Practising holistic financial wellness to make it to 100

Feel free to reach out to PSG Wealth Adviser Richus Nel directly.

Physical and financial wellness also work together to empower us to live life to the fullest. Health really is another form of wealth. It is to our benefit to make a comparison between good health and good financial decisions. This can help us follow a lifestyle that supports longevity.

It is important to note that nowadays we must plan for a life of at least 100 years. The result is that, when you retire, you need R1 000 000 for every R4 000 of income you want to draw in retirement. A R20 000 income would therefore require R5 000 000 in capital, which should be included in your budget as a savings goal.

If you start at 20 you need to save 12.5% of your income, at 30 the required percentage will be 22.5% and at 40 it will be 42.5%. By the time you reach your 50s you will need to save more than your income!

Financial wellness is dependent upon your savings, so a slogan worth heeding is, “Spend what you have left after you have saved – don’t save what you have left after you have spent.”

Financial wellness

This requires a focus on your budget in order to limit your expenses. All of us have seen how a salary increase just disappears within a couple of months because we allow our expenses to balloon. But this doesn’t mean you shouldn’t start saving, even if you have ignored this for years.

Your financial wellness is determined by the decisions you make today, so any well-considered decision you make will benefit your future financial wellness.

Remember that financial wellness starts with you. That is why planning for retirement is so important. It will determine the peace of mind you have for 40 years of your life. Once this is sorted, plan for the risk of losing your capacity to earn an income through disability and for serious illness that can wipe out all of your assets. Then look at the financial position of your dependents should you pass away. Finally, you can focus on your short-term goals such as purchasing assets or planning memory-making holidays.

It might seem impossible to achieve all of this, but that’s what financial wellness is all about. If you truly limit your lifestyle and expenses, all of this can be achieved. And that is where a financial planner adds value – not by picking the best performing fund, but helping you set your goals for your financial wellness.

Health is wealth, truly

Fortunately, there is no shortage of health disciplines to follow to be physically healthy. We can use some of these health disciplines and link them to financial disciplines:

• Exercise regularly – invest regularly, irrespective of market conditions. Lower your stress by focusing on what you can control, e.g. managing your tax structures/deductions and career.
• Get a trainer/coach – use a reputable financial planner, follow their advice, and sit tight during times of turmoil.
• Get enough sleep – invest in assets that generate income and capital gains while you sleep.
• Avoid too much alcohol/sugar/fatty foods – we all know how we feel after indulgent behaviour. The most significant financial ‘hangover’ suffered by individuals derives from too much debt.

Mind over matter

Mental health is becoming increasingly relevant due to elevated stress and anxiety levels observed in society. Today, people are pressured to look successful in their relationships, career and finances. A study undertaken by Wits University in 2022, indicated that the number of South Africans suffering from mental illness is double that of Brazil (also a low- and middle-income country with elevated levels of inequality). It is up to us to use the tools we have available, seek quality advice and use proper planning to navigate what we allow into our mental real estate.

Financial tools available to put your mind at ease:

• An updated will (estate planning, guardians, and sufficient financial provision through life cover)
• Career planning (along with finding your purpose, protecting your income)
• An emergency fund (3-6 months’ net income) – you cannot make sound financial decisions in times of financial crisis
• Risk cover (appropriate levels of short- and long-term risk cover/medical aid/critical illness cover).

Who are you letting into your inner circle?

Nurture good friends and relationships. Jim Rohn is famous for saying, “We become the average of the five people we spend most of our time with.” This is important to consider when we do want to manage our thoughts and actions (health and financial wellness).

Surround yourself with expert advisers (financial, legal, tax and other) – positive mentors that can help with your financial and other decision-making. Our decisions are often driven by those we seek counsel from. Whom are you allowing to sit on your trusted board of advisers?

Aligning our lives with the above objectives may take time but ensures that we manage our holistic wellness optimally for fulfilment and long-lasting success.

Additional commentary provided by Ronald King, Head: Public Policy & Regulatory Affairs