Insights for a financial-wise 2023 / Financial planning for 2023

As a South African, there are about a million reasons why you’d want your money to go further in 2023. It’s no secret that last year was an absolute doozy, but it’s likely that there are still many more challenges to come.

With the rising cost of living, power outages and widespread corruption that shows no sign of slowing anytime soon, there has never been a more crucial time to kick your financial planning into high gear.

With a new year comes new opportunities. And if you’d like to lay the foundations for your fiscal health, not just for 2023 but in the long term, here are a few insights that should prove useful:

Get organised, take stock

The start of the New Year proves an ideal time to adjust your financial strategy and effectively grow and preserve your wealth. However, before you hit the ground running, the first key step is conducting a thorough evaluation of where you are in your financial journey right now.

If you’ve been putting this off (as many do), it will undoubtedly appear intimidating at first. What I recommend, is setting up an exact time and place for yourself to sit and comb through your statements and reports. Ideally, this can be done alongside a professional, but it’s a useful and time-saving exercise to do as much as possible before consulting an expert. Before any solid financial planning begins, it helps to have a basic overview of your financial position.

Having a clear understanding of where you are now with your finances proves a significant step in paving the way for the future position that you’d like to see yourself in. When you increase your knowledge, only then can you better manage how you spend and save your money in the short and long term. Learning from past financial decisions can also help us make better financial decisions in the future.

Be specific with money goals

Before the year kicks into high gear, take some time to really think about what your 2023 financial goals should be. Make them measurable and give them a time limit – the more specific you are, the more likely you’ll hold yourself accountable.

When setting your financial objectives for 2023, some questions you can ask yourself include: what am I trying to accomplish here? When and why do I want to make this goal happen? What are my roadblocks?

It’s also good practice to break your goals into bite-size chunks by giving yourself daily, weekly and monthly steps to take. For example, if you know you want to pay off R24,000 of debt, that means you’ll need to knock off R2,000 a month to reach that goal (or about R500 a week).

Although creating a plan to reach your goals should be specific, it doesn’t need to be complicated. Just start out with a basic spreadsheet with reminders in your calendar – you can always upgrade to an app later if that’s what you’d prefer. Remember, done is better than perfect and having good intentions alone changes nothing.

Bring in the big guns

Suppose you’ve been going in circles with your current investment portfolio, or simply want an overview of new opportunities available to you. In that case, I highly recommend consulting a professional and accredited wealth manager, such as myself.

Trying to do everything yourself will put you on a sure path to burnout, especially when reviewing and rebalancing your portfolio or updating your estate plan. If South Africa’s turbulent economic and political climate causes increased anxiety, a trusted advisor could help steady the ship. They also have direct access to the right tools, data, and knowledge of the latest financial products and market trends, which can help you make the most well-informed financial planning choices.

Ultimately, there’s no reason to try and go it alone this year when there are plenty of seasoned experts who can help you create an all-encompassing financial strategy. And if you’re not happy with your current wealth manager, make a point of seeking a second opinion. South Africa boasts a strong pool of FPI (Financial Planning Institute) accredited advisors and wealth managers, so why not?

Ensure diversification

A diverse portfolio has become a must-have for scores of investors across the country. When it comes to diversifying your portfolio in 2023, what will top the list locally, is accelerated motivations for externalising rands through direct offshore exposure.

To further put this into perspective, South Africa currently contributes only 0.42% to the world’s GDP. This means over 99% of the world’s investment opportunities lie outside the country, which is why it’s risky to have all of your assets domiciled in South Africa.

If you’re yet to dip your toes into the offshore investment world, this is an option available to all South Africans who can transfer up to R1 million offshore per calendar year without having to obtain a Foreign Tax Clearance Certificate. An additional R10 million can also be moved abroad with a simple application to SARS. Once your money is offshore, you’ll have a much wider range of asset classes open to you. The process is also relatively easy if done through a reliable advisor or wealth manager such as myself.

While investing offshore enables one to achieve global diversification by accessing different regions, economies and companies, always ensure that your decision to go offshore is fit for purpose and not merely a knee-jerk reaction to local bad news.

In conclusion…

Everyone has the opportunity to make real progress with their financial planning goals this year. But the sooner you take the steps needed to manage your business, career, and money responsibly, the better.

Just remember, you don’t have to do everything at once (or on your own). There’s a lot you can do to improve your financial health by taking it one step at a time. Not sure where to start? I’m here to help. Feel free to reach out here, and I’ll get back to you within 24 hours.

I’m Giles Maynard. I provide individual investment and wealth management services for private clients and companies. I have been trusted by clients, large and small to manage, protect, and preserve their wealth. How can I help you with yours?