Financial Advisors & why everyone should have one!

With 60% of South Africans struggling to pay their bills each month and a whopping 15.4% only of its GDP saving money it’s clear that we need some help with our finances. With a further study showing that only 30% of South Africans have a will in place it seems rather crucial to have a financial advisor, but what exactly does a financial advisor do and more importantly can I afford one?

Well, I am just an average citizen. I live in an average town, in an average home that I share, because living standards in South Africa are expensive, with my average lower income bracket salary and I have a financial advisor. Why? Well, because I want to improve my financial future and because I do not have the knowledge on how to do it on my own.

When I was in my early 20’s I thought that Financial Advisors were for the top 10% of South Africans, the people who had money to protect and invest. Then I met someone who actually was a Financial Advisor and explained it to me in a way that I could understand. So let me help bring that message forward to you.

“A financial Advisor is someone whose job it is to help their clients, that’s you,  plan for their short and long-term financial goals. These goals may include retirement and education. A financial advisor may provide investment, tax and insurance advice.”

This advice may start from how much savings and debt you currently have to whether you have a retirement plan. Typically the process is very simple and easy to understand. The hardest part is coming to grips with your real financial situation and being honest about your debt and your savings or lack thereof, however, once you have this clarified the planning can begin.

Many financial advisors appointments are free for the first visit and costs going forward will be discussed should you make use of the advice and move forward with your financial portfolio. The legislation requires that all fees be disclosed so once a plan is proposed an investor will be comprehensively advised on what the fees will be.

Things that you will have to think about:

  • Do you have any dependents such as kids? Do you have an educational goal for them such as going to a certain school or a university?
  • Do you have insurance for your personal and household items?
  • What about insurance for yourself? Life insurance can prove to be a lifesaver for your family should something happen to you.
  • Dread & disability cover? A possible risk that we all face during our lifetime is that of becoming disabled due to an accident or illness. In some cases, you might still be able to work, but if your disability is so severe that you can’t continue working, you will need some form of income to cover your monthly living expenses. That is what disability cover is for.
  • Funeral Policy? No one wants to think about dying and that is why it is important to consider having a funeral plan because funerals are very costly and no family member should need to have the additional worry of paying for a funeral plan during such an emotional time.
  • Retirement and investments? It is never too early to prepare for the day you retire.
  • Savings plan? No matter how small the amount, time is your best friend with any savings plan. In my early 20’s I started with R250 saving per month which most months I scrambled to get together but I always did and 5 years later I had saved R15 000!

So there you have it, more reasons as to why you should have a Financial Advisor as to why not! #WhenMoneyMatters

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