Every year starts with a promise and an intent to change and enhance one’s life.
2023 is no different and after the year that was 2022, there is even more reason to undertake a comprehensive review of one’s financial management strategy.
We list a few recommendations below that one needs to consider on an annual basis, for the protection of your wealth and finances:
- Reduce Debt: 2022 saw interest rates increasing by 45%. The prime interest rate began the year at 7,25% and ended 2022 at 10,5%. There is little prospect of this rate reducing in 2023 (in fact further increases could be on the cards), and reducing debt will benefit any financial plan.
- Review Will & Trust Deed: Life happens! An outdated Last Will & Testament is sometimes more dangerous than no Will. Your current Will may have suited your circumstances a few years ago but may now be outdated, or even redundant. Reviewing your will on an annual basis, together with the conditions and terms of any trust you may have, is highly encouraged.
- Rebroke Risk Cover: Risk cover, both short term and long term, is both a necessary and important part of your financial planning. In these difficult financial times, it is often worthwhile to review the risk cover that you currently have and ensure that it is both appropriate and cost efficient.
- Review Investment Portfolio: 2022 was a difficult year for financial markets and there was literally no place to hide! A good financial advisor will ensure that your portfolio remains optimally positioned and relevant to your strategic wealth and financial goals. It is critical to review your portfolio and make changes where required.
- Maximise Tax Efficiency: Tax is something that is a necessary part of life, that nobody really enjoys. Are your financial affairs structured to ensure tax efficiency? There are several products that give you significant tax benefits. Make sure that you are availing yourself of these opportunities.
- Offshore Diversifications: As South Africans, we have to live with exchange control restrictions, similar to loadshedding in a way. Every calendar year brings new opportunities to diversify a portion of your wealth offshore. Take advantage of this valuable opportunity to diversify your wealth.
It is no secret that we are living in a world that is increasingly becoming more regularised and complex. The same is true for your financial planning, tax and wealth management strategies. The days of a simple DIY strategy are long gone. Speak to a trusted advisory firm that is multi-disciplinary and skilled to advise you on all the above-mentioned matters.
An Activ8 Advisor can also provide further guidance on these important aspects of your financial planning.