Connect with us

Wealth Management

WHAT DOES RETIREMENT MEAN TO YOU?

Published

on

By Gary Fisher, Head: Member Education Services and Individual Consulting at Alexander Forbes

 

No matter your age or current stage of life, you probably have questions in the back of your mind about retirement, such as “When do I retire?’ ‘What options do I have?’, and ‘Who can assist me?’.

The simple answer is that you decide when you want to retire – there is no specific event or deadline which forces you to retire. The company you work for stipulates your required retirement age but this does not mean that the stipulated date is the starting point of your retirement. If you are lucky enough to continue working past this date either for your current employer or a new one, then what you do with your retirement savings becomes of the utmost importance.

Today, there are different options available to you when your required retirement date becomes a reality and you are asked to make a choice. One of the options is that you simply notify your employer that you have not yet decided to retire from the fund and would like to leave your money in the fund until further notice. Nothing will change and you remain a paid-up member of that fund, receiving regular statements and notifications. The only thing that changes is that you can no longer make contributions into the fund. However, your retirement savings will continue to attract growth based on your selected investment strategy, just like it did before your required retirement age. You will notify your fund when you want to retire and need your money.

Some retirement funds offer additional benefits while you are employed, such as group life insurance cover, personal health insurance, disability cover and funeral benefits. These benefits usually end at your required retirement age. However, should you still require this cover, make enquiries with your employer whether a continuation option exists and what it would cost you to continue with the cover.

Those who are many years away from their required retirement age might be thinking all this talk about retirement doesn’t apply to them yet. Think again, as time flies by quickly. So while you have the opportunity and time on your side take the necessary steps to ensure that when your required retirement date comes around, everything is in place and the planning is done. In this way, you can make a stress-free, seamless decision about your retirement.

 

Here are some tips which will assist in securing your financial well-being by the time you reach your retirement date:

  1. Make additional contributions into your retirement fund

Most retirement funds have flexible contribution rates which allow you to choose how much you want to invest each month. The decision you make, however, has far-reaching consequences, as it affects the final amount that you receive at retirement. Choose an affordable amount and review your decision at least once a year. If you are lucky enough to receive a bonus, consider taking a portion and paying it into your retirement fund. To work out what is an affordable amount for you, ensure that you have a budget in place which sets out all your earnings and expenses and how much extra money you have available once all your expenses are taken care of. Reviewing it regularly allows you to keep track of how much extra you can afford and contribute.

 

  1. Harness the power of compound interest

Compound interest is when you get to the point of where the interest on your investments, is earning interest. The key to this solution is to start investing as soon as possible and as much as you can afford.

To understand compound interest, we need to first understand simple interest: You deposit R1 000 into your savings account assuming an interest rate of 5% a year. At the end of the first year the amount in your account is now R1 050 (made up of your R1 000 investment and R50 interest earned).

What happens the following year? This is where compound interest starts to work its magic. You will earn interest on your initial R1 000 deposit and interest on the interest you have already earned. In our example the total amount in the account at the end of year number two is now R1 102.50 assuming the interest rate is constant. The secret ingredient here is time: the longer you leave the money invested, the greater the amount becomes and the more you harness the power of compound interest.

 

  1. Keep your retirement savings invested when changing jobs

According to the Alexander Forbes Member Watch, the average South African employee retires on a pension income that’s around 30% of their last salary. This is mainly because they take their retirement savings in cash when changing jobs rather than keeping them invested. Withdrawing their retirement savings between jobs interrupts the power of compound growth. You have a number of options available to you to ensure you remain invested for the long term, including leaving your retirement savings in the fund when leaving your employer.

  1. Partner with a professional financial adviser

Take time to read widely and research financial topics you are grappling with so that you can ask informed questions when you meet with a financial adviser. The role of the adviser should begin from a position of trust and that trust can only be built over a period of time. Find an adviser who can explain financial concepts simply. Make sure they are suitably qualified and carry the Certified Financial Planner designation. In this way, you will receive targeted advice that is unique to your circumstances to assist you in achieving your financial goals both now and in the future.

The decision of when to retire remains yours, but before you get to that point and need to make important decisions, take some time to assess your current situation. Make necessary tweaks to ensure you set yourself up for your best possible retirement.

 

Top 10

Turn the data landfill into an insight goldmine

Published

on

By

Andrew Watson, CTO, MHR

Today, businesses have access to a wealth of data, with vast amounts of information created daily. While tools exist to help companies make sense of it and take advantage of the critical insights that data can bring to drive stronger business growth, many organisations are simply overwhelmed with the volume and velocity of data collected. With this, there is also a sense of uncertainty on how best to leverage this to create data driven insights.

Disjointed processes and dormant ‘shelfware’ are keeping a wealth of data stuck in silos – untapped and underutilised. As a result, nearly three fifths (57%) of UK organisations say they believe they are making business decisions based on inaccurate data. Without a clear strategy to guide them, organisations will be running blind, unable to access and get value from the relevant data to make stronger predictions and smarter decisions.

And the longer data is left untouched, and the more of it that is generated, the harder it will be to leverage it to its truest potential. Organisations must urgently recalibrate their relationship with data and learn how to integrate and analyse it to find trends and useful information. Leaders should see this as an opportunity to utilise the right tech solutions to harness the power of data as a vital source of competitive advantage and turn a digital landfill into a goldmine of data.

 

The data treadmill

Andrew Watson

Every day data is captured by every department in every business. No matter how big or small an organisation is, it is generating invaluable insight from customer patterns to trends on the efficiency of internal processes.

But with this level of data generated, many are finding themselves on a data treadmill, constantly working to ‘catch up’. These organisations are failing to make progress as they are not utilising or optimising the data tools at their disposal. In fact, very few companies are fully embracing the spectrum of tools and methodologies available. Most businesses are spending disproportionate amounts of time on manual data processes, resulting in a ‘reporting lag’. By focusing on simply managing the mechanics of data, such as moving and storing it, businesses are struggling to unite and access real-time data insights, instead creating disjointed silos that lack the enterprise-wide connectivity and visibility needed to identify where processes can be improved.

For other businesses, the challenge comes from not knowing what they want to achieve with the data, or that they have data at their disposal at all. Unused, unanalysed data is a missed opportunity for leaders to create real business value. This is not helped by organisations rushing into buying new systems during the pandemic and subsequently leaving them gathering dust, or only being used at a fraction of their full potential. In other cases, data scientists have been brought into an organisation, but do not know where to start, as the wider business lacks a smart data strategy underpinned by clear objectives. All too often, analytics are left as an afterthought.

Businesses need to become more data savvy lest they continue to fall even further behind. Not only do leaders need to ascertain what decisions their company needs to make, and where they can get the data to support these choices, but they also need to change their data strategy by putting in place the tools and people that can integrate the data to find previously unknown information.

 

Uniting business strategy and data strategy

However, this requires the organisation to have a business strategy that aligns with its data strategy, so that the data being captured can be used to measure improvements and ultimately drive business growth – after all, more than nine in ten (91%) organisations recently surveyed by MHR acknowledged data-driven decision making as an important factor in their development.

A strong data strategy is a cultural shift that requires top-down leadership. Leaders can ensure that the purpose and use of data within an organisation is directly linked to the core business goals, while guaranteeing that a new data-optimised culture is developed end-to-end throughout the company, bridging the gap between business strategy and implementation. In turn, aligning business and data strategies enables organisations to accurately measure the success of their current approach, providing them the next steps they need to take to continuously improve.

While data scientists can be viewed as a solution, they do not have the in-depth knowledge of how the business operates to ensure true strategic alignment. Alternatively, businesses can leverage the right technology, such as an integrated software solution, to ensure that their business and data strategies are fully intertwined throughout the organisation. With this in place, complex data processes can be streamlined and simplified through automation, empowering businesses to make informed strategic decisions from reliable and accurate data.

With technology in place, business and data strategies can be brought together and can generate eye-opening insights that keep companies on top of their data, ensuring that they are not running blind in the race towards data maturity.

 

Continue Reading

Top 10

An Entrepreneur’s Guide to Investing in Bitcoin

Published

on

By

Marcus de Maria, Founder and Chairman of Investment Mastery.

 

Over recent years, Bitcoin has been steadily growing in popularity among today’s investors. At the same time, there has been a lot of debate about Bitcoin, and other cryptocurrencies, and their value.

Its supporters argue that it is the future of currencies and investment; its critics are adamant it’s not all it’s cracked up to be and might not make the big profits people are expecting.

To better understand its true stature in the market, we need to look at recent developments. For instance, Bitcoin’s valuation has risen by more than 763% in just one year, easily surpassing the rise in the traditional stock market.

With more and more people buying Bitcoin, it is now gaining the attention of the mainstream financial institutions and platforms, when once Bitcoin was derided, joked about and said would never last.

Marcus de Maria

Fast forward twelve years since its’ launch, and we have Tesla and SpaceX mastermind Elon Musk recently announcing that his car empire will not only buy $1.5 billion-worth of Bitcoin, but will accept cryptocurrencies as payments in the future.

And well-known FinTech companies such as Square and PayPal have also announced their intention to support Bitcoin in the future.

Despite this, the most important Bitcoin development is, perhaps, the recent initial public offering (IPO) of Coinbase Global, Inc. (NASDAQ: COIN), today’s leading cryptocurrency exchange platform.

There is no doubt: Bitcoin is gaining momentum. Recent developments have contributed to the sharp rise in the value of Bitcoin, and asset proponents believe this is just the beginning.

 

Bitcoin background

Bitcoin was created in 2008 by a programmer, or group of programmers, under the pseudonym “Satoshi Nakamoto”. Twelve years on, and the true identity of Bitcoin’s inventor is still unknown, adding a little mystique to this already enigmatic entity!

Essentially, Bitcoin is a cryptocurrency. A cryptocurrency is a virtual “coins” or “tokens” and used in digital cryptocurrency systems instead of physical cash.

Similar to physical fiat currencies, digital coins have no intrinsic value, and are not backed by gold or silver.

Bitcoin is one of the most widely used of the thousands of cryptos now available to the investor.

Considering that the great attraction to crypto is that it’s a decentralized currency, thousands of different types of coin in “circulation” is a big giveaway to how popular it is among users and investors.

What gives Bitcoin its value is the fact that there will only ever be 21 million bitcoins “minted” or “mined” to give its proper definition (more on this in the future).

It’s this scarcity that provides the value, although one Bitcoin can consist of multiple denominations, the smallest being a “satoshi” which is 0.00000001 of one Bitcoin (or BTC as it is also known).

 

Bitcoin & The Blockchain: How does it work?

Bitcoin exists solely on the “blockchain” in “wallets.”

A wallet is the digital equivalent of a traditional bank account for fiat currencies such as dollars, sterling, yen, etc.

The blockchain is a public ledger that is totally transparent and accessible to everyone who uses the blockchain and bitcoin, and now any crypto that is in existence.

Transactions on the blockchain are “peer-to-peer”, meaning the transaction doesn’t go through a “middleman” (i.e. third party that would normally charge a fee for making the transaction).

Crypto transactions also undergo thorough verification and confirmation.

Crucially, every transaction and record of bitcoin activity is encrypted which means no one knows who owns any one bitcoin or where it goes to and from, unless they publically declare it (although the identities can eventually be detected under special police powers in cases of suspected fraud).

Only the transaction itself is recorded and is made visible to anyone.

That is why Bitcoin is a cryptocurrency (or crypto), because it has an extremely high level of privacy to it via cryptography.

“Crypto” comes from the Greek word “kryptos,” meaning hidden.

Bitcoin wallets operate via secret key.

This key is used to “sign” transactions. It provides mathematical proof that the transaction has come from your wallet (or owner of the transacting wallet).

This secret verification stops the transaction from being tampered with once it has been issued.

All transactions are confirmed and appear on the block chain network within 10-20 minutes.

It is this security and the fact YOU – and not the banks – are truly in control of your digital money that is so appealing to users and investors alike.

 

What to consider when investing

Firstly, and arguably most importantly, is risk-factor. Investing in Bitcoin as an individual is a lot less risky than investing as a business.

The mentality must be, ‘this is my business’s money. I won’t speculate with my business’s money, and I am not going to risk my employee’s livelihoods. Yes, I would be crazy not to invest but it would be crazier to risk it all.’

It’s very easy to go all-in and invest a large sum of money when you have it, but that is not really a sensible strategy.

So, to start with, entrepreneurs and business leaders should consider the risks, diversifying their portfolio and starting small.

 

Other Bitcoin Investment Options

There are different options when it comes to investing in Bitcoin.

First, you can invest in a company that uses Bitcoin technology so you will be exposed to it without purchasing it directly. When the value of Bitcoin goes up, the company shares go up too, providing a return on your investment.

I can’t invest in Bitcoin through my ISA, but investing in a company such as Block (previously known as Square) means I have an indirect tax-free investment opportunity in Bitcoin. Investing in a company that utilizes Bitcoin can be more volatile than Bitcoin itself, so more money can certainly be made.

Investing solely in Bitcoin is different, as it doesn’t move so much in value, but the individual company using Bitcoin can go up and down sometimes by 80%.

Buying Bitcoins directly from an app like Coinbase allows investors to “physically” own the asset.

This is an important distinction to make, as Coinbase allows investors to actually buy Bitcoin and store it in their own crypto wallet. That way, investors will be able to gain access to the coin’s price performance and use it as the currency to make other trades.

Owning a standalone Bitcoin is no different from owning any other currency, except for the incredible fluctuations in value.

 

To invest directly into Bitcoin here’s how to get started:

  1. Sign up to an Exchange
  2. Enable two-factor-authentication for security
  3. Get a Bitcoin wallet
  4. Connect the wallet to a standard fiat bank account
  5. Place your Bitcoin order
  6. Manage your Bitcoin investment

When the set-up is complete, what you really need to consider is, how much do you know? I am a firm believer in spending at least 20 minutes a day educating myself on investing. I’ve seen too many beginner investors ignoring that advice and rushing in without understanding how it all works.

Surround yourself with people that understand crypto investment and dedicate time to reading up on strategies and tips that will benefit all investments you make.

Bitcoin is certainly a crypto asset you should be investing in alongside a diversified portfolio. It is certainly a highly volatile asset with large and rapid price swings, which in turn can offer the potential for large returns but also carries a high level of risk.

Before making any decisions, it is critical that you learn how to invest in Bitcoin responsibly and utilise proven, reliable strategies. Once you feel confident with your approach, take that first brave step.

As Warren Buffet once famously said, “Be fearful when others are greedy, and greedy when others are fearful.”

Continue Reading

Magazine

Trending

Business3 days ago

How can businesses boost employee experience for finance professionals?

By Martin Schirmer, President, Enterprise Service Management, IFS Over the course of the last year, The Great Resignation has seriously...

Business4 days ago

CBDCs: the key to transform cross-border payments

Dr. Ruth Wandhöfer, Board Director at RTGS.global   If you work in finance, you’ll have been hearing a lot about...

Business4 days ago

Green growth: The unstoppable rise of climate technology investment

With the investment community focusing more and more on renewable technologies, investor interest is at an all-time high. Ian Thomas,...

Business4 days ago

Bolstering know your customer processes as regulation tightens

Nick Payne, banking services, customer advisory, SAS UK & Ireland, discusses how new technologies allow financial services companies to develop rigorous KYC...

Finance4 days ago

The penny has dropped – the finance sector needs Data Governance-as-a-Service

By Michael Queenan, Co-Founder and CEO at Nephos Technologies   In our data-driven world, the amount of data is growing...

Business4 days ago

Seven tips for financial services brands using mail

By Cameron Russell, Head of Marketing at Marketreach   Customer experience (CX) is a powerful differentiator for modern brands. If...

Top 104 days ago

Turn the data landfill into an insight goldmine

Andrew Watson, CTO, MHR Today, businesses have access to a wealth of data, with vast amounts of information created daily....

Business4 days ago

A Culture of Cyber Security Throughout Financial Services Organisations

Michael Cantor, CIO, Park Place Technologies Financial Services organisations have long been a top target for cyber-attacks given both the...

Business6 days ago

Financial Stability Board Gives Full Support to Wide LEI Use in Global Payments

Clare Rowley, Head of Business Operations at the Global Legal Entity Identifier Foundation The strongest recommendation yet by the Financial...

Business6 days ago

On-demand pay: why payroll needs a modern approach

Byline:  Paul Bartlett, CEO, CloudPay   While the world of work has evolved drastically over the last decade, payroll has...

Business6 days ago

 ‘What should real estate investors be doing now – has the market hit rock bottom or is now the time to buy?’

Following many years of housing prices soaring and competition steadily increasing, real estate growth has finally started to slow, likely...

Business7 days ago

Expert Guide for Email Marketing to Improving Your Conversion Rates

If you talk about email marketing campaigns, it would seem like an old-fashioned advertising style. But it is still an...

Banking1 week ago

Augmented automated underwriting and the evolution of the life insurance market

By Alby van Wyk, Chief Commercial Officer at Munich Re Automation Solutions   It’s almost inevitable. Spend your working life...

Banking1 week ago

ESG in the finance and banking industry – are you ready?

By Julian Moffett, CTO BFSI, EDB   Environmental, Social and Governance (ESG) has soared towards the top of banking, financial...

Top 102 weeks ago

An Entrepreneur’s Guide to Investing in Bitcoin

Marcus de Maria, Founder and Chairman of Investment Mastery.   Over recent years, Bitcoin has been steadily growing in popularity...

Business2 weeks ago

Overcoming macroeconomic challenges

By Mike Chambers, formerly CEO of Bacs and a consultant at Access PaySuite.   For businesses offering a subscription-based service, the...

Banking2 weeks ago

How unlocking the potential of tokenised markets can help banks keep pace with the digital economy

Giulia Secco is the Strategic Partnership & Ecosystem Manager at Fnality International.   In the aftermath of the 2008 financial...

Banking2 weeks ago

The role of Artificial intelligence in compliance at banks

Sujata Dasgupta, Global Head – Financial Crime Compliance Advisory, Tata Consultancy Services   There’s not a financial institution across the...

Technology2 weeks ago

Scaling securely in the automation-first era

By Brandon Traffanstedt, Sr. Director, Field Technology Office at CyberArk   Robotic process automation (RPA) has been one of the...

Business2 weeks ago

Putting technology to work on entrepreneur fund-raising

By Simon Glass, CEO, Qodeo   Human relationships are behind the most successful venture capital deals. The chemistry between an...

Trending