At this time of year, there are forecasts and predictions aplenty for the year to come – obviously some good and some bad. The coronavirus pandemic is still with us and still taking its toll but there are also many positive sentiments around recovery following it and hopefully, vaccines timeously rolled out will help.
The interesting thing to keep in mind, as analysts all make their predictions and forecasts for 2021, is that historically whenever these types of financial downturns have occurred, the eventual outcomes are always the same.
Those with foresight – and with a sound financial basis to their businesses – or in the case of the man in the street, a sound financial plan, always manage to ride the storm (some astute investors even riding the crest of the tidal wave) and can pick themselves up after things recover.
Let’s face it, some came out of the last massive financial downturn better off than before, as they were well advised of what was about to happen, made contingencies and bought in when share prices were at rock bottom.
Some things don’t change
The people that were really hurt were, as always, the poor – or those simply not prepared to be able to sustain a period of loss. So what was is it that those who are at least reasonable earners had failed to do that left them totally battered by the storm – in some cases even unable to recover?
Three sound financial principles
It may sound ridiculous to say there are only 3 solid financial principles on which to build wealth when the world of finance appears to be so complex, but it is true and here they are…
1. Don’t spend more than you earn
Whether you earn R1, 000 a month or you’re a multi Billionaire, if you spend more than you are worth – or you earn – you will always be struggling with finance. Even in the worst circumstances those who prepare for rainy days will usually overcome and win in the end. Ensure you budget correctly and manage it wisely.
2. Save and start investing early
This obviously leads to saving – a habit that has to begin from the day you start earning, but even if you didn’t it is never too late. It is doubtful that anyone earning a reasonable income can’t replace some aspect of their budget with some money to save or invest.
3. Have a solid financial plan
Regarding making investments, this is where you need to talk to a professional Financial Advisor. Remember they don’t judge you on how much you earn. Whatever amount it is they will work with you on making those astute investments that will be the beginning of a sound financial future.
If you enlist sound financial advice, it is the ‘cushion’ that prevents you becoming one of the casualties of market downturns. With the help of Hereford Group, regardless of forecasts and predictions for 2021 and whether you are a less than average earner or a wealthy business owner, through saving, investing and having a solid financial plan you can build a sound financial future.
Contact us to review your unique financial requirements. You’ll find out that although we are always in the know and aware of all forecasts and predictions, we base our client’s futures on age-old sound financial principles!