School of Money with Old Mutual

The Big Five Secrets of

Money Management

THE SECRET OF THE LION

The lion eats first, ahead of the pack. You too should “eat first” by having an automatic deduction from your salary or wages.

WHY DO I NEED TO SAVE?• What if I lose my job?

• What will happen to my family if I die?

• How will I pay any unexpected medical bills? • Where will I get the money to pay for any major car or house

repairs? 

 HOW MUCH SHOULD I SAVE?

The answer to how much you should save is simple – AS MUCH AS YOU CAN AFFORD just as the lion eats as much as he can, because he is not certain of his next meal.

HOW TO STICK TO YOUR SAVINGS

Arrange an automatic savings transfer, immediately after payday.

Put your money in a safe vehicle that you can’t be tempted to

use the money.

Re-budget your monthly expenses carefully.

If you have short-term debts or loans, sacrifice now and pay

them back as quickly as you can.

When you are tempted to spend, think of your longer-term goals.

Remind yourself – you are not being selfish by saving.You are ensuring your family’s future needs are met.

THE SECRET OF THE LEOPARD

The leopard never lets its prey out of its sight, patiently planning and moving towards its goal, never backing off or giving up...

WHAT CAN I LEARN FROM THE LEOPARD?

They identify what they are going to eat (vision) then which animal they will bring down (set a goal)Use your vision to help you remain focused for your dreams to come trueWe often don’t make our visions come trueLack of vision is why most of us have so much unplanned spendingRealistic goals will encourage you and keep you on track

Regularly:

•Refer to your vision •Research your vision •Review your vision

KEEPING YOUR VISION ALIVE

THE SECRET OF THE ELEPHANT

The African elephant never forgets. Its knowledge, aided by its memory, is its power. It remembers the places it has been, and uses this knowledge to plan its future.

An elephant’s knowledge, aided by its memory, is its power. Dominant females build up a social memory as they get older, enabling recognition of “friendly” faces.They signal whether an outsider is a friend or foe allowing family members to focus on feeding and breeding when there is no danger.Knowledge is power but because our memory is not as good as the elephant, we need to write down what we earn owe & spend

WHAT CAN I LEARN FROM THE ELEPHANT?

HOW TO TAKE CONTROL OF YOUR MONEY MATTERS

• Learn what you earn - Look at your salary slip and bank statements

• Know what you owe and spend -Write down all your expenses.

• Reflect on and change your expenses - Work out your income less your expenses.

• Draw up your budget - Design a workable budget for your household.

• Review your budget - compare your budgeted expenses to your actual expenses

"Goals that are not written down are just wishes.“ Unknown

THE OF SECRET OF THE RHINO

The rhino’s weapon is to charge. When threatened, it looks for the biggest threat and charges, taking swift control of the situation.

• Rhinos are fairly peaceful and don’t have many enemies, yet mother rhino often has to defend her calves from multiple predators or dangers.

• When threatened usually charges down the predator to protect itself.

• You need to manage the level of debt you take on to ensure it does not threaten your financial security.

WHAT CAN I LEARN FROM THE RHINO?

HOW DO I GET OUT OF DEBT?

Face the problemShare your problemAdjust your budgetCreate strategies to deal with your debtNo new debt

Ok, I get it. Time to face the music and make a plan but where do I start?

“Debts are like children: the smaller they are the more noise they make.”-Spanish Proverb

THE SECRET OF THE BUFFALO

The mighty buffalo is deliberate and steady, waiting all day for the hot African sun to pass. It steadily grows and protects its herd, knowing its strength and future are in its numbers.

WHAT CAN I LEARN FROM THE WHAT CAN I LEARN FROM THE BUFFALOBUFFALO

Buffalo form really big herds, some of the biggest in nature which gives the buffalo great deal of protectionTheir biggest enemy is the lion who are scared of them in a herdThe buffalo knows it’s wealth and strength is in its family, takes a great deal of patience but pays off in the endThey can inspire you to grow your wealth patiently and protect your assets using combined strength of an insurer

CREATING WEALTH PRINCIPLES

Investments are risky, the higher the return the more the risk

Have a long term strategy, changing investments is expensive

Diversify your investments

Chose an advisor you can trust

When younger can take higher risk investments, reverse is true

Knowledge is power! Be in charge of your investments

Review your investments regularly, check returns, make changes

where need be

THE WAY FORWARD…..• Take action: decide and launch

• Don’t consider possibility for failure- fly with eagles

• Take one step at a time: “ the only time you have is now”

• Watch out for negative Sayers: “power of associations”

• Learn from obstacles, taking them as opportunities and instructions to do something

• Keep your mind open and clear on your goals but be flexible on your achievements: “circumstances don’t make a man”

• No one does it alone: “give and receive”

GOAL SETTINGGoal setting is a powerful process of thinking about your ideal future, and for motivating yourself to turn your vision of this future into reality.The process of setting goals helps you choose where you want to go in life. By knowing precisely what you want to achieve, you know where you have to concentrate your efforts. You'll also quickly spot the distractions that can, so easily, lead you astray.

"Begin with the end in mind.“ Stephen Covey

S.M.A.R.T. GOALS

"Never tell me the sky's the limit when there are footprints on the moon.“ Unknown

HOW TO DEVELOP A FINANCIAL PLAN• Step 1 – Know your goalsWhat are your goals for the short, medium and long term?

• Step 2 – Research your goalCollect information about them – where and how can you achieve your goal?

• Step 3 – Reality check your goalsHow achievable are your goals, given your current earnings, education level

or home circumstances

• Step 4 - Prioritize your goalsWhich ones will you start with?

• Step 5 - Plan your savings for your goalsBudget for them now.

"The greater danger for most of us is not that our aim is too high and we miss it, but that it is too low and we hit it." Michelangelo

FINANCIAL SOLUTIONS

• Budgeting• Save regularly• Protect your wealth

Desired Future

Current Reality

Financial freedomEducation Actualization of goalsRetirementRetirement homeThat ranchGoals…savings

Marital statusChildrenEducationFinancial portfolio availableMonthly ExpensesIncomeDisposable income

Illness

Death

Poor Financial planning

Disability

WEALTH CONSERVATION

Inflation

PROTECTION WEALTHCREATION

LifeLifeHealthHealth

DisabilityDisabilityInvestmentInvestmentRetirementRetirement

A financial plan is deemed to be sound if the

investment basket is adequately

secured

THE RIGHT BALANCE

Thank you!

Q & A