Protecting and growing wealth is critical in the current local and global economic and political climates, in order to take care of yourself and your family.
For investors to accumulate wealth, the following is required:
- A target
- A strategy
- An implementation plan
Investors then need to carefully assess their profile, in terms of the following:
- Current assets and liabilities
- Current earnings
- Risk appetite
- Required rate of return
- Desired lifestyle requirements
Understanding and evaluating current and future requirements, in relation to expectations, will enable the development of a strategy that will create and grow wealth and assist in avoiding the pitfalls of wealth erosion.
According to the AfrAsia Bank Africa Wealth Report 2017, as at the end of 2016:
- Worldwide wealth held by individuals amounted to approximately US$ 192 trillion.
- The average individual had net assets of US$ 27,000 (wealth per capita).
- There were 13.6 million High Net Worth Individuals (HNWIs) in the world and worldwide HNWI wealth stood at US$ 69 trillion.
- There were 522,000 multi-millionaires in the world.
In Africa:
- The average African individual had net assets of approximately US$ 2,000 (wealth per capita).
- Total individual wealth held on the continent amounted to US$ 2.2 trillion.
- There were approximately 145,000 HNWIs living in Africa, with combined wealth holdings of approximately US$ 800 billion.
- There were 7,010 multi-millionaires living in Africa.
Growth rate trends:
- African HNWI numbers have increased by 19% during the review period (2006-2016).
- 2016 was a bad year for African HNWIs. Their numbers decreased by 2% during the year.
- HNWI numbers in Africa are expected to rise by 36% over next 10 years, reaching approximately 198,000 by 2026.
DEVELOP A STRATEGY
As Wealth managers, one of the key objectives is to take on a level of custodianship for clients and their wealth. Investing is more arduous than ever before – some investors don’t necessarily understand the nuances of exchange controls, choosing a trading platform or even the implications of offshore investing in general, says Michael Sassoon, Head of Sasfin Wealth.
During times of heightened volatility diversification becomes even more critical and is especially crucial given the present economic climate.
Ultimately, we must view our lives, our wealth, and our future in global terms – global should be seen as the framework and not as an asset class within a local portfolio, says Sassoon.
DIGITAL CONTROL
If you had to create a financial scorecard – based on all your investments, retirement annuities, long-term insurance and other savings mechanisms – what would it look like? Will it be sufficient for you to reach your goals for the short term and in the future for yourself and your loved ones?
This is an important question you should ask yourself, especially when either considering new investments or trying to understand your current investments. Having a full view of your portfolio – as well as understanding how it benefits your life and family at times when it is most needed – has traditionally been overcomplicated and not accessible, says Eugene Maree, Founder and Group CEO, Director: Strategy and Investment Management Services at Wealthport.
Too often, consumers are not empowered around their finances and feel as though their investments should be left solely in the hands of the broker, but today with digitalisation there is a rapid shift towards digital investment portfolios, for a vast array of reasons. Embracing technology both empowers the advisor as well as you, the individual, with a clear view of your financial scorecard, anytime.
With this migration to digital investment portfolio management and transactions, it has never been easier to…
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Read this Feature entitled YOUR WEALTH as well as a host of other topical management articles written by professionals, consultants and academics in the October/November 2017 edition of BusinessBrief.
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