MONTHLY SAVINGS CHALLENGE

Since I posted the daily savings challenge plans two posts ago, a few readers requested that we embark on a monthly savings challenge as well. It makes perfect sense as most of my readers get paid once a month.

monthly savings challenge

Anyway I also want to thank all of you for joining the savings drive. Those who follow us on Facebook have sent amazing messages. Remember to like our Facebook and our Instagram page. It is easier to inspire and encourage each other in social media platforms. And our hashtag is off course #SavingCommunitySA because we are building a community of savers.

We will once again choose the plan we are comfortable with from the four in this article. By the end of the month or whenever we get paid, we will open our emergency (or any) fund accounts. We will post the suitable accounts here for each reader to choose. The 24 hour (one day) notice account requires about R500 initial investment. The ETFs require about R300 per month. Please remember that each plan has our investment or own contribution and no interest added. We will save everything in interest bearing accounts or stocks.

Know your WHY. Are you saving towards building:

• Emergency fund.
• Children school fees fund.
• Deposit on their home.
• Deposit on their car.
• Investment for retirement.
• Investment for passive income.
• Business capital.
• ETC.

 I wish us all the very best in this monthly savings challenge. Keep pushing.

Read More

GET FEATURED ON SAFE INVESTING SA

We would like to have you get featured on Safe investing SA.
Safe Investing SA has, since 2011 been inspiring readers to do better, live better, attain financial freedom, spread their wings, get that extra income, diversify their portfolio, excel at their jobs, raise level-headed children and just be better citizens. For eight years we have built a community of doers and influencers. Some of our readers are successful investors, entrepreneurs and have built various streams of income.

In the aim to continue promoting a debt-free lifestyle, financial freedom, and a great lifestyle community we would love to publish your story. Have you changed careers, started from the bottom up, started a business, paid up debt, saved and invested for retirement or any cause at all? Please share your story and inspire our financial freedom community.

Calling all:

• Entrepreneurs
• Freelancers
• Career persons
• Investors
• Debt Free Enthusiasts
• Early retirees
• Wealth builders
• Anyone with a story.

Let us learn from your journey in order to grow and be better. Let us also support your hustle. Get featured on Safe Investing SA today.

Email: editor@safeinvestingsa.com

Facebook: @safeinvestingsa

Instagram: @safeinvestingsa

Read More

DAILY SAVINGS CHALLENGE

This daily savings challenge is my idea of fun. I know, I'm even more boring in real life. Get over it people. Here goes the fun. We have six daily savings plans for you to choose if you are joining. I so hope you are. We are saving up to R150,000 (about $12,500) per year each. This is an accountability stokvel and savings club of sorts.

How it Works:
We will each choose the plan we are comfortable with from the six listed below. We will then save our daily amount mentally and leave it wherever it is. We will then open our emergency (or any) fund accounts in 2 weeks time. The 24 hour (one day) notice account requires R500 initial investment. The ETFs require about R300 per month. Please remember that each plan has our investment and no interest added. We will save everything in interest bearing accounts or stocks.

Some of our readers are saving towards building their:

1. Emergency fund.
2. Children school fees fund.
3. Deposit on their home.
4. Deposit on their car.
5. Investment for retirement.
6. Investment for passive income.
7. Business capital.
8. ETC.

Remember, depending on each one's needs, one can save in a notice account, money market account or invest in exchange traded funds (ETFs) for better returns. For those who prefer a monthly plan, we'll work on a few options for the beginning of next month. For now, choose from one of our daily savings challenge plans below.

daily savings challenge

This is our basic daily savings plan. You may just save R280 per week. If you convert it into a monthly savings plan, you will save less because there are a few extra weeks in a year. A year is not made of exactly 4 weeks per month. Keep records of this and follow us on Facebook to keep track of where we are.

daily savings plan

 Above is the double of the basic plan. A number of the readers can spare more than the R500 per week. Remember again that if you convert it into a monthly savings plan, you will make less because there are a few extra weeks in a year. Keep moving with us.

And now we look at half of the basic plan. Students and young professionals who are starting out might go for this plan. The most important part of building wealth is consistency. We are developing a culture of saving here more than anything.

Below are R50K to R150K daily savings plans.

All the best to you. I will keep reminding all of us on our Facebook page. Stay tuned.

Read More

BASIC FINANCIAL PLAN

The logical step, following the previous post on financial independence is drawing a basic financial plan. Wouldn't you agree? We are unpacking ways to reach financial freedom. It is as much a journey for me as it is for my readers. I am also investigating the best ways to improve on how I handle my finances, how I save, how I invest, how I diversify and balance my portfolio, how I build various streams of income and how I  plan to eventually retire comfortably.

basic financial plan

Let us look at the very basics of financial planning and set some milestones together. Like both our Facebook and Instagram pages to follow my progress whilst you work on your own plan. I am right now growing my medium term savings.
Oh well, let us dive right into our exercise by firstly taking stock of where we are.

1. My Assets (What I own):

The beginning is how our finances look at the point of this review. We start with what we own. There are broadly 4 asset classes that we will use for this exercise. We are not going to break the assets down to sub categories. Check the examples in the third column below to get an idea.

Asset Class	Asset Description	Examples
Cash	Cash is generally short-term and low-risk in nature. My shortest term account is the one day notice account.	Money market, notice accounts, savings, etc
Bonds	Savings bonds is money one lends to government or an institution that needs to raise funds. This is also low risk.	Government or company issued bonds.
Real Estate	Property investment for holding, leasing and/ or flipping. This is obviously my weakness.	Residential, commercial and real estate investment trusts (REITs).
Shares, Stocks or Equities	Company shares in the stock exchange or even offshore. This is easier than most people imagine.	Individual stocks and/ or exchange traded funds (ETFs).

2. Debt (What I owe):

The next step in drawing a basic financial plan is listing liabilities or what we owe. This has to be the most scary step. No stress though, a problem identified is as good as conquered. 

• Homeloans or Mortgages are more longer term debts that we have. Get the exact amounts owed to banks and add them up;
• Short to long term loans;
• Car loans;
• Credit cards and other revolving debt like retail store accounts;
• Any other debt.

3. Net Worth (What I am worth):

This is where we add up all our assets and subtract our liabilities (debt) to get an idea of how much we are worth. Not to be fazed though, a negative net worth can still be rectified. 

4. Setting Financial Goals

Now that we have an idea of how much we are worth, let's go ahead and set our finance goals. How far do we want to grow our net worth? Are we looking at developing passive income, diversifying our portfolio for more streams of income, invest for a comfortable retirement? What to we want to achieve? What is our basic financial plan?

5. The Plan and Strategy

• My main focus has always been on paying myself first. This involves saving before spending, growing funds for various purposes like emergencies, saving for larger purchases like cars, etc.
• Drawing and sticking to a monthly spending plan or budget. It's not that hard really.
• Paying consumer debt off, including credit cards, retail cards, cars, mortgages, etc.
• Reviewing the essential policies like life insurance. This is a need when one has dependents.
• Reviewing funds for retirement, including the retirement annuity. Learn how to maximize the RA.
• Growing savings for children's education.
• Growing the investments for a balanced portfolio. Are you happy with your stocks, bonds, savings, real estate investments, etc.

Please share your own personal finance strategies in the comment below, on Facebook or Instagram.

Read More

FINANCIAL INDEPENDENCE

I thought a refresher post on financial independence makes sense, in light of new developments in my life. I finally quit my part time job over a year ago. I am not retired yet but I only work on what I enjoy working on at any given time. I realize that I have almost reached the goal I had set from the very beginning. That of living my life in my terms.

financial independence

A lot of people have ruled early retirement out as a dream that is impossible to achieve. They are so wrong. Anyone can achieve the state where they have enough wealth that they do not need a job or any form of paying work. How lovely it must be to know that you own your time and thus your life. But even better, how exciting it is to believe in that possibility and claiming it for your life. Make that happen for yourself. You are so deserving.

I am very proud of myself for being so close to my idea of reaching financial independence. I am so close, I can almost touch it. I will break down how I am ensuring that I will reach the ultimate goal and retire or do whatever I want to do with my life. Travel would be very nice. Every single strategy listed here is within our control. We are not building castles in the air.

1. Lowering Expenses.

Most of my readers are fortunate enough to have formal employment and therefore an opportunity to save and invest. We all know by now that we should pay ourselves first and only spend after. We also need to know what our priorities are and cut costs on any expenses outside those. I love going to a beauty spar and not so much eating out. However, with my current setup of working from home, I have decided to go out for coffee every week and rather cut on doing my nails. I have not visited my nail technician in six months. I will probably stretch it to a year or longer. I paint my own nails. That is already saving me some R400 per month. I will survive my healthy natural nails. I know I am trying hard to convince myself.

2. Building Multiple Streams of Income.

I am currently using all the skills in my possession to earn some income. I am a personal finance speaker, as I'm sure you can imagine. I also do some technical economic work to keep my brain active and of course earn some income. My speaking assignments used to be for free. I have started charging a fee as I need to take valuable time to prepare. And of course the property income which is the main source of my income. Writing is still a hobby but definitely not for long.

 3. Investing in High Return Vehicles.

Apart from real estate, the stocks are an amazing way to grow one's equity. I am still a huge fan of exchange traded funds (ETFs). I am diversifying with a number of off-shore options. ETFs is one of the most exciting investment tools. It is relatively easy as management is fully outsourced.

4. Building Passive Income.

Over the years I have realized that real estate is not a source of passive income. I do not even manage my properties, but I somehow find myself doing a lot from marketing to working on the physical structures. However, dividends from stocks are one hundred percent passive. I love that a lot. 

5. Start Early.

I think I started early enough. But starting at any point is great. Just start where you are. Working on reaching financial independence is very much worth it. We owe it to ourselves.

Read More

Home Staging is Important

Before I start on why home staging is important for fellow landlords, let me go off topic a bit. I have been busy with business development and a lot of new ventures, but property investing remains my lifeline and main hustle. It has been a hectic period with short stints at part time employment. It is great to be back here.This is the space that keeps me focused. I share for my own benefit here too.

property cleaned up

 For about three months I have been revamping properties for new tenants and restructuring the rental types themselves. I turned a commune into a single-family property, installed prepaid meters in a multiple family property and worked quite hard at ensuring that the properties look amazing. You must have heard it before...I only let a property that is good enough for me and my family to occupy. I will provide details of the work I have been busy with in the next few blogs. Today is introductory to that with regards to why home staging is important.

Home staging is important

A number of people cant take the stress of fixing stuff and dealing with contractors. This is true with tenants too. A number of people who do not prefer home ownership prefer a simple stress free life without the pain of replacing broken tiles. I on the other hand am one of a few people who makes it a point that stuff is fixed each time it breaks. Sitting with a problem distracts me. If a cabinet drawer is broken, it should be fixed or replaced within a few days. Maintenance is one of the most important aspects of home ownership and being a landlord. The longer it takes to fix a problem, the higher the cost.

This also helps with upgrades on the property in between tenancies. Prospective tenants never see potential. Frankly, potential is not in their interest. All they want is a “ready-to-move-in” home. That is probably the reason they avoid the stress of building their own homes themselves. I shy away from showing a place before it is completely turnkey. You’d be lucky to show a house to a prospective tenant twice. They take the first impression and take their decision based on it. Avoid showing a property prematurely with statements such as: “the cabinet will be fixed; we will replace the cracked glass; the electrician is coming tomorrow;" etc. This is why home staging is important.

I have also viewed properties that are packed with stuff resembling some kind of a storage facility. Some with those thin and shallow cracks that take minutes to fix.  Properties that are sometimes fixed but not cleaned. Its worth taking a week extra to go through fixing those nuisances and hiring a cleaner for one day to remove the dust.

I always take a minute to imagine myself living in the place. Once again, if the place is not good enough for me and my family, it is not ready for my tenant. This has little to do with the value of the finishings but neatness and state of repair. I will go through ways of ensuring easier maintenance in the coming posts. This was just to welcome myself back to the space that has given so much back to my life.

Expect diversified investment posts and guest bloggers with real life wealth building posts.

Read More

I CHANGED MY BAD FINANCIAL HABITS

Changing bad habits is a constant battle for all of us. It does not matter how not life altering the habit may seem. From eating in instead of dining out to raiding your closet for the next wedding instead of paying a designer for a new outfit. It takes a lot of discipline and intentional effort. I changed my bad financial habits and still continue to relapse and rework on them again and again. We need to understand that this is a ceaseless battle.

I changed my bad financial habits

I am fortunate in that, my own habits do not encompass carrying huge debt quantities. It is mostly shopping for stuff I do not need. Carrying consumer debt should be frightening for all of us. It is strange that when people are in that high debt situation, they tend to behave like frogs that are being boiled from low water temperatures. They simple adjust to their situations, and then start borrowing even more. The longer one is in debt, the deeper they tend to dig the grave.

Let me start by confessing, to demonstrate how easy this happens to most of us. A few months ago, I finally got myself a credit card. Phew! Was I ever so eager to get into debt? The thing is, I started an exciting, high capital and slow growth business. I was rushing the business to be self-sustaining ahead of its time. I'm not a patient type. It emerged that it is not happening anytime soon. I had to get a credit card to assist the business. I do not believe in bankrupting myself to assist the business but the situation called for it.

Well…I swiped the credit card for the business transactions and ahem, mine. In no time, the card was maxed out. I started having the business pay the debt, but it was very difficult. Instead of me working harder on doing this, I just got used to carrying this debt. I got comfort in the fact that I was not paying any interest because I was paying the credit card balance up monthly and transferring my money back again. The credit card debt was becoming part of me, until I realised that I was getting captured (as South Africans would say) and paid it up. The business may reimburse me someday.

A lot of people carry huge sums of credit card debt like it is a perfect way of life. Some have intentions to get out of debt but regress back to it. This is just one of the habits that keep us trapped regardless of our intentions. Then comes January, we repent and promise to get ourselves cleaned up. The main reason we don't permanently kick these habits is that, they somehow fill the void inside of us. You can only replace a bad habit with a good one. That void needs to be filled with something, Right.

I changed my bad financial habits by replacing them with good habits. I am a designer and tend to buy a lot of home stuff. I also have acute hoarding habits. I decided to have a business that sells used, vintage and antique home-ware. This enables me to acquire new stuff as often as I wish. I simply resell existing. You may not be reselling (I don’t see why not though), but need to replace the mall time with something that adds better value to your life.

We also need to understand that changing bad habits is a very difficult and lonely journey. The society is about spending and spending more. The higher your debt, the more likely you would be "liked". Our society shows a high level of respect for people who are flashy. Being one's own person often takes swimming against the tide. Do it despite everyone else's perceptions. It is your own journey and your own goals. Your ability to exercise self-control can stretch beyond your imagination. It is easier than you imagine.

• Always keep your eye on the ball. Refer to the article on setting SMART goals posted in the blog.
• Know what triggers your bad habit. If it takes cutting mall visits and people who are bad influence from your life, do it.
• Keep busy with something else. Physical exercise could be one.
• Get support structure if you must. Surrounding yourself with like-minded people does wonders for one's goals.

Those are a few steps I took when I changed my bad financial habits. I stay put most of the times.

Read More

SHARING GOALS

Sharing goals with friends, family and other like-minded people can help provide one with the much needed support. This may also provide a safe place to "sort of" account on implementation and progress. I am very much aware that this is a non-negotiable NO for many people. But the outlier in me makes this perfectly OK, at least for myself. Well, I am evidently a blogger. You know, the crazy bunch that deliberately thinks aloud.

Sharing goals

In the previous post, we detailed how to set personal finance goals. If you haven't already, go check the post before this one. You will not be disappointed *broad smile*. Having set the smart goals, I find that sharing them with just one person helps me strive to bring them to fruition. I cannot be the only one who thrives on support. Anyway today's post will be about me…of course, my self centeredness knows no bounds *more smiles*.

For as long as I can remember I had an accountability buddy. My accountability person is usually a like-minded friend who also derives similar benefits from the friendship. In my twenties I had a friend who impeccably played this role in the finance area of my life. She had a lot of goals herself, which gave a high degree of mutuality to this accountability role. We never planned to keep each other accountable, but we did. She would tell me how she plans on paying her apartment up in a very short space of time. I would do the same. That is when most of our friends were shopping just to kill time and to feel "rich".

I later started this blog, specifically to keep myself accountable. I account to myself with no reservation here. If I set a goal using this blog, I am sure to achieve it at the set time. But this happens when I commit to constant reporting. You may not have been following me for long enough to have been part of my mortgage pay up journey that I took about 6 years ago. I was very excited each time I write the progress report. This pushed me to pay more on the mortgage, to beat my set target deadline. All of this happened here in the open, in my blog. I did that until my mortgage was fully paid. What a feeling!I attribute my bond repayment success to the target setting and tracking that I was doing in this space.

I still share some of my goals with close friends. Apart from that, I have set an accountability club on Facebook to keep myself and others accountable to ourselves. It is a closed group with like-minded friends. Every month each of us reports on progress towards achieving their set goals. One may have only one goal communicated to the group. Reporting is done in the form of sharing evidence which is done monthly on all set goals. The regular updates keep each member of the group accountable not only to us as group members but to themselves too. I would recommend this approach to anyone who has ambitions to build wealth.

Sharing goals does have its cons too by the way. One has to be careful when they choose their accountability buddies. Negative buddies are to be steered clear of. I know people who bring so much negative energy to one's excitement and dampen the spirit. Choose wisely.

Read More

SETTING FINANCIAL GOALS

I must have told you about the guy who goes beyond the exercise of setting financial goals by framing and hanging them on the wall of his home office. He takes pleasure in seeing his goals on display daily. I don't quite do that, but it seems to do wonders for people as visual as the guy. I myself am a goal driven nutcase. I can never achieve anything without intentionally setting a goal for it. I am currently re-building on my emergency fund for instance. I have committed to a specific amount that I save every month towards my maximum emergency fund. Without that commitment, I tend not to be consistent. I can be that messy.

setting financial goals

I advocate for goals that are challenging enough to push one where they are aiming to be, but yet attainable. Whenever I plan to achieve a financial milestone, my goal states the amounts to be saved and/ or invested with target returns. The idea of SMART (specific, measurable, attainable, result-focused and time-bound) goals will never get out of fashion. I have a detailed explanation of SMART goals which entails writing goals down, setting targets and celebrating every milestone achieved below.

• Specific. You most likely have different goals at any given time. The "my goal is to build wealth" is a goal too broad and overwhelming to work on. I have heard of this particular one far too often in my wealth class. A smart goal is more specific than that. When setting financial goals, one needs to break a goal down with an attempt to respond to their own "What", "Why" and "How" for specificity.

What is my goal? My goal is to earn high rental income.
Why this goal? I need high rental income to supplement my current income and invest for early retirement.
How will I achieve this goal? I am saving through a high interest investment vehicle towards acquiring my investment property. I am currently saving R5000 per month. I am also working on improving my credit rating to increase my chances of getting charged low interest by my lender of choice.
It does not get more specific than that.

• Measurable. The measurability of your goals enables you to track your progress. This is the only way that you can have an evidence of the work you are putting towards achieving your objectives.

Let's take our rental income goal as an example. The investment property will only be purchased in exactly two years' time. Break this goal into smaller targets goes:

• Monthly:- I am saving R5000 every month to build towards my deposit.
• 6 Months:- To improve on my credit rating I am paying all my consumer debt off by month 6. I will also be having R30,000 plus interest at this date.
• 7 Months: In month 7 I am getting a new credit card that I will take great care of for the purposes of improving my credit score.
• 12 Months: By the end of year one, my credit rating will have improved to excellent. I will be having over R60,000 in my investment account at this time.
• Year 2: I will be having extra income to boost my savings at month 13. By the end of year two I will be having R240,000 in my investment account.

You must be getting the measurability point of this post. I do this a lot. I go to an extent of adding interest to my excel spreadsheet. This makes the goal tangible and motivates one to work harder to achieve it.

• Attainable. I have come across a lot of people who have dreams that remain dreams purely because of lack of their dreams attainability. We all wish to achieve stuff but it takes a bit of time and proper planning to get where we want to be. We have to be millionaires before we become billionaires, unless of course we win lottery. Our current goals cannot be to be billionaires in a short space of time whilst we have not even attained the first R1 Million.

Having said that, your goals should challenge you. Easy will not cut it either. Remember to break your goal down into smaller targets. This enables one to determine how possible achieving their goal is. Always remember to start where you are when setting financial goals.

• Results-focused. The only way to get things done is by focusing on the outcome. Always keep your goal alive. Take care of the processes but have your goal in your face/ mind at all times. Keep in mind that your main outcome is owning your investment property. Every step that you take is for the advancement of that goal. And the question asked is "how is this objective advancing my ambition to earn my rental income".

• Time-bound: Tying your goal to a time frame helps one to pace themselves in achieving it. A lot of us are procrastinators. A time-bound goal will keep one moving.

Read More

YOUR RELATIONSHIP WITH MONEY

Have you ever given yourself enough time to sit down and analyse your relationship with money? Yeah, neither have most of us. We just walk around pretending that our financial crisis is going to somehow sort itself out. We also get scared of being associated with the "love" of money. Because we may get labelled as "evil". To keep ourselves as saints we choose to lead a life of low productivity and high wastage. As if that makes us better citizens.

your relationship with money

Oh well, let's be serious for a minute. The main challenge with the majority of human beings is lack of patience. The idea of getting satisfaction sooner rather than later is so much more attractive. This, in most cases is what leads to a lot of us being highly indebted. Wanting a great lifestyle is by all means not a bad thing. Wanting it too early and with money one does not have is the main cause of the debt crisis that we are faced with.

I will not waste any time on instant gratification. It is what it is. I have written and spoken about it until I was blue in the face. Everyone wants everything and they want it now. They want a nice executive car and a new closet that matches it. And they want it all, NOW. Instant gratification is what stands between most people and their ability to create wealth. This can certainly be rectified by the change in the mind set.  Giving more value to long term goal versus the short term satisfaction. It is not easy but very doable.

Next to lack of patience is the negativity. Most people don’t believe that they can be better, wealthier, wiser, etc. We are ultimately what we believe. This reminds me of when I started my business last year. I got into it with faith that my business was going to get very big. I started behaving like I was running a huge business because I never doubted for a minute that, that is where I was herded. Thinking big commands respect. Whilst thinking small diverts one's focus from setting and working towards meaningful goals. When you believe that you can achieve, you just do. Try it.

The reason some people have the negative relationship with money is how they were raised. The only phrase they ever heard about money from their parents was negative.
"We don't have money"
"I am poor"
"Business is not for people like us"
Try and think of what your parents used to say about money. That could be where answers to your love hate relationship with money lie. When you do find the link between your own thoughts about wealth and your upbringing, fight that negativity every single day of your life.
I do not remember ever saying I do not have money to my kids. All I say is that, what they want is not in my budget, or that we have other priorities. My son was still attending preschool/ kindergarten when he asked "mama, what are priorities?" To this day, he knows that we prioritise, which is a more intelligent and positive message than not having money. Especially when you actually do have some.

Now that we have the negatives out of the way, let's look at how we can improve our relationship with money. Think about what will happen when you neglect anything in your life. It never grows, Right? That's exactly what happens when you neglect your financial affairs. Pay attention to where your money comes from and where it goes. One of the signs that you are not paying attention is that you find yourself having no idea what happened to the R1000 you withdrew. Red flag right there.

Paying attention to your money involves appropriate personal finance planning, budgeting and/ or tracking one's expenditure. Your financial health is as important as any other aspect of your life. As we should all know, a bad financial state has a potential to make one physically sick. Why then would someone only focus on their physical health and neglect their state of finances? That cannot make any sense at all.

Empowering yourself to know more about money should also be prioritised. Educate yourself, read, talk about money and learn from others. Learn from others' mistakes too.

Finally, draw a personal life road map. Know where you wish to be and how you plan to get there. I am reminded of a piece of reading that I recently came across. A guy who not only sets goals but frames and hangs them in his home office wall wrote about how that keeps him motivated. He is able to see his goals daily. I don't quite do that, but it seems to do wonders for the guy.
Goals should of course be challenging enough to push you where you are aiming to be. They should also be more specific and measurable. If you want to buy a house in two years, your goal should be to save XYZ amount for the down payment/ deposit, transfer and legal fees. You may even go further to break that amount to smaller deposits, like saving R2,600 per month over 12 months.

I hope you will join me and work towards improving your relationship with money daily. I am, as a matter of fact, aware that I am an impulsive spender. I need to check on myself often, otherwise I lose track. Everyone has a money weakness and needs to check on themselves often. Take a decision to be a better version of yourself. It is a lifetime commitment and a very worthy cause.

Read More