Contribution R
Growth per annum %
Investment period years
Total contribution R
Growth R
Final value R

Your wealth in good company

Wealth is not only created by investing your savings but also by limiting the loss of money due to a lack of experience, time, knowledge and proper financial advice. Save yourself valuable time by allowing the team at Delfin to share with you our experience, knowledge and approach to understandable and transparent financial advice.


Wealth Accumulation

There are many reasons why you would want to accumulate wealth. Buying your first car, going on your dream vacation, buying that perfect home, ensuring a quality education for your children and making sure you have enough money to retire comfortably, are just some of them.

Whatever your reasons for wanting to accumulate wealth, the three most important factors that influence this, are budgeting, saving and compound growth.

Budgeting

Everyone should have a budget. This gives you an indication of what portion of your income is allocated to necessary expenses and what is available for savings and investments.

Once you have a budget, you need to work out where you are overspending and where you can save on your expenses, eg. you may be overspending on life cover, but not making enough provision for your children’s tertiary education. You also need to strike a balance between the things you need and the things you want.

Saving and Compound Growth

Once you know how much money you have available for wealth accumulation, it’s time to make that money work for you. There are various ways of going about this and whatever strategy you choose, it is important to understand the power of compound growth.

Compound growth is growth-on-growth and has been described as the eighth wonder of the world. If you invest R1,000 in the first year and it grows by 10% in that year, an additional R100 will be available in the second year. Growth will now be on the original R1,000 and also on the extra R100. Over time this phenomenon greatly increases the value of your investments.

This Magic Formula is: Growth-on-Growth Plus Time

Use the wealth calculator by entering your own monthly investment contribution, growth rate and investment period.

Calculator

Also consider the following:

Gearing

Another powerful wealth building tool is gearing. Gearing is the process of investing borrowed money, for instance by taking out a loan to buy a property that you rent out. While the bank is entitled to interest on the loan, you are entitled to the rental income as well as the growth on the value of the property.

Tax

It is also important to consider tax as one of the expense items in your budget. There are various pre-tax investment vehicles that you can use to reduce the amount of tax that you pay to SARS.

Whether you are an employee that contributes to a pension or provident fund or are self-employed and contribute to a retirement annuity, these contributions can be deducted from the income that you have to pay tax on.

This means that you can save up to 67% more in these pre-tax investment vehicles than in an after-tax investment and still have the same amount of money left to spend.

There have been great advances in the structuring of these pre-tax investment vehicles over the past 10 years, which means that you are now able to have access to investment performance and fee structures similar to unit trusts or share portfolios. In fact, you can even invest in a direct share portfolio through your retirement annuity.

In summary

Whatever your personal preferences, by combining our knowledge and understanding of various investments, we can help you compile the most appropriate strategy for achieving your goals based on these and other investing fundamentals.

The bottom line is that wealth is not created by what you earn, but by what you save.  You need to spend your earnings effectively and make use of appropriate investments to increase the value of the funds that you put toward wealth accumulation.

 In compiling your investment strategy, some of the investment options we consider are:

• Unit trusts
• Share portfolios
• Savings accounts
• Property – direct local property, direct offshore property, listed property
• Retirement annuities
• Pension and Provident funds
• Preservation funds