Financially Speaking January 2008

“… to the multisensory human [more evolved], a reverent businessman or woman is a person who infuses a new energy into the archetype of entrepreneur, shifting it from a dynamic that is motivated by profits that are generated by serving others to a dynamic of serving others that is made possible by profits…”

Gary Zukav, The Seat of the Soul

Dear Client,

Just before Christmas I went to one of those funerals you just shouldn’t have to go to; a 2 year-old girl. She passed away from Leukemia before a bone marrow donor could be found and the transplant done. Five months before this, the parents had been enjoying their little girl unaware of the trauma that was about to unfold in their lives.

Then last year in September I went to paddle overseas as part of a South African Canoeing Team. One of our

incredibly healthy and fit team mates (a fantastic guy, role model, husband and father) just suddenly collapsed and died while we were watching one of the races. The cause was an aneurism, a condition none of us would probably be aware of if we were in the same situation.

These two events shocked me as they were too close to home. The issue is that we can never know when these life events will be upon us. Financially, we can cater for the latter event through insurance. But the first one scared me from a financial point of view. This little girl was one of two small children who died within weeks of each other here in Pietermaritzburg from the same thing. Both families had had to try raising money for medical costs not covered by medical aid for the transplant, possibly flying international donors out, the Cape Town transplant visit etc. They were needing anywhere from half to one million Rand, possibly more. Can you and I find that sort of cash tomorrow?

Just thoughts….

Investment issues –

Finally the rampant Bull Run has passed and the JSE has lost 15% of its value in a matter of months. Remember; this is a loss on paper until you need to sell out of your funds without re-investing immediately, because then you’re out and in during the same conditions. I want to comment on a couple of positive concepts here:

  • This immediately creates better times of value to buy into the markets as suddenly shares and units are now cheaper and you buy more for the same Rand.
  • Any re-investments inside your unit trust funds (dividends, interest and property rental income being re-invested) would therefore also buy more units
  • Retired or income dependent investors who sell units of capital for income will, over the pass couple of months, have had to begin selling more and more units of capital each month in order to get the same level of income. However, for my Marriott clients, they don’t have this worry as they know that units of their capital are not sold in order to receive income. Even though some of their capital value will have dropped, their unit balance will have remained the same. And their excess income now buys more units each month, for income for the future. [They haven’t paid me to say this, we just all know that this is why you’ve chosen to live on the income created by the capital!]

Monthly lifestyle advice:

A useful thing: put 082911 on your cell phone for Netcare 911. Having this number available like this, helped me call an ambulance for a school pupil motorbike rider who was knocked down by a taxi in my neighbourhood two weeks ago. But last year I first had to look for it when my neighbour fell down her stairs and had to go to hospital.

Until next time

Please note that all the views expressed in this publication are based on my opinion and no action or advice is implied or intended.