Archive | October, 2014

Contribute 15% of your income to a RA and SARS “pay you back”

The PDF prepared by Lyle at Chalford Wealth shows you how your money will grow with and without increasing your monthly contribution each year. Page 2 shows you how having an RA can be used as a tax deduction benefit. IE: If you contribute a full 15% of your salary to an RA, SARS ultimately ends up paying towards your RA in the form of a tax rebate.

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GAP cover

Chalford Wealth now offer GAP cover by CompliMed.  GAP Cover is a fantastic product that covers the shortfall of your medical aid.  Not all medical aid packages cover the full procedure although the cover 100%.  The 100% is the medical aid rate, but some specialists charge up to 500% of that figure.  The cover would […]

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What is investing and compound interest?

The act of committing money or capital to an endeavor with the expectation of obtaining an additional income or profit. Investing means putting your money to work for you. Essentially, it’s a different way to think about how to make money. Growing up, most of us were taught that you can earn an income only by getting a job and working. And that’s exactly what most of us do. There’s one big problem with this: if you want more money, you have to work more hours. However, there is a limit to how many hours a day we can work, not to mention the fact that having a bunch of money is no fun if we don’t have the leisure time to enjoy it

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Use your bond wisely

One of the reasons that make a house such a good investment is that it is just about the only investment in which a normal average family can utilise financial leverage. Any bank is willing to give you a loan of about R500 000 if you can scrape together a deposit of R50 000. Then you get the benefit of capital growth on the full value of the house over the next 20 years – using the bank’s money to grow your own capital. The alternative is to pay rent rather than interest and thus subsidise somebody else’s property. On the other hand, your bank manager will be very sceptical of lending you R500 000 to buy some shares or unit trusts. He will likely argue that financial markets are too volatile and shares are unsuitable collateral. Consider this; Total interest paid on a home loan of R1.2m at 9% per annum will come to R1.39m over 20 years. The instalment is R10 796 per month. If you pay R200 per month extra, you pay your bond off after 19 years and save more than R80 000 in interest. If a home owner can pay R500 more than just his normal bond repayment every month, he will save R182 752 in interest over the term of the bond. His house will be paid after 17 years and 9 months. An investment of R500 per month in a savings account would have grown to less than half this amount.

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Retirement reform at a cross roads

Delay in increased retirement fund tax deductions proposed. In terms of the new proposal, the introduction of an annual R350 000 contribution ceiling will also be delayed for two years. According to a presentation by National Treasury the contributions to provident funds will continue not to benefit from the tax deduction enjoyed for contributions to pension funds till 2017. It stressed that provident fund members would in future still be allowed to take a cash lump sum for funds that had already been saved and that they would not be forced to annuitise historic savings.

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71% of SA Wealth in Hands of Richest 10%

In South Africa, 63 000 people are among the top 1% of the wealthiest people in the world. The wealthiest 10% of our population hold 71% of the country’s wealth, according to a global wealth report by the Credit Suisse Research Institute. Rich South Africans have most (73%) of their wealth held in financial assets. Inequality has risen since 2008, particularly in developing economies, says Mark Stierl, a researcher at the Credit Suisse Research Institute.

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A Quick history of the Rand

The level of the South African rand (ZAR) dominates most conversations these days and directs our spending and investment policies to a large degree. But, how much do we know about the origins, history and management of the ZAR? Being interested, we have put together a concise 3-page summary of the ZAR developments since the formation of […]

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Discovery Health’s 2015 price increase table

Discovery Health has released its price increase for 2015.  It looks like between R250 and R350 across the board.  Take a closer look here.  For any questions or changes contact Jayden at Chalford Wealth.  Now is the time to take a closer look at your policy. You may need to upgrade, downgrade or get an entirely […]

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