Tag: PSG Wealth

When discussing the value of the financial profession, financial advisers are often compared to medical doctors and are sometimes even called ‘financial doctors’. The reason behind this is that financial advisers look after the financial challenges of clients in much the same way that doctors look after the health issues of patients. This is not a perfect analogy, but there are certainly some comparisons to be drawn.

Warren Buffet’s favourite holding period for a stock is “forever”, but even he acknowledges there are valid reasons for selling a stock. Deciding when to sell a stock is something both professional and retail investors grapple with. In fact, it’s accepted wisdom that it is psychologically easier to buy a stock than to sell one.

When we think about estate planning, we think of a plan outlining a tax-efficient way to deal with our assets when we pass away. Instead of viewing this as a ‘death plan’, try to think of it as a ‘life plan’ – a strategy created during your lifetime to ensure that your wishes are fulfilled, and that your loved ones benefit as intended after you pass away.

When it comes to the world of investing, many people have no idea where to start, how to invest, and what the risks are. There are also several myths surrounding trading in shares that need to be debunked to help you make informed decisions that will stand you in good stead in the long run.

The rise in life expectancy poses a significant challenge for individuals planning for retirement, necessitating a shift in the approach to financial preparedness. As people live longer, the duration of retirement increases, and with it, the financial demands.

Lately, I have received several questions from investors about how rich people go about their money. What do they do differently, or have they simply inherited wealth? Our clients include a substantial number of families who have accumulated wealth over many generations, but many are first generation.

For many years, the concept of self-made success was considered by many to be the ‘making of the man’, with each generation expected to prove their self-worth by being at least as financially successful as the generation before. However, the adage of shirtsleeves to shirtsleeves in three generations continues to this day, with a recent Harvard Business Review article by Stark and Foley finding that 70% of wealthy families studied lost their wealth within the second generation, and 90% within the third.

In a world where more young people are unemployed than employed, it has never been more important to ensure our children’s future. Ultimately, you want to empower them to rise above their competitors in the race for the limited jobs that are on offer.

Conversations around black tax – the obligation placed on those who achieve a degree of financial success to provide for their extended families and communities – need to be centred around families rather than individuals. Frank conversations that involve clearly communicated boundaries are imperative to dealing with the emotional aspects of money management.

An early start is at the heart of achieving sufficient financial resources for the lifestyle you desire for yourself and your family. It gives your investments more time to compound and grow. There are rules of thumb for younger investors who want to secure a strong financial future.