How To Teach Your Child About Investing

 

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How To Teach Your Child About Investing
By Andrew Beattie

Have you taught your children about investing? As they become aware of money and other financial concepts, it is vital that you arm them with investment tools that can last a lifetime.
Children mature at different rates so it may take time before they’re ready to tackle concepts like portfolio creation and asset allocation. However, the basics of investing can be taught quite young. Before your kids start cruising the Internet to check company profiles, you should explain risk and reward. Risk is the possibility that an investment loses some or all of its value while reward is the gain that an investment earns over time.
Let’s sketch a brief picture of two common investments: debt securities and stocks.

Stocks & Debt Securities
Stocks are variable risk, variable return investments. On the whole, they are categorized as high risk and high return. Make it clear that many risks involved in stocks can’t be predicted because corporate records can be tampered with or CEOs can lie but, despite those outliers, the stock market has risen consistently in the last hundred years, offering healthy returns.
A bond is a low-risk, low-return investment. Typically, bonds pay a small amount over the prime interest rate and are backed by stable institutions (usually banks or governments). You can buy lower rated bonds that offer better returns but they can default and you can’t necessarily count on getting the income when expected. Given the complexity of these instruments, you may wish to start your child with stocks and explain that bonds become more important later in life.

Keeping Your Child’s Attention
Show your child what stocks you own. Interesting companies might get their attention – plane manufacturers like Boeing, sports gear specialists like Nike, technology companies like Apple – look at the company’s investor relations page with your child to learn how much they earned, what they make and how many people work for them. Then ask your child what company he or she would like to buy. Kids have favorites even if they are not aware of them. For example, Facebook and Disney are popular with most children.
Once you have introduced your kids to basic concepts, sit down and let them select a company. If you have the money, buy the stock and look at it at least once a week to show how investments can rise or fall. If you don’t have the money, make an model online portfolio and track stocks for fun.
When your child is older, you can provide a more in-depth explanation of stocks and other investments. Eventually, you want to let your children buy their own stocks. Your child may have enough cash diligently saved up in a savings account by the time he or she is interested in investing. Don’t put it all into a bond or the stock market, but invest a third in each and keep a third in savings. This will allow your child to compare the returns of different types of investments.
You have two options if your child doesn’t have money to participate in the learning process. You can use your own cash to open a small brokerage account for your child to make investments or build a model portfolio of stocks that your child wants to buy some day. In the latter case, you will need to find innovative ways to maintain their interest.
Allow your child to make real decisions and take real risks. Money may be lost but the purpose of the exercise is to familiarize them with investing and part of this process is learning that investments have advantages and disadvantages. Whatever the outcome, the experience of gaining and losing money will be valuable.

The Bottom Line
If you pick stocks with your children when they are young, they will get a sense of the financial market’s up-and-down cycles. This understanding will prepare them for dealing with market fluctuations and making informed decisions when they grow up.

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Read more: How To Teach Your Child About Investing https://www.investopedia.com/articles/pf/07/childinvestor.asp#ixzz5Jd43H1jN

Success is better, shared – PPS allocates R3.7 billion in profits to members in 2017

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PPS – Built on the ethos of mutuality, PPS, a financial services company focused exclusively on graduate professionals, showed a strong performance in the 2017 financial year, allocating R3.7 billion in profits to its members. This is in addition to the R2.9 billion in total benefits paid.
“Success is better, shared,” says CEO of PPS, Izak Smit. “PPS members enjoy more than just professional cover. In 2017, our members were able to enjoy their share of R3.7 billion allocated to their unique Profit-Share Accounts, further reinforcing our passion for mutuality.”
The company’s ability to perform in a tough economic environment was achieved through leveraging technology for cost-efficiencies, tight expense management and a significant rise in investment profits.
There are currently 4 400 PPS members who have over a million Rand in their PPS Profit-Share Accounts. Profits are allocated to members’ PPS Profit-Share Account annually. These profits accumulate over members’ working lifetime and at retirement, can be transferred to PPS Investments for further investment growth.
Smit is pleased with the company’s robust growth in 2017, which saw gross premium revenue exceeding R4 billion for the first time – a 12% increase year on year. The Group’s total assets, (excluding unit trusts for third parties), increased to R35.3 billion. PPS Investments increased assets under management to R28.6 billion with new investment flows rising 14%. This is partly attributed to members reinvesting their money with the investment business at retirement. Smit adds, “PPS has evolved to an end-to-end financial partner for our members.”
Smit attributes this healthy performance to graduate professionals’ growing appetite for PPS’s unique solutions and the ongoing support the company receives from intermediaries.
“We have seen a strong surge in support from intermediaries and were delighted to win the Long-Term Insurer of the year: Risk Product category, at the prestigious Financial Intermediary Association (FIA) awards last year. Intermediaries are key business partners and we will continue to work closely with them in the future.”
A focused strategy and strong growth have underpinned the company’s evolution into a fully-fledged financial services company, offering a wide range of solutions tailored exclusively around the needs of graduate professionals. The PPS offering now spans long and short term Insurance, investments, financial planning, fiduciary services and healthcare administration.
Looking ahead to 2018, the company will continue to focus on growth across the full range of financial solutions. PPS also plans to roll out digital tools and initiatives which will further enhance the service experience for members and intermediaries.
Additional information:
PPS members enjoy access to a comprehensive suite of financial and healthcare products that are specifically tailored to meet the needs of graduate professionals.
PPS is the largest South African company of its kind that still embraces an ethos of mutuality, which means that it exists solely for the benefit of its members. Thus, PPS members with qualifying products share in the profits of PPS Insurance via annual allocations to the unique PPS Profit-Share Account and those who have qualifying PPS Provider products can also share in the profits of PPS Investments.
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Struggle to secure home loans

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Fin 24 -Younger buyers are starting to struggle to get on to the first rung of the property ladder, said an industry analyst.

According to BetterLife home loans statistics, over the past 12 months, home loans granted for between R500 000 and R1m, declined from 40.2% to 38.6%.

However, this drop in percentage of home loans to younger people is not due to a decline in demand, said BetterLife Home Loans CEO Shaun Rademeyer.

“[T]he percentage of home loan applications being made by first-time buyers has actually increased over the past 12 months from 46.1% to 47.5%.

“But the banks are becoming increasingly cautious when it comes to approving new loans and are applying very strict credit qualification criteria,” said Rademeyer.

Statistics show banks currently decline almost two-thirds (66%) of home loan applications.

BetterLife’s data also showed that on average buyers over-50 are currently paying about twice as much for their homes, compared to buyers under-30. But over-50’s only pay about 30% more on their monthly bond repayments in relation to under-30’s.

“Buyers aged 50 to 60, are paying an average of R388 000 as a deposit, which takes their average bond down to R949 000 and monthly repayment to R9 475. The average deposit size for over-60s currently is R674 000, which puts their average bond at just over R1m and average monthly repayment at around R10 000,” said Rademeyer.

Statistics show that buyers aged 20 to 30 are currently paying an average deposit of around R90 000, which puts their average bond at R682 000 and their average monthly repayment at just over R6 800.

Fin24 previously reported that South Africans are turning to unsecured debt to service home loans. About 30% of homeowners borrowing short-term unsecured debt, DebtBusters CEO Ian Wason told Fin24. This is in order to keep home loan payments up to date.

 

Source: https://www.fin24.com/Money/Property/younger-buyers-struggle-to-secure-home-loans-20170606

The Importance of a Last Will and Testament

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The Importance of a Last Will and Testament. A Last Will and Testament states what will happen to your assets after death. … The consequences of not having a will are quite serious; the government will divide your property, regardless of your intended wishes.

What happens to your investments when you die? Will they pass to your loved ones, as you would want? An uncomfortable topic to think about, but one that we all need to consider – especially if there are dependants involved.

Did you know?

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The rate at which medicine and medical practices are advancing poses a problem if you want your dread disease policy to provide benefits that will still be relevant in many years’ time.

At least one life assurance company has introduced a benefit that provides for the payment of claims when the policy’s original criteria for a particular condition become outdated as a result of medical advancements.

Dread disease policies typically define the medical conditions and the level of severity for which claims will be paid.

The criteria used to establish the legitimacy of a claim often rely on a classification system, a procedure, or a test. The claims criteria will be appropriate when you take out the policy, but they may become outdated over time.

Company X has therefore introduced a new feature on its dread disease policies – Medical Advancement Protection. This benefit provides a set of rules for assessing claims where the original claim requirements have become outdated due to medical advancements.

Medical Advancement Protection ensures you will still be covered for a condition as long as your symptoms would have qualified you to be paid a benefit at the time you took out the policy, and appropriate medical literature shows that the new surgery or procedure is not experimental, is necessary and is superior to the procedure used before.

Contact Light-Insurance for more information on Company X.

Light -Insurance

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We want you to live your life with confidence knowing that the things that matter to you are protected.
But there’s something about driving a car without insurance which scares the nonsense out of me, and I bet it does you too.
So why not tell us what’s most important to you when it comes to car and home insurance.

If you are lucky in life you will never be involved in a car accident… your house will never be damaged and you’ll never be the victim of a crime. Unfortunately though, life’s not like that and chances are you will lose something that is valuable to you. That’s why you need comprehensive car and home insurance that is affordable to protect your biggest assets.