Mid month update May 5th
I wanted to send a “mid month” update to all with some tips specifically for small business owners and freelancers as well as provide a quick update into the investment markets.
For those who have done some budgeting and found that they are actually saving money during lockdown, there is no better time to make use of that disposable income by buffering up your unit trust (emergency fund) , this time has really just shown how critical having an emergency fund is. I strongly urge everyone to take the concept of adding money into their unit trusts to buffer up a rainy day fund seriously in the coming months and even years to prepare for any further financial strain and just to become more financially prepared in the future.
For those of you wanting to actually learn about the economy and financial planning I have posted about 30 videos on various topics on my instagram page, you can follow and watch at @pierrevdmsa.
My free e-book is also in the link of my bio.
I need your help too in spreading word of my services and practice, If you do know of anyone who I could be of assistance to that would be very much appreciated as always.
I appreciate your support during this time and keep well until next time,
A QUICK UPDATE ON INVESTMENT MARKETS:
Since the initial Covid 19 global financial crash about 4-5 weeks ago the majority of both local and foreign share markets have subsequently recovered to where it was. I do expect however for there to be volatility going forward considering the majority of these markets are “propped up” by positivity around news of Covid-19 easing in certain parts of the world. The truth however is that I believe many countries have not yet felt the true economic implications of the slowdown of economic activity, for those that are near retirement, I have ensured that portfolio’s are
protected and conservative, for those of you in Retirement Annuities, Tax Free Savings, Medium Term Policies, Aggressive Unit Trusts that have no need to access for the next 7 years minimum as my previous advice stated, do absolutely nothing. Right now, if the market does go down again it is the best time for debit orders to be going off and buying cheaper units.
The main market which has not recovered and is of concern would be the South African Listed Property sector, which is still down about 50% year on year. I expect further volatility to be in play as we are yet to see how businesses will afford to pay rent etc. As always, property is an Aggressive investment which provides income and capital growth over the very long run, I like to use the exposure to property portfolio’s specifically for tax free savings accounts and over the long run I still believe South African property markets will still be a very viable investment.
A FEW TIPS I HAVE BEEN GIVING TO ALL MY SMALL/MEDIUM BUSINESS OWNERS OR FREELANCE CLIENTS
1) Upskill your staff and yourself : Wherever possible, try your best to keep your staff– they rely on you, and if you have managed a good team, they should be supporting you. You could train your existing staff on additional skills, which could make them more productive and efficient, rather than hiring more staff. There are hundreds of free online courses and talks that can help your staff become more proficient at their jobs which enables you to add more value to your clients.
2) Apply to every single financial relief scheme you can find. Whilst many of the relief structures such as UIF or the Solidarity fund are proving more difficult to access than originally thought, if you do have time on your hands, fill in as many applications as possible.
3) DO NOT take exorbitant loans if you do not have to : The economy will take a few years to recover from the effects we have seen so far from Covid 19, banks are offering extended credit and loans in abundance, usually with exorbitant interest rates. It is critical to completely understand what you are signing in to when it comes to taking loans or extended credit as this can pose a threat to fall into unmanageable debt.
4) Now is the time to stand out amongst the rest and provide VALUE: With social media playing a dominating effect in everyone’s lives, there are more and more people especially during this lockdown glued to their phones. What value do you add to your prospective client base? I believe now is a time to really stand out amongst your competition and create fantastic content that doesn’t necessarily mean “selling” . By providing and maintaining easy to engage content, it builds a positive reflection to your followers and possible customers. Even though they might not “buy” from you now, by remaining relevant when the time comes to make use of a service or product that you offer you will be the first they think about.
5) Cut out luxuries and create a budget for your business: Now is definitely not the time to cut back on advertising and marketing as it's the only real thing we can do during this lockdown. It's important to create a budget, I advise my clients to download 3 months of their bank statements and comb over all the various expenses, during lockdown you would of saved a ton of money by not having to drive, not having to have those sneaky lunches and coffee’s, there is much value in building up an emergency fund now and also for the future. As in personal financial planning, an important step is for everyone to build up a “rainy day” fund of 3-6 months of their expenses especially for times like these, this is exactly the same for a business. Obviously we cannot reverse the past, but I encourage you to become more aware of your expenses going forward, by building up a conservative unit trust fund that holds liquid cash, it drastically eases the financial burden of this lockdown.
6) STAY POSITIVE: These are trying times for all of us, as a leader and an entrepreneur now is the time to maintain a healthy, positive image for your staff and your following. Many will be basing their future purchasing choices on the behaviour of a brand on social media now, it's important to empathize with the public, your staff and your clients, but it's also important to remain resilient and be proactive