Giving yourself a gift

Reward for achieving goalHave you ever considered giving yourself an annual gift?

Or maybe a monthly one (on a smaller scale)?

I have a relative who has a very limited budget, but once a month when she achieves her goal, she treats herself by driving to the beach and ordering the biggest ice cream cone she can find. She savours every mouthful while listening to her favorite Gospel singers. If she feels really good, she will even sing along with the noisy gulls while they beg for food. Two slices of bread encourage them to stay close by.

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Detailing our Fees-Based Model and Upfront Fees

Members in the financial planning and advisory industry have two different means of earning an income.

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The industry standard – appropriated by most financial planners – is a commission-based model. With this, the financial consultant meets with the client, assesses the client’s needs requirement and then suggests and sells various policies to them. As the financial consultant works on a commission-based model, they will not earn an income in the event that no sale is made on behalf of the client. With this, there is a more aggressive approach to the selling of policies, and more often than not, the client will be heavily encouraged to buy a policy.

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Dealing with the Financial Implications of Divorce

Getting married and starting a life with the person you love is a marvellous new chapter to begin, unfortunately, most marriages do not last. The divorce rate has increased by 5% and statistics from 2012 show that of the 161,112 marriages that took place in South Africa, 22,000 of those marriages resulted in divorce.

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In most instances, the wife almost always ends up in a position of disadvantage. After experiencing a divorce, she will be forced to deal with emotional trauma and extra financial implications, and too, face the challenge of dealing with getting herself back to where she used to be and figuring out where she wants to be. Continue reading

Is all debt bad?

Is all debt bad? To answer that question, we need to consider two concepts:

  • What is the cost of debt?
  • What is the reward to be gained as a result of that debt?

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If you are prepared to enter into debt to purchase a pair of shoes valued at R10 000, the reward will be that you are the envy of many of your friends. Is this reward worth R10 000, plus interest on the debt? Continue reading

Frustrations with a Local South African Bank

I have held a Private Banking account with a large South African bank for the past 24 years. Although this is an expensive account to have, I am provided with a Private Banker – which is one of the main benefits of private banking. However, after a long time of holding the account, I have come to the conclusion that for me, this is no longer good value for money.

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My main concern is the overall lack of communication with my Private Banker. Whenever I try to phone her, I am met with a voicemail message which instructs me to contact her assistant. When trying to phone the assistant, who also doesn’t answer the phone, I am redirected again to the Call Centre. Here, after spending very long periods of time moving between the switchboard and related prompts, I am told to contact my Private Banker.

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How to Afford your Child’s Education

The cost of education in South Africa is at an alarming all-time high, and these rates are northwood-paying-for-your-childs-educationnot showing any sign of decreasing in the near future. Budgeting for your child or children’s education is imperative, and need not be too much of an overwhelming task.

We suggest seeking the assistance and guidance from a trusted financial planner to set a long-term strategy in place through the use of carefully considered unit trust funds.

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Why is it so difficult to talk about money?

Money is a strange matter; it always appears to be on everyone’s mind, yet at a social gathering, or even in a private conversation, it always seems too much of a personal topic to discuss.northwood-talking-about-money-is-taboo

Money is taboo. When couples come for financial coaching, regardless of how long they have been married, I am always surprised at how difficult it is for them to speak about money. In some cases, we cannot have a joint meeting when we discuss budgets as the subject is simply too toxic.

From an early age, we are taught that it is impolite to talk about money. Even to close friends or family members, it is deemed as ill-mannered to talk about how much something costs or how much money someone earns. Quite simply put, money is a complex subject, and it can stir up many intense emotions when it features in a conversation.

The result of this sensitivity sees us not teach our children about money. For example, think of your own family:

When you were a child, how many times did your parents sit down with you and teach you about money and how to use it? Even if your parents didn’t talk to you about money, you would still have learned about money from them; as well as having probably picked up some bad habits, you would probably also carry the fear of talking openly about money.

Your silence hurts your children today. Whatever the reason for avoiding the subject; whether you feel that you have made too many mistakes, or that you are embarrassed, or that you are afraid of conflict; silence is never a long-term solution.

Silence hurts you: after all, without attention, money problems only tend to get bigger. It’s a powerful symbol representing many different things to many different people. It can symbolise the comfort of being taken care of and loved, as well as bring up issues of dependence and survival. It can symbolise power, control, adoration or seduction.

Money is a way to deal with anxiety and separation issues, while others believe a lack of money may be perceived as a threat to their safety and can give rise to depression and feelings of emptiness.

At Northwood Financial Services cc, we play a game called CashFlow 101 with our clients. In this game, people can become unemployed. We’ve noticed that if a client becomes unemployed more than once, they tend to give up and opt not to play any longer. Although CashFlow 101 is simply an exercise, we don’t have to option to opt out or give up when money troubles become too hard in the real world.

Our advice: ask for help. If, for example, you wanted to learn a new skill, you would seek the help of a tutor. The same principle applies to financial planning, yet few would consider asking for help to deal with money.