“How Can Anyone Afford to Save These Days?” How many time have you heard this question, perhaps even asked it?
“The cost of everything goes up, but our income stays the same. How can I save?”
Somebody send me this excellent link and I started it on 17 July 2019. One has to start somewhere, right?
If you want to know what the date number of TODAY is, click HERE.
Here is how you can start saving with just 10c a day:
Please leave your comments below and let us know what and how you are doing!
Download the In Case of Accident cheatsheet.
From experience (which I hope you never have) I know how rattled one becomes with an accident. A few years ago I saw my wife driving out of our driveway and being hit by another car. I did what we are taught to do: I took the other driver’s detail. Only to discover later that I wrote down my own phone number instead of the other driver’s number. Rattled, is the word.
Download the cheat sheet, keep it in your car and make sure that every driver of your vehiccle knows where it is In Case of Accident. Remember to complete the section with your own detail in advance, so that you have it ready and do not have to look for it. People tell stories how they search for emergency numbers on their phones “Have I saved it under this or that?”
Most (if not all) insurance companies offer an emergency number that you should call in case of an accident. If you call that number, they will manage the accident:
Never admit guilt in any way after an accident. Even saying “I am sorry” can be taken as admission of guilt.
Take photos, as many as needed from all sides. Up close of the damage, from a distance of the whole scene. Take your time. Don’t be rushed into moving vehicles and clearing the road until you are satisfied that you have all the evidence that you can get. Make sure to get photos of the vehicle’s license disk and registration. Take photos of the name and model (normally rear side). I had a case where my client bumped a Mazda rear-left with no damage to our client’s vehicle. The claim against our client came in for a Tata LDV smashed to pieces right-front! Then you realise the value of cellphone cameras.
Get the detail of the other driver (name, phone number – let him phone you and capture the number) and address. Take a photo of his driver’s license. You will be surprised how difficult it can be to trace the other driver! Get as much info as you can.
This cheatsheet will help you to gather the information you need In Case of Accident.
Keep it handy, like a spare wheel. May you never need it.
“Somebody always pays for insurance.” It is an old insurance saying and I had occasion to say it to a client this morning.
Last week she was in an accident and the other party does not have insurance. Now they start harrassing her.
My advice was: Do not talk to them or negotiate with them, it can only put you at risk. Tell them you have insurance, give them my number and I will point them to the insurers.
My client has insurance, we will follow the procedure, her car will be repaired, no problem.
It is not “no problem” for the other party.
1. He will have to submit and substantiate a claim against my client/the insurance company;
2. If the insurance company decides that he is at fault (and already we know a lot of erroneous or false statements at the police), he will have to pay his own repair cost and will be liable for my client’s costs (paid by the insurance company).
I do not know why he did not have insurance. The fact is, anything he saved by not paying an insurance premium, is now at risk and then some more!
That is why we say: “Somebody always pays for insurance.”
Life insurance: Either you pay a premium while alive, or your family will pay after your death with a reduced standard of living and your dreams for your children may never be realised;
Income Protection: Either you pay while healthy and working, or you suffer the financial consequences of a debilitating event;
Medical Aid: Either you pay the premiums while healthy, or face financial ruin while fighting death. This is very relevant in my life. My wife has leukemia – if we did not have medical aid paying for the medication, we would be ruined financially and she would have a 3 year life expectancy. Now the medical aid pays the medicine and she has a normal life expectancy.
That is the downside of my work – I have to remind my clients of things that can go wrong. The satisfaction? When a claim is settled and a client carries on with his life, whatever happened, was just a bump in the road.
Do you know these two extremely important facts about making money?
Only once have I seen anybody else making reference to the first one. Never have I heard anybody referring to the second one. Once I was helping somebody evaluate a business he wanted to buy. I explained the first fact. The owner of the coffee shop where we were, overheard me. He chipped in and said: “Listen carefully. It is wisdom. I did not know it and I pay the price daily.”
So, what are these two facts?
Fact 1: You make money when you BUY.
I told the person who wanted to buy the business I think the price is too high. If you pay to much for the business, your returns are reduced right through the process to the end where you sell it. If you pay too much, your returns would be less than optimal, which means you will always be earning less than you should.
This does not only apply to businesses. It applies to everything. If you overpay for a listed share on the stock exchange, it is the same. So-called “smart money” get in for cheap and the “not-so-smart-money” get in at the top when the first group start selling. There is not enough upside left! If you buy a car with the idea to sell it for a profit, you have to buy it a price that allows you to fix it up, add your profit and still sell it at an acceptable price to the next person.
That is fact 1: We make our money when we BUY, not when we sell.
Fact 2: You need an exit strategy.
That means, before you buy anything, you should know how you will dispose of it. Perhaps it does not work like you thought and you want to get out. Perhaps you reach your investment goal and you want to get out. You need answers to two questions:
2.1 Who will buy it from me?
2.2 How will I get in contact with them?
Nobody makes money from Timeshare, except the managing and sales companies. So we never buy it as an investment, we buy a lifestyle and that always costs money. If you decide you do not like the lifestyle any more, how will you get out of it?
Who will buy your timeshare? Somebody who would like that sort of lifestyle. There are many people who would like that lifestyle. There is, in other words, a market.
How will you find the market? Most timeshare companies have sales staff who advertise to existing owners and who will sell on your behalf for commission. But going outside this system is not easy.
Stock exchange listed shares are easy. Buy a share in a property syncication where a number of people own the share is not so easy. It is like the timeshare scenario.
Before you part with your money with the idea that you will make more money, just answer these two questions honestly:
Who will buy from me at a higher price?
How will I find them?
That is fact 2: Have an exit strategy in place.
It is easy to forget these two facts – but it can cost you dearly.
Insurance companies have to operate lawfully. That is no surprise.
But did you know that we, as insureds, have to operate within the boundaries of the law, or a claim could be repudiated?
Here are some examples of when a claim could be repudiated:
Businesses are regulated at almost every level and you have to comply or run the risk of fines and even closure. Ignoring some of these regulations could also have dire consequences for your short term insurance claims.
How many times have you seen or heard about somebody who retires and then shortly afterwards gets sick? Nothing comes of all the dreams and plans for the “golden years.”
The saddest I have experienced was when I was a student (studying for the Ministry) and one holiday I helped in a congregation. I was 23 years old. One of the people on the list that I had to visit was 60 year old gentleman. His dream was for him and his wife to travel South Africa in a motorhome after retirement. Everything was organized, motorhome in the driveway – preparations under way. Two months before turning 60 and retiring, he was diagnosed with liver cancer – at that time it was a death sentence. Nothing came of his retirement.
| That is why I also define wealth in terms of money, time and health. |
I love the outdoors. I love traveling the roads less traveled. To do that, I need money for diesel, for the right food and accommodation. Each one of us has something that we love doing and that we look forward to doing more of. Without money we can do very little.
No sense in working so hard for money that I do not have time to enjoy my life. We will go through this life but once. Time is the one commodity we can never make up once we have used it or abused it.
Without health, we have a problem. In fact, our health is our biggest wealth. As long as we are healthy, we can work and make money and enjoy our time.
This is not a common definition of wealth. It is a definition that makes me think about my life.
| Wealth is a matter of balance – work, play, mind, body, values |
How many time have I heard: “I will do it when I can afford it.” When will you be able to afford it, whatever “it” is?
Creating wealth is a process. You will need resources on this journey. Resources like your health (if you get sick and cannot work, how will you earn an income?). The tools of your occupation, that could be a laptop, a cellphone. High value/cost items that you bought, such as a house and vehicles.
Protecting your wealth as you build it, means you need to look at insuring the risks:
| Cellphones are computers in our pockets and I cannot do my work without it. Let’s assume my cellphone costs R18 000. If I lose it, I want the same one or a better one. Insurance would cost R150 per month. Or I could use R18 000 from my savings to replace it. In my mind R150/month is cheaper! |
This is the case for Short Term Insurance. Protect Wealth before you create it.
If you need any help with short term insurance, please contact me. That is what I do – I help people protect their lives and wealth!
Some people measure wealth in terms of cars, toys, gadgets, holidays. All of these could be signs of wealth.
There is another, more accurate, way of measuring wealth – in days, weeks, months or years. In Time. Do yourself a favour and watch the movie In Time to get an idea!)
Measuring wealth in this way, is simple. If, for any reason, you lose your salary today, for how long can you maintain your lifestyle with the money and income that you have (other than your salary)? I encourage you to do this – debt payments (house/rent, car,. credit cards, etc), entertainment, food, school fees, clothes, all monthly expenses – how much do you need every month to live like you do?
If you take the income from investments – how much of expenses is covered? If you need capital to maintain your lifestyle you are in deep trouble! It is at this point that you realise wealth is definitely not cars and gadgets!
So, what do think about this? Please comment below.
