Real Estate Investor Magazine South Africa April/May 2019

LAST WORD A man is not an investment plan D espite women playing a bigger role in the profession- al world, far too many either don't invest or delegate the task to someone else, be it a spouse or financial advisor, according to an investment specialist. Financial planning is a skill every modern woman should possess. Women are generally more independent and financially savvy than 20 years ago, with millennial women especially, being more confident in their understanding of and participation in the investment world, says Coreen van der Merwe, Managing Director, Sovereign Trust (SA) Limited. ‘The bottom line is that the more involved women are in their own financial well-being, the greater their ability to not only become financially independent, but to recognise good opportunities.’ The Sovereign Group offers various offshore investment vehicles in jurisdictions like Malta, Gibraltar, Isle of Man, Guernsey and Hong Kong. One of the biggest misconceptions when it comes to the world of finance is that it's ‘a man's game’. There's been strong growth in the number of female investors over the past couple of decades, and the numbers definitively show that a woman's approach to investing is different to that of her male counterpart – and that's not a bad thing, considering the modern woman whose time in majorly spent doing grocery shopping, school runs, cooking dinner and exercising in between office hours. Women have less time to do research, attend financial seminars or meet with financial advisors during the day, resulting in a delayed or slower decision- making process. In this way, women tend to avoid unnecessary risks, and are often better long-term investors because they stick to their long-term goals instead of trying to beat the market over shorter periods of time. Don't know where to start? Your first step should be to 64 APRIL/MAY 2019 SA Real Estate Investor Magazine contribute to a South African retirement annuity, pension or provident fund. 27,5% or a maximum of R350 000 of your annual salary will be allowed as a tax deduction when made to any of these 3 retirement products. Next, you can look at contributing to a tax-free investment account. You can contribute R33 000 annually to this type of account that doesn't trigger any dividend, interest, income or capital gains tax. After that, you can look at diversifying by contributing to an offshore investment. This can either be in your name, an offshore trust or an offshore retirement plan in a tax friendly jurisdiction like Guernsey, for example. South Africa only forms 1% of the world market, making diversification the sensible and imperative choice. A financial advisor would recommend that 30-40% of one's overall portfolio should be exposed to international equities or be invested offshore. The broad principles for investing are the same for everyone – men and women alike. • The earlier you start to save, the better – the effect of compound interest is astonishing! • Take a long-term approach. Your goal should be to beat inflation, which is probably one of our biggest threats in South Africa. • Make informed decisions before you invest. You must understand the various levels of fees and the risks involved in every option. If this means that you are going to take a bit longer to decide how you invest, that is your prerogative. • Try not to touch the funds that you are saving and investing in your retirement plans unless it is absolutely necessary. So, go ahead. Take the first steps to your financial independence today. It will not only give you higher returns, but the financial resources to deal with the unexpected.

Real Estate Investor Magazine South Africa April/May 2019 | Page 66