Silke Financial Monitor, Issue 2

Well it's that time of the month for me to put my writing cap on and entice you with my literary prowess. So readers: "Read On– If this Newsletter be the food of your Financial Awareness, read on".

The last two months have seen Ken and I focusing on drafting Wills and Trusts. From next month Trevor and I will are attending a PARA-Legal Course focusing in this regard - with Adv. Silke at the helm, our combined working experienced within Silke Financial Services will ensure that your last wishes will be discreetly settled. If you don't have a Will, serious ramifications could arise, both from a financial point of view and in terms of the welfare of those who you care about.

Mandy is still in the middle of up-dating our client files for new and existing clients. If Mandy he has not contacted you by the end of next month –please give us a call for us to update your existing details.

On my side: Two rugby games with the "False Bay JOCKS" (Junior Old Crocks for over 30's) Less said the better. My daughter turned six. New pergola for my wife - unquestionably I surrendered to the ever growing demands of her book club.

Anyways - for those of you who insist on not reading more than one page - Here are some quick Tips for managing your Money:

• Decide on what you really want and focus on the most important goal.
• Start saving now: you can start small – compound interest is a very powerful tool and don't underestimate this!
• Increase your savings whenever you can.
• Diversify your investments across asset classes and geographically.
• Always check the facts – ask questions/get professional advice
• If you don't understand – ask until you do!!

For inside information, I invite you to visit our personal "Blogs" See profiles under the www.silke.co.za for links.

Best Wishes,
Shane Thom

In this issue

1. Articles How are you doing so Far? The Concept of "Risk" made simple. Financial Planning for Children Will/Estate Planning advice
2. Our Sponsorship Program
3. Recommended Resources
4. Business Opportunity
5. Quote of the Week

Articles

1.1 How are you doing so Far?

– Shane Thom

Taking stock of your current financial situation is the first important step in managing your own money. Questions to ask yourself:

• Am I in a better financial situation today than a year ago?
• How is my ratio between assets and liabilities? (what you own and what you owe)
• Am I saving enough money?
• Have I checked my expenditure and income recently?

So, are you better-off today?? Even without answering the above questions you will already know if you are feeling uncomfortable. It is fairly easy to assess.

To go forward, it is always necessary to identify what are assets and what are liabilities. Write these figures down if you are serious about your finances and want to take charge: a column setting out your assets and a separate column setting out your liabilities.

If you don't do this, money will always take charge of you. Draw up a table as set out below. Make a few estimates for last year and then fill actual mortgage bonds, credit cards, overdrafts bank accounts etc...

Simply put... last year you splashed out on a new car. Your home loan and RA have grown in value. Your car value has depreciated and the amount owing on your car has increased. Credit card debt is up and very little, if anything has been saved.

The first step in making a budget is to ask yourself these questions:

• Am I saving enough money?
• Am I living beyond my means? (Do a quick Income and Expenditure table)

So, if this were you and you were 30 years old, this scenario would be pretty comfortable because you have plenty of time to pay off the bond and build your retirement plan. If you are 55 years or older, this will be a problem because with so much debt and hardly any retirement planning you might have to keep on working past your retirement date.

Get Professional Advice now so that you can analyse your current position so as to define your current and future objectives making best use of your available assets.

To enable Silke Financial Services to review your current Financial Position we will require our "Appointment letter" which is to be signed by you. Download our letter of appointment.

In the next issue, I will discuss Planning your Finances

1.2 The Concept of "Risk" made simple

– Ken Silke

If you are considering investing money, you have to look at risk seriously.

Firstly, decide on your investment timeframe, i.e. for how long you wish to invest for. For example, if you consider yourself an aggressive investor but will need your money in 6 months time, it would be unwise to expose your money to the stock market or high risk unit trusts.

Secondly, you must decide on your time frame, look then at whether you want a high, moderate, conservative or a guaranteed investment. Naturally, your age will also have an impact on your ultimate decision.

One of the problems with risk is that many people expect to take little risk and expect a high return. This is not possible unless interest rates are sky-high. Compare two unemployed men living next-door to each other who have recently been paid out relatively handsome retrenchment packages: John decides to take a portion of his package and buy a small truck to start a small light delivery business. Peter sits at home and bemoans his unemployed status.

John has taken a risk by using some of his money. He naturally stands a chance of making some money by taking a calculated risk. Peter has not put himself out there to better his situation and hence has no chance of making money.

The great news is that there unit trusts available which cater for all risk profiles: from safe money market funds to low risk and medium risk fund to higher risk funds.

If you want to invest money and are unsure on how to go about it, call us to "Risk Profile" you. The unique Silke Risk Profiler is a unique and simple tool which is guaranteed to explain the risk you will be taking when investing.

1.3 Financial Planning for Children

– Shane Thom

The earlier you start to save and invest, the easier it is to achieve financial security for you and your children! Whether you are investing for your children's education, or teaching them about the value of saving, it is essential that you start. Open a savings plan for your children is a great way to teach your child about financial planning through first-hand experience investing in saving. So...

• Open a bank account
• Birthday presents, Christmas, Pocket money etc... is good way to get this account up and running. Always insist that half must be saved.
• Dig up a "Piggy bank" as my Gran refers to it. It must be clear, ensuring that the children can see the hard cash. This visual incentive enables the child to see his/her money "growing". (No I.O.U.'s- Mom and Dad)
• Once a month take your child to the bank and deposit the money into his/hers saving account. Developing a culture of saving.
• If the child desperately wants something – let him/her save for it. Parents could set the example i.e. children observe parents saving for a new pergola area. (High priority - especially for mom's!)

Savings plans are good for children as they involve making small and regular investments. Whatever investment goal you and your child decide on, regular investing will teach your child commitment and restraint and show them first-hand how to reach their goals. Saving skills are needed at every stage of a person's life. Your children must learn the skills to save and invest.

Wealth creation is not a skill taught at school, so it's up us/to you Mom and Dad! "Your children are watching You!"

In the next issue I will share with you some of my ideas on how one can protect and invest in your children's future education.

1.4 Wills and Estate Planning

– Ken Silke

It is highly irresponsible NOT to have a Will in place. Don't leave your loved ones in the lurch. Without a Will, your family could be left in dire straits with no Executor appointed and with huge risks in having your assets distributed to those who are not deserving.

Engage in a Financial Health Check: Did u know? - the Estate Duty abatement has just increased from R1.5m to R2.5m. This could have a significant impact on your overall Estate Planning.

A Living Will is also an important document: Do you really want your family to make medical decisions when you can NOT do so? Disease or accidents can befall us without warning often rendering us incapable of communicating our wishes in terms of how we are to be medically treated. The costs of keeping someone on life support when there is no prospect of recovery can devastate your financially and emotionally.

Act now if you have put off making your Will; if your marital status has changed or you have additional children or grandchildren you have a responsibility to make sure that your affairs are in order and that your wishes are adhered to.

By appointing Silke Financial Services as executors - both the Will and Living Will offering will be a free service when we draft or re-draft your existing Will.

Silke Sponsorship Program – Ikwezi Art Centre

We are proud to be the Main Sponsors to the Ikwezi Art Centre situated at the Montebello Design Centre in Newlands, Cape Town.

WHAT'S NEW:

Ikwezi Artist: Luvuyo has been asked to enter the "Picasso and Africa" art competition. Sponsored by French Embassy and French Institute of South Africa, in collaboration with the National Picasso Museum in Paris. All art will be exhibited at the Iziko South African National Gallery from 13 April to 21 May.

Ikwezi Artist: Luvuyo Sityoshwana

This South African born artist gets his inspiration from local township experiences. Should you wish to view anymore of Luvuyo's art or any other artist for that matter we invite you to visit our gallery. You can find the centre at the Montebello design centre, 31 Newlands avenue, Newlands.

Please feel free to contact Joel Zwane, manager, should you require any further details. Cell: 073 608 9984

Recommended Resources

In each issue, we will try and recommend some helpful resources. Try them and if you find them useful, please feel free tell us so and if you come across any of your own – tell us as well.

This is a must read, Madonna's parenting secrets

Business Opportunities

Own your own Café Nescafe fully licensed restaurant situated in an unique and recently refurbished shopping mall in Randburg, Gauteng. Anchor tenants include Pick 'n Pay with a Woolworths store about to be opened.

This business will suit an owner/operator who is looking to maximize an investment of R1.5 million with a minimum return of 20% per annum.

There is a long lease in place with a very favorable rental. The owner is selling because of other business commitments.

Call Ken Silke on (021) 683-3380 for more details.

Quote of the Week

"Cherish your visions, cherish your ideals, cherish the music that stirs your heart, the beauty and loveliness that drapes your purest thoughts, if you remain true to them your world will at last be built." – James Allen (5yrs)

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