OFFENSIVE AND DEFENSIVE MONEY MATTERS


Investing & Money
piece written on the 16th October 2014 by  

Over the past couple of years that I’ve gone down the journey of understanding financial wellness I’ve learnt there when it comes to money, you get offensive strategies and defensive strategies. These strategies need to run side by side – If you only focus on defensive strategies you won’t earn a great return and on the other hand if you’re offensive you might stand a chance of losing money. Anyone who understands money, trading, investing and so forth well will advise a person to balance their finance.

I’ve had a really difficult time with this such as life insurance, dread cover and the likes. It’s really difficult to think of spending money each month for effectively getting nothing in return. The problem is, if something happens to you and you don’t have these policies in place, that’s when you look back and wish that you’d listened, taken the advise and opened a policy. To be honest, I’m still in a position where I need to set these policies up and I know I have to because I refuse to get into a “I told you so” situation – which will actually be the least of my problems! And I think it’s important to mention that when you take out a policy that covers life insurance, disability, critical illness and so forth you really need to understand how things are broken down and how well you are covered.

Last week I spoke about Momentum’s MyScore solution, MyScore is a solution that Momentum developed to assist individuals assess their overall financial wellness. While the solution can assist you to find the gaps in your entire financial portfolio, you can opt to take the life assurance section on its own. By answering a series of question the solution will help you to identify the gaps that exist in your cover.  What’s great about these solutions is that they educate you so that when you go to meet with a financial advisor, you’ll have a basic understanding of what you require – I cannot stress how beneficial it is when you meet an advisor and have a decent understanding. Been there, done that from both sides and the ignorant side doesn’t lead you to great things.

As this is a commissioned post I need to talk a little more about Momentum’s services. Let me tie this back to the life insurance and MyScore solution though so I can close the loop. Momentum policy holders who are members of Multiply (rewards program) that complete the MyScore process earn Multiply points. Further to this, members who complete the financial wellness assessment, Money Sense questionnaire and keep their profile updated will earn points as well. With these points members may enjoy great discounts on a number of products and services. It’s an interesting set up because they’re assisting you in getting your financial wellness into a strong position and then rewarding you to do so.

I’m not awfully clued up on calculations around things such as life insurance, but I’ve been told that a good way to do it is to take 10 times your annual earnings and add debt. For example, if you earn R500,000 a year and have R1,000,000 in debt you would need R6,000,000 in cover.

I hoped onto MyScore and completed the 10 questions in the questionnaire and received the following outcome:

Momentum MyScore

I’m fortunate in the sense that I don’t have children yet so I’m not as much at risk as many others, but when I do have children I certainly would need to look at this again and I imagine my score would be considerably lower.

Give the MyScore questionnaire a try, it’s completely free, easy to sign up and let me remind you that 3 people who register during this campaign stand the chance to win a Momentum Retirement Annuity to the value of R250,000 plus a Momentum Savings Portfolio of R500/month for 5 years.