“If you buy things you don’t need, soon you will have to sell things you need” – Warren Buffett.

In celebrating the youth of South Africa, we at Opulentia Financial Services decided to share some important topics for consideration during a time where financial uncertainties rise high. Making the right decisions which are financially sane and places you in the best possible position, is sometimes not the easiest (nor the most flashy), but will most certainly be beneficial down the road.

Having the correct insurance plays a big part in making these type of sound financial decisions and setting the correct infrastructure for your personal finances. The youth ought to prioritise setting the following insurance-type products in place from an early age:

Income Protection

Income protection insurance provides you with a monthly income, equal to the insured amount and based on your income, should you be unable to work for a month or longer due to an illness, injury or disability. Imagine being employed and dependent on your income, but suffering a disability which leaves you permanently incapable of earning an income? Who will look after your financial needs in such a scenario? Make sure you have income protection in place as soon as possible.

Retirement Annuities

Retirement annuities are savings vehicles into which you contribute a monthly premium based on your income needs at age 65. The sooner you start saving, the more affordable the contribution required in order to achieve your income goals at retirement age. A common misconception exists that one can start saving at a later stage as one “still has time”. Ideally you should contribute at least 10% of your monthly income toward a retirement from age 25 already… The tax benefits of contributing toward retirement makes this an excellent investment vehicle.

Investments/Savings Plans

An investment or saving plan should ideally be open-access investments. Can either be a product taken out through your Bank or an established investment company.  You can invest lump sums or contribute monthly.  The interest earned within your investment means that your money works for you without any effort on your part. At some stage you will want to move out of your parents’ house, purchase a vehicle and/or fixed property or get married…  You ought to start saving towards these goals, the sooner you start the better the chances of you actually being able to fund these needs on your own, without having to depend on others for financial assistance/loans etc. Insure your independence by applying for an investment/savings plan today!

Last Will and Testament

The youth generally avoid this topic of discussion when it comes to their financial planning, but the harsh truth is that this document is the only way to determine exactly what happens to your assets upon death.  So yes, your chances of passing away are smaller whilst you are young, but it’s not impossible. It is beneficial to speak to a financial advisor about getting your Will in place, regardless of what you own.

If you need help with any of the above mentioned services, we have a team of fully qualified and experienced financial advisors from various walks of life, who are eager to help you structure your financial life to be the best it can be and position yourself the best for future growth. Talk to us today.