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Thread: How many of us invest our pension in our business

  1. #1
    Diamond Member wynn's Avatar
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    How many of us invest our pension in our business

    This article gives much food for thought;

    http://www.mg.co.za/article/2010-04-...etirement-plan
    "Nobody who has succeeded has not failed along the way"
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    i am not sure of the specs at present...but when i started my bussiness in feb 1991...i was told the chances where...

    within the first 5 years 50 % of companies close down

    and on 10% of companies are still operating after 10 years

    going by this it would pay you to invest in a pension fund.

    but something else to consider...which has become a reality...many people have spoken to who have got to the satge where they got paid out but the amount paid out was less then what they put in...and where told it was because of the markets...



    in all the tips and sales cr*p i have heard from life insurance brokers...who by the way cleaned me out of all my investments because of the life cover they had on all my investments...managed to make huge commission out of me then cost me my entire investment when all did go wrong...i thought i had all the cover i needed...if i had died in the vehicle accident my family would have been millionaires (maybe if they didnt find some other clause in section 4.5.6.8 of (d) page 34567 of policy number 345678 of all the cr*p)

    anyway bottom line there was a clause for every claim i submitted...

    i ended up with a cheque for R14.50 from sanlam with a letter stating that because of my years of experience and qualification they did not feel they should pay me out for disability or partial disablily because i could get a job as a superviser in the line of work i do...and didnt need the use of my right arm to do this.

    old mutual didnt even bother sending me a letter expliaining why they refused to pay out...after days of telephone calls i was told my policies had had all be chewed up by the life cover over the months i couldnt work or pay the policies.

    including my entire retirement policy

    i spoke to a friend the other day and asked him how he could afford to buy his vehicles boats toys like motorbikes etc and pay cash...he gave me the best advice i have heard since i started working...

    he only keeps enough money in his cheque account (because you dont earn any interest in your cheque account whether there is R10 or R1 million) in it to cover the monthly expenses...he transfers the balance into a plus plan savings account and credit card until the amounts get to R100 000 then transfers the money into a money market account...and most important he doesnt buy anything on credit...if he cant affrd it he doesnt buy it.

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    Site Caretaker Dave A's Avatar
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    I think Maya Fisher-French missed the fact that many people's "safe as houses" retirement funds got wiped out with the GFM/recession too. The only take-away from that little story is "don't put your eggs in one basket."

    Or maybe that should be one type of basket. If you have the luxury of diversifying your options, of course.
    Last edited by Dave A; 21-Apr-10 at 07:30 AM.
    The trouble with opportunity is it normally comes dressed up as work.

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    Gold Member garthu's Avatar
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    Wow and what a subject

    Pensions, retirements etc i will NEVER do again. Lived in Zim to around 2000. Had life policy's etc from about the age of 20 supported by companies and very large ones as worked on alot of voltage high power electronics. If anyone had come into any of my policies at age 30 they could have bought 6 upmarket houses.

    By the time we left Zim, i didnt even bother cashing anything in - at that point it was about a months groceries. From multi millionaire (in policy) to not a months support. NEVER again!!!

    And then made the second mistake
    Or maybe that should be one type of basket.
    Both the wife and i in property, no other income. Spot on Dave, another mistake not to make. Wife is still in property but i went out separately , didn't have a choice for survival.

    Personally my opinion on policy's, retirement funds etc is run a mile - but personal opinion...
    Garth

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    Diamond Member tec0's Avatar
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    Well if one looks at all the “biltong” shops you can see how many people put their savings in businesses. They will open with a bang and then just disappear then two months on, you find the same 2 old people selling “hotdogs” at the local supermarket.

    Now don’t miss understand me I really do feel bad that there business didn’t last and I know the price of failure first hand. So why then is there always the next “biltong” shop? The same is true with investments you never really get your money?

    Every single time some poor old woman loses everything because of a Paragraph B section something BS? Where was the legal representation when the contract was “explained” that part always get missed by our law makers?

    Basically investments became the perfect crime! So can we blame the “biltong” shops? No we cannot simply because large investment groups cannot be trusted and I think that is really the deal here.
    peace is a state of mind
    Disclaimer: everything written by me can be considered as fictional.

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    Diamond Member wynn's Avatar
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    The idea of sinking your pension into your business is a bad idea!
    What you invest in is what is critical!
    Retirement annuities tied into insurance policies are a load of crap, (been there done that lost the shirt) take pure insurance for your life and limbs and a hospital plan if there is a chance you will get injured in your job especially if you don't have a medical aid.

    Property is always touted as safe (as houses?) but what if your investment property goes into a redline area and loses value, or any of the other million things that can go wrong.
    I have been following the value of OM unit trusts 'SA Quoted Properties' and have seen them tripple in value in the last few years. but I can't tell you what dividends they paid out? (do your own due diligence)

    There must be a hundred ways to invest that gives you a safer better income than annuities and that is safe from the hands of creditors if your business goes belly up.

    Peter Carruthers (that other forum ) recommends seperating business and personal completely and protecting personal stuff behind watertight trusts, I wish I had this information when I was young and new everything about making money and lost it all due to LIFE.

    Now that I am older and less inclined to risk anything, I have the protection in place but nothing to protect.
    "Nobody who has succeeded has not failed along the way"
    Arianna Huffington

    Read the first 10% of my books "Didymus" and "The BEAST of BIKO BRIDGE" for free
    You can also read and download 100% free my short stories "A Real Surprise" and "Pieces of Eight" at
    http://www.smashwords.com/books/view/332256

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    Diamond Member wynn's Avatar
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    A useful site is Mark Corkes 'Suitegum', www.prepareyourbusinessforsale.co.za
    he has a series of free emails that help you value your business, by getting all your ducks in a row in case you want or need to sell, that way you realise the best price for your business without having to 'thumbsuck'.
    But you can't put a value on a business that requires your mental input on a day to day basis, info that only you or someone like you that has experienced what you have?

    PS I don't get anything out of recommending him and offer the info as usefull only!!
    "Nobody who has succeeded has not failed along the way"
    Arianna Huffington

    Read the first 10% of my books "Didymus" and "The BEAST of BIKO BRIDGE" for free
    You can also read and download 100% free my short stories "A Real Surprise" and "Pieces of Eight" at
    http://www.smashwords.com/books/view/332256

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    I have been in financial services for ever, and yes, defining the solutions. The key factor to a financial services product is that it is designed to yield maximum benefit to the investor, not the person who pays the premium, but the person who receives the premium. I have such a passion for financial services, I really get started here. I view financial services as the wild. There must be at least 100 springboks to feed a lion, right? So, are you a springbok who pays premiums or the lion who does not bother to make good on a policy when payout is due. Just a thought. I think this global recession had turned the financial services industry on its head. Does anyone know someone who was due to retire in 2008 and whose RA and pension funds have lost 50% value, two or three months before retiremen? That was brutal!

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    Site Caretaker Dave A's Avatar
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    Quote Originally Posted by Erika Gordon View Post
    The key factor to a financial services product is that it is designed to yield maximum benefit to the investor, not the person who pays the premium, but the person who receives the premium.
    Straight to the heart of the problem.

    My personal view is that investing in your own business should produce a great return, but it doesn't hurt to plough some money into other stuff too. So the question is where?

    My tip would be that the admin cost of a good stock broker is way lower than the life assurance/unit trust sectors - and it's the admin costs that are destroying the profits, especially if you compound the effect over many years.

    Find a stock broker and build a reasonable working relationship. Be honest and frank. Say "here's x for now that I want to invest in listed shares to build up a retirement nest egg." Make sure he/she understands that looked after right, you're a client for the next 10, 20 (whatever) years and that you're not a speculator.

    The shares are in your name, there's no "assets under management" admin fee and there is no chance of intermediaries running off with your money.
    The trouble with opportunity is it normally comes dressed up as work.

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    Diamond Member tec0's Avatar
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    Risk free investments are what my one uncle thought he had when he passed away. Now the problem started with paperwork that has gone “missing” and the banks ignored their own mistake “the paperwork” and repossessed the house after a 5 year battle that basically killed the surviving members financially.

    I was really young then but I saw the hardships that contributed people altimetry losing everything. The question is regulations can be broken if the banks can keep your in court long enough so that you cannot pursue the matter anymore due to monumental financial loss.

    Today I am smarter and even when I do the most simplistic investment I always arrange for a legal representative at my own cost of about R2000 for that day. I make sure that all aspects are explained to me in excruciating detail. Thus when the papers are signed... I also keep two originals. The one is stored at my safe the second is stored at the bank. Unfortunately digital copies don’t mean much but can help.

    Lastly I keep book on all investments made and revisit them systematically once every 2 months I get a print outs of how the investment is growing. This is kept in a file along with the original contract and agreements.

    I also include a document explaining the points and agreements in laymen’s terms to assist the beneficiary. It sounds extreme but the truth of the matter is that that you will not be there to explain things if something goes wrong. Thanks to new technologies I started making DVD’s explaining the claiming process to the beneficiary. This will rule out much confusion and allow for smooth claims.

    As for the investment systems, there are really only 4 ways to allow your money to grow 3 is safe and the last is a gamble. The first is a bank investment with guaranteed growth meaning the money can only grow but nothing can be taken from it. The growth is slow but your losses is basically zero. The second investment is life insurance, thanks to restructured system your life assurance can now double as a policy at some companies meaning after 30 years it will pay out to you if you are still alive but will still act as life insurance if something happens.

    The third investment is your basic policy from a trusted company. Just get all your facts strait and you are allowed to ask for legal representation to aid you. These policies will give good growth but note that you need to make sure that you stay on top of your policies.

    The last is sock marked and shareholding. As long as the shareholding is owned by you and not administration as Dave pointed out it is reasonable but the markets can be unstable at times so again it will take a lot of work form your side to make it work.

    I also wish to add that assets can also be a good investment. Certified fully registered diamonds is a good way to create a frozen asset. It will remain frozen until you sell them on. Also the tax man cannot tax diamonds “every year like a house... “keep that in mind” there are still safety deposit boxes available and is your best bet. “Sounds stupid” not really because diamonds don’t normally lose value especially certified diamonds “unlike property” diamonds have no maintenance a car or a house have a lot of maintenance cost and age is not a factor when it comes to diamonds.

    Gold and especially Platinum in the form of jewellery is also a good investment because these metals are connected to the stock marked indirectly and on a good year you can have a good return. Also everything needs certification! Lastly this is how I deal with investments “people may think I am stupid” but as stupid as I am my money is active all the time and for the most part safe.
    peace is a state of mind
    Disclaimer: everything written by me can be considered as fictional.

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