Monthly Archives: September 2015

Is your loyalty program worth it!

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In these tough times when households are under pressure to make ends meet, perhaps it is time to have a closer look at loyalty programs to unlock some value to help get through. The more successful loyalty programs help you to change towards lifestyle behaviours which align with their business models and they reward you with useful benefits for doing so.

Here are some areas you should focus on with your loyalty program to ensure that you max out the benefits on offer.
Understand the program
Understand as much as you can about the program. What you have to do to get the most out of it. If you just, say, join it for a free gym contract, then you probably will miss out on a whole lot more.
There was probably a lot more to understand about the program in terms of its philosophy of say” wellness”. It probably would encourage you to eat well and focus on other areas like stress and mental health. The program probably also offers much more and the more instant the rewards the more gratifying it will be. So, getting to understand the program completely will obviously unlock a lot more value.
Are the values real?
As a premium member of one of my loyalty programs, I have diligently kept up with the required behaviours towards a healthier lifestyle. The rewards, in the main, are real and immediate with discounts on healthy food and retail items. However, when booking an air ticket recently, I realised that my 35% discount was applied to the “rack rate”. This ended up being no cheaper than similar air tickets available on the “Travel Start” website. So this reward had no real value. Check out the actual value of what is promised and try not to be lulled into perceived values.
Commit fully to the program
You will do better with fewer programs. You should align your goals with the program. If the program sets out to encourage you to improve your health, help you to drive better or manage your money more efficiently then you should commit fully. By so doing, you will enjoy most of the rewards on offer and improve your lifestyle at the same time. Dabbling in the program won’t unlock much in rewards and will just end up being a cost to you in membership fees.

Equitable provisions between spouses are a ‘no brainer’…

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In these modern times, there is a strong shift away from the traditional breadwinner to a more equitable contribution by both spouses towards the income in the household. In more and more cases, there is even a reversal to where the husband stays at home with the children whilst the wife pursues her career as the breadwinner.
Either way, it makes sound financial sense for both spouses to approach their financial planning jointly. Spouses should focus on building equitable portfolios wherever possible into the future. The advantages are clear when a balanced approach is applied:
Your average rate of tax is reduced
If both spouses accumulate separate portfolios over the years then it positions the household to draw income from two sources. Our income is taxed on a progressive scale, so if more of it comes from one source then the tax rate is higher than if it was drawn equally from two taxpayers. The average rate of tax is reduced.
You claim double the rebates
What further reduces the average rate of tax between spouses are the rebates applied to each partner as well as the exemptions on interest and inclusion rates on capital gains tax. So having two interest-bearing accounts instead of one allows for a higher exemption on the interest and therefore a lower rate of tax overall. Joint ownership of assets will also make way for lesser capital gains tax being applied when selling off a property or shares as two inclusion rates will be applied instead of one.
You provide access to funds should you lose your spouse 
Having your own equitable portfolios is a very practical plan in the event of a death or a divorce. Investments tied up in the estate are locked up whilst the executor winds things up. This could take a long while leaving you financially stranded in the process. Having your own portfolio provides you with some financial freedom in the meantime.
If you get divorced you already have equitable investments in place between you which avoids having to sell off things and creating unnecessary taxes and costs.
The approach is one of interdependence making equitable provisions for each spouse and, if applied effectively, has the outcome of “one and one makes three”.

Financial Planning Week … Quality advice for free!!!

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The annual Financial Planning Week kicks off on the 7th of September. It aims to raise awareness of the importance of financial planning and how relevant it is to all South Africans. It’s an initiative from the Financial Planning Institute which has become a successful annual event over the years.

Financial planning differs from financial advice in that it follows a deliberate process to arrive at an appropriate solution as opposed to a sales approach which is purely product focused.
The week devotes itself to educating the public about financial planning by arranging workshops and exhibitions throughout the country at various venues as well as offering free financial planning to the public from CFP professionals.
There are well over 100 000 advisors in South Africa and only 2 000 practising CFP professionals. This a rare chance to engage with a qualified financial planner ‘pro bono” ….gratis….free
All you need do is go to www.fiancialplanningweek.co.za for details on what is happening in your area and where to find a Certified Financial Planner who will offer you a free consultation. There is also a very useful course you can register for called My Money 123 which helps you to get a better understanding of things financial.