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Starting With What You Have

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Starting With What You Have

Money is such a taboo conversation for many of us, especially those who came from lower to middle class families, and this has for some transferred through to spending and saving habits in adulthood. Which results in us creating a financial mess as we start off in our careers and this has had a detrimental effect on us attaining our financial goals and ultimately financial liberation.

Therefore it is vital in the pursuit of our financial goals we understand our financial position, earnings and work within the confines of our finances to achieve our desired goals – by starting with what we have.

The questions one should generally ask themselves in starting with what you have is “what do I want my money to do for me” or “what financial goals do I have for myself and my money” this will assist you in understanding how much financial resources you have at your disposal and its limitations. 

Many of us cannot afford to purchase capital and lifestyle assets cash, therefore we need to finance such things, however we can save towards a significant portion of the capital required to purchase these assets, what we at SimWealth like to refer to as goal based investing.

In the pursuit of goal based investing there are three aspects of  financial goals one should consider. Short-term financial goals; an example of such a goal could be building an emergency fund as they typically fall within a 3 year time horizon.

Medium-term goals usually have a time horizon 3 – 5 years and these could be financial goals that will require a substantial amount of capital to initially fund a purchase of a car, a purchase of a home, raising of capital of  start a business.

Long-term financial goal, this is what we at SimWealth like to refer to as the wealth creation strategy of your financial plan and these are goals with a time horizon of 5 years above, this is the portion which you pursue when building financial assets.

Financial goals will vary in terms of importance based on different factors, life cycle you may find yourself in, and time horizon. Therefore when setting out your financial goals you and your financial planner should incorporate them into your financial plan, and based on the goal created structure an investment portfolio that speaks to each goal.

The importance of selecting and structuring the correct investment portfolio with the correct asset class allocation is vital as this could see you other miss or achieve your financial goal, therefore other financial goals need investment portfolios which provide capital preservations, while other financial goals require a high equity driven investment portfolio.

We need to address our financial fears and goals head on, as this will result in us not being intimidated in addressing our financial circumstances and our perception about money and this will stop it from being such a taboo in conversation. Allowing you to achieve your desired financial goals by starting with what you have.  

also see: https://simwealth.co.za/2019/06/11/the-dos-and-dont-of-financial-planning/

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Sanele NkosiManaging Director

Sanele Nkosi is a Wealth Manager by profession. Having obtained an undergraduate degree in Finance from the University of Johannesburg. He is currently pursuing an Honours in Financial Planning. He started in the investment and asset management industry through the Investec Advisor’s In The Making Programme, strongly developing his passion for wealth management and financial planning. He finds great pleasure in assisting clients realise their financial goals, through well executed financial planning. With insurmountable experience gained in the industry, by working for some of the biggest asset management firms in South Africa. He has also improved and enhanced his skills and experience by completing the Association of Savings and Investments of South Africa (ASISA) Program, and other professional qualifications. He is an avid believer in creating a culture of setting long-term financial and life goals, and pursuing them with diligence and discipline.

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