Tuesday, 10 September 2013 - 20:00
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Seed weekly - Financial Planning 101
I was recently asked by a client of mine if we had any pamphlet material outlining the basics of advice for people who have just started working.
I looked around and couldn’t find much that was satisfactory so I have decided to give a brief summary in financial planning 101. Please note that this is an initial guideline and is not meant to be an exhaustive all-encompassing view. If you do understand financial planning, please forward this to somebody who doesn’t.
The back bone of any financial plan and the foundation of financial wellbeing is a budget. If you spend more than you earn you will never be financially independent no matter how much you earn, I have seen people earning R 300 000 per month net with expenses of R 320 000 per month. A budget is the only instrument which can keep your expenses in check, most people underestimate their expenses.
Every person has three basic financial planning needs namely life cover, disability cover and savings.
Life Cover
There are two basic reasons why a person should have life cover, firstly to cover your debts and liabilities, and secondly to cover your future income stream for your dependents. If you have no dependents and no liabilities you don’t need life cover. Your life cover generally goes in a cycle increasing to a point where you have car debt, house debt and the maintenance of 2.5 kids and reducing as the debts reduce and the kids start becoming financially dependent.
Disability
Disability cover is often sold as a lump sum but income protection is probably the most neglected area of financial planning. No matter what your debt/dependent situation is, if you are earning an income you need to ensure that if you cannot work anymore that income will be covered.
Savings
When looking at savings, there are a number of aspects that need to be taken into account. Short term needs (holidays, large expenses such as car tyres etc.) Medium term savings (saving for a deposit on a house, kids tuition fees etc.) and Long Term savings needs (Retirement). Whilst the numbers may vary it is an indisputable fact that most South African’s cannot retire at anywhere near the lifestyle they had before retirement. Compound interest is an incredibly powerful force and most people who can retire comfortably can do so because they started saving very early in their working lives. It is important that you start early enough and that you save enough. It is pointless putting away R 150 per month starting at the age of 20 but not increasing that amount. I often get asked how much money is needed to retire. This is a very difficult as each person has different income needs, but if you want to retire at the age of 60 a general rule of thumb is that you will need investable capital of 25 times your annual net income needs.
A will is a very important document that will only be used once. If you have any assets you need to have a will. Whilst most people hate thinking about their death a Will is an integral part of any decent financial plan.
The most important thing about being financially dependent is to have a plan, this plan will include a realistic budget, enough life cover (not too much) the right income protection and a properly managed portfolio of short, medium and long term investments. Most people do not have the time or inclination to set up this plan so it is important to have a reputable trustworthy financial advisor to help you achieve your goals. Should you have any further questions, please don’t hesitate to contact me.
Kind regards,
Barry Hugo
www.seedinvestments.co.za
info@seedinvestments.co.za
021 914 4966
Tue, 10 Sep 2013
Top News
South African bullion producer Gold Fields said on Tuesday it was being investigated by the U.S. Securities and Exchange Commission over a $210 million black empowerment deal involving a senior member of the ruling party. Full story
Revenue grew by 44% to R115.5 billion (R80.1 billion). Operating profit before capital items jumped by 41% to R11.3 billion (R8 billion). EBITDA improved 39% R11 billion (R7.9billion). Net attributable profit was up 29% to R7.3 billion (R5.7 billion). In addition, headline earnings per ordin Full story |
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Syria accepted a
Russian proposal on Tuesday to give up chemical weapons and win
a reprieve from U.S. military strikes, while its jets returned
to the sky to bomb rebel positions in Damascus for the first
time since the West threatened force. Full storySyria accepted a Russian proposal on Tuesday to give up chemical weapons and win a reprieve from U.S. military strikes, while its jets returned to the sky to bomb rebel positions in Damascus for the first time since the West threatened force. Full storyTop Obama administration
officials urged Congress on Tuesday to keep the pressure on
Syria over its chemical weapons arsenal while the United States
explores a diplomatic alternative to military strikes. Full story |
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Markets | U.S. stocks rose on Tuesday,
with the S&P 500 on track for a sixth straight session of gains
as an alternative solution emerged. . . Full story | | U.S. stocks climbed for a
sixth straight session on Tuesday as the dollar and global
equities rallied on more upbeat economic data from. . . Full story | | European shares rallied to a
3-1/2 month high on Tuesday as equities globally rose on signs
that a U.S. strike on Syria, with. . . Full story | | Britain's main share index rose
to its highest level in nearly a month on Tuesday, bolstered by
the outlines of an international compromise. . . Full story |
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| European shares rallied to
retest their August high on Tuesday as equities globally were
lifted by signs that a U.S. strike on Syria,. . . Full story | | Gold fell 2 percent on Tuesday
after Syria accepted a Russian proposal to give up chemical
weapons to avert a U.S. strike.. . . Full story | | Europe's financial companies are
expected to lead a rise in stock market dividends over the next
four years and insurers are best placed. . . Full story | | U.S. stocks rose at the open
on Tuesday, putting the S&P 500 on track for a sixth day of
gains, following further upbeat. . . Full story |
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SA Business | South Africa's Eskom said on Tuesday power will remain tight during the southern hemisphere summer period as it increases maintenance work. . . Full story | | South Africa's top construction firm, Aveng Ltd, reported a drop in full-year profit on Tuesday, hit by weakness in its domestic. . . Full story | | Growth in spending in South Africa slowed to an annualised 2.7 percent in the second quarter of 2013 from 3.5 percent. . . Full story | | South Africa's current account deficit widened more than expected to 6.5 percent of GDP in the second quarter of 2013 from. . . Full story |
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| South African bullion
producer Gold Fields said on Tuesday it was being
investigated by the U.S. Securities and Exchange Commission over
a $210 million. . . Full story | | South Africa's Kagiso Media said on Tuesday its top shareholder had offered to buy out the remaining stake in the company. . . Full story | | South African furniture retailer Steinhoff International on Tuesday reported a 25 percent increase in earnings, bolstered by rand weakness against the. . . Full story | | South Africa's FirstRand, Africa's second-largest lender by stock market value, said it has a $1 billion kitty to pursue an expansion. . . Full story |
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| South Africa's Treasury sold a total 2.35 billion rand of its 2023, 2031 and 2037 government bonds on Tuesday.. . . Full story | | South Africa's rand weakened against the dollar early on Tuesday as investors fretted about upcoming current account data for the second. . . Full story | | South Africa sold $2 billion of 12-year paper at a 5.875 percent coupon rate, the Treasury said in a statement on. . . Full story | | South Africa's FirstRand posted a 20 percent jump in full-year earnings on Tuesday, propelled by strong growth in loan income and. . . Full story |
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Company News | Kagiso shareholders were advised that, following the release of this firm intention announcement, the cautionary announcement dated 10 June 2013 (and. . . Full story | | Kagiso shareholders were referred to the cautionary announcement released on SENS on 10 June 2013 ("cautionary announcement") and are advised that. . . Full story | | At the annual general meeting of Datatec, held at 14h00 on 10 September 2013, votes were registered for 85% of the. . . Full story | | Keaton Energy announces the following board and committee changes:
*David Salter's short-term assignment as executive chairman has ended and he has returned. . . Full story |
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| Shareholders were referred to the circular dated 2 August 2013 (and using the terms defined therein unless otherwise stated) relating to,. . . Full story | | Shareholders were advised that Mr Norman Axten will be retiring as independent non-executive chairman and director of the group and its. . . Full story | | References in this announcement to R are to South African rand and references to U.S. dollars and are to United States. . . Full story | | PPC will be attending the Exane BNP Paribas's Cement Majors of the Future Investor Conference in London. A presentation, which will. . . Full story |
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Company Results | Revenue increased by 11.2% to R9.2 billion (R8.3 billion). Gross profit was up 9.2% to R4.1 billion (R3.8 billion). Operating profit. . . Full story | | Revenue for the year increased to R181.3 billion (2012:169.4 billion). Operating profit grew to R40.6 billion (2012: R36.8 billion). Earnings attributable. . . Full story | | Revenue increased to R51.7 billion (R40.9 billion). Gross earnings declined to R3.47 billion (R3.49 billion). Net operating earnings rose to R656. . . Full story | | Operating loss fell to GBP3.0 million (loss of GBP4.3 million). Loss attributable to equity owners narrowed to GBP2.9 million (loss of. . . Full story |
World Markets (Spot Prices)
Name | Time | RP | Move | % Move | JSE Overall | 17:00 | 43545.83 | 776.21 | 1.81% | JSE Top 40 | 17:00 | 39087.02 | 780.14 | 2.04% | JSE Gold | 17:00 | 1280.28 | -30.00 | -2.29% | JSE Financial | 17:00 | 30989.75 | 374.38 | 1.22% | JSE Industrial | 17:00 | 56555.45 | 1153.03 | 2.08% | JSE Indust 25 | 17:00 | 49595.08 | 1112.74 | 2.30% | JSE Resource | 17:00 | 51428.20 | 917.55 | 1.82% | DJ Futures | 19:18 | 15130.00 | 94.00 | 0.63% | DJ Ind | 19:52 | 15169.90 | 106.78 | 0.71% | SP 500 | 19:52 | 1682.43 | 10.72 | 0.64% | Nasdaq | 19:52 | 3726.60 | 20.42 | 0.55% | FTSE 100 | 17:35 | 6583.99 | 53.25 | 0.82% | DAX | 18:08 | 8446.54 | 170.22 | 2.06% | CAC40 | 18:08 | 4116.64 | 76.31 | 1.89% | Nikkei | 09:08 | 14423.36 | 218.13 | 1.54% | Shanghai | 09:30 | 2237.98 | 25.47 | 1.15% | Hang-Seng | 10:28 | 22976.65 | 226.00 | 0.99% | All Ords | 08:47 | 5198.90 | 19.50 | 0.38% | NZSE 50 | 09:08 | 4627.76 | 13.74 | 0.30% |
| | Name | Time | RP | Move | % Move | Gold $ | 19:59 | 1365.30 | -21.75 | -1.57% | Gold R | 00:00 | 13797.56 | -136.56 | -0.98% | Gold R/kg | 19:52 | 438910 | -5888 | -1.32% | Silver $ | 19:59 | 23.0050 | -.6920 | -2.92% | Platinum $ | 19:59 | 1474.00 | -4.50 | -0.30% | Palladium $ | 19:59 | 693.90 | 8.30 | 1.21% | R157 | 16:55 | 6.19 | .03 | 0.49% | R186 | 17:35 | 8.33 | .04 | 0.42% | R204 | 17:36 | 7.28 | .04 | 0.55% | R207 | 17:24 | 7.62 | .03 | 0.33% | Brent Crude | 19:48 | 110.87 | -5.25 | -4.52% | Rand / Dollar | 19:59 | 10.0043 | 0.0547 | 0.55% | Rand / Pound | 19:55 | 15.7138 | 0.1200 | 0.77% | Rand / Euro | 19:55 | 13.2726 | 0.0765 | 0.58% | Rand / NZD | 00:00 | 7.9804 | -0.0358 | -0.45% | Rand / AUD | 19:55 | 9.3150 | 0.1228 | 1.34% | Yen / Dollar | 19:59 | 100.2930 | 0.6750 | 0.68% | Euro / Dollar | 00:00 | 0.7545 | -0.0047 | -0.62% | Dollar / Euro | 19:59 | 1.3271 | 0.0017 | 0.13% | Pound / Dollar | 19:55 | 0.6351 | -0.0019 | -0.30% |
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Click here for the Sharenet Spot Price page
The JSE Today
Trading Statistics
Date | Adv. | Decl. | Unch. | Actives | Volume | Value | Trades | Orders |
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10/09/2013 | 239 | 132 | 68 | 439 | 236,998,891 | R16,943,610,492 | 182857 | 1633842 | 09/09/2013 | 180 | 159 | 75 | 414 | 187,638,599 | R11,686,837,827 | 138920 | 1487293 | 06/09/2013 | 182 | 156 | 85 | 423 | 178,897,441 | R10,685,255,503 | 133588 | 1764716 | 05/09/2013 | 218 | 129 | 58 | 405 | 192,254,062 | R10,618,518,359 | 118083 | 1583745 | 04/09/2013 | 114 | 235 | 53 | 402 | 172,101,728 | R10,953,239,375 | 136640 | 1152407 |
* Includes all listed instruments on the JSE
Index Summary Index Name | RP | Move | % Move | Top 40 | 39,087.02 | 780.14 | 2.04% | Industrial | 56,555.45 | 1153.03 | 2.08% | Mid Cap | 56,360.56 | 460.13 | 0.82% | Small Cap | 46,688.60 | 10.93 | 0.02% | Resource 20 | 51,428.20 | 917.55 | 1.82% | Industrial 25 | 49,595.08 | 1112.74 | 2.30% | Financial 15 | 11,722.62 | 161.04 | 1.39% | Financial & Ind. 30 | 52,433.33 | 1099.06 | 2.14% | All Share | 43,545.83 | 776.21 | 1.81% | Oil & Gas | 36,929.19 | -79.45 | -0.21% | Mining | 31,295.56 | 652.33 | 2.13% | Gold Mining | 1,280.28 | -30.00 | -2.29% | Platinum Mining | 51.01 | 1.15 | 2.31% | GENERAL MINING | 8,994.87 | 232.39 | 2.65% | Oil & Gas Producers | 19,856.14 | -42.72 | -0.21% | Basic Materials | 27,698.62 | 564.95 | 2.08% | Chemicals | 22,327.37 | 57.86 | 0.26% | Forestry & Paper | 27,685.62 | 593.35 | 2.19% | Industrial Metals | 24,694.23 | 363.78 | 1.50% | Industrials | 42,197.83 | 195.88 | 0.47% | General Industrials | 125.55 | .92 | 0.74% | Consumer Goods | 53,050.33 | 1216.73 | 2.35% | Automobiles & Parts | 7,472.71 | 38.49 | 0.52% | Household Goods | 216.35 | 11 | 5.33% | Health Care | 71,375.97 | 1408.45 | 2.01% | Beverages | 170.41 | 5.25 | 3.18% |
| | Index Name | RP | Move | % Move | Food Producers | 68,919.12 | 864.98 | 1.27% | Personal Goods | 1,002.26 | 16.88 | 1.71% | Consumer Services | 9,795.59 | 207.61 | 2.17% | General Retailers | 61,508.43 | 1144.26 | 1.90% | Travel & Leisure | 5,552.36 | -39.30 | -0.70% | Media | 197.27 | 5.33 | 2.78% | Support Services | 2,589.04 | 4.34 | 0.17% | Telecommunications | 8,753.23 | 256.54 | 3.02% | Financials | 30,989.75 | 374.38 | 1.22% | Banks | 52,360.14 | 697.17 | 1.35% | Non-life Insurance | 48,078.73 | 352.20 | 0.74% | Life Insurance | 29,823.11 | 549.78 | 1.88% | General Financial | 2,876.83 | 23.60 | 0.83% | Technology | 43,667.63 | -116.28 | -0.27% | SHARIAH TOP40 | 3,738.81 | 76 | 2.07% | FTSE/JSE SHARIAH ALL | 3,838.93 | 70 | 1.86% | COAL MINING | 21,268.08 | 365 | 1.75% | FTSE JSE Fledgling | 5,773.31 | 21 | 0.36% | FTSE/JSE Alt X | 1,027.69 | -8 | -0.76% | SA LISTED PROPERTY | 491.48 | | 0.38% | CAPPED PROPERTY | 410.36 | | 0.79% | RESOURCE | 28,131.51 | 476 | 1.72% | DIVIDEND PLUS | 208.06 | 2 | 1.14% | FTSE/JSE RAFI 40 | 8,640.60 | 148 | 1.74% | Capped Top 40 | 20,653.53 | 399 | 1.97% | Capped All Share | 22,038.56 | 388 | 1.79% | JSE TABACO | 6,695.80 | 64 | 0.96% |
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Click here for the Sharenet Index Summary page
Latest Consensus Changes** Code | Company Name | Status | Updated | BTI | BRITISH AM. TOBACCO PLC | BUY | 08/09/2013 | NPN | NASPERS LIMITED | BUY | 06/09/2013 | NTC | NETCARE LIMITED | BUY | 05/09/2013 | ANG | ANGLOGOLD ASHANTI LIMITED | BUY | 05/09/2013 | PIK | PICK N PAY STORES LIMITED | SELL | 05/09/2013 |
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Results Expected** Expected | Company Name | Fin. Date | 11/09/2013 | ASPEN | June 2013 (Final) | 11/09/2013 | ASPENPREF | June 2013 (Final) | 11/09/2013 | EOH | July 2013 (Final) | 11/09/2013 | MUSTEK | June 2013 (Final) | 11/09/2013 | RMBH | June 2013 (Final) |
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Recent Dividends** Share Name | Dec-Date | LDT | Pay-Date | Amount | A-V-I | 09/09/13 | 11/10/13 | 21/10/13 | ZAR 1.7000 | SASOL | 09/09/13 | 04/10/13 | 14/10/13 | ZAR 13.3000 | COMPCLEAR | 06/09/13 | 18/10/13 | 28/10/13 | ZAR 0.3000 | PINNACLE | 05/09/13 | 08/11/13 | 18/11/13 | ZAR 0.4100 | EQSTRA | 04/09/13 | 19/09/13 | 30/09/13 | ZAR 0.3600 |
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Ex Div** Share Name | Dec-Date | LDT | Pay-Date | Amount | ABSABANK-P | 30/07/13 | 06/09/13 | 16/09/13 | ZAR 29.9945 | NEDBANK | 06/08/13 | 06/09/13 | 16/09/13 | ZAR 3.9000 | B-AFRICA | 30/07/13 | 06/09/13 | 16/09/13 | ZAR 3.5000 | EXXARO | 22/08/13 | 06/09/13 | 16/09/13 | ZAR 2.3500 | STANBANK | 15/08/13 | 06/09/13 | 16/09/13 | ZAR 2.3300 |
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Upcoming AGMs** Code | Company Name | Date | Status | DTC | Datatec Ltd. | 10/09/2013 | Confirmed | FMC | Forbes - Manhattan Coal Corp | 11/09/2013 | Confirmed | AFP | Alexander Forbes Preference Share Invest... | 13/09/2013 | Confirmed | KEH | Keaton Energy Holdings Ltd. | 17/09/2013 | Confirmed |
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