SPONSORED | The right financial plan delivers prosperity

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The right financial plan delivers prosperity, writes Abulela Gazi. Picture: Supplied
The right financial plan delivers prosperity, writes Abulela Gazi. Picture: Supplied

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What are the hallmarks of a solid financial plan for an individual? And for a family? 

The hallmarks of a solid financial plan is firstly having one in place. A financial plan is the plan which is crafted to reach one’s financial life goals.

So for example, say you want to ensure that you are able to afford your 10 year old’s tertiary education fees, you would then put this as a financial life goal and put a plan in place to make this a reality.

Majority of South African’s unfortunately do not have financial plans which results in an inability to reach these goals.

You know the saying – if you fail to plan, you plan to fail. Once you have identified your financial life goals, it is important to put a plan in place to meet these.

It is critical to go on this journey with a financial adviser as they are well versed in understanding financial matters. They will identify different ways to reach these financial life goals.

These could be through savings vehicles and insurance products like Life Cover among others. They will also help you draft a monthly budget which will help support you reach your financial life goals.

Once this is in place, it is then critical to be disciplined in achieving them; continuously pay ones premiums, annual check-ins with the adviser to update the plans and take into account any changes to your circumstances.

It is worth mentioning that, we at Metropolitan Life have over 3500 advisers across South Africa should one need assistance. They can be found in our 120 branches across the country. 

What is the best way to ensure you have chosen the right partner for financial prosperity?

There are a few things which we encourage our clients to look at when choosing a financial adviser:

  • Qualification. It is critical that the adviser has the necessary qualifications to assist you through this journey. Qualifications could span from being a Certified Financial Planner to having completed their RE exams. It is important to ask for evidence of these qualifications.
  • Reputable company. Advisers who generally work for well established, reputable companies will have the necessary qualifications to assist you. As a result, it might be easier to rather go this direction than obtaining the actual qualifications from the adviser. For example, at Metropolitan, we ensure that advisers go through the necessary training and are well versed in financial matters prior to putting them in front of clients. 

Building generational wealth is difficult – where is the most effective place to begin for someone wanting to provide for their family?

Unfortunately, there is no one effective way to begin. There are various ways in which people can start creating generation wealth.

For example, one could start a business and try make it successful, sustainable and profit generating.

This business can then be left behind to dependents as a form of wealth.

However, not all South Africans are entrepreneurs– either they do not have the risk appetite or the skills to build businesses. Fortunately, there are other alternatives.

These being starting to save as soon as possible. Most people ask how much but the reality is that anything you can save, you should save. And the power of compound interest will then work its magic.

I like using farming chickens as an example of how compound interest works. One chicken will lay a number of eggs, say 5. When these eggs hatch, you go from having 1 chicken to 6. Once the chicks are of age, they too will start laying eggs effectively giving you 6 chickens laying eggs. And it goes on like this. That is the power of compound interest and why it is applicable to even the smallest savings amount.

It also helps being clear on what you are saving for; are you saving for a rainy day, saving for a specific event etc. By doing this, it will help ensure that you do not dip into the savings for another purpose.

Also, there are other insurance products like Life Cover which pay out a lump sum should you, as the breadwinner pass on.

The lump sum is a cash payout which could be a large sum total depending on the size of your policy.

Metropolitan has in fact just launched a new, innovative, customer-centric, life cover product. What three quick fixes are there for someone wanting to budget better today?

  • Put a budget in place, understanding at a granular level, what and where you spend your money.
  • Stay disciplined in adhering to the budget. This will entail tracking your spend on a regular basis. Fortunately, there are apps which one can access which help you track your spend on a daily basis. We would recommend these.
  • Cut all unnecessary spend. For example, instead of paying for that gym membership, perhaps you invest in running shoes and rather run. 

When it comes to life cover what is its place in comprehensive financial planning for family?

Its place is critical especially with the uncertainty we are confronted with given this Covid situation.

It is important to ensure that your family is taken care of regardless of what happens to you. Life cover achieves this and gives you peace of mind that your family is covered.

For more information about providing for your family through the generations, visit https://www.momentummetropolitan.co.za/

This post and content is sponsored, written and provided by Metropolitan.


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