SP Wealth Management

SP Wealth Management Good Governance and Compliance is one the key attributes we strive towards.

Established in 2003, SP Wealth Management is an investment management and advisory service that offers holistic financial planning and risk management solutions. SP Wealth Management’s core purpose is to provide clients with the best management practices and solutions for their wealth and risk management. Inherent to that purpose is the needs driven approach of SP Wealth Management (SPWM) to achie

ve the clients goals and objectives through the well established relationships with investment management and
insurance companies.

The Actual cost of . We all know of someone that experienced some form of severe illness and sadly, most of the time,...
25/07/2023

The Actual cost of . We all know of someone that experienced some form of severe illness and sadly, most of the time, it results in either permanent damage or worse case, the passing on of this individual. What is however not noticeable, is the hardship that the loved one or family members may experience after the event is lived through. It is with this in mind that one needs to consider protection and or some for of product to provide for the immediate needs of those left behind. Something to think about....

01/09/2022

FIVE TIP TIPS TO GET YOUR CLAIM PAID IN FULL

*Underinsurance*: In short, you are when you insure your assets for less than what is required, and what is required is to
be able to be in the same financial position as prior to your misfortune. The insured value of your contents and buildings of your private residential structures must be equal to the current replacement value, not the original purchase price or current market value. This is not just the case for when you have large losses. It is important to note that, if you are underinsured, you will also not be fully paid for smaller losses. If you insure for only 50% of the replacement value, then you will be paid only 50% of the loss in accordance with a principle called “averaging”.

However, calculating the replacement value of your building or contents is easier said than done. Neither you nor your broker is an
expert in this field. But it is only you that know the details of what you own. Insurers therefore often make different tools and services
available to assist clients in the evaluation process. These include inventories, the services of professional evaluators, and online
calculators. You will often find that, should you make use of these tools and insure for the suggested values, your insurer will scrap the average condition and you will then have the assurance that any claim, big or small, will be paid in full. Especially on home contents, replacement costs often are much higher than you may think. The small additional premium you pay for what seems to be inflated replacement values is well worth the ability to replace in full the assets you had when you suffer a loss.

*Excess*: An excess amount is the first amount payable for which the client is responsible. It is the agreed amount of money you pay
as a contribution towards repairs or replacements. While these excesses are highly differentiated in the insurance market, an excess amount is applicable to most short-term policies, and it is explicitly stated in all policy documents. Clients are advised to read this part of the policy carefully, so they do not get a shock when it comes to the claim stage. In some cases, clients can also adjust excesses (reduce or increase) to suit their needs, and in doing so pay an adjusted premium.

*Exclusions*: No insurance policy will cover all losses. However, most insurers will know what the market needs are and provide
appropriate cover to be competitive. Exclusions and limitations are largely there to ensure affordability, with the option to the buy
additional cover at a premium. Some conditions relate to high or unacceptable risks, like a home alarm or a vehicle tracking device
that needs be installed. With especially motor insurance, exclusions are one of the main pitfalls. Claims for mechanical or electrical
breakdowns are not covered under a normal vehicle insurance policy and require a vehicle warranty policy. Cover for car hire may need to be added, or extras fitted to the vehicle may have to be insured separately. Be sure to check that your policy covers multiple drivers of your vehicle and make sure you have declared the use of your vehicle correctly for either business use or private use. In addition to the exclusions stated on your policy, you also need to inform you insurer of any material changes, such as a change of address or a change in the regular driver of a .

*All-risks insurance*: This mostly refers to items that are portable, such as jewellery, cameras, laptops, mobile phones or tablets. As a
norm, if not specifically insured, these are generally still insured under your house contents policy, but only when they are at your home address. High-value items that can be removed from the risk address should be specified and then do not form part of the total value of the house contents. In recent years there have been developments with regard to the way cover is provided while contents are not at home, be it while at work, a child who is a student and living away from home, while , and in general. The cover available in the market can differ substantially, so it is important to consider a scenario where your assets are not at home and test the policy cover against your needs.

All-risks insurance normally carries a higher and is therefore more expensive. Insuring everything you remove from your premises may not be the best financial solution. Due to the current economic climate or personal circumstances, it is therefore vital to evaluate the priority of specifying these items, and only insure the items you want to by considering the following aspects:
• Monetary value
• Risk exposure (nature (high/low risk) of item lost or damaged).

*Personal liability*: This refers to insurance against a third party suing you in your personal capacity for financial loss, physical injury or death. The most common form relates to your house-owner’s insurance, covering the structure of your home and its permanent fittings and typically includes medical costs, restoring or replacing damaged property, pain and suffering to the injured party, loss of income, legal costs and expenses. Standard cover for personal is between R2m and R5m, but this may not be enough to save you from financial ruin if someone does claim against you. Most insurers, therefore, offer top-up cover at a low additional premium, extending your cover to R10m or even R20m as in the case of . As the chances of you claiming are very low, extended cover is highly affordable and probably well worth it

11/08/2022

CMScript 9 of 2022: Focus on Mellitus Type 2

Diabetes Mellitus Type 2 or Type 2 Diabetes Mellitus (T2DM) is caused by the body not having enough insulin or being resistant to insulin. When the body is resistant to , the cells in the body do not respond normally to insulin.

Because T2DM usually occurs gradually and can take many years to develop, most people do not notice their symptoms or think other conditions cause them. If you have any risk factors for diabetes, it is essential to discuss screening with your doctor or health care provider.

T2DM is one of the conditions included in the Chronic Disease List (2CDL) of the Prescribed Minimum Benefit ( ) regulations. This means that medical schemes MUST fully fund the diagnosis, treatment, and care of T2DM. The minimum care and management of T2DM must be funded according to the algorithm in the PMB regulations, which is available here. Medical schemes are allowed to put in place managed care protocols and formularies to fund the diagnosis, treatment and care of T2DM.

28/06/2022

as an example of personal, business and private use
Using the example of carpooling, the following scenarios demonstrate the three different categories of usage.

use:
Eve is a full time mother and does not engage in any form of employment. She uses her vehicle primarily to drive her children to and from school and to extra mural activities. Eve lives close to two other full time mothers, Nadia and Thandi. In order to reduce the costs associated with driving the children, Eve has entered into a car-pooling arrangement with Nadia and Thandi whereby each of the mothers takes turns to drive the children to and from school.
On Mondays, Delia, another mother from the school attends to her sick mother and is unableto drive her children home. She lives in the opposite direction from Eve but Eve has nonetheless offered to assist Delia by her children home. Delia pays Eve a small
amount to cover the additional used by Eve to make this extra trip. Eve does not make any profit from this payment.
Accordingly, Eve uses her car for personal use only.

use:
As times are tight, Eve has decided to embark on a part-time business venture in order to earn extra money. She is a qualified tax consultant. Nadia and Thandi are both required to submit tax returns each year and have engaged Eve’s services in order to assist them in doing so. On the days when Eve drives to Thandi or Nadia’s house to drop off their children, she spends a few minutes consulting with them on their tax issues. She also uses this
opportunity to deliver or collect documents that she needs in order to reconcile their accounts.
Eve is using her vehicle for personal and business use and must therefore insure it for business use.

use:
Thandi has been offered full time and is no longer able to carpool with Eve and Nadia. Eve offers to take over Thandi’s lifting obligations in exchange for a small payment.
After covering her petrol costs, Eve enjoys a small profit from this arrangement.
Eve is accordingly using her vehicle for commercial purposes.

27/06/2022

RISK MITIGATION SERIES – PERSONAL LINES

KEEP YOUR BICYCLE (AND YOURSELF) SAFE

Whether you like ambling about on your bicycle for fun or are training for the next -bike or event, knowing how to stay safe is the best way to enjoy your time cycling.

An increasing number of South Africans are taking up cycling as a hobby and are purchasing bicycles fit for their lifestyle. Whether it
be for environmental reasons, saving petrol when commuting to work in city areas, to simply have fun or to compete in sport races,
thousands of South Africans are fully immersing themselves in this trend.

But regardless of whether you’re a beginner or a seasoned , we want to make sure you’re always safe wherever you may find
yourself, which is why we’ve put together this list of safety tips.

tips for cyclists
1. Like any vehicle, a bicycle needs to be serviced properly before you embark on any major challenge, or when parts start to get worn. Make sure you get your bike checked out.

2. Always obey the road rules with respect to cycling. You could start by familiarising yourself with these Cycling Rules of the Road and Road Safety from Arrive Alive.

3. Always wear a helmet while cycling. Cycling without a helmet has been illegal in South Africa since 2004.

4. Make sure you are always visible to motorists.

5. Keep your friends and family informed of your plans, whether you’re going for a long or short ride. Let them know which route you intend to take.

How to insure your
• You must specify the insurance cover for your bicycle in your policy with your insurer or intermediary.
• You can also insure accessories/gear relating to your bike, such as a helmet. This must be clearly specified in your policy.
• State whether your bicycle is used for pleasure purposes only or for professional use in competitions.
• Know what the current replacement value of your bicycle is and insure it for the same value.
• You will be asked to share the following information with your insurer in order to make sure you are adequately covered:

o Make, model, serial number, sum insured (replacement value of your bicycle);
o Type of bicycle, for example a or bicycle

17/03/2022

power! Why is important 📝


Estate planning is a fancy term that means deciding what will happen to your money and your things when you pass away. Nobody likes to think about death, but if you plan for it, you can make life much easier for your loved ones should the worst happen.

It all starts with your will, which is a legal document that determines how your estate is distributed when you die. Your ‘estate’ is everything you own (your assets) minus what you owe (liabilities and costs related to your death). Anyone over the age of 16 is able to draw one up.

Why do I need a will?

Without a will, your estate will be divided according to the Law of Intestate Succession. In other words, you have no control over who inherits your assets. This law can be very blunt. If you live with your partner but you’re not married to them, for example, they will inherit nothing unless you have a will.

So, you need a will because it allows you to care for those who are financially dependent on you. Remember to keep your will updated, especially after significant life events such as getting married or divorced, having children, buying a house or starting a business.

What else do I need to know about wills?

Your will should include a nominated ‘executor’ – the person who will carry out your wishes and handle the administration of your estate. The admin part can be complex, so make sure you know who your nominated executor is and how much they will charge. Legally, an executor can ask for more than 4% (3.5% + VAT) of the assets in the estate. Depending on the size of your estate, it might be a good idea to negotiate the executor’s fee upfront and state it in your will.

If you have children, you could also include a nominated guardian for them. The guardian will look after your children if you pass away, so keep this section updated too, as life circumstances change. Nominating a grandparent might be fine when the kids are young, but they are getting older and might not be able to manage in a few years’ time…

What are the other benefits of estate planning?

The main benefit is that it reduces costs and lightens the burden on your loved ones when you pass away. Costs at death can be high. There’s estate duty to consider – a tax calculated at a minimum of 20% of the value of your estate – and there are other administrative expenses involved. Any outstanding debt must also be settled before your beneficiaries receive anything. A good estate plan will make provision for all the relevant costs, and even streamline some of them, meaning that more of your wealth goes to your family and less to unnecessary parties.

This links to the next point: Should you die, having an organised estate plan reduces the stress on your loved ones at an already stressful time. With a qualified and experienced executor appointed, and a clear will in place, the emotional distress of winding up your estate will be greatly reduced.

Ask for help

Estate planning is relatively simple for some people, but for others it can be a complex task. If you fall into the latter category, you might need to meet with a financial planner or estates specialist. Depending on your financial situation and whether your beneficiaries will require any special care when you pass away, a professional will also be able to suggest other estate planning tools such as setting up a trust, for example.

It’s always better to plan for the worst, even if death is scary to think about. You’ll feel much better once you’ve put a solid estate plan into place.

10/02/2022

How to pay less this February 💲

Yup, it’s that time of the year again. On 28 February, the 2021/2022 tax year ends and the next one begins.

If you have some spare money to invest, there are two easy ways to pay less tax: you can contribute more to a retirement fund, or you can start a tax-free investment (also called a tax-free savings account). Or you can do both!

Confused? Don’t worry, we’re here to help.

Option 1: Top up your retirement fund

Retirement funds go by quite a few names: retirement annuity (RA), provident fund, pension fund… All of them essentially do the same thing: they provide a safe haven for your savings and allow those savings to grow so that you have a sum of money to draw on when you retire.

Saving for your retirement is important, and encourages you to do so by giving you an incentive: each year, you can reduce your taxable income by contributing up to 27,5% of that income to a qualifying retirement fund, or R350K, whichever is greater. Reducing your taxable income means you pay less tax.

If you’re part of a company pension fund, have a look at your latest payslip to see how much you’ve contributed this tax year, and speak to your HR manager to find out how you can make an additional voluntary contribution. If you contribute to an RA, you can make an extra lump sum payment before the end of February to get yourself to the tax-free limit and take advantage of the SARS incentive.

Option 2: Start a tax-free investment

Opening a tax-free investment (TFI) is another way to save and pay less tax at the same time. This is how it works: you can contribute up to R36K per tax year, to a maximum of R500K in your lifetime, and when you decide to withdraw your money one day, there is no tax on the growth of the investment. (Most other investments usually attract some form of ‘growth’ tax, like dividends tax or capital gains tax etc.)

Unlike a retirement fund, which you can only start withdrawing from when you reach the age of 55, you can withdraw the money from a TFI at any time. The longer you leave your capital invested, however, the greater the growth of the fund will be, and the bigger your tax saving.

Which should I choose?

Each solution offers a different kind of tax saving. If you want to reduce your taxable income this tax year, the best course of action is to top up your retirement fund. On the other hand, if you have some spare money to invest, a can be very tax-efficient if you’re prepared to play the long game and give the enough time to grow.

There’s also no reason why you can’t do both: pay a little extra into your fund and use the balance to open a TFI. If you’re unsure what to do, set up a meeting with a financial advisor, who will help you choose the right investments to suit your lifestyle and your financial goals.

Happy saving!

04/02/2022

Let’s talk about your 📝


At some point in life, most of us will take a loan from the bank. Maybe you’ll need the money to study, or to buy a car, or to pay for your dream home. Ideally, you want the interest rate on that loan to be as low as possible, so that you don’t end up paying double or even triple the amount you loaned over the period.

How does the bank decide what interest rate to give you? They look at your credit score. And here’s the dilemma: credit (like a store card or credit card) can easily lead to accumulating bad debt, yet at the same it can be a key to helping you achieve a good credit score.

So, do you apply for the credit or not? As Uncle Ben said to Spider-Man: ‘With great power there must also come – great responsibility…’

What is a credit score and why is it important?

A credit score is a three-digit number that reflects your creditworthiness to potential lenders and financial institutions. The higher the number, the more likely that your application for a loan or more credit will be approved. This applies to a big like vehicle finance or a , but also to smaller credit lines like mobile contracts and store accounts.

Your credit score is based on your credit history, which includes your total amount of debt, how many open accounts you have, and your repayment history. Missed payments, for example, will impact your credit score negatively and lower your chances of acquiring more credit in the future. Your credit score will also determine what interest rate you’ll pay for future credit applications.

4 ways to build a good credit score

1. Pay your bills on time. Every missed payment can lower your score. When you apply for any form of credit, account or loan, make sure you can actually afford the repayment. Also consider setting up a debit order – that way you’ll never forget a repayment.

2. Don’t use all your credit. Your ‘credit utilization rate’ is a fancy term for the percentage of credit available to you that you’ve decided to use. Using less available credit is generally seen as positive – it means that you’re keeping your spending in check. Also be aware that if you use the majority of your available credit on short-term, high-interest products like credit cards and store accounts, it could negatively affect your score.

3. Don’t apply for too many products. Multiple credit applications in a short space of time (especially to multiple credit providers) will raise a red flag that will negatively impact your credit score.

4. If you have a credit card, manage it well. Try not to spend wantonly on your credit card and be sure to pay the minimum required installment each month. Even better, pay back the full amount.

At the end of the day, the credit scoring system is all about activity and balance: how much credit you use and how well you manage it. Building a history of good credit and responsible spending is important – it will improve your credit score, which will save you money through lower interest rates and open doors to loans that might improve your life in the long-term.

Master your money, not the other way around!

vs
28/01/2022

vs

What is an ?• An exchange traded fund (ETF) is just a unit trust that trades on the stock exchange (governed by the s...
28/01/2022

What is an ?
• An exchange traded fund (ETF) is just a unit trust that trades on the stock exchange (governed by the same CISCA regulations).
• An ETF is composed of a basket of securities or assets that seeks to mirror the performance of an index.
• The underlying assets could be shares, bonds, money market instruments or a single commodity like gold or platinum.
• If the underlying assets perform well, the ETF will perform well – the opposite is also true.
ETFs are regulated by the and Financial Sector Conduct Authority ( )

10/01/2022

How to plan for your best year yet 🎉

2-3 min read (or writing down your 2022 finance because this is your year)

At , we love budgeting and planning ahead. Not sure where to begin? Here’s how to get your bucks in a row so that you can have a stress-free 2022.

Start with the basics

You can’t plan for spending or saving if you don’t know what you have to spend in the first place. Work out what you owe (car loan, store card etc.), what your fixed expenses are ( fees, , rent etc.) and estimate how much you’ll earn this year. This will give you a clear idea of what you have to work with.

for each month

Use the 22seven app to review your 2021 spending habits. Check which categories attracted the most spending and note the months where you went over budget. This will help you set a realistic budget for 2022.

Remember that your budget is not just for recurring expenses. You need to consider day-to-day expenses and exceptions, too. Here’s an example of what to plan for:

to save, not just spend

Once you know what you need to pay and where you can cut some expenses, it’s time to look at saving, investing and most importantly, paying off debt. Start with the most expensive debt – the loan with the highest interest rate. Once you’ve flattened that, you can start looking to the future and financial growth!

‘Saving’ can include putting money into an emergency fund, or towards a big purchase in your future like a deposit on a car or home, or a wedding. ‘Investing’ can include a tax-free savings account, unit trusts, or a retirement annuity.

If you can’t find a gap in your budget to save, review your budget again and cut even more. Here are some ideas to free up money. Give them a bash in January and enjoy the benefits for the rest of the year.

• Shop around for better car insurance. Your premium increases annually, but your car’s value decreases. Get some quotes for a lower premium and use them as leverage to reduce your current premium, or simply switch providers.

• Do you need the things you think you need? Are you really going to use your gym membership this year, or will you be better off with an extra R1 000 in your pocket each month and more outdoor time to exercise?

• Life insurance and your home loan… If you have life insurance to cover your home loan, remember that your loan amount decreases while your premium continues to climb. Call your provider and ask them to lower your cover, and therefore your premium, to match the outstanding balance.

• Medical aid. Review your medical aid plan. Are you paying too much for unnecessary benefits? Read more on previous posts.

• Do you need Platinum? The bank card looks cool, but how often do you really use the airport lounge? You might be better served with a cheaper bank account.

• Ditch the contract. Pay as you go usually works out cheaper than a cellphone contract. And BTW, your old phone works fine, you don’t need a new one every two years!

Automation for the win

Once you’ve decided how much you want to save, invest and repay on loans this year, set up debit orders to make sure the payments are made automatically. This will help you pay on time, take the hassle out of the process and keep you 100% on track. Your credit score will thank you.

All the best for the New Year!

10/01/2022

Time to review your … But how!? 🏥

Choosing a medical aid is like trying to decipher the menu at that dodgy restaurant that serves grills, seafood, pizza, Mexican and sushi. The choice is overwhelming, and you don’t want to make the wrong choice because there may be unpleasant consequences…

South Africa has 18 registered open medical schemes, some of which have dozens of plan options. If you have an existing medical aid, there’s an ‘upgrade window’ in November and December when you should reflect on your health needs and decide if you need to change your level of cover for 2022.

Confused? Here’s a quick guide.

Are all your pre-existing conditions covered?

There’s no crystal ball to warn of unexpected health challenges next year. But you should evaluate your current health status and that of your dependents. Make a list of any pre-existing medical conditions, chronic medication and treatments that you or your dependents might require and check your list against your medical scheme’s benefit list.

This exercise can help you decide if your plan will cover current and expected future medical expenses, or if you should upgrade to a more comprehensive plan.

It’s a real slog to do this, but it’s important to prevent any nasty surprises.

Are you thinking of starting a family?

As mentioned, you can’t upgrade your medical aid plan during the year without paying penalties — this can only be done during the upgrade window. If you’re planning to have a baby next year, upgrade your plan to one that covers all the expenses linked to pregnancy, birth and post-natal care.

Same story if you’re planning on getting married or moving in with your partner. Sit down and discuss your respective health needs and existing medical aid plans. Compare the benefits and consider adding one partner to the other’s medical aid — it often works out cheaper.

Does your scheme offer medical savings?

Many medical aids offer a combination of a plan and a medical portion. The hospital plan is like insurance — it covers costs if you need to be hospitalised. The medical savings component is a percentage of your contributions that’s held in a separate account to pay for GP visits, medicine purchased from a pharmacy and other smaller expenses throughout the year.

A good hospital plan is non-negotiable. Private medical care is exorbitantly expensive — you need to know that you’ll be covered should you have to spend time in hospital.

And while it’s also important to maintain a medical savings account, there are pros and cons to letting your medical aid administer this account. The pros mostly involve easier admin: you’re ‘forced’ to save; payments automatically go through if you have a positive balance; and it’s easier to do your tax return because your scheme will provide you with a certificate of all expenses, including those that you had to cover yourself when your funds were depleted.

The cons? Your medical aid scheme will usually charge a fee to administer the account, and you don’t earn any interest on your savings. If you put money into an interest-bearing account instead and use that to draw from for day-to-day medical expenses, you’ll get more bang for your buck.

If you’re organised and you’re not afraid of managing your own finances, a separate account is the way to go. You’ll pay less in medical aid premiums, earn interest on money you don’t spend, and you won’t be hampered by scheme rules regarding what you can claim for and what you can’t. Use 22seven to track your medical expenses so that you can put all your medical expenses on your tax return.

However, if you’d prefer to keep all your medical stuff under one umbrella, choose a plan with a medical savings account.

Ask for help

If you work for a big company, ask HR if there’s a representative who can help you unravel the complexities of their medical aid options. Many corporates offer their employees this service. Otherwise, consider speaking to a financial advisor with experience in healthcare, who can help you choose the best solution for you and your family.

Here’s to good health in 2022!

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721 Springfield Street
Philippi
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Tuesday 09:00 - 17:00
Wednesday 09:00 - 17:00
Thursday 09:00 - 17:00
Friday 09:00 - 17:00

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+27218392836

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