The number 1 reason why most people cannot afford to retire in South Africa.
Disclaimer:
Firstly, I am not a financial advisor, and this information is not intended to be financial advice. The content is derived from my own experiences and interpretations. It is strongly recommended that you conduct your own due diligence or seek professional advice before acting on any information provided in this document.
Please read everything attentively to the end to get a proper understanding of the situation and a solution to the issue.
Firstly, I am not a financial advisor, and this information is not intended to be financial advice. The content is derived from my own experiences and interpretations. It is strongly recommended that you conduct your own due diligence or seek professional advice before acting on any information provided in this document.
Please read everything attentively to the end to get a proper understanding of the situation and a solution to the issue.
The undeniable fact and main reason why many, if not most, South Africans experience significant financial strain within five years of their retirement and struggle to make ends meet a decade after retirement, is mainly because of the devaluation of the South African Rand.
Statistics affirm this reality.
Numbers don't lie.
You can verify the following information by simply doing a Google search.
The Rand lost a staggering 88% of its value against the US $ during the past 10 years.
Historical values are as follows:
2013: 1 US $ = 9.84 Rand on year average.
5 Years later in 2018:
1 US $ = 13.32 Rand, reflecting a 35% devaluation compared to the previous five years.
Another five years later, in 2023:
1US $ = 18.50 Rand, showing a 38.88% devaluation over the past five years and an alarming 88% devaluation over the previous 10-year period.
I repeat:
The value of the Rand against 1US $ was 9.84 Rand in 2013, compared to 18.50 Rand in 2023.
Over a period of ten years, our currency lost 88% of its value.
Statistics affirm this reality.
Numbers don't lie.
You can verify the following information by simply doing a Google search.
The Rand lost a staggering 88% of its value against the US $ during the past 10 years.
Historical values are as follows:
2013: 1 US $ = 9.84 Rand on year average.
5 Years later in 2018:
1 US $ = 13.32 Rand, reflecting a 35% devaluation compared to the previous five years.
Another five years later, in 2023:
1US $ = 18.50 Rand, showing a 38.88% devaluation over the past five years and an alarming 88% devaluation over the previous 10-year period.
I repeat:
The value of the Rand against 1US $ was 9.84 Rand in 2013, compared to 18.50 Rand in 2023.
Over a period of ten years, our currency lost 88% of its value.
The effect of the devaluation of the Rand:
The devaluation of the Rand directly diminishes the purchasing power of our money within South Africa due to our shift from being a manufacturing country for local consumption to relying heavily on imports. Even basic food supplies like maize and grain are supplemented with imports.
On the other hand, our local agricultural industry imports raw materials, chemicals, and machinery at a very disadvantageous exchange rate for local use.
One illustrative example is the demise of the South African textile industry, replaced by imported products and clothing, mainly from China.
Given that all international trade happens in US Dollars, the Rand's value against the Dollar significantly influences our purchasing ability.
The devaluation of the Rand directly diminishes the purchasing power of our money within South Africa due to our shift from being a manufacturing country for local consumption to relying heavily on imports. Even basic food supplies like maize and grain are supplemented with imports.
On the other hand, our local agricultural industry imports raw materials, chemicals, and machinery at a very disadvantageous exchange rate for local use.
One illustrative example is the demise of the South African textile industry, replaced by imported products and clothing, mainly from China.
Given that all international trade happens in US Dollars, the Rand's value against the Dollar significantly influences our purchasing ability.
Over a period of ten years, our currency lost 88% of its value.
The question is:
How will we survive financially in a few years' time if your retirement investments lose value at this alarming rate?
The question is:
How will we survive financially in a few years' time if your retirement investments lose value at this alarming rate?
Consider this:
When you retire, you cease earning in the current and continuous value of money. You rely on personal savings, investment proceeds, or pension fund income, all accumulated before your retirement date and are unable to keep pace with post-retirement money devaluation.
It's concerning that, given historical currency devaluation trends, the investment component of our retirement provision may lose value at a rate exceeding 35% every five years.
Even if you reinvest some proceeds during your initial post-retirement years, the reinvestment is generated from "old" money and is unlikely to match the ongoing devaluation of money.
Another scary reality for those working towards retirement but not yet reached it, the constant devaluation of the Rand implies that the value (buying value) of their retirement portfolio may be decreasing despite rising numerical figures.
When you retire, you cease earning in the current and continuous value of money. You rely on personal savings, investment proceeds, or pension fund income, all accumulated before your retirement date and are unable to keep pace with post-retirement money devaluation.
It's concerning that, given historical currency devaluation trends, the investment component of our retirement provision may lose value at a rate exceeding 35% every five years.
Even if you reinvest some proceeds during your initial post-retirement years, the reinvestment is generated from "old" money and is unlikely to match the ongoing devaluation of money.
Another scary reality for those working towards retirement but not yet reached it, the constant devaluation of the Rand implies that the value (buying value) of their retirement portfolio may be decreasing despite rising numerical figures.
However, there are solutions:
The best way to safeguard against post-retirement impoverishment is to continue earning in the current and continuous value of money through passive income sources.
In my opinion there are two excellent ways of creating passive income sources.
When I say passive income, I mean that you will not be involved in formal employment or bound to formal business hours, but you will still have to do some part time work as and when it suits you and at your own pace.
Option 1:
Is to invest in rental properties.
Personally, I come a long way with fixed properties and I am experienced in buying, selling and rental of fixed properties. It is my investment class of choice.
Fixed property investments may however not be the easiest type of investment to enter into. It usually requires a long-term strategy to accumulate enough assets in property to be self-sustaining.
Fixed property has the advantage that the asset value increases reasonably in line with the devaluation of our currency and rental income will likely track the inflation rate. This is therefore one of the bests ways to protect both your capital and your income against the devaluation of money. Though there are some risks, income from property investment is a fairly passive income. It does however require proper management and regular maintenance.
In my opinion, at least part of a person's retirement investment should be in a fixed property portfolio.
Option 2:
Another very good strategy to stay ahead of the devaluation of money, is to remain earning at the current and continuous value of money after you retire from formal employment. An excellent way to set up a passive, recurring income within a reasonably short period of time is to establish a part time business in the digital space.
Though it is not to late to do this after retirement, it will be ideal to start doing business online even before retirement.
The Internet is presently available to almost everyone. With so many people present in the digital space and specifically on social media, it became the ideal place to establish a part time online business.
The options of doing business online are unlimited. My experience is that digital marketing of products with a recurring income is a good choice. With the right products and strategy, results can be found from it within a reasonably short period of time.
In digital marketing, success requires only three basic key actions.
This is the simple 1,2,3 method that works for any digital business strategy.
1. Find a product to promote.
Choose a product that you personally trust and which you are prepared to use yourself, preferably one with recurring income potential. When you scout for products, make sure that there is a large enough demand or need for the product. Popular product niches are financial services, health and wellness, education, e-commerce, crafts and hobbies.
2. Find a way to tell people about the product.
It really helps if you can find products from a company who does “done for you” product presentations and who actively do the selling on your behalf.
3. Find people who have a need for the product/s and connect them with a product presentation or offer.
The best way to safeguard against post-retirement impoverishment is to continue earning in the current and continuous value of money through passive income sources.
In my opinion there are two excellent ways of creating passive income sources.
When I say passive income, I mean that you will not be involved in formal employment or bound to formal business hours, but you will still have to do some part time work as and when it suits you and at your own pace.
Option 1:
Is to invest in rental properties.
Personally, I come a long way with fixed properties and I am experienced in buying, selling and rental of fixed properties. It is my investment class of choice.
Fixed property investments may however not be the easiest type of investment to enter into. It usually requires a long-term strategy to accumulate enough assets in property to be self-sustaining.
Fixed property has the advantage that the asset value increases reasonably in line with the devaluation of our currency and rental income will likely track the inflation rate. This is therefore one of the bests ways to protect both your capital and your income against the devaluation of money. Though there are some risks, income from property investment is a fairly passive income. It does however require proper management and regular maintenance.
In my opinion, at least part of a person's retirement investment should be in a fixed property portfolio.
Option 2:
Another very good strategy to stay ahead of the devaluation of money, is to remain earning at the current and continuous value of money after you retire from formal employment. An excellent way to set up a passive, recurring income within a reasonably short period of time is to establish a part time business in the digital space.
Though it is not to late to do this after retirement, it will be ideal to start doing business online even before retirement.
The Internet is presently available to almost everyone. With so many people present in the digital space and specifically on social media, it became the ideal place to establish a part time online business.
The options of doing business online are unlimited. My experience is that digital marketing of products with a recurring income is a good choice. With the right products and strategy, results can be found from it within a reasonably short period of time.
In digital marketing, success requires only three basic key actions.
This is the simple 1,2,3 method that works for any digital business strategy.
1. Find a product to promote.
Choose a product that you personally trust and which you are prepared to use yourself, preferably one with recurring income potential. When you scout for products, make sure that there is a large enough demand or need for the product. Popular product niches are financial services, health and wellness, education, e-commerce, crafts and hobbies.
2. Find a way to tell people about the product.
It really helps if you can find products from a company who does “done for you” product presentations and who actively do the selling on your behalf.
3. Find people who have a need for the product/s and connect them with a product presentation or offer.
My Best Solution:
What if I can show you to a company who offers financial products which they sell themselves and you can earn a recurring, monthly and growing referral fee from only connecting people with them?
The company is listed, licensed, regulated and fully transparent.
It was established in 2015 as a direct marketing division of insurance companies which are well established and in businesses for many years.
You do not have to have any product knowledge.
You do not have to sell anything.
They are legally compliant and will be doing the product selling themselves.
All you have to do is connect people who have a need for these products, with the company’s online marketing platform.
The company uses a monthly debit order system for premium payments and you will earn proportional as a referrer from the premiums as they are paid.
This will result in a monthly, increasing and recurring income for you, which is paid to you in the current and continuous value of money. It could prevent you from becoming poor because of the devaluation of your retirement savings.
What if I can show you to a company who offers financial products which they sell themselves and you can earn a recurring, monthly and growing referral fee from only connecting people with them?
The company is listed, licensed, regulated and fully transparent.
It was established in 2015 as a direct marketing division of insurance companies which are well established and in businesses for many years.
You do not have to have any product knowledge.
You do not have to sell anything.
They are legally compliant and will be doing the product selling themselves.
All you have to do is connect people who have a need for these products, with the company’s online marketing platform.
The company uses a monthly debit order system for premium payments and you will earn proportional as a referrer from the premiums as they are paid.
This will result in a monthly, increasing and recurring income for you, which is paid to you in the current and continuous value of money. It could prevent you from becoming poor because of the devaluation of your retirement savings.
Remember the 3 things that you need to do to be successful in digital marketing, namely:
1. Find a product to promote.
2. Find a way to tell people about the product.
3. Find people who have a need for the product and connect them with the presentation.
With this business model, the first two tasks are already done for you.
1. I will show you to a legally compliant company and products from which you can earn a recurring monthly income.
2. All systems are in place by the company to tell people about the product and they are doing all the selling themselves.
3. All that you must do as a referrer is to connect people with the opportunity.
1. Find a product to promote.
2. Find a way to tell people about the product.
3. Find people who have a need for the product and connect them with the presentation.
With this business model, the first two tasks are already done for you.
1. I will show you to a legally compliant company and products from which you can earn a recurring monthly income.
2. All systems are in place by the company to tell people about the product and they are doing all the selling themselves.
3. All that you must do as a referrer is to connect people with the opportunity.
Cobus van der Merwe
