10 Tips to 10X your future

Want to give your future self something to celebrate? How about setting yourself up for a successful retirement. Here, 10 South African retirement savers share their top tips on how you can 10X your future.

Take charge of your money

Felicia, who is semi-retired, says it is easy to feel overwhelmed when it comes to personal finances, especially regarding retirement saving, where the industry inundates consumers with so many choices. But, she says, your future is in your hands so don’t leave it up to others to decide for you. 

“Take charge of your money, take control, and you will be surprised at how easy it is, and how much your money can work for you.” - Felicia Roman, 57

Start early

Keabetswe, who wishes someone had advised her about retirement saving when she started working, believes that time is your best friend when it comes to investing. The earlier you start investing, the more time your money has to grow. She is referring to the magical power of compound interest, where over time you earn interest on the interest you have already earned in a virtuous cycle of growth. 

Keabetswe believes that the biggest regret most investors face is not starting earlier. As they say: The best time to start saving is when you receive your first pay cheque; the second-best time is now.

“Get yourself educated, get more information, and the sooner the better.” - Keabetswe Mafofo, 31

Ask questions, don’t trust blindly

Youven, who left the corporate world after 15 years to start his own business, warns that when it comes to the investment industry – which is characterised by lots of jargon and mumbo jumbo, hidden fees and complicated fine print – investors’ ignorance can easily be exploited.

“Get involved and make sure that you ask the right questions of your financial advisor.” - Youven Naicker, 38

Look at the long-term performance

Sarah-Jane, who is semi-retired after 35 years working internationally in the finance industry, says that although many asset managers have their day in the sun very few are able to consistently deliver a strong return over many years. 

“Don’t just jump around from one fund manager to another … choose what you are comfortable with and look at the long-term performance.” - Sarah-Jane Wagg, 55

Keep your fees low

Ian, who is comfortably retired, knows that fees are the single most reliable predictor of an investment’s performance. He worries that ignoring this key factor puts many pensioners at risk of losing a massive chunk of their precious savings to fees. 

Someone drawing down a total of 5% of their capital each year and paying the industry average of 3% in fees is receiving only 40% of their earnings and paying 60% of it away in fees. Moving to 10X Investments, which charges less than 1% plus Vat in fees, they could continue to draw down 5% of their savings, but pay themselves a lot more ie more than 80% of their drawdown.

When I first did the analysis and looked at the structure, especially the impact of the fees, it was actually a wake-up call to see how much money I would lose over the longer term.” - Ian Fordred, 65 

Capitalise on the tax benefits

Bob, who is in a position that he could retire at any time, says that one of the great things about saving for retirement is the tax benefits. He is referring to the tax incentives on saving for retirement. Money that you put into a retirement savings fund is deducted from your taxable income, so the more you save the less tax you pay. 

“Get the tax benefit. If you’re not doing that, you’re crazy.” - Bob Bond, 62

Save consistently

Mother-of-two Linah says that when it comes to retirement planning, there is no replacement for saving consistently. She agrees with Warren Buffet, who says we should not save what is left after spending but rather spend what is left after saving. 

“Consistency in dedicating a portion of your salary into the retirement plan is also important,” says Linah, who adds that savers should “automate their savings by setting up a debit order that goes off on the 1st of each month”. - Linah Molele, 39

Don’t touch your savings

Avishkar, who resisted the “extreme temptation” to cash out his savings when he changed jobs, says he doesn’t want to be stuck in a 9-5 job that he does not enjoy when he gets to retirement age. 

Cashing out savings on changing jobs is one of the classic retirement savings mistakes that many South Africans make, setting themselves back enormously. Avishkar says that not cashing out means he has options in the future. 

You put it in there, you leave it in for the long run, and you control the investment costs.” - Avishkar Brijmohum, 32

Don’t try to time the market

Joggie, a retiree who was on the board of trustees of his employer’s pension fund for years, warns savers and retirees alike not to try to time the market, as it rarely works. 

“Don’t try to time the market and shift money around because it’s normally the wrong time anyway.” - Joggie Mentz, 69

Make a plan and work it

Business owner Kristoff says he is often surprised to hear people who have no retirement savings plan at all tell him they want to retire early. Creating a plan is not complicated with the help of an online calculator, such as the one on 10X Investments’ website. Insert some basic information (age, how much you earn, how much you have saved) into the calculator and it will build a personalised retirement savings plan for you. 

“Talk to someone, get a plan, work the plan.” - Kristoff du Plessis, 39

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