of bush property developments is paramount. Here, the investor is not merely a buyer but a custodian of South Africa’s rich biodiversity, which encompasses protected areas of fauna and flora, integral to the nation’s natural heritage. Such an investment transcends the material to embody a responsibility toward conservation and the celebration of life in its most primal form.

At Simbini, the meaning of ‘sustainability’ is threefold: ecological, structural and financial. The estate is meticulously planned, from its construction methodologies to its long-term financial viability. Significantly, it includes an operational 17ha macadamia farm, which adds a layer of agro-economic resilience to the investment, ensuring a steady income stream while promoting ecological harmony.

Bush properties adjoining the Kruger National Park, especially those along vital water sources like the Crocodile River, come with an added imperative: custodianship of a precious legacy and a commitment to the enduring prosperity of one of the planet’s most extraordinary landscapes. Such properties are increasingly rare.

This scarcity creates a supply-and-demand dynamic poised to accelerate the value of such investments substantially. In this context, estates like Simbini Lifestyle Estate emerge not only as protectors of the Crocodile River and the park, but as coveted assets that promise escalating returns.

Investing in ‘the bush’ should be a blend of financial sustainability and ethical stewardship. To find that is rare, but where it exists, it is a compelling proposition for a particularly discerning investor.

For more information, contact Lindi Le Grange: lindi@bluegrass1028.co.za or call 074 444 0178.

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FinanceHouseholdPress Release

The investment case for solar

by Tania Griffin
written by Tania Griffin

As we approach the end of 2023, South Africans fortunate enough to have built up a nest egg over the course of the year may be wondering how to maximise the value of their money over the long term – for example, by paying down debt on their mortgages or investing in the stock market. But there is a third option to consider: installing a solar system. 

Given the reality of ongoing loadshedding, many households have realised the immediate benefit of an investment in a solar system for their daily lives and energy needs. However, there is a strong case to be made for solar as an investment option that can significantly benefit pockets in the long run as well, notes business director for Alumo Energy, Jean-Philippe Ghyoot.

“A high-quality, professionally installed solar system, complemented by high-grade batteries and a capable inverter, offers immediate convenience and reliable energy in the short term. But many people don’t realise just how big an impact it can have on their budgets through reducing their monthly electricity bills, freeing up money to invest in other things,” he says.

A typical solar system costs R200 000 for an average home. Alumo Energy compares three typical options measured over a 10-year period – whether to pay down a mortgage, invest in the stock market, or invest in a solar system:          

  1. Paying down mortgage

First, Ghyoot considers the option of paying down your mortgage – an attractive choice, given the impact of rising interest rates. 

A financially responsible, albeit conservative option, repaying your bond offers a guaranteed return on investment in the form of interest savings. This choice also offers a risk-free investment that will help reduce your debt and thus improve your financial security and peace of mind heading into 2024.  

However, using your savings to repay your mortgage may leave you with lower levels of financial liquidity, as your funds are tied up in the property – unless you have an access bond facility. Additionally, it may offer lower potential returns for your savings compared to other investment options. 

For example, assume your bond is valued at R2 million with a prime interest rate of 11.75%. If you channel the entire R200 000 amount toward reducing your mortgage, you would have saved R140 870 in interest over the 10 years.

  1. Investing in shares

While there are many investment options available to South Africans, Ghyoot next weighs the potential benefits and drawbacks of investing in shares in the stock market. 

Share portfolios represent a high-risk, high-reward investment option, as while you could potentially earn greater returns in the long term, these returns are not guaranteed and you may experience high levels of investment volatility as markets rise and fall. 

Investments in equity or shares are thus best guided by professionals or financial advisers. This option is also best suited to investors with a high tolerance for risk and a long-term investment horizon. 

According to Ghyoot’s calculations, if you were to invest R200 000 in shares and these were to generate average annual returns of 13%, your savings would have grown to a substantial R678 913 by the end of 10 years. A 13% return target is appropriate for a portfolio with an aggressive risk profile.

However, it’s important to note that this growth could also be impacted by various investment fees, taxes on interest or dividends, and capital gains tax when selling out of the investment.

  1. Investing in a solar and battery system

“Investing in a solar and battery system for your home could be a smart long-term financial move, especially as the world shifts toward more sustainable energy sources,” states Ghyoot.

“Plus, in addition to the environmental benefits and reducing your carbon footprint, solar systems act to immediately minimise your electricity bills. And finally, the South African Revenue Service offers incentives and tax credits for solar installations.”

On the list of cons, solar systems can carry high upfront costs. This can be managed by financing the system through a rent-to-own option or even adding the cost of the installation to your mortgage. However, these options can result in a long payback period that typically spans between five to 10 years, limiting your liquidity in the interim, as your investment will be tied physically to your property. 

Despite this, the long-term cost savings and return on investment of a solar system are substantial. For example, assuming one could purchase the R200 000 system outright, and assuming the property had an existing monthly electricity bill of R3 900, one could expect R1 407 in savings each month, which increases in line with electricity inflation at 12% each year. After 10 years, the system would have generated lifetime savings of R308 925 – and factoring in the 25% tax rebate on the panels, an internal rate of return of 16% would be achieved on the initial solar investment. 

Based on these examples, an investment in solar is therefore a clear winner in terms of absolute annualised percentage returns. Ghyoot emphasises again, however, that your investment decision should be guided by your unique financial circumstances in consultation with a financial adviser. 

“Your decision will depend on your risk tolerance and financial goals. If you value environmental benefits and energy cost-savings, a solar and battery system may be the right choice. If you prefer the guaranteed returns offered by reducing your debt, paying your bond may be the better option for you. And investors with a high tolerance for risk and volatility who are seeking greater liquidity and good returns may wish to consider an investment in shares.

“Ultimately, it’s often wise to diversify your investments to balance risk and reward, but the key is to make an informed choice that is best suited to your needs,” Ghyoot concludes.

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FinancePress Release

Makro, PayJustNow partnership enables buy-now-pay-later in-store payments

by Tania Griffin
written by Tania Griffin

Leading South African and Massmart-owned retailer Makro has partnered with PayJustNow to enable buy-now-pay-later (BNPL) in-store payments for customers ahead of the peak shopping season. This extends PayJustNow’s growing in-store and online footprint of over 2 500 retail brands including Game, PnP Clothing and Samsung.

Varsha Dayaram, senior vice-president for Group Financial Services at Massmart, says the introduction of PayJustNow as an in-store payment option at Makro comes at a critical time for a consumer market that is feeling the effects of slow economic growth and inflationary pressures. “Shoppers are increasingly seeking convenient, cost-effective payment options to ease some of the financial pressures brought by a challenging market environment. With the introduction of PayJustNow in-store, we are bringing greater convenience to our shoppers, enabling us to help our customers save money on the products they need, so they can live better.”

Makro’s partnership with PayJustNow will allow consumers to use BNPL to pay for their must-have and big-ticket items at all of the retailer’s 22 warehouse stores across the country, from electronics, large appliances, furniture and outdoor items to homeware and entertaining. Consumers can simply choose PayJustNow at checkout to split their payments into three equal, interest-free monthly charges, removing some of the cash-flow pressure of making larger purchases.

Craig Newborn, CEO at PayJustNow, says: “As we approach the peak Black Friday, Cyber Monday and festive season shopping periods, the flexibility offered by BNPL allows retailers like Makro to grow their customer base and deliver a superior customer experience that can drive higher levels of customer loyalty.”

South African consumers have adopted BNPL at a rapid rate, with PayJustNow growing its customer base at ‘a stadium-full per month’ to over 1 million by the end of August 2023, from 649 000 at the end of 2022.

According to Newborn, BNPL is increasingly used by financially secure shoppers to boost their buying power and ease cash flow pressures. “Critically, the BNPL model also rewards good financial behaviour, as consumers have to pay off one purchase before they can make another. This ensures responsible financial behaviour while also allowing non-credit card users to build up a credit history in a low risk way.”

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CommunityFinanceHouseholdPress Release

Shoprite and Checkers support small suppliers this Black Friday

by Tania Griffin
written by Tania Griffin

Shoprite and Checkers are helping small suppliers grow their volumes this Black Friday as customers flock to its stores looking for value on everyday essentials and groceries between 23 November and 26 November 2023.

Small toy manufacturer Hope Sonic is based in Blackheath, Cape Town, with approximately 130 employees (majority women), most of whom live within walking distance of the factory. Available from Shoprite and Checkers supermarkets nationwide and manufactured from recycled materials, the following toys are discounted by 50% for Black Friday:

• Zeus Building Blocks (100 pieces) – R99.99 (save 50%)

• Zeus Ride-on Bike – R199.99 (save 50%)

Launched earlier this year, Shoprite’s Homegrown private label product range is sourced locally from primarily small, medium and micro enterprises including Wonder Snacks, Khayelitsha Cookies, and Exotic Taste. This Black Friday, buy any two Homegrown products and save 10%.

Browns Foods was started in Mabel and Wale Akinlabi’s home kitchen in Johannesburg 2019. This husband-and-wife team’s frozen corn dogs come in three different flavours: Awesome Original, Jalapeño Cheese, and Creamy Cheese. For Black Friday, each 350g box of Browns Foods corn dogs will retail for R44.99 each (save R18) in all Checkers Gauteng supermarkets.

Other Black Friday deals from small suppliers include:

• Sherley’s Ginger Biscuits 500g – buy 2 for R80 (save R20) – available from Checkers Free State & Northern Cape

• Regano Pasta Sauce 300g – buy 2 for R20 (save R10) – available from Shoprite Western Cape

• HQ Foods Mango Atchar 375ml – buy 2 for R20 (save R50) – available from Shoprite Western Cape

Additionally, considering the pressure many households are under, Shoprite and Checkers have worked closely with its suppliers to identify discounts that will provide customers with meaningful savings and value on everyday essentials and groceries.

Some of the biggest household savings this Black Friday include:

Shoprite

• Omo Hand Washing Powder 2kg for R49.99 (save R25)

• Pampers Value Pack Nappies or Pants for R149.99 Each (save R105)

• Huggies Dry Comfort Value Pack Nappies for R119.00 (save R80)

• Baby Soft 2-ply Toilet Paper 9s for R59.99 (save R31)

• Weetbix 900g for R45.00 (save R23)

Checkers

• Jacobs Krönung/Gold Instant Coffee 200g for R99 (save R65)

• Omo 2kg/1.5L Laundry Liquids and Detergents for R59 (save R46)

• Finish Dishwashing Tablets 50/56 per pack – buy one get the second free (save R260)

• Pampers Jumbo Pack Baby-Dry / Premium Care Value Pack Nappies/Pants – R199 per pack (save R126)

• Lean Beef Mince – R89 per kg

• Nestlé / Dairymade Gelata Roma Premium Ice Cream 1.5L – buy 2 for R140 (save R100)

• Philips XL Essential Airfryer 1.2kg/6.2L for R1 499 (save R1 500)

Black Friday will run from Thursday, 23 November to Sunday, 26 November 2023 at Shoprite, Checkers, Checkers Hyper, Checkers Foods, Checkers Little Me, Checkers Outdoor and UNIQ stores nationwide

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FinancePress Release

Top scams to watch out for this Black Friday

by Tania Griffin
written by Tania Griffin

Despite the continued reports about the tough economic environment facing South African consumers, and the fact that disposable income is steadily decreasing, South Africans are still enjoying Black Friday sales.

While consumers are trying to find the best way to stretch their Black Friday budget, the Southern African Fraud Prevention Service (SAFPS) warns that scammers are very active during this period.

Nazia Karrim, head of Product Development at the SAFPS, points out that various scams are being run by international scam syndicates, of which consumers need to be aware this Black Friday:

Spoofed shopping sites

Domain spoofing is when a scammer uses fake websites that mimic the actual websites of businesses. Outside of the domain name, the website can look identical to the trusted site. The spoofed website may collect personal information, including payment details when you try to make a purchase, or it could download malware to your device.

“When consumers interact on a spoofed site, their personal details are compromised, and perhaps even their banking details have been handed over to scammers to abuse. Armed with ID numbers, residential addresses and banking details, scammers can assume the victim’s identity and create significant financial distress for the victim,” says Karrim.

Account verification scams

Account verification scams occur when fraudsters ask for personal information to secure an account. Consumers may receive a call, text message or email that looks like it’s official communication from a company, and it may sound urgent – a common theme with these scams is a warning that someone has compromised your account.

When you receive a call from a supposed ‘bank employee’, urgently calling to verify yourself, or requesting you to enter a one-time PIN as there is a possibility that your account has been defrauded, consumers drop their guard, and they provide the requested information or PIN. The caller creates this panic and urgency, and when consumers provide the PIN and/or information, that’s when their bank accounts are being emptied,” says Karrim.

Billing error scams

A billing error scam is a key tactic that scammers use to turn consumers into victims, as it falsifies a sense of urgency.

“Consumers may receive an invoice or phone call about products they didn’t order. Counterfeit invoices can be sent as email attachments that may infect your device, or a scammer may call you to confirm your payment details to settle the bill. Both methods are used to obtain personal information illegally,” says Karrim.

Facebook scams encapsulate most of the fraudulent activities listed above, and include cons such as:

• Asking consumers to pay a fee in advance and not sending the product;

• Presenting flyers for products that are on a malicious or proxy website; and

• Charging extremely low prices for products.

“The most common tactic used by fraudsters is social engineering. Most social media users are aware of targeted advertising, where advertisements for products they search online are packed and presented to them on their timeline. But not all of these links are genuine. Fraudsters use targeted advertising to lure consumers to a proxy site where all their personal information is provided. From there, the fraudsters can easily assume the consumer’s identity and use this identity to commit fraud,” says Karrim.

An important tool

Because of the increase in scams in South Africa, the SAFPS launched Yima, a platform providing free online tools to combat these scams. Karrim points out that the Yima platform has proven very effective in the proactive fight against fraud.

“Yima is a one-stop-shop website for South Africans to report scams, secure their identity, and scan any website for vulnerabilities related to scams. Consumers can also inform themselves how to identify a scam. Using the Yima tools will enable consumers to surf the Internet more safely, access online banking and online shopping sites more confidently, and stay actively aware and informed.”

One of the main elements of the website is the ability to report a scam incident or any suspicious activity to the SAFPS. This suspicious activity includes a fake or suspect-looking online shopping website/portal and instances where the user has received phoney banking information. These reports will be collated and shared with the relevant authorities for syndicate identification.

Users are also provided with a scams hotline to report a fraud incident directly to their banks, retailers or insurance companies via a single number. “By dialling 083 123 SCAM (7226), victims of fraud will be able to be put through to relevant authorities such as the South African Police Service as well as their bank or other registered credit providers to report their case. This will simplify the process of reporting fraud cases and will hopefully alleviate some of the stress that victims of fraud experience,” says Karrim.

She adds that this is once again another example of how the SAFPS is changing the narrative when it comes to a proactive approach to combatting fraud. 

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FinanceHouseholdPress Release

Is your insurance geared for extreme weather?

by Tania Griffin
written by Tania Griffin

Parts of Johannesburg were battered on 13 November 2023 in a devastating hailstorm, with golf ball–sized hailstones wreaking havoc. The frequency of severe weather storms is increasing at an accelerated pace, with economic losses from natural disasters estimated at $313 billion in 2022 alone – with approximately 42% of losses covered by insurance, according to Aon’s 2023 Weather, Climate and Catastrophe Insight report.

The return of El Niño is set to continue until mid-2024 and brings disruptive weather and climate events: The cyclical weather phenomenon refers to the warm phase of the El Niño–Southern Oscillation climate pattern that is caused by warmer ocean temperatures in the Pacific Ocean.

Insurance brokerage and risk advisory Aon South Africa warns South Africans to brace for continued weather extremities and to ensure their assets are covered for weather-related losses that are now leading claims causes. “The need to review insurance covers to make sure you are covered for weather-related catastrophes cannot be overstated,” says Mandy Barrett of Aon South Africa.

Aon offers the following advice for policyholders filing hailstorm damage claims:

  • Confirm whether you are covered for hail damage on your motor and home insurance, as hail cover is excluded on certain insurance policies unless specified. The damage that can be caused by hail should not be underestimated.
  • Assess hail damage as soon as possible and make a comprehensive list of all items and damage.
  • Take photos of the damage if you can – this will be very helpful to the insurance assessor as well when they come to inspect the damage for repair purposes.
  • Notify your broker or insurer of the claim as soon as possible – the timeframe is usually around 60 days, but it is wise to check your policy wording, as some insurers differ on this. 
  • Remember that some insurers work with pre-approved repair companies – check with your broker before you embark on any emergency repairs, or you could find yourself having to pay a larger excess or your settlement being less than expected.
  • Due to high claims volumes, you could experience delays in repair due to the strain on the available capacity of service providers and a shortage of materials, especially as we head into the holiday season.

Consider the following to minimise your exposure to hail damage:

  • Subscribe to a weather service or get onto your insurer’s SMS database to receive hail alerts.
  • Avoid travelling in a heavy downpour or hailstorm. Pull over or try and get to a place of safety that is undercover as quickly as possible and wait it out.
  • If a road is flooded, do not attempt to drive through it. There are countless cases of drivers thinking it is a puddle, only to be swept away.
  • Do not park under trees – falling branches pose a real risk in a powerful storm. Find secure shelter under a solid structure if you can.
  • If you are indoors during a hailstorm, avoid skylights, windows and doors.

“Our current climate is a stark reminder of just how vulnerable we are to weather catastrophes. It is essential to review the terms and levels of your household and motor insurance regularly so that you are not financially compromised in a worst-case scenario. A broker plays an invaluable role in the making of a well-rounded insurance portfolio that addresses every eventuality, takes your specific needs into account, and finds a solution that suits your pocket,” concludes Barrett.

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FinanceHouseholdPress Release

No will no worries? Think again!

by Tania Griffin
written by Tania Griffin

A will is one of the most important documents you will ever sign. Think of it this way: You’ve spent your entire life working to provide for your loved ones and, in that, built a legacy. A will ensures this legacy lives on. This is because a will documents your wishes, and legally, your executor(s) have to make sure these wishes are carried out as you intended.

But isn’t a will only for the wealthy?

You may be thinking, “I don’t have assets worth millions, so what’s the point”. This is a very good question. There are two misconceptions about this topic:

Wills are for rich people – this is incorrect. A will also indicates information like whether you want to be buried or cremated, and other details around the logistics of your funeral. In the case that you do have minor children, a will allows you to appoint a preferred guardian for them.

Assets must be worth millions – this is also incorrect. A car, a house, a necklace that you’d like to be passed down from generation to generation… any of your possessions are classified as assets.

Another misconception is that wills are expensive. This is not the case. Capital Legacy offers free will drafting and free will services, including free collection and safekeeping of your will. You can also review your will as many times as needed, at no additional cost.

What could possibly go wrong without a will?

Without a will, the distribution of assets is determined by the Intestate Succession Act, 1987 (Act 81 of 1987). If you die intestate, your family members may dispute the distribution of your assets, leading to expensive and time-consuming legal battles. Not only is this an administrative nightmare but also causes great strain on relationships.

As mentioned above, your last will and testament can also include wishes regarding funeral arrangements. Without a valid last will and testament, loved ones may be left to make these decisions on your behalf. This can cause additional stress and tension, particularly if family members have differing opinions on how you would have wanted the funeral arrangements to be made.

An outdated will is as good as no will

It is important to update your last will and testament regularly to ensure it reflects any changes in your life circumstances or wishes. For example, if you have a child, get married or divorced, or acquire new assets, you will need to update your will. It is recommended that people review their will annually to ensure it is up to date.

Things to consider when drafting a will

• Assets: The first step in creating a will is to determine what assets you have. This includes all property, investments and personal possessions.
• Beneficiaries: Once you have determined your assets, you will need to decide who your beneficiaries will be. This can include family members, friends or organisations.
• Distribution: You will need to decide how your assets will be distributed among your beneficiaries. There are various ways that this can be done, including dividing the assets equally or designating specific assets to specific beneficiaries.
• Executor: You will need to choose an executor to be responsible for carrying out the wishes outlined in your will. This can be a family member or a professional executor.
• Guardianship: If you have minor children, you will need to consider who will be responsible for caring for them and their assets if you pass away. A will affords you the opportunity to guide the courts as to who you would like the guardian to be.

Let us make it easy for you

Get a free will drafted with expert advice and no hassle. Drafting a will can seem intimidating, but Capital Legacy is here to help you. We have drafted more than 650 000 wills over the past 11 years. Our expert consultants are not only skilled in the specifics of wills and estates, but they have also built up an understanding that the process of getting your affairs in order may not be very comfortable but is necessary and will be able to slowly take you through the process to ensure your will is professionally drafted.

Complimentary wills

A complimentary will consultation with a Capital Legacy expert ensures no details or considerations have been missed, which could save your family a lot of drama if anything were to happen to you. Our consultants will calculate your estimated costs of dying (such as executor fees, conveyancing costs and other immediate expenses your family would have when you pass away) and guide you through the various affordable solutions we have available to indemnify these fees.

Get it done!

It is important to get your will drafted and we’ve made it simple to do. So, get your free will sorted! Your family will thank you. Speak to your financial advisor or connect with Capital Legacy today.

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FinancePress Release

5 money-mindful tips for a financially responsible Black November

by Tania Griffin
written by Tania Griffin

“The shopping season is in full swing with anticipated ‘discounts’ and various Black November sale frenzies going on. But if there is one thing you can do to make sure you end your 2023 year off on a high note, it is to reject overconsumption and, instead, practise mindful spending (IF you have a budget outlined, of course),” says Wikus Olivier, managing director at CreditSmart Financial Services.

According to the recent numbers from Eighty20/XDS’ Credit Stress Report, consumer credit defaults continue to rise. The National Credit Regulator’s Credit Bureau Monitor statistics indicate consecutive increases in the number of credit-active consumers quarter upon quarter. In June 2022, there were 26.52 million credit-active consumers, which rose to 26.90 million by December 2022 (a climb during the shopping season), and further to 27.05 million by June 2023.

What’s concerning is the growth in the number of consumers with impaired credit records, which climbed from 9.88 million in June 2022 to 10.02 million within a year (June 2023). Equally alarming is the decline in the number of consumers classified as being in good standing, which dropped from 17.19 million in December 2022 to 17.03 million in June 2023.

These figures highlight the importance of adopting financial mindfulness when it comes to considering extra debt, especially in the face of Black November’s enticing marketing gimmicks being portrayed as actual ‘deals’.

Here are Olivier’s five money-mindful recommendations on how to ensure a frugal and responsible shopping silly season:

Know your current money situation: Safeguard your financial health and look at the holistic picture of your financial situation. An overall view will allow you to know if you should rather shy away from inviting ‘sales’ this month entirely, or to what extent you can go (money-wise) to take part in the shopping phenomenon of the year. 

Specify your budget amount: Ensure you have a separate Black November/Friday budget set up before doing any online browsing or outlet visits. Exercise self-control and stick to your allocated budget amount, as shopping in the current period is more tempting than ever. Focus on essentials or ‘needs’ and not your ‘wants’. 

Pause before making a purchase: Before committing to buying something, take a minute and ask yourself: “Is this an essential or just something I ‘want’?” and “Am I still within my budget if I buy this item?” 

Duck Black November retailer tricks: Know what items cost, as this will help you point out if a ‘sale’ is reflecting an actual discounted deal or not. Remember: Retailers tend to raise prices above the usual asking price and they market aggressively – creating a false sense of urgency, clouding your judgment to do a thoughtless ‘impulse buy’. Overpriced impulse purchases are usually followed by guilt, regret and even uncontrolled debt. 

The most mindful thing you can do is to NOT spend money: Don’t take part in the consumption chaos if you have not budgeted and don’t want to accumulate extra debt. Over-indebtedness is real and can creep in unexpectedly. If, however, you are already feeling the debt pinch, be #CreditSmart and seek the best-registered solution to help you break free from the shackles of debt.

“Don’t set yourself up for an indebted 2024 by overspending and overstretching your pocket this shopping season. You can be financially mindful this #BlackNovember by avoiding impulse spending and being fully aware of your financial position – focusing your attention on your budget and ‘real needs’ instead of those unnecessary ‘wants’,” concludes Olivier.

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FinanceProperty

Mastering financial fitness: A homeowner’s guide

by Tania Griffin
written by Tania Griffin

Owning a home is a significant milestone and a dream for many, but it comes with its own set of financial responsibilities as well as opportunities that both require careful management.

This is according to Claude McKirby, co-principal for Lew Geffen Sotheby’s International Realty in Cape Town’s Southern Suburbs, who says that achieving and maintaining financial fitness as a homeowner requires careful planning, strategic budgeting and a proactive approach to wealth management.

“Financial fitness doesn’t happen overnight; it’s a journey that involves informed decision-making – and regular reassessment of your goals and strategies is also key to long-term prosperity.”

He offers the following tips for successfully navigating home ownership and optimising your investment:

1. Budgeting wisdom for homeowners

Budgeting is the cornerstone of financial fitness, and for homeowners and it’s crucial to create a budget that aligns with the unique expenses associated with owning a property.

Start by listing all monthly expenses including mortgage payments, property taxes, homeowner’s insurance and maintenance costs. Factor in utilities, home owners’ association fees and any additional home-related expenses. Differentiate between essential and discretionary spending to identify areas where you can cut back.

Additionally, it’s wise to:

• Establish an emergency fund: Set aside a portion of your income for an emergency fund. Homeownership often brings unexpected expenses such as a leaking roof or a malfunctioning plumbing. Having an emergency fund can prevent these unforeseen events from derailing your financial stability.

• Prioritise debt repayment: If you have other debts alongside your mortgage, prioritise high-interest debts first. This may include credit cards or personal loans. Reducing these high-interest debts can free up funds for other financial goals.

2. Strategies for mortgage payoff

Paying off your mortgage faster not only brings a sense of financial freedom but also saves you money in interest over the life of the loan. Consider these strategies to accelerate your mortgage payoff:

• Make extra payments: Allocate additional funds to your mortgage payments whenever possible. Even a small extra amount each month can significantly reduce the total interest paid over time.

• Biweekly payments: Instead of making monthly payments, switch to a biweekly schedule. This results in 26 half-payments, equivalent to 13 full payments per year, helping you make an extra month’s payment annually.

• Refinance smartly: Explore refinancing options to secure a lower interest rate. While this may extend the loan term, it can reduce monthly payments, freeing up cash for other financial goals.

• Round up payments: Rounding up your monthly mortgage payment to the nearest thousand (or even hundred) rand can make a substantial impact over time. It’s a painless way to add a little extra to each payment.

3. Unlocking home equity: Your home as a financial asset

Home equity is the difference between your home’s market value and the outstanding mortgage balance and it’s a valuable asset that can be leveraged for various financial purposes. Here’s how you can make the most of your home equity:

• Home equity loans and lines of credit: Tap into your home equity through loans or lines of credit for home improvements, education expenses or debt consolidation. Be cautious and use this option wisely to avoid over-leveraging.

• Building equity through appreciation: Increase your home’s value by investing in strategic improvements. Consider kitchen and bathroom renovations, landscaping enhancements or energy-efficient upgrades. These not only improve your quality of life but also boost property value.

• Avoid over-borrowing: While tapping into home equity can be advantageous, it’s crucial to avoid over-borrowing. Carefully assess your financial situation and only borrow what you can comfortably repay.

4. Increasing property value

Boosting your property’s value is a long-term investment that pays off when you decide to sell. Here are some tips to enhance your home’s market appeal:

• Regular maintenance: Keep your home well-maintained. Attend to repairs promptly, update outdated features and ensure the overall cleanliness and functionality of your property.

• Energy-efficiency upgrades: Make your home more energy-efficient by installing solar panels, upgrading insulation and using smart home technologies. These improvements not only save you money on utilities but also increase your home’s market value.

• Kerb appeal: First impressions matter. Invest in landscaping and exterior upgrades to enhance your home’s kerb appeal. A well-maintained and visually appealing exterior can significantly increase property value.

5. Wise financial decision-making

As a homeowner, making sound financial decisions goes beyond mortgage payments and property value. Consider these principles for overall financial success:

• Realistic home improvements: Be strategic with home improvements. While enhancing your property’s value is important, avoid over-capitalising for the neighbourhood. Aim for improvements that align with market expectations and trends.

• Insurance coverage: Ensure your homeowner’s insurance adequately covers your property and possessions. Review your policy regularly and make adjustments as needed, especially after home improvements or renovations.

• Property tax management: Understand your property tax assessment and explore opportunities for exemptions, incentives and reductions.

• Stay informed: Keep abreast of market trends, interest rates and changes in property values in your area. Staying informed allows you to make timely decisions that positively impact your financial well-being.

“By staying on top of your financial matters, making well-informed decisions and leveraging your equity, you can build a solid financial foundation that not only supports your current lifestyle but also secures your financial future,” concludes McKirby.

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Finance

Black Friday tricks you shouldn’t fall for

by Tania Griffin
written by Tania Griffin

It’s been a challenging year, and it seems like everyone in South Africa is tightening their belts. A recent McKinsey Global Consumer Sentiment Survey shows just how widespread the struggle is, with a staggering 87% of respondents admitting they’re financially stretched.

With the cost of living hitting new highs, Black Friday seems like a golden chance to make your money go further. But be cautious – those Black Friday deals that look so tempting? They may not be as great as they first appear.

This is according to Charnel Collins, CEO of National Debt Advisors, who warns that retailers often employ smart marketing gags which, if indulged, could have long-term consequences for consumers’ financial health.

The first trick to look out for, she says, is when retailers sometimes give the impression of huge discounts by marking up prices before Black Friday. “They do this to make the discounts look bigger than they are. For instance, something that usually costs R50 may be raised to R80 and then ‘reduced’ to R60 on Black Friday. It looks like a big saving, but it’s not as good as it seems,” she explains.

Secondly, Collins points out that Black Friday is famous for its deals that don’t last long, which can make consumers feel like they need to buy something quickly. This kind of pressure often leads to buying things on impulse – even if they don’t need or don’t plan to buy. It’s important to remember that making quick decisions, especially about spending money, usually isn’t the best move.

According to Shopify, research shows that while shoppers aim to snag bargains, they often end up buying items impulsively, lured by the idea of a discount rather than the actual need or value of the product. In a recent survey, more than half (52%) of respondents said they preferred taking a discount over paying the regular price, even when they did not plan for it.

“Surprisingly, even shoppers who make lists to control their Christmas spending end up buying items on Black Friday that don’t align with their planned purchases. This is often a result of the emotional tug-of-war between the fear of missing out (FOMO) and buyer’s remorse,” says Collins.

She also warns consumers against relying on credit for their Black Friday purchases. Hidden fees and interest rates associated with credit card purchases can transform what appears to be a wise purchase into a prolonged financial burden. She stresses that many consumers fail to consider these added expenses. “When you make a credit card purchase, you’re not just paying the price on the tag. You may be committing to high interest rates and undisclosed fees that accumulate over time. It’s a recurring trap where one impulsive purchase can trigger lasting financial consequences.”

Collins offers the following tips for a successful shopping experience this Black Friday:

  • Create a comprehensive list of what you truly need: Your list should reflect not just your desires, but also what aligns with your long-term financial goals.
  • Establish a realistic spending limit: It’s not just about how much you can spend, but how much you should spend considering your overall budget. This approach ensures you enjoy the discounts without straining your finances.
  • Understand true deals vs marketing tricks: Black Friday is notorious for flashy sales and big numbers, but not all deals are as good as they seem. The trick is in differentiating between a genuine discount and clever marketing.
  • Be wary of hidden costs: Hidden costs can turn a deal sour. Always read the fine print. Whether it’s shipping fees, non-refundable policies or limited warranties, understanding these details can help you avoid unexpected expenses.
  • Secure your online purchases: In the digital age, Black Friday shopping often means buying online. Use trusted websites, look for HTTPS in the URL, and be wary of too-good-to-be-true offers that may be phishing scams.

“The consequences of Black Friday splurges extend beyond immediate financial strain. The long-term impact on credit scores can be significant. Late payments, defaults and bankruptcies stemming from credit card debt can severely damage creditworthiness. This impact can linger, affecting future financial opportunities and stability,” concludes Collins.

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