Latest news with #AshburtonInvestments
The Citizen
5 days ago
- Business
- The Citizen
How to be a savvier saver and investor
National Savings Month is an initiative to promote healthier financial habits and encourage households to save. National Savings Month is almost over. Some consumers learned how to save, but how many know how to be a savvier saver and investor? 'In essence, the intention is to foster a culture where South Africans can become more financially disciplined, leading to greater financial independence. To foster this culture, South Africans must learn that small actions in savings and investments can make a big difference in their lives. 'There are positive changes in the financial advice industry that consumers can capitalise on to do this,' Steven Amey, head of Intermediated distribution at Ashburton Investments, says. ALSO READ: South Africans experiencing less financial stress, but still under pressure — survey Why healthier savings and investment habits are necessary According to Eighty20 XDS Credit Stress Report 2025 for the first quarter of 2025, South Africans rely too much on debt. Household debt reached an outstanding R2.56 trillion in the first quarter of 2025, up 2.1% from the previous quarter. 'The most concerning aspect of this is the number of overdue loans. A staggering 34.8% of all loans are in arrears, the first time in two years this number increased,' Amey warns. 'Consumers are battling to pay for rent, food and the basic necessities of life, yet we continue to spend on items that fall outside these categories, evidenced in the 'Mass Credit Market', representing the majority of the South African population. 'Interestingly, approximately 325 000 people started using credit for the first time, in the form of retail loans. Overdue payments on credit cards in the mass credit market increased and 53% are in default, unable to pay an instalment. On average, South Africans spend close to 30% of their income on loans.' ALSO READ: Survey shows how economic distress erodes South Africans' savings culture Statistics show we are not savvier savers Amey points out that according to TransUnion's South Africa Industry Insights Report for the first quarter, the growth in originations for new credit cards at 30.7% compared to the previous year far outstripped growth for other consumer credit products. He says this is cause for concern. How do you change to build better savings habits? Amey says there are a number of good habits South Africans can embrace to improve your financial well-being, including: reviewing your household budget to find where you can save; becoming financially self-disciplined because small changes in spending can make a big difference; and starting to save immediately without hesitation to reap the benefits of compound interest over time. Amey says to start with, you must separate your needs from your wants and rather use your hard-earned salary to pay for the essentials and save the rest or spoil yourself. 'We tend to overreach and spend more than we can afford. The statistics demonstrate this. 'Why extend yourself for short-term happiness when the inevitable of having to return your item or have it repossessed a few months later will cause greater embarrassment?' ALSO READ: How can you save when you use 75% of your income to pay debts? Options to be savvier savers and investors are available He says savings and investment options in South Africa are also evolving in South Africa. 'While learning to save is critical, turning savings into long-term investments is where real wealth is built. To do this, you must be aware of changes in the financial industry that can be leveraged for your benefit. 'The investment value chain dramatically improved for the regular retail investor over the past two decades. We moved from having an investment industry that largely sold financial solutions on the back of attractive commissions to one that has become well-regulated, respected and led by financial professionals that truly care about their clients' financial well-being.' Amey says it is interesting to note that the financial services industry splintered into various advisory groups, each with their own unique value proposition. Many advisors elected to join networks of advisors, ordinarily supported by large established industry providers which assist advisors with regulatory compliance and enable them to offer sound financial advice and a host of additional ancillary services to enhance their value proposition to their clients. In addition, large life and banking advisory divisions offer advisors many of the benefits of a network, with access to additional systems and services these large life and banking channels developed over decades. And then there are the larger, more established independent financial advisory practices that retained their total independence, leveraging the resources they accumulated over years of entrepreneurial practice, Amey says. ALSO READ: Five money mistakes that seem smart, but could cost you a lot later How qualified financial advisers can help us be savvier savers and investors 'Today's Qualified Independent Financial Advisors (IFAs) can render sound holistic financial advice and are regarded as the modern day 'sherpa'. Their role is to prepare and help you navigate the financial complexities of life. 'Holistic financial planning is the epitome, where there is no longer a focus on a single need but a comprehensive analysis, incorporating all aspects of financial planning, from budgeting to cash-flow analysis, tax planning, investment planning and estate planning. 'Once all of this and more is compiled into an understandable and executable financial strategy, financial products, platforms and solutions can be recommended to enable your unique plan.' Amey also warns that while robo-advisor platforms are prevalent and tempting, they should be used only by more informed and astute investors. 'The need for financial advice from a qualified financial advisor remains as strong as ever despite these latest developments.' According to the March report of the Association for Savings and Investment South Africa (ASISA), there are a plethora of investment options available to investors. For instance, there are 1 884 unit trusts (100+ being passive or 'Smart Beta Funds'), commodity funds, hedge funds, structured products, private equity, venture capital funds, fine art, actively managed certificates (AMCs) and more to select from, all adding to the financial complexity investors are facing. 'This is why it is critical to get advice from a qualified financial advisor.' ALSO READ: Savings month: How to save like a millionaire – even if you are not one yet How discretionary fund managers can help us be better savers and investors Amy points out that one very important development is the recent steep growth in discretionary fund managers (DFMs) in South Africa. 'DFMs removed the burden of the advisor having to perform in-depth investment management due diligence and the complexity of having to compile detailed economic and asset management reports. 'Most DFMs have experienced teams, with sound investment processes and philosophies mastered over several years, for the benefit of the advisors they serve. In addition, many DFMs manage significant assets, which can enable them to negotiate reduced asset management fees on behalf of advisors.' He says the investment portfolios they compile may be personalised for the needs of certain financial planning practices or more generally to serve broader financial advisor needs. These portfolios usually comprise large and boutique active asset managers, as well as passive and smart beta investment strategies to reduce overall investment portfolio costs. Advisors then invest their clients' assets into these portfolios to achieve desired investment outcomes.' Amey says it is clear that many DFMs 'add significant value, segregating roles and responsibilities to ensure the advisors they partner with can focus on what they do best'. 'The savings and investment industry evolved significantly over the past two decades. If you want to change your financial fate you must tap into this opportunity. The way to do this is to partner with the highly skilled new generation of accredited financial advisors who lead from the front, acting as much needed financial sherpas for South Africans who want to build a better future.'
eNCA
18-06-2025
- Business
- eNCA
Markets Update
JOHANNESBURG - The markets kicked off the week in the red with an expectation of Small Caps. Patrice Rassou from Ashburton Investments joins us to unpack those movements.
The Citizen
31-05-2025
- Business
- The Citizen
Three financial literacy truths I wish I knew at 20
Steven Amey, head of intermediated distribution at Ashburton Investments, says he wishes his financial literacy was better when he was younger. The saying goes that hindsight is 20/20 vision, meaning that you will always think you could have done better later. This is even more valid when it comes to financial literacy. Do you ever wish that you knew what you know at the age of 50 about investments when you were 20? If you were 20 today and could learn about investing from scratch, you might be surprised to learn that it is not just a privilege reserved for people with a lot of wealth. It is, in fact, much more accessible than you might imagine, because it is all about three small things. 'Did you know that all people are genetically 99.9% similar, yet the 0.1% difference makes us all so unique? And did you know that if a plane incorrectly sets its course with a 1% error rate, it can have a dramatic impact on where it lands? 'A flight from Los Angeles to New York, with a 1% flight path deviation, would result in the plane landing 239 km off course. 'Lastly, and this one is close to home, did you know that in the 2024 Olympics, our very own super athlete, Akani Simbine, missed winning a medal by one hundredth of a second? Only 0.01 seconds was the difference between receiving an Olympic medal and not.' Amey says this makes it clear that the small things can have a profound impact on outcomes and shares these three lessons you can use to help your future self financially. ALSO READ: What to consider when deciding to invest locally or offshore Financial literacy lesson 1: Look at the small picture Sometimes you need to look at the small details to get ahead in life, he says. 'Many people complain about not having enough monthly income. To resolve this issue, you could search for a higher paying job, work a second job or play the Lotto, but these take time or may never materialise. 'Budgeting, on the other hand, is a much surer bet. Over two decades of experience have taught me that you can always find a place where you can cut back, be more financially free and start investing, even if just a little, for your future self.' Amey says the sooner you start to invest, the better. 'I love the old Chinese proverb, 'the best time to plant a tree was 20 years ago. The second-best time is now.' 'Do not wait for the right time, because time is not waiting for you. If you feel overwhelmed, contact a registered financial adviser or visit an asset management website where you will find different funds to suit your needs.' His advice is to start by moving from a motivational to a disciplined mindset. 'Someone who is emotionally stunted uses motivation to do something difficult once, while an emotionally mature person uses discipline to do something difficult a thousand times. 'It may be difficult to start saving, but look at what the disciplined investor achieves over time. 'If you start at 25 and invest just R1 000 per month until you are 55, you will end up with an impressive R1.5 million if market growth over the period is 8%.' ALSO READ: Investing in JSE shares: What you need to know Financial literacy lesson 2: Go small or go home People usually start by adding bigger pebbles to fill a glass jar, but adding thousands of tiny granules of sand will ensure the jar reaches its true capacity. Amey says you should not wait until you have bigger chunks of money before you start investing. 'True success is not about chasing big wins, it is about getting the small things right so that the big things can follow. Some of the biggest success stories in the world started small.' He uses these examples from well-known people on starting small and growing from there: Madiba tended herds of cattle in Qunu but went on to go to university and become the leader of the ANC and South Africa's first democratically elected president, a true world icon. Legendary businessman Raymond Ackerman was fired from his retail job in the late 1960s when he bought four Pick n Pay stores and grew them over the years into what is today one of South Africa's premier retail chains. 'These stories all teach us that even from humble beginnings, greatness can follow if you just persevere. Ultimately, it is all about putting one small foot in front of the other.' ALSO READ: South Africans optimistic about investing in residential property — survey Financial literacy lesson 3: Be a small deal In our consumer culture, we often feel the pressure to stand out and flaunt status, Amey says. 'But what if there was more value in rejecting status anxiety to pursue our best life? What if real success was more about quiet self-reflection to see where our innate vulnerabilities and biases may be tripping us up?' He points out that success is not about big gestures but about the consistent care and attention to every small detail. 'It is not about how much wealth you can display but about how financially literate you can become. Do not let your anxiety about current success stop you from putting the small things in place to achieve bigger success one day. 'One of the best small things you can do is to become aware of inherent behaviour biases that affect your decision-making. The three most common mind traps are the herding, anchoring and recency biases. 'Herding refers to doing what the herd is doing out of fear of missing out. If all your friends are spending freely and not saving, is it wise to simply follow? Anchoring means relying too heavily on the first piece of information you stumble across. 'Take a more holistic approach, do your research on reputable investment sites and if you can, engage with a qualified financial advisor and increase your financial literacy. 'Thirdly, do not get trapped by the recency bias. This is when we tend to focus more on recent events than long-term trends.' He emphasises that markets are currently volatile, and while some of your family and friends may have lost money over recent months, longer-term investing, with exposure to equities, creates long-term wealth despite short-term market downturns. Amey points out that instant gratification is celebrated in our culture. 'We have information at our fingertips through Google, social media and AI, and we can instantly order transport or food on our mobile devices. 'Investing, on the other hand, is counterintuitive to this programming, because it requires patience. 'Materialism and compulsivity erode our monthly income and trap us in debt cycles, leading to short-term gain and long-term pain. 'I have learnt that it is better to start off small, even if that means your house or car is not as smart as that of your friends. 'Be wise and use some of your income to provide for future capital growth over time. Your future-wise self will thank you in years to come for focusing on the small things that reap meaningful long-term rewards.'
