Your investment, debt and financial questions answered
How can understanding the difference between risk appetite and risk tolerance help me develop my financial strategy? Shreekanth Sing, Wealth Adviser, PSG Wealth, Northcliff, Johannesburg
When developing a financial strategy, a key element is understanding the required level of risk you need to take to achieve your objectives.
Risk appetite refers to the level and type of risk an investor is willing to take in pursuit of their financial goals. It is a strategic, forward-looking concept that reflects the investor's desired level of risk exposure based on their objectives and preferences.
Risk appetite helps determine the types of investments a person chooses, such as an equity-focused long-term growth portfolio or lower-risk conservative portfolios that focus on cash and bonds. For example, someone with a high-risk appetite may allocate more funds with more equity exposure matched with a long-term investment horizon.
Risk tolerance is the investor's emotional and psychological comfort with uncertainty and potential losses. It reflects how much risk they can handle without becoming overly stressed or making impulsive decisions. For instance, a person with low risk tolerance may prefer low-risk assets like cash bonds over stocks.
This preference doesn't mean that it is the right solution to achieve your objective.
The main distinction is that risk appetite focuses on what risks an investor wants to take. Risk tolerance focuses on what risks an investor can emotionally endure.
Both concepts are crucial for building a portfolio that aligns with an investor's goals while minimising emotional stress during market fluctuations. People typically make poor decisions when faced with market turmoil, like what's been experienced over the last month.
It's important to work with a qualified financial adviser who can assist you with managing your investments and help ensure you achieve your financial goals and not destroy your wealth by making knee-jerk decisions.
I recently started a new job and I am now earning R5,000 more. I would like to maintain my existing lifestyle so that I can use this money effectively. What investment vehicles would you suggest I look at? Chrisley Botha, Wealth Adviser at PSG Wealth
Congratulations on your new job and the salary increase — using the additional R5,000 wisely can make a real difference over time. Before investing, make sure you have a solid financial foundation. This includes:
Emergency savings
– ideally three to six months' worth of expenses in a money market or high-interest savings account. No high-interest debt
– if you have credit card or personal loan debt, consider settling this first.
Once that's in place, here are a few investment vehicles to consider:
Tax-Free Savings Account (TFSA):
You can invest up to R36,000 per year (R500,000 over your lifetime) without paying tax on the growth or withdrawals. It's flexible and ideal for medium- to long-term goals. Retirement Annuity (RA):
A great way to boost your long-term retirement savings. Contributions are tax-deductible, which can reduce your taxable income — a smart move for future you. Unit trusts or Exchange-Traded Funds (ETFs):
These are suitable for long-term growth and offer access to local and offshore markets. ETFs, in particular, are low-cost and well-diversified. Fixed products or goal-based investment:
If you have specific goals (like a deposit on a home or future travel), consider a separate investment account aligned to your timeline and risk profile.
The key is consistency. Investing even R5,000 a month can grow significantly due to compound interest. A financial adviser can help you align your choices with your personal goals and risk tolerance.
I just started working and would like advice on how to effectively budget. How do I cover my monthly expenses, save, and pay off my student loan? Bianca van Niekerk, Wealth Adviser, Vanderbijlpark Financial Planning
Congratulations on your first job! Budgeting is a crucial skill, especially when starting your career. While financial institutions may tempt you with credit cards or overdrafts, avoid them — high-interest debt can spiral quickly.
A budget is simply an estimate of your income and expenses over a set period. To start, create a spreadsheet with monthly tabs. First, list your net income - the amount deposited into your account after deductions. Next, track fixed expenses like car payments, insurance, and medical contributions. Subtract these from your income to find your remaining balance.
Then, outline variable expenses, including transport, groceries, and personal care. These fluctuate monthly, but tracking them will help you stay in control. After deducting these, you'll see what's left —this is where luxuries come in. Items like gifts, beauty treatment, and shopping should be added cautiously since they aren't necessities. If your budget doesn't balance, this is where you should cut back.
Consider allocating extra funds to your student loan or any high-interest debt, but don't overcommit. If you find yourself short on money, you might feel pressured to take on more debt, creating a dangerous cycle. While some debt, like a car or home loan, can be beneficial, reckless borrowing leads to financial instability.
Start planning for the future early. Opening a Tax-Free Savings Account allows you to invest without tax levies (provided you contribute within the prescribed maximums). This ensures financial security while keeping funds accessible for emergencies. This is just the beginning — your financial journey will evolve with time.
Taking charge of your finances now sets you up for long-term success. Stay disciplined, make informed choices, and enjoy the rewards of financial independence.
Given the economic climate locally and internationally, how can I protect my assets from unexpected events or market volatility? Richus Nel, Financial Adviser at PSG Wealth, Old Oak
Financial markets may not favour short-term investors. It does, however, mostly reward the long-term investor despite short-term valuation disparities. Since we cannot know the short-term outcome with certainty, being a disciplined investor is the best strategy.
Short-term
There is a clear distinction between saving and investing.
Saving is normally restricted to cash and cash-like instruments, earning a pedestrian interest rate return (considering inflation and tax). With no value fluctuation, ideally, a 'parking' facility.
Investing is utilising asset classes that can appreciate (and drop) in value, depending on the economic environment. Investors focus on achieving marginal capital appreciation 'over and above' the interest or income earned from that instrument.
Well-run money market, bond or diversified income unit trust solutions (at the most extreme) are useful investment tools for short-term savings and investing. Investors should stick to a low equity exposure of 20-30% and be content with the inflation +1%, -2% return. The main aim here is short-focused 'inflation-like returns' for stability and certainty.
During times of volatility, short-term investors can re-evaluate their investment strategy with a financial adviser, as such times could offer the opportunity to realign with risk assets.
The above options are only appropriate if your investment focus is shorter than 3 years.
Long-term
Short-term savings and conservative investments are not suitable over the long term due to inflation. A long-term investment requires appropriate exposure to equity and should be well-diversified. During market turmoil, like we are currently experiencing, greater buying opportunities present themselves. These opportunities only exist due to short-term market fear.
Volatility can work for you in the long run when partnering with the right investment managers who know when to take advantage of investment opportunities.
Successful investing is a science, but it's easy to achieve if you stick to your investment plan with a financial adviser.
Kidnappings for ransom have been steadily increasing globally and in South Africa over the past few years. What cover is available for this type of event? Ryno de Kock, Head: Distribution at PSG Insure
There are different types of kidnappings to be aware of. Recently, we have seen a surge in express kidnappings in South Africa in which kidnappers will demand you log on to your banking app and process transactions into their accounts or take you to an ATM to withdraw cash. These values are normally much lower than larger organised syndicates, but happen frequently. Wealthy individuals, tourists and owners of cash-based businesses are generally targeted by more sophisticated criminals. Beyond financial protection, kidnap for ransom cover also includes access to a range of support, such as hostage negotiators, specialist investigators, and security experts to help secure the release of the kidnapped individual in a safe and effective manner.
To learn more about this policy and what else it covers, please reach out to one of our qualified advisers for more information.
PERSONAL FINANCE
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
IOL News
2 hours ago
- IOL News
Trump's false claims: challenging negative narratives with the warmth and beauty of the 'rainbow nation'
US President Donald Trump uses an image taken in Congo as proof of his claims that there is a genocide against Afrikaner farmers in South Africa. Image: AFP Amidst the backdrop of misinformation surrounding South Africa's socio-political landscape, South African Tourism invites the world to experience the country's rich diversity and vibrant culture, challenging negative narratives with the warmth and beauty of the 'Rainbow Nation'. This comes in the wake of a controversial meeting between President Cyril Ramaphosa and US President Donald Trump, where unfounded claims regarding genocide against Afrikaner farmers in South Africa were raised. During their meeting last month in the Oval Office, Trump labelled the situation facing Afrikaner farmers as one of 'genocide". However, Ramaphosa denied these claims, asserting that while South Africa faces significant crime challenges, they affect citizens across all racial backgrounds and he asked for assistance to address the high levels of crime. As international scrutiny mounts, a second wave of Afrikaners landed in the US last week under Trump's controversial resettlement programme that will eventually see 8,000 individuals relocating. In 2018, during his first term in office, Trump referred to countries on the African continent as 'shithole countries'. According to reports, in addressing concerns about false narratives affecting South Africa's global image, Michael Delaney, general manager of Radisson RED Johannesburg-Rosebank, cautioned against narratives seeking to make South Africa look bad and argued the importance of highlighting the country's positive attributes. 'Many of the misconceptions can be countered by showcasing the friendliness of its people, natural beauty, and cultural diversity,' he said, noting that most international visitors' perceptions of South Africa tend to improve significantly once they arrive. Trump's religious advisor, Pastor Mark Burns, visited South Africa to investigate the alleged genocide of white Afrikaner farmers. He later dismissed the EFF and Julius Malema as attention seekers for chanting 'Kill the Boer, kill the farmer.' Tourism bodies and an international relations specialist responded to inquiries about the actions taken and necessary measures needed to challenge Trump's genocide narrative. Toni Gumede, manager in the office of the CEO of Brand South Africa, said since Trump took office, Brand SA has consistently responded to his statements in line with the country's values. 'Ours is to continually drive messaging that not only balances whatever the narrative may be in the environment, but to highlight facts from misinformation in all our touchpoints domestically and internationally,' she said. She said Brand SA's nation branding mandate encompasses the promotion of South Africa's image, competitiveness, institutional credibility, and attractiveness for investment, tourism, trade, and skills mobility. 'Brand South Africa is tasked with improving how South Africa is perceived globally. The objective is to position the country as an attractive destination to invest in, visit, work, study, or do business with,' she said. Gumede said as an organisation, Brand SA continuously implements both proactive and reactive strategies through communications, marketing, and stakeholder engagements across the globe to ensure that we influence perceptions about the country. 'We work with and through a broad spectrum of partners and stakeholders, including business, civil society, and government,' she said. Some of the issues that Brand SA has addressed is South Africa's Expropriation Act of 2025 and the legacy of land dispossession among others. Gumede said Brand SA also drives a domestic programme called Play Your Part to get South Africans involved in positive social impact, including those in the diaspora, our very own Global South Africans, and ensure visibility/messaging about South Africa at global platforms like WEF, the recent SA-France investment Forum, and many others. 'According to the 2025 Global Reputation Study conducted by Bloom Consulting and Brand SA, South Africa's global brand equity is on an upward trajectory, with five out of six key dimensions showing improvement: Exports, Investment, Tourism, Work, and Study,' she said. Gumede said taken together, these results affirm the strategic value of Brand South Africa's interventions globally. 'Nearing or exceeding global affinity thresholds in Exports and Investment, and showing resilience across other dimensions, the nation brand is increasingly seen as credible, competitive, and globally connected which is a critical enabler for trade, tourism, and human capital attraction,' she said. Global manager PR and communications for South African Tourism, Thandiwe Mathibela, said South Africa stands ready to welcome travellers from across the globe. 'We invite the world to discover the joy of South Africa - for a memorable, long-lasting experience,' she said. Home to over 60 million people, Mathibela said South Africa celebrates unity in diversity. 'The spirit of ubuntu — shared humanity — defines our national character. South Africa's social fabric is defined by the everyday coexistence of people from diverse backgrounds, reflecting the stability and cohesion that support our broader economic and tourism environment.' In 2024, Mathibela said over 8.5 million international visitors chose South Africa, with continued growth from markets including the US, UK, Germany, China, and the rest of Africa. 'As we prepare to host the G20 Leaders' Summit in November this year, our ability to deliver secure, high-level global events has been reaffirmed,' she said. Mathibela emphasised that safety is a priority, and that the government is actively investing in traveller safety through expanded safety monitor programmes and infrastructure upgrades. 'South Africa continues to invest in quality-assured tourism facilities to ensure high service excellence and seamless sustainable visitor experience.' International relations expert André Thomashausen argued that South Africa should rely on facts and refer to the recently updated "Investigative Report on White Murders in South Africa Since 1992" by the European Centre for Information Policy and Security ( He said this is an unbiased assessment that records 12,567 farm attacks over the past 3 decades and that this cannot be 'wished away.' The report states that in 2019 alone, there were 552 attacks and 57 murders, primarily targeting white farm owners and their families, and although white farmers are disproportionately affected due to their prevalence in commercial farming, farm workers and smallholders of all races are also victims. Robbery is the main motive, with racially or politically motivated attacks being rare. The report recommended improved intelligence, data transparency, crime prevention strategies, and balanced public communication to tackle farm attacks amidst South Africa's complex environment. 'The SA government count since 1994 indicates 3,398 murdered farmers. The Wikipedia entry on 'South African Farm Attacks' refers to a murder rate of 274 per 100,000 farmers, as against a national average of 61 per 100,000,' said Thomashausen. Thomashausen said South African farmers make up the profession suffering from the highest murder risk, in South Africa and even globally. 'It is good that the recent presidential meeting in Washington DC has refocused the debates on South Africa's inequality index, giving it [the] worst Gini coefficients recorded anywhere. This cannot be resolved by 'nationalising' relative and absolute wealth but only by an aggressive economic growth and employment policy,' he said. According to Thomashausen, the meeting in Washington DC behind closed doors focused on how to overcome the development failure in the South African economy. 'Hopefully this will reflect in the abolishment of tariffs on both sides and stronger foreign investment support for South Africa.' [email protected]
Daily Maverick
2 hours ago
- Daily Maverick
The Financial Wellness Coach: How to calculate your retirement savings capital
The amount of retirement capital that you need depends on how much you will require to live on every month. Question: My friends tell me I need R30-million in order to retire. My savings are nowhere near that. Am I in trouble? Answer: The amount of money that you need in order to retire will depend on how much you need to live on when you have retired. I do a lot of retirement counselling with individuals approaching retirement, and determining how much they need to live on is always the first step in the planning process. I've found that this amount can vary dramatically – from as little as R8,000 to as much as R230,000 per month. Depending on how much you need in a month, the amount of retirement capital that you need will vary. If you need an after-tax income of R100,000 a month, you will need about R32-million in savings. I suspect that this is where the R30-million story comes in. However, I find that most retired people I help need an after-tax income of between R30,000 and R50,000 a month. I will go through the factors you need to consider when working out how much you will need in order to retire. Monthly retirement budget The first step in working out how much you need when you retire is to get an idea of how much you need to live on each month. I would recommend that you draw up a budget based on what you are spending now, and then amend it to reflect the type of spending pattern you may have when you retire. For example, your parking and lunchtime costs will probably reduce and your medical costs will increase. If you need help here, I have a retirement budget spreadsheet that I can email to you. Tax Once you have figured out how much you need, increase that amount to account for income tax. Drawdown rate and investment strategy You need to ensure that you will have enough money to live on until you, your spouse and any dependants pass away. As one in 10 of us is likely to live to 100, you need to plan on having enough capital for the next 35 years when you retire. What's more, this capital needs to be invested in such a way that it can withstand all the economic and political challenges that you are going to experience over the next 35 years. For someone who is retiring at the age of 65, just think back to what the world was like when you were 30 and all the political and economic challenges you had to deal with. When you retire, you will have a similar set of challenges, but will only have your retirement capital to depend on. There will be no promotions or performance bonuses to help you. It is therefore vital that you get the right investment strategy in place. The recommended drawdown rate for a 65-year-old is 5%. The thinking here is that the typical costs of a living annuity come to about 2.5%, so as long as your investments are growing by more than 7.5%, your pension will increase each year and be sustainable for the rest of your life. In order to work out how much capital you will need in order to retire, you would do the following: Calculate your monthly expenses when you retire; Work out what tax you'll be paying when you retire and increase those expenses by the tax rate; and Divide that number by 5%. This will give you the capital needed to provide you with a sustainable income when you retire. Some examples can be found in the table below. What I've shown you is a rough guide for how to calculate your retirement needs. I would strongly recommend that you speak to a financial adviser who is experienced in retirement planning. They will have access to software that will help you structure your retirement income in the most tax-efficient way and be able to model your investments to ensure you get the right level of returns without risking your capital. DM Kenny Meiring is an independent financial adviser. Contact him on 082 856 0348 or at Send your questions to [email protected] This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.
TimesLIVE
3 hours ago
- TimesLIVE
'I won't be left behind': UKZN first in SA to give AI smart glasses to visually impaired students
UKZN disability support unit head Amith Ramballie said the technology reflects the university's commitment to inclusion and equity. 'UKZN is proud to lead the way in implementing advanced assistive technology that speaks to the needs of our diverse student body. These glasses not only reflect our commitment to accessibility but also our belief in every student's right to learn, grow and succeed independently. 'This milestone is particularly significant because no other university in South Africa offers students access to this device.' Envision Glasses feature a high-definition camera that captures visual data from printed pages to street signs and processes it through an AI algorithm, delivering real-time audio cues via speakers discreetly placed near the ear. The glasses support more than 60 languages and connect seamlessly to smartphones. Sensory Solutions' Mukthar Khan praised the partnership, calling UKZN 'the ideal launch partner for this technology in South Africa'. He lauded the university's 'genuine commitment to inclusion' and urged the students to make the most of their new tools. 'It is now up to you to use this remarkable piece of technology to reach your goals — from academic success to personal and professional growth — we hope these glasses bring you more ease, freedom and joy in your studies.' The selection process for recipients involved a comprehensive assessment by disability support unit staff, taking into account factors such as the severity of impairment, academic demands, independence levels and financial circumstances. 'The impact of the glasses extends far beyond the classroom. Imagine being able to read a printed timetable independently for the first time, confidently find your way to a lecture venue or recognise your lecturer or classmates in a crowd,' said Ramaballie. The R75,000 hi-tech glasses were donated by Sensory Solutions to the university, courtesy of the UKZN Foundation.
