Why you need life cover if you have a bond

When applying for a home loan, one vital aspect to carefully consider is life cover or mortgage protection cover. This will ensure that you can continue to provide your dependants with a roof over their head if you pass away, or become disabled and cannot work.

If you are the main income earner, but don’t have appropriate life cover or mortgage insurance, you could leave your family in a world of financial hardship after your death, or create complications that could have been easily avoided. As any financial planner will agree, this area of a financial portfolio is one of the first building blocks to be put into place.

Life Insurance 101

A bondgiver is the person paying the bond, while the bank is known as the bondholder. In the event of the death of the bondgiver, a lack of life cover can make a very distressing situation all the more tragic. Families who have lost a member, who is responsible for paying the home loan, can face the very real possibility of losing their home.

According to an article published on Fin24, “life cover or life insurance is a means of ensuring that money is available to settle all outstanding debts and provide dependants with financial security in the event of the death or disability of the person whose life is insured. The cash sum paid out can be used to settle debt like the home loan that could then allow dependents to keep their home. Mortgage protection insurance, another type of life cover, is limited to provision of cover for the home loan only.”

South Africa

In spite of its arguable importance, taking out life cover or mortgage protection to cover a home loan is not always compulsory and, in our stressed economy in which more than half of credit active customers are considered to be credit impaired, many South African homeowners opt to forego this option in order to avoid additional monthly costs.

Many people choose to take a gamble and pray that they won’t be the victim of a life-changing incident, and that it won’t have a negative impact on their situation or their families if they are. According to a survey conducted by FinScope, this risk-taking tendency led to only 15% of South African consumers buying life insurance products in 2013. Although the Timetric report shows that the life insurance sector grew at a compound annual growth rate of 12.1% from 2012 to 2016, the lower economic growth that was expected until 2019 has meant that the life insurance sector hasn’t expanded as quickly as need be. Ironically, many South African adults are believed to have funeral cover, but few of these have life cover, and even fewer have disability insurance.

South Africa is not alone in its pitiful mortgage protection statistics, but the low figures do point to a possible lack of understanding among bondgivers about the essential nature of life cover. The crux of the matter is that, if you are a homeowner with a bond, it is important to have life cover in place so that your family will be protected in the sad event of your passing. A small monthly installment can save your family from massive financial pressure in the future, while not paying now can end up costing them dearly.

Don’t leave these things to chance — be proactive and ensure you have taken the necessary steps now to protect those you love after you’re gone. Don’t hesitate to arrange a meeting to discuss how you can secure your family’s financial well-being.

Business assurance matters

It is highly advisable that anyone who runs their own business takes out business assurance, which is a broad term for a range of life assurance products that are designed to cover various scenarios and requirements.

Running a successful business often takes considerable financial investment, but many business owners fail to plan for what happens in the event that they die, become disabled or severely ill; or if they lose one of their key employees for one of the same reasons.

However, it is essential to consider all risks in order to avoid adverse consequences for the business, and your dependants, as often a family’s financial health is intertwined with the health of a business. This blog serves as an overview to how this product could bolster your portfolio, but for your specific needs it is always best to setup a meeting for us to chat directly to your situation.

What is business assurance?

Generally speaking, business assurance is risk and/or investment assurance that will protect a business in the event that someone essential to the operation — be that an owner, a director or a key employee — dies or becomes disabled.

Business assurance not only protects those involved against potentially dire financial consequences, but it can also be used to prevent any main employees from leaving to work for a competitor by providing them with a policy that will mature to their future financial benefit.

Arguably, one of the principal purposes of business assurance is to ensure that a business can continue to be fully operational after an unfortunate loss of a key player, so as to protect the owner(s) and their dependants from financial hardship.

The last thing you would want in the event of your passing would be to leave your dependants or your business in dire straits. This is particularly the case if your business has an overdraft, which you have secured in a personal capacity. The appropriate assurance product will allow you to rest assured that any loans will be repaid when you die, so that your loved ones won’t suffer further. When setting up a business, it is, therefore, vital to carefully consider all financial risks, and take the appropriate measures to negate those risks.

Business structures

One of the most important aspects to consider when setting up a business is its ownership structure, as whether you choose to structure your business as a sole proprietorship, a partnership, a close corporation (CC), a company, or a small business corporation will determine the type of business assurance you will need.

All of these types of business structures have different implications when it comes to financial planning, and each business assurance product has different tax consequences that must be taken into account.

For example, there will be more tax obligations for a sole proprietor at death than someone who is a shareholder in a company. It is, therefore, extremely important that a sole proprietor ensures that any debts — including income tax and CGT — can be paid in the event of their death, so as not to leave debts to their dependents.

Most businesses tend to consist of three distinct levels — the owner, the management, and the employees. All involved parties have particular risks and financial needs that can be covered by a business assurance product.

The consequences and financial risks of each business structure should be carefully analysed to establish what type of business assurance is needed. This will require regular valuations and cash flow assessments, as well as taking into consideration any tax obligations and capital investment borrowings.

Question time

Business owners should ask themselves some hypothetical questions when it comes to making necessary arrangements for business assurance. Can your family still draw an income from the business if you die? In the event of your death, how can you unlock the value of your shareholding for your family’s benefit? Will there be any conflicts of interest between your family and business partners that you need to mitigate before your passing?

In the event that you cannot simply leave your business to a family member to run, it’s wise to ensure that you have done all that you can to guard your heirs against any risks, rather than leaving anything to chance. Usually, in the event of death, your share of a business would become part of your estate — but other people involved may have different ideas, and it’s best to avoid any unnecessary complications if possible. Written agreements, as well as appropriate life assurance and disability cover, can help a great deal in this regard. If you structure your policy holdings well, you could even save in terms of capital gains tax and estate duty, so it is important to make sure you correctly implement and structure your financial plan so that your loved ones can reap the most benefits possible.

Don’t hesitate to arrange a meeting if you wish to discuss your options and their implications.

International Day of Families

In 1993, the United Nations General Assembly proclaimed that 15th May should be observed each year as the International Day of Families. The aim of this annual observance is to increase awareness of family-related issues, and to help countries to tackle these problems with comprehensive policies.

The United Nations states that this day “reflects the importance which the international community attaches to families as basic units of society, as well as its concern regarding their situation around the world.” The aim of the day is to mobilise action in countries across the globe, and to offer the opportunity for people to speak out about and demonstrate support of varying family issues in different societies.


In 2018, the annual observance takes the theme of Families and Inclusive Societies, which aims to explore the role of families and policies in advancing the 17 Sustainable Development Goals, which include achieving gender equality, eradicating hunger, and providing clean water and sanitation for all.

These were adopted in September 2015 with the aim of ending poverty, protecting the planet and ensuring prosperity for everyone. For these world-changing objectives to be reached, it is important that everyone plays their part — that doesn’t just mean governments, international organisations, world leaders and the private sector, but civil society in general and each of us as individuals.

Here is a list of actions that you can do in your daily life to contribute towards a sustainable future, make an impact and be part of the solution (some of these can even be done from the comfort of your sofa).

In the good ol’ R. of S.A.

Every year, this day (2 April) is an occasion to promote a better understanding of the social, economic and demographic processes affecting the family unit. In South Africa, the family plays an important role in society, and nothing is arguably more important than making sure your dependents are safe, happy and healthy — while you’re still alive and after you’re gone.

In a country where divorce, unemployment, crime and health issues are rife, cover for dependents is more important than ever, and it’s advisable to do thorough research about what and who your medical aid policy will cover. Many schemes will cover you (principal member), your spouse (adult dependent) and children (child dependents) as members; and the same members should be covered if you take out a medical aid gap cover policy too. However, many factors determine who can be added to your medical aid scheme as a dependent. A dependent is classified as someone who depends on you financially, or who cannot take care of themselves due to a physical or mental disability — this does not need to be a blood relative, but you will need to be able to provide proof that they are dependent on you.

Medical aid schemes can vary on the age that they define children as becoming adults, but for most schemes, this tends to be at 21 years of age. The child can remain classified as a ‘child dependent’ for longer — even up to the age of 27 — If the parent can prove that the child is still dependent on them, be that because they are studying or unemployed.

If a child is included under a parent’s membership and the parent passes away, the dependent’s cover as a minor will remain valid so long as premium payments are maintained. In this case, children can often maintain the status of dependent until the age of 26, which will mean they are covered throughout university and early employment.

Many feel it important to ensure that their dependents will be taken care of after they’ve gone. If you are one of these people, do take the appropriate measures to cover any debts in case you pass away, and make sure you have the necessary life assurance products to cover you and your family in the event of a tragedy. A bit of planning and preparation are key to ensure that you have all your bases covered, so that you can rest assured that your loved ones won’t suffer any adverse financial consequences after your death.

The overarching goal of days such as International Day of Families is to make us realise the importance of what we often take for granted, and to review and rectify our situation so that we can protect those we love in the long-run.

Let’s pave the way this 15th May for an inclusive society that can work together towards sustainable development and look after each other for posterity.

Life has three constants

Navigating today’s complex world can be challenging, and acting in an effective manner can help you to thrive in our current reality. However, research has shown that many people are not thriving in modern times or feeling fulfilled. Every individual has the potential for greatness but, in order to excel in our environment, we may need to change our mindsets, and develop new skills and habits.

Stephen Convey’s best-selling book, The 7 Habits of Highly Effective People, is based on principles of fairness, integrity, honesty, and human dignity; and it has been inspiring people to solve an array of problems for 15 years.

This thought leader’s message is simple — to find success and meaning, we must maintain solid principles. He teaches that “there are three constants in life: change, choice and principles.”

Let’s take a brief look at the habits summarised in his international bestseller to see what behavioural techniques can be developed and applied in a financial context. You may find it useful to practice some of these habits to improve your behavioural patterns, so that you can successfully reach your financial goals. Don’t hesitate to arrange a meeting if you’d like a bit of help along the way.

1. Be proactive

You may not always have control over what happens to you, but you do have control over how you choose to react to your circumstances, and that is often most the battle. You make your own choices, and every situation provides a new choice — so be proactive about taking responsibility for your life.

The book teaches that “proactive people recognise that they are response-able” and know they can choose how to behave. Whereas, reactive people are often easily affected by environmental conditions and find external sources to blame.

Problems, challenges and opportunities tend to fall into two areas — a Circle of Concern and a Circle of Influence. Proactive people focus their time and energy on things they can control, such as their physical and mental well-being, their family or their work. This is referred to as a Circle of Influence. On the other hand, reactive people tend to focus their efforts on a Circle of Concern, which is to say the things over which they have little or no control, such as politics or the weather.

Your greatest power lies between the stimulus and your response. Remember you are free to choose how you respond, so evaluate what issues you can control, then work out how to be proactive in doing so. For example, you know you can look after your family by taking simple steps, such as making sure you have adequate life insurance and income protection; and you can prioritise your health by making sure you have sufficient medical aid coverage.

2. Begin with the end in mind

The book offers the belief that all things are created twice — firstly as a mental creation, and secondly as a physical creation.

Are you who you want to be? If not, make a conscious effort to visualise what you want yourself and your life to look like. Take some time to reflect on what you believe to be your personal set of morals. Begin each day or task with a clear vision of where you want to be, then be proactive in taking the steps to get there.

You may find that writing a personal mission statement helps you to put your goals in focus and reaffirms who you are. Once this is all clear in your mind, you can set about securing the future you envision by taking appropriate measures, such as saving sufficiently for retirement.

3. Put first things first
Strive to live a balanced existence by recognising that you don’t have to do everything that is put in front of you. Be careful not to overextend yourself, but rather focus on your priorities.

It’s a question of managing your life in a way that will make you happiest. Decide what you value the most, then manage your time and choices to be in line with these personal priorities.

4. Think win-win

For many of us, our self-worth is based on comparisons. It’s easy to think about success in terms of someone else failing — if they lose, you win (or the other way around).

It would arguably be much healthier to view life as a cooperative arena, rather than a competitive one. Train your mind to always look for mutual benefits in all human interactions, so that everyone can win and feel satisfied.

This approach exercises integrity and maturity, as well as a mentality of abundance. It is a question of moving away from thinking in terms of “either/or”. You can be both nice and strong. Practice this balancing act between courage and consideration, and develop your sense of empathy as well as confidence.

5. Think first to understand, then to be understood

Good communication is one of the most important skills we can learn in life. However, there is often a tendency to focus on speaking, rather than listening.

One of the biggest communication problems is listening to be able to reply, rather than to understand. Sometimes we do this because we filter everything we hear through our own life experiences, so we think that we already know the answer. Many of us are also guilty of seeking primarily to be understood ourselves.

However, as a result, we often end up ignoring what someone is actually saying and missing their point entirely. When we listen ‘autobiographically’, we tend to respond in one of four ways — (1) We make a judgement that leads us to either agree or disagree; (2) We ask questions solely from our own frames of reference; (3) We rush to give unsolicited advice or incorrect solutions; (4) We analyse motives and behaviours based on our own experiences.

To understand things as they actually are, and to properly connect with another human being, we need to start listening properly — without judgement or bias, but with an open mind.

6. Synergise

To follow on from the last point is the habit of creative cooperation. This is understanding the importance of teamwork and finding new solutions to old problems. If you view your life and financial situation as a process, you can appreciate that external experience and expertise can help you to produce far better results than you could on your own.

No man is an island, and sometimes we need a little help from outside sources to achieve the optimum solutions. By committing to genuine interactions and remaining open to other people’s influence, you can gain valuable insights.

It’s important to be aware that you may not always know best, and you can exponentially improve your situation by valuing other people’s differences and what they have to offer.

7. Sharpen the saw

Protect and continuously develop your well-being by having a balanced approach in four main areas — physical (eat well, exercise and rest more) social/emotional (make meaningful connections with other people), mental (keep on learning — teach yourself and others), and spiritual (spend time in nature, expand your being with practices such as meditation or service to others).

By consistently trying to improve yourself in these areas, you may find yourself growing as an individual and naturally making changes in your life. You may also find it easier to handle any challenges that come your way. Take the time to work on yourself on a daily basis, as every day provides a new opportunity to recharge your batteries and avoid hitting a wall.

The empowering seven approaches of this highly-acclaimed book transcend socio-economic, religious, political, generational and gender differences. The principles can be recognised in every society and can be notably applied in a context of wealth creation.

Working towards a better future

The public holidays just keep on coming this month! From Freedom Day, we have quickly made our way to Labour Day tomorrow, Tuesday, 1st May — and who couldn’t love all these tributes to the human spirit and the notable events that have changed the course of history?

Somewhat ironically, to celebrate this International Worker’s Day, we will have yet another day off work. In many countries, Worker’s Day, otherwise known as May Day, is an important public holiday — but for labour rights campaigners, it holds a particularly strong significance as it is a commemoration of past struggles against a range of workers’ rights violations, such as unsafe conditions, child labour and excessive working hours.

It is also a reflection on what can further be done to improve working conditions around the world, so that we can create productive and healthy societies that are based on fairness and equality.

Let’s take it back to the start…

This international day finds its origins in the United States of America in the late-19th century, when leftist activists and trade unionists came together to protest unjust working conditions. The chosen date is particularly poignant in its close association with the Haymarket Riot, also known as the Haymarket Massacre or Haymarket Affair. This was a violent confrontation that took place on 4th May 1886 in Chicago between police and an estimated 40,000 protesters.

On 3rd May, police officers attacked workers, who were striking as part of a national campaign for an eight-hour workday (instead of the 16 hours a day that they were often forced to work). At least two were killed and several injured. To protest the police brutality, labour leaders called a peaceful mass meeting the next day in Haymarket Square, but when the police intervened and demanded that the crowds disperse, an unidentified person threw a bomb and the police responded with gunfire. Seven officers and at least four civilians were killed in the violence, and over 60 people were injured. Eight people were then arrested and convicted of murder on the grounds of conspiracy, despite many of this so-called ‘Chicago Eight’ not even being present at the event and their involvement never being proved. They were given sentences ranging from hanging to life imprisonment, and those who died have since been regarded by many socialists as the Haymarket Martyrs.

Widespread hysteria resulted after the riots and, in 1889, an international organisation for workers and socialists declared that 1st May would be International Workers’ Day. However, the eight-hour work day wasn’t actually passed as law in the United States until 1916, after years of strikes and protests.

The Haymarket Riot galvanised the broader labour movement and, after massive global anti-war sentiment in the years that followed — particularly as many people considered World War I to be an example of capitalist countries setting members of an international working class against each other — it fuelled workers to further unite and wage a revolutionary war against the upper echelons of their own societies.

Since that period of history, International Workers’ Day has been commemorated with celebrations, protests and strikes around the world; and several notable May Day marches have been held to call on governing forces to improve rights and reduce violations.

The South African context

While South Africa does have structures in place to protect employees and settle matters of injustice, such as the Commission for Conciliation, Mediation and Arbitration (CCMA), there is still a lot of room for improvement when it comes to workers’ rights. Massive strikes in recent years, such as the five-month wage strike in the platinum sector in 2014, highlight that unfair conditions and general discontent in the workforce are still rife. To name but a few issues — the bill that grants fathers the right to paternity leave still hasn’t been passed, basic annual leave is far below that of European nations, and minimum wage (at just ZAR3,500 per month) is considerably low when taking into account the general cost of living and inflation.

According to an article originally published at the end of last year in The Conversation, “trade union membership has been declining and now only about a quarter of the workforce is unionised.” There are also potential changes on the horizon that could affect workers across the country. As well as a new National Minimum Wage Bill, amendments to the Labour Relations Act and the Basic Conditions of Employment Act are currently being considered by parliament, and, if passed, these will be the biggest changes to South Africa’s labour laws since 1995.

Although two of the proposed amendments aim to prevent lengthy and violent strikes in the future, they would potentially introduce measures that could undermine the collective nature of a strike in general, and give employers an easy way of avoiding strikes without necessarily having to agree to any of their workers’ demands. If these amendments are passed, it would be a significant defeat for workers, as it could take away the most powerful tool available to people to improve their earnings and working conditions.

It has also been proposed to change the monthly minimum wage in favour of an hourly minimum wage of ZAR20 per hour (this will be even less for domestic or farm workers). This could have a particularly detrimental effect on those who cannot work at least 40 hours a week. Considering that non-compliance with minimum wage laws is already sadly high in South Africa, this amendment does nothing to help reduce exploitation, which should be key; and it could further restrict basic rights and choices.

In a country where there is still a long way to go to achieve justice for all, it is vital that we protect the hard-won gains of the labour movement in South Africa, so that we can focus on lessening the country’s vast economic disparities. Although minimum wage amendments may not be of direct financial concern to you, they could have serious knock-on effects for the country as a whole — an increase in economic hardship will arguably cause an increase in negative social consequences, such as crime, gangsterism, and general health and education issues. If economic deprivation isn’t tackled effectively, a deficit will also need to be covered, which could result in further tax hikes.

It is also important to make sure that your own working situation is to par, and that you are maximising your financial situation. The key is to make your money work for you as much as possible, and to take advantage of any benefits and savings to which you are entitled. Know your rights and make the most of them.

The Haymarket tragedy motivated generations of activists, labour leaders and artists across the world into action. Let us remember the global struggle for workers’ rights this Labour Day, and let’s make it a labour of love to work towards a better future together in South Africa — on both a personal and collective level. Don’t hesitate to arrange a meeting to discuss how to achieve your goals so that you can help others to achieve theirs too.

8 Behaviours for Financial Freedom

“Man is born free and everywhere he is in chains.” — Jean-Jacques Rousseau

The opening sentence of The Social Contract, by revolutionary thinker Jean-Jacques Rousseau, is still just as pertinent today as it was in the 18th century. The book highlights man’s journey from a state of autonomy to the modern condition, which is arguably dominated by a reign of inequality and dependency that not only destroys man’s original happiness and freedom, but also results in the “right of the strongest”.

Rousseau believed that the only thing that made humans different from animals is free will, which is placed in danger whenever man enters into society. He, therefore, believed that only the general will — which is to say general interest as opposed to private interest — allows us to regain our freedom.

This concept that general interest should prevail over individual interest is a particularly apt reflection this month, as we prepare for Freedom Day in South Africa on 27th April. This public holiday is celebrated annually on the date when South Africa’s first democratic election was held in 1994, after almost five decades of white-minority rule.

Freedom Day marks the achievement of democracy, and it also pays tribute to those who fought for the freedom of all citizens and challenged the laws of apartheid. The Freedom Charter affirmed “that South Africa belongs to all who live in it, black and white, and that no government can justly claim authority unless it is based on the will of the people”. A non-racial constitution eventually came into effect on 27th April 1994 when the whole nation finally had the freedom to cast their votes.

The days of apartheid are thankfully behind us, but in an article published by the Huffington Post, it has been argued that “the apartheid we face today is not a political system, but an economic one.”

The next phase of the struggle is to achieve economic freedom and equality, which needs to be backed by governmental policies and programmes if we are to conquer the abject poverty and corruption that is sadly so prevalent in today’s South Africa. This type of independence now needs to be won, and Freedom Day can be seen as a catalyst for development if conscious efforts are made to encourage what Rousseau referred to as the general will.

The dream of financial freedom may mean different things to different people. For some, the focus may be on being debt-free with a secure home to live in. While for others, it may mean having emergency savings to protect family and a retirement fund to open doors later in life. Financial freedom is personal. However, whether it is the freedom to respond to the needs of others generously, or the freedom to choose a career you love without worrying about money, the common thread is that being financially independent gives you options.

Here are 8 behaviours to becoming financially free this Freedom Day:

  1. Make a commitment to change and make today the day you take control of your financial future.
  2. Take a good look at your spending habits, debt and credit history. If you are living above your means, work out by how much you’re overspending each month and whether it’s actually necessary. Recognise and assess your spending habits — and the beliefs behind them — then clean up your finances and pay off any debts so that you can start building a foundation for wealth that will last. Seek the help of a professional behavioural coach if need be.
  3. Come up with a financial game plan and timeline. Set yourself achievable financial goals, and consider using a money management app to help you on your way.
  4. Cut your spending by simply changing some of your habits or elements of your lifestyle. For example, try cooking at home rather than ordering in or eating out, and enjoy the great outdoors rather than splashing heaps of cash in a bar. It’s very hard to build wealth if you live paycheck to paycheck, so it’s important to budget to get on the right track.
  5. Start building an emergency fund by working up from a simple goal, such as saving enough for what you pay for electricity each month. Anything is better than nothing. Just don’t be deterred if an unforeseeable event occurs that sets you back financially and prevents you from reaching a monthly target.
  6. Be proactive in your journey to financial independence by educating yourself financially. Take the time to review and understand your finances, read financial blogs, and find sources of financial inspiration. You may even wish to follow some financial gurus on Twitter, or participate in chats, such as #creditchat and #WBchat. It’s important to learn about your investment options (and know what’s out there beyond retirement accounts), so don’t hesitate to arrange a meeting if you ever wish to discuss them in more depth.
  7. Give yourself time to reach your goals, and develop some good habits on the journey. If you plan for the future and maximise tax benefits while you’re young, you can really benefit from the powers of compound interest, so the sooner you start investing, the more time your money has to grow. It’s important to set realistic goals and stick to them, as achieving financial security is a process.
  8. Although it is arguably important to pay yourself first in a developing country like South Africa, where there is little by means of social welfare structures, don’t forget to give back by helping others to reach their goals once you have found a sound financial footing. This could mean donating a bit of cash to help someone reach a savings goal, or keeping a friend on track with their debt repayments. There is more to true wealth than simply retiring early or buying a yacht. Financial freedom arguably means being able to help others — whether this means setting up a trust fund for your children, donating to a local homeless shelter, or mentoring someone who’s in need of your expertise.

This Freedom Day, let us strive together for economic empowerment and development, as independence in this regard will benefit all citizens and allow us to move forward as a nation.

Benefits of behavioural coaching and your finances

A Barclays Wealth study found that people improved substantially in investment decisions as they got older. When people are young — and perhaps less secure in their financial situation — a tendency has been recognised to be controlled by emotional biases that can be detrimental to investment habits.

Behavioural economists refer to some typical flaws that are commonly seen in investment decisions as failures of rationality. In order to achieve long-term financial goals, it is, therefore, important to identify and wrestle with some of our personality-driven investing mistakes.

This can sometimes be harder to achieve than you might think, but it is possible. The first step to overcoming an obstacle is to recognise that a problem exists. It is then a question of devising a set of strategies to control, or at least limit, bad decisions. According to the survey conducted by Barclays Wealth, many wealthy investors do realise their tendency to make emotional decisions, and would be happy to have some help dealing with certain issues.

The ability to exercise control plays a vital part in financial decision-making, especially when investment climates can be volatile, confusing, and even nerve-wracking. It is thus important to feel confident in your financial plan, so that you can resolutely commit to whatever investment strategy you decide.

For example, research suggests that there is a psychological phenomenon referred to as the trading paradox. A high percentage of investors feel they need to trade frequently in order to maximise their investment gains but, at the same time, many of the same investors feel that their overall returns suffer because they trade too much. Even though certain investors have this realisation and see the downfalls of their actions, they still give in to emotionally-triggered temptations and often miss out on optimal returns as a result. Behavioural coaching, in this instance, could help someone to focus on methods of changing this behaviour for good.

Behavioural Coaching

Behavioural coaching employs a range of professional techniques to help you to make changes to certain patterns of behaviour. Behaviour comprises of actions and reactions, and behavioural coaching has been defined by the Behavioural Coaching Institute as “the art of facilitating the learning and development of an individual, so as to increase their effectiveness and happiness”.

It emphasises that much of human behaviour is, in fact, learned, and that all behaviours result in positive or negative consequences for the individual and those around them.

This model of coaching, therefore, involves identifying and measuring certain learned behaviours and their impacts. To do this requires an exploration of core values and motivations, as well as assessing covert behaviours (such as anxiety or self-defeating beliefs) in relation to overt actions (such as public speaking).

Once you have identified an issue and sought professional guidance in establishing a personal set of effective coping mechanisms, it is important to consistently exercise your newfound good habits. These need to be practiced on an ongoing basis, and regular monitoring and evaluation will help you to achieve long-term success.

Your commitment to addressing any unhealthy feelings and unproductive behaviours should help you to attain SMART financial goals — S (specific), M (measurable), A (attainable), R (realistic) and T (time-based) — and be your own best coach.

5 tips to avoid making bad investment moves

While no one has a ball of fortune with which to predict the future, there are some common mistakes that many investors make, which can be avoided.

The basics of investing can seem relatively simple, but it is important to set emotions aside in order to maintain an objective strategy that will benefit you in the long-run, and this can sometimes be quite hard to do. It is, therefore, very helpful to follow certain mechanisms to control or limit bad investment decisions.

Having recently researched some articles on Investopedia and USnews –

Here are 5 tips to take into consideration:

1. Look at the big picture and don’t just make decisions in isolation. Rather examine the potential impact that each decision could have on an entire portfolio. Failure to do this can result in you investing too much in a single asset class, industry, or geographic market. Instead of going all in with one investment, it would arguably be better to stay informed about a wide range of options that can complement each other, diversify your risk and help you to achieve your long-term goals.

2. Establish your goal horizon, then make decisions accordingly. Don’t just ignore the potential of long-term wealth accumulation in favour of short-term returns. Statistically, losses happen more frequently over a short timeframe and, as people tend to be very sensitive to losses, a behavioural phenomenon known as ‘myopic loss aversion’ occurs, which affects willingness to take short-term risks. This, in turn, results in people making emotion-based investment decisions that can have a negative effect on a portfolio.

3. Don’t just follow the crowd or do what’s comfortable in bullish or bearish market conditions. A good investment strategy is to buy low and sell high, but if you follow the masses blindly, it’s easy to end up buying high and selling low, which may have opposite results and prevent you from taking advantage of the same market opportunities. A buy-and-hold strategy is often far superior.

If you know that you can be prone to having knee-jerk reactions, you may wish to try to avoid constant information about how the market or your portfolio is performing, so that you can just focus on sticking to your long-term investment strategy. Don’t chase the news or get swept away by rumours and hot tips.

It’s also a good idea to do some research before jumping in, so that you have made a basic analysis of any weaknesses or values. Rather than following the rumour mill, it is better to make investments in things you understand.

4. Don’t trade too frequently — especially if you are prone to having a sometimes irrational bias towards action — as this can result in higher investment costs and an increase in making poor decisions.

If you ever have itchy feet, it can often be a good idea to wait a few days before executing a big financial decision and seek advice by organising a meeting to discuss an option.

5. Don’t invest money that you cannot afford to lose, as it’s important to keep cash on the side for emergencies and opportunities. You may not feel happy having some of your money just sitting there, not earning any returns, but having all your money tied up in the market is a risk that’s arguably not worth taking.

To help you make healthy financial decisions, set yourself some rules, such as only contributing a percentage of your monthly income; and establish some realistic targets, such as aiming to save a certain amount of money by the end of the year. Some people can even find it helpful to limit their options by purchasing more illiquid investments to avoid the urge to simply sell or switch on a whim or when the markets aren’t performing as desired.

Many people also find delegation a handy tool. By delegating your financial decisions to a professional who you trust to manage your portfolio, you can spare yourself a lot of stress and rest assured that you will receive sound advice as to how best to execute your financial plan to achieve your goals.

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In sickness and in health | Disability Cover

A study conducted a few years ago on behalf of the Association for Savings and Investments in South Africa indicated that over 12 million of the country’s workforce were underinsured in terms of life and disability cover. Furthermore, reviews by various insurance companies highlighted that this shortfall fell primarily in the realm of disability cover.

In the event that you are not able to completely (or partly) perform your usual professional duties as a result of a medical condition, impairment, or trauma, then sickness and incapacity benefits are vital in order to ensure your monthly income is covered or supplemented. No insurance company will issue long-term insurance once you have been incapacitated, so it is important to prepare for any unforeseen events in advance and understand the details of your cover. ‘Just in case’ is better than ‘simply too late’.

Your gross professional income will determine the amount for which you can apply, and it is important to acknowledge the value of monthly benefits that will pay out until retirement age, rather than only focusing on lump-sum benefits. If you are employed by a company, you can cover not only loss of income, but also any benefits — such as travel allowance, medical aid and retirement contributions — and even average performance bonuses. If you are self-employed, you can cover the salary that you withdraw from your business, as well as your share in net profits and business expenses.

Depending on your chosen insurance provider, sickness and incapacity benefits may be offered as one product or as three separate products — (1) sickness benefits, (2) temporary incapacity benefits, and (3) permanent incapacity benefits.

A permanent incapacity benefit follows as a natural progression from a sickness benefit. This means that, after you have claimed from your sickness benefit for a certain period of time, if your condition is permanent, your monthly benefit will then be paid from the incapacity cover until the specified retirement age.

When disability claims have been analysed, many insurance companies have found that South Africans tend to only be covered for permanent disability. However, many claims are actually as a result of a temporary disability. For example, unless you are a professional athlete, if you lose or injure a limb, you won’t be regarded as permanently disabled and you will not be able to claim for a permanent disability. Granted, you will need to make significant adjustments to cope with the life-changing circumstances, and you may require a substantial amount of time off work, but you should ultimately be able to return to your job. In an event such as that, you would need to be protected by having sickness and/or temporary incapacity benefits.


Benefits can vary depending on your insurer but, generally, listed pregnancy complications are automatically covered (so long as claims criteria are met). A benefit will also be paid in the event of hospitalisation for four or more days due to a pregnancy-related condition​​.

You will also often be entitled to a Family Responsibility Benefit, which allows you to take time off work if one of your family members is hospitalised. This can also provide funds that can be used to cover any non-medical costs that occur as a result of hospitalisation.

When considering sickness and incapacity benefits, you may wish to also add benefits, such as the Child Terminal Illness Benefit and the Child Death Benefit, which enable you to cover costs and support your family during this tragic time.

A Hospital Benefit may also offer extra peace of mind, as this pays an additional amount equal to the sickness benefit if you are hospitalised for four consecutive days or more.

It may be worth considering a Permanent Incapacity Booster as, in the event of permanent incapacitation, this will automatically increase a partial monthly payment to 100% until you reach the selected retirement age.​​​

Whatever benefits you decide to include, it is important to understand the fine print to ensure that you are covered in the face of any disaster — be that temporary or permanent. For example, waiting periods can vary significantly — some insurance companies pay out if you are booked off work for more than seven days, and payment is made retrospectively from the first day; while other insurers have a much longer initial waiting period, and you will not be able to claim your policy if you are booked off work for less than this time. When making your decisions, you may, therefore, need to consider how long you can cope with a loss of income.

Don’t hesitate to arrange a meeting to discuss your options and ensure you are covered in the event of all eventualities.

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Health For All

The World Health Organisation (WHO) was founded on 7th April 1948, and this date is celebrated every year as World Health Day, with the goal of drawing attention to a specific global health concern.

Last year, the focus of the campaign was to mobilise action with regards to depression, and the theme for this year will be “Universal Health Coverage: everyone, everywhere.” The slogan and hashtag behind the 2018 drive is #HealthForAll, and the aim is to encourage and support countries to provide quality Universal Health Coverage for all citizens.

It is vital for leaders to understand the importance of investing significantly in human capital, as access to quality care not only improves people’s health and longevity, but it also prevents outbreaks of epidemics, and creates jobs, which in turn alleviates poverty and drives economic growth.

The World Health Organisation supports the principle that all people should have the right to live their life in good health. According to the organisation’s website, the Director-General said that “no one should have to choose between death and financial hardship. No one should have to choose between buying medicine and buying food.”

As WHO is also celebrating a notable rite of passage this year — its 70th anniversary — it is calling on world leaders to follow through on the pledges they made in 2015 when they agreed to the Sustainable Development Goals. From a South African perspective, it is important that we now commit to taking the concrete steps necessary to protect and ameliorate the health of all citizens.

Turning the spotlight on South Africa

Although South Africa does have a public healthcare system, it would be fair to say that it is severely lacking and is often unable to provide the quality of care, equipment, skill and service that citizens need and deserve. And unfortunately, the country still has issues with deadly outbreaks of diseases such as malaria, HIV, rabies and, most recently, listeriosis. These diseases particularly affect the poor, and highlight systemic failures in providing secure shelter and proper sanitation to many South Africans.

Having some form of private medical cover in South Africa is, therefore, still an arguably unavoidable and expensive necessity if you wish to have access to quality medical treatment if the need arises. According to statistics released by the Council for Medical Schemes (CMS), by the end of 2016, there were 82 medical aid schemes operating in South Africa, with a total subscription of just under 8.9 million members; and Discovery remains the country’s largest medical aid provider, with currently over 2.7 million members.

According to an article published on Business Tech, “over the past decade and half, the average year-on-year increase of medical scheme contributions has been 7.6%”. However, due to the country’s recent political and economic turmoil, many people’s salaries have not increased in line with this each year, and many citizens are feeling the financial strain of keeping up with their contributions.

As a result, some people have started looking for cheaper options, which is known as ‘buying down’, and the popularity of hospital plans is on the increase due to its affordability. However, this could have a significant impact on your health and future well-being, as certain schemes do not cover patients in full. Even if it is stated that hospital procedures will be covered 100%, this may mean that you will only be paid out in full for the tariffs that are specified by your scheme, rather than 100% of the actual treatment costs.

For example, if a specialist charges more than your scheme specifies, which is common, you will have to pay the balance yourself, which can be financially crippling. As a result, many South Africans also opt to pay for Gap Cover to cover any differences in rates, and this is yet another cost that must be budgeted each month.

A brighter future

However, the future is looking bright for South Africa now that Cyril Ramaphosa has been elected president and Jacob Zuma has left the building.

According to an article published by Eyewitness News, Ramaphosa has spoken frankly in the past about the country’s ailing health system and “has urged the Treatment Action Campaign (TAC) to take on government, and challenge officials to do more to improve the healthcare system.”
Now that he is president, it is essential that he doesn’t neglect the issue of National Health Insurance (NHI), which is an important implementation that would improve the lives of millions. The urgency of structural change to resolve the country’s crushing inequality should be at the forefront of our new leader’s objectives and, as citizens, it is up to us to collectively push for the right of everyone to have access to quality healthcare — #HealthForAll.
In the meantime, take the time this global awareness day to ensure that you understand the benefits and potential implications of your medical scheme. Rather than opting to ‘buy down’, research your options and don’t skimp on appropriate coverage if you can afford not to.
Don’t hesitate to arrange a meeting to discuss how you can ensure that you and your family are always fully protected in the event of any unfortunate circumstances – get the best advice and make the right choice..