Yaseen Badat - Financial Advisor

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Yaseen Badat Improving people's lives by making their financial freedom possible.
FSP2409

10 Retirement Mistakes SA Citizens Make

1. Education: Lack of early education about retirement savings is a common mistake.

2. Delayed Start: Starting retirement savings late leads to missed compound interest opportunities.

3. Early Retirement: Failing to plan for longer life spans can result in outliving savings.

4. High Fees: Excessive investment fees can significantly reduce retirement fund growth.

5. Asset Allocation: Being too conservative with investments may hinder returns.

6. Family Planning: Involving partners early in retirement planning and considering future implications is crucial.

7. Passive vs. Active Funds: Passive funds are often better for long-term investments due to market-related returns.

8. Financial Advisors: Consulting independent financial advisors is important for sound financial decisions.

9. Adequate Savings: Living beyond means and relying on credit impact future retirement savings negatively.

10. Early Withdrawals: Avoiding premature withdrawals helps prevent tax implications and allows funds to grow.

-BusinessTech

Unit trust or fixed-income funds: Which is best to invest savings for a property?

Unit Trusts offer potential for higher returns with diversified investments across asset classes but are exposed to market fluctuations.

On the other hand, fixed deposits and money market accounts are considered low-risk, providing fixed interest rates or higher interest rates with easy fund access. However, they generally yield lower returns compared to market-exposed options.

Considering the four- to five-year time frame, you need to balance the risk and potential returns. The choice should align with your financial goals, risk tolerance, and may involve a diversified strategy.

-Moneyweb

Warning over South Africa’s new two-pot retirement system withdrawal benefit

The new two-pot retirement system in South Africa, effective from March 1, 2025, splits contributions into a retirement component (preserved until retirement) and a savings component (withdrawable once per tax year before retirement).

While designed to balance preservation and accessibility, Jaya Leibowitz of Allan Gray warns against accessing the savings component. Existing members can access a portion tax-free, but Leibowitz emphasizes the immediate tax implications, cautioning against higher tax brackets.

She also highlights the long-term impact, stressing the loss of compounding if withdrawals are made before retirement, potentially leading to a substantial reduction in retirement income. Leibowitz advises avoiding withdrawals unless absolutely necessary to preserve retirement fund growth.

-BusinessTech

The importance of the Global Financial Planning Standards

The financial services industry's professionalization, guided by Global Financial Planning Standards, benefits clients by emphasizing long-term interests. These standards stress emotional intelligence, self-awareness, and coaching to align advice with clients' goals. The focus is on client well-being rather than pursuing trendy investments. Over 300 sub-topics cover various aspects, with an emphasis on putting clients first.

The standards highlight the critical role of financial planners in helping clients define and adhere to financial goals. While competent advice is expected, the emphasis is on diversification and appropriate risk profiling over superior fund selection or market timing. Clients are urged to understand these standards to ensure their financial planners prioritize their interests.

The importance of mutual financial companies, like PPS, emphasizing alignment with clients' interests is also covered. PPS, as a financial mutual, underscores the alignment through technical benefits and a multi-manager approach to investing. The latter involves a team of experts managing funds, reducing risks for both financial planners and clients.

The multi-manager strategy aligns with goal-based investing, emphasizing long-term performance over market timing. The standards remind financial planners that fund selection isn't their core skill, and outsourcing to a multi-manager aligned with client interests is beneficial.

Trust is highlighted as the cornerstone of the financial planner-client relationship. The standards provide a framework for client expectations and guide financial planners to add value realistically. Financial planners are viewed as guides rather than fortune-tellers, helping clients navigate the investment path safely.

-Moneyweb

Carbon credits and renewable certificates – what South Africa’s new trade platform means

The Johannesburg Stock Exchange (JSE) has launched the JSE Ventures Carbon Market, in collaboration Xpansiv, a US-based infrastructure provider for global environmental markets.

The new trading platform allows local participants to buy or sell carbon credits and renewable energy certificates (RECs) held in local or global registries, and adds another tool to mitigate climate change.

Carbon credits are tradeable certificates that represent a one metric tonne reduction in carbon dioxide emissions that companies can use to offset their own carbon emissions when it is not possible to do so through operational changes.

The credits are generated through projects that reduce emissions, like renewable energy projects or reforestation efforts.

In South Africa, when a company is unable to reduce its carbon emissions, the government allows for them to offset these emissions through credits for tax purposes.

Renewable energy certificates differ from carbon credits by the units in which they are measured, the sources they originate from, their use and purpose, and the environmental claims they support.

Carbon trading is likely to become a major factor in the coming years as National Treasury looks to tap into further tax sources and environmental, social, and governance (ESG) targets get increasingly tied up in corporate regulations.

-BusinessTech

5 Facts To Consider Before Investing Offshore

Did you know it is becoming easier and more affordable for South Africans to invest in offshore funds? There are five facts to consider before you invest offshore:

1. Regulation 28 allows up to 45% of international assets in domestic balanced funds, potentially providing enough offshore exposure for retirement.

2. Additional international exposure is beneficial, especially due to the impact of the domestic economy, currency volatility, and future international expenses.

3. Investing offshore is straightforward and accessible through South African funds or offshore funds, offering diversification and foreign currency settlement options.

4. Funding offshore investments is simplified by using existing foreign currency holdings or the annual single discretionary allowance of R1 million, with minimal paperwork. Some providers have reduced minimum investment requirements.

5. Choosing the right offshore fund involves selecting options that align with your long-term financial goals and risk tolerance, making the selection process easier for new investors. Diversified funds spanning global markets are suitable for most investors, while lower-risk alternatives are available for those seeking capital preservation.

-Moneyweb

Tax Reforms For SA

The Parliamentary Budget Office (PBO) in South Africa has criticized the government's approach to budget problems, suggesting that cutting spending won't solve them. They recommend structural economic reforms to address unemployment, inequality, and poverty.

The PBO emphasizes that South Africa's broad tax base can be used to generate more tax revenue, which is crucial for income and wealth redistribution given the extreme inequality in the country.

Revenue collections are expected to be lower than projected due to falling commodity prices and rising VAT refund claims, leading to a higher budget deficit and government debt.

Potential areas for additional tax collection include an "excess profits tax" on companies profiting from inflation and windfall taxes for sectors benefiting from the commodities boom. They also suggest reviewing tax incentives, implementing a progressive wealth tax, expanding wealth taxes through donations and estate duties, raising the carbon tax, and widening the property tax base.

The government intends to raise an additional R15 billion in taxes in 2024, likely by not adjusting tax brackets for inflation.

The PBO criticizes the government's approach, stating that pursuing a budget surplus through austerity measures and more debt may harm the economy in the long term, considering structural unemployment, poverty, and inequality.

The office highlights the need to protect social spending and address various risks, including load shedding, climate change, COVID-19, geopolitical conflicts, and economic instability, to maintain fiscal credibility and protect democratic institutions.

-BusinessTech

🌟 Celebrating Success and Gratitude! 🌟



On behalf of the entire Yaseen Badat Wealth Management Team and family, we want to extend our heartfelt gratitude to our amazing service providers who did a fantastic job in making the event a remarkable success!

We would like to send a special shout out to:

Your breathtaking venue, along with your dedicated staff, provided the perfect backdrop for the event.

aryabhava Your beautiful graphic designs, expert event management, and ex*****on brought our vision to life.

Your delicious food and the exquisite presentation were nothing short of culinary artistry.

and : Your scrumptious desserts delighted our guests' taste buds.

co.za for providing us with an impressive array of warm drinks

for adding elegance and beauty to the event.

and : Your incredible photography skills captured the essence of our empowering day.

: Your positive energy and vibrant presence added an extra layer of excitement and enthusiasm to the event.

: Your beautiful burgundy roses added a touch of elegance.

for ensuring that all our prints and event signage were delivered on time

We would like to also extend our thanks to our corporate partners who supplied us with amazing gifts:

for gifting us with vouchers

from FNB for the delicious Westwood hampers

for the vouchers and gift hamper

for your incredibly tasty chocolates

Alhamdulillah, EmpowHER was a vision brought to life, and your dedication and support played a pivotal role. Your commitment to excellence is deeply appreciated, and we couldn't have done it without you.

Thank you for being an essential part of this incredible journey. Here's to many more collaborations and successful events in the future! InshaAllah. 🎉

SARS Big Changes For International Transfers

SARS, the South African Revenue Service, has introduced significant changes to international money transfers. These changes, effective from 30 October, require tax residents looking to transfer more than R1 million in a calendar year to obtain a TCS pin under the category "Approval International Transfer" (AIT). Non-residents also need AIT approval for all capital remitted.

Previously, SARS required TCS approval for emigration or Foreign Investment Allowance. However, these processes have been consolidated into the AIT TCS system, which necessitates taxpayers to provide information on their tax residency status, local and foreign assets, and liabilities to SARS.

New changes allow flexibility regarding the disclosure of foreign assets and liabilities, depending on when the taxpayer ceased South African tax residency. Transparency is enhanced, and the residency status under which approval was granted is displayed in the associated document (PIN).

Authorized dealers, such as banks, must verify AIT TCS PINs for international payments. The addition of an "Amount" column to the verification dashboard provides better financial data visibility.

The "Net Worth" field is replaced with "Net Amount" for a clearer understanding of asset information. Some fields in trust and loan sections are made optional for simplicity in foreign trusts. The "Share code" and "Number of shares sold" fields are disabled for "Listed Shares" transfers.

-BusinessTech

Emergency Funds

An emergency fund is a financial safety net for unexpected expenses. It's crucial for handling financial shocks without going into debt.

You can build one by starting a side hustle to contribute, setting up periodic debits, or using performance bonuses. Discipline is key; separate the fund in a fixed deposit or a different bank account to avoid easy access.

Considering a family emergency fund administered by a responsible adult or multiple signatories for accountability can be helpful. It's like having consolidated contributions and central administration.

-Moneyweb

SA's Two - Pot Retirement System

South Africa's new Two-Pot retirement system, set to begin on March 1, 2024, allows for one-third of retirement savings to be withdrawn before retirement, addressing a key issue of the current system that permits total cash-outs when changing jobs.

While the new system provides immediate relief, there are concerns that it may promote short-term thinking and undermine the purpose of a pension fund, as people may frequently access their savings pots. The system aims to strike a balance between short-term needs and long-term financial security. It encourages members to be more actively involved in managing their retirement savings, emphasizing responsible financial planning and saving for the future.

The Two-Pot system doesn't claim to be a cure-all for current financial challenges but rather a foundation for future financial security.




-BusinessTech