Individual Consulting Connect Newsletter July 2025 by Alexforbes

Hello Everyone

July is savings month and in this edition we share some thoughts on savings and how it can lead to financial freedom.

How does your spending affect your saving and can you improve your spending habits to benefit your savings? Our article highlights a few tips how to improve both spending & saving.

In his article on debt, Jaco Prinsloo takes a hard look at what it means to have debt and how it affects your life if you don’t deal with it. Sinawo Makalima takes us on one couple’s journey to financial freedom by consistently applying the six-step process to financial planning.

Would you believe that missing the ten best trading days on our stock market every year for the last 25 years could fundamentally change your investment destiny? Gareth van Deventer tells us more in his article.

Sleep is crucial for our health, both physical and mental, just like diet and exercise. A well-rested individual can make better investment decisions. Our article on the importance of sleep provides some useful tips on improving sleep hygiene.

We bring it home with a wrap of recent events affecting financial markets with thoughts from our investment team and how they see things playing out locally and abroad.

Keep saving, deal with your debt, stay warm and enjoy the read.

In this issue

How do you balance spending and saving

Own your debt and live free

Time well spent: How a long-term financial plan transformed one couple’s lives

10 days can change an investment’s destiny

Importance of sleep

Financial advice in action

Economic and market update

Connect with us

How do you balance spending and saving?

Saving is often seen as one of those daunting tasks that most of us would rather delay, for varying reasons.

People often feel they have insufficient money to live on and therefore have no money left to allocate to savings. Saving is the foundation of a good financial plan and is therefore, crucial to consider. It can protect you against smaller and larger events that could derail your plans and gives you opportunities that you might not otherwise be able to pursue.

Spending and saving go hand in hand. The more you spend, the less you can save. Making small changes to your spending can lead to big savings outcomes. It may seem boring, but one of the best places to start is knowing exactly what you are spending money on by drawing up a budget.

Having one doesn’t mean that you are on a restrictive diet where you can never treat yourself again; it is a reality check of where you stand that can highlight areas where you are succeeding and falling short. You might not have realised how much debt you have or how much you are spending on a certain habit until you go through your bank account and credit card statements.

Your budget can show you if you are keeping a healthy balance between your income, living expenses, debt and other costs. Even if you are not monitoring yourself the whole time, you will need to check your budget regularly to make sure that it remains relevant.

Have a SMART plan

Your budget can unearth opportunities to save or invest that you might not have thought possible. Where can you spend differently to enhance your savings and where do you start to save?

Your savings should be SMART- Specific, measurable, actionable, relevant and within a specific time frame. Without a specific target, how do you know what you are saving for and how will you know if you achieved that? For example, are you saving to build up your emergency fund with three to six months’ worth of salary or saving for your year-end holiday?

Your budget will show if you need to delay that once-in-a-lifetime trip to be able to afford it without going into debt, or if you can change your spending habits to save faster.

Automate your spending and saving

With most companies having done away with a 13th cheque, set up a savings structure that you can use for end-of-year festivities or to fund Januworry. Some companies offer staff savings schemes that will deduct the money from your salary to prevent the temptation to skip saving each month. Saving regularly the rest of the year will help with these more expensive months.

Your brain doesn’t like to be taxed by making the same decisions again and again. Why not automate your savings and take away the stress of remembering to save monthly? Set up a debit order to take care of your savings and build in an escalation annually to keep up with inflation. Automate your weekly grocery list and have it delivered so you don’t have to go into the shops and be tempted with in in-store promotions.

Pay yourself a 13th cheque

As convenient as it is to order your favourite takeaway meal and have it delivered to your door, this usually comes with extra costs such as a delivery fee or a tip to the driver. These might seem like small amounts, but they add up when you are trying to get a handle on your finances. If you do make use of more convenient options, can you save by getting free deliveries, setting up a delivery subscription plan, ordering less frequently, or picking up the takeaway?

Manage temptations

Before you buy something with money you wanted to save, think about how long you must work to make that money. A small item might not take long and could feel insignificant, but add all the small purchases together and you realise how many hours you are working to fuel your coffee or new clothes habit and then think if it is worth it.

Alternatively, think about what you are giving up in the longer term when you buy an item. How long will this item be useful compared to how long you would remember a trip overseas that you want to save towards. Allocate money into buckets for certain purchases like entertainment, food, holiday and spend from that bucket only.

Reduce buying triggers by cancelling marketing newsletters and being aware of what your social media shows you. Advanced algorithms will show you more and more of something you seem interested in, but might not need, tempting you to buy.

If you still want to buy something, wait a few days before you buy to see if you still want or need it. Don’t fall for limited time or urgent offers that are designed to let you make emotional decisions.

Mental accounting

By adopting better spending habits, it can help you save, no matter your income. Make sure you are spending on the right things so you can save for the right things as well.

Own your debt and live free

By Jaco Prinsloo, CFP® Senior Financial Planning Consultant at Alexforbes

Debt isn’t just money you owe. It’s a chain around your neck, a cage you lock yourself in, a slow drain on your future before you even get there.

Every rand of debt is a rand that owns you. It dictates your choices, limits your freedom and forces you to keep running just to stay in place. You think you’re making progress, but you are going nowhere financially.

Nothing controls people like debt. A person buried in debt can’t take risks. They can’t walk away from a bad job, they can’t start a business and they can’t invest for their goals. They are too busy serving the banks, the lenders, the credit card companies.

You don’t make bold moves when you’re in survival mode. You don’t own your paycheck when half of it is spoken for before it even hits your account. The bank owns it. The credit card company owns it. The car loan owns it. You are working for someone else.

Debt is easy to get, too easy. Without looking at the total, you swipe a card, or sign papers and before you know it you bought something you can’t afford. For a moment, when you have that new item, it feels like winning, until the bill comes and you realise that your ‘flex’ is a financial shackle.

You are sold the lifestyle, but you don’t always understand the price because you don’t see the full impact that interest will have. Your million rand house will cost you more than double that over 20 years at a 10% interest rate. Your debt repayment isn’t just a number; it’s a monthly reminder that you don’t own your own life. What is your real value if you compare assets with liabilities? To buy now, pay later is just a slowmotion way to go backwards financially. Most people aren’t rich; they just look rich while drowning in debt.

The truth is that if you can’t afford to buy it in cash, you can’t afford it.

If you want real freedom, then you need to go to war with your debt. Not next year. Not when you make more money, start now. Stop borrowing unnecessarily and look at what your debt is doing to your finances. If your actions are not benefitting your overall plan, don’t finance it.

To take action in sorting out your debt, pay the smallest debt first. Pay any extra cash towards that debt until that one is paid, then roll that payment into the next biggest debt, on top of the payment you were already making. Keep up the same technique until your expensive debt, like credit cards and personal loans, is paid off. Debt doesn’t disappear just because you wish it away. Give yourself a target date when you want to be free of debt, or else it is too easy to extend the date.

Get aggressive in your aim to pay off debt. Pick up extra work, sell things, do what it takes. Live below your means. Be serious with yourself and include your family in the plans so that they can work with you. That might mean that there is no vacation when you’re drowning in repayments and do you need a brandnew car when a used one will do?

Discipline now means freedom later. Pay the mortgage early. Don’t give away 20 years of your life if you can pay it sooner and then make your money work for you. Debt keeps you working for someone else. Freedom comes when your money works for you.

People say that debt is a tool and it can be if you are better off by leveraging finance, for example, to buy a house. But be careful, debt is a leash and most people never get off it. Own your pay check and then own your future because you don’t want debt for the rest of your life.

Own your debt or let it own you. The choice is yours.

Time well spent

How a long-term financial plan transformed one couple’s lives

By Sinawo Makalima, CFP® Financial Consultant at Alexforbes

Eight years ago, I met a newly married couple just beginning their journey together. He was 29 and she was 26. Like many young professionals, they had some of the building blocks of a financial plan but had not yet assembled the full picture. At the time, they were living with their parents, focused on building their careers and unsure of how to align their financial decisions with their life goals.

Step 1

Establishing the relationship

Our journey began after I conducted a financial wellness session at the husband’s workplace. At 29, he had a pension fund and group risk cover through his employer, but we quickly identified that financial products alone were not enough; alignment with personal goals was essential.

His wife was 26 at the time and unemployed. The couple had already taken a prudent step by ensuring they had a will in place, to make sure their estates went to the correct beneficiaries. It became clear early on that setting a strong foundation would allow them to build toward their future with confidence.

Today, in 2025, they are parents, homeowners and well on their way to a financially secure retirement. Their journey underscores how a disciplined, collaborative approach can transform planning into tangible progress. This article reflects how the six-step financial planning process helped them achieve life-changing outcomes, proving that investing time in your future is always time well spent.

Step 2

Gathering data and setting goals, laying the foundation

The next step involved understanding their personal and financial goals. We discussed their aspirations, such as owning a home, starting a family and securing a comfortable retirement, and translated those into actionable financial objectives.

A lot of clients, both young and old, tend to accumulate financial products without understanding how they fit into their broader life plans. My role was to turn abstract products into purposeful tools.

Initial targets were set for retirement savings, future homeownership and family planning to create a roadmap that evolved with their changing circumstances.

Once the goals were clear, the planning process became a shared journey, making every session truly time well spent.

Step 3

Analysing and evaluating their financial status

After gathering the necessary information, I conducted a comprehensive review of their financial standing. This helped identify gaps in their savings and risk cover and evaluate the resilience of their plan against future life events.

We recognised the importance of ensuring that the wife had her risk cover. We also assessed how potential milestones like starting a family and purchasing a home and even death would impact their financial situation.

This critical analysis positioned them to make informed decisions and provided a clear path forward. At its core, our role as financial advisers is to place our clients in a position where they can make informed decisions.

Step 4

Developing and presenting the financial plan

The initial plan focused on optimising the husband’s employer benefits and preparing the wife for future income opportunities as her career progressed.

I created a detailed cash flow statement, focusing on building a budget buffer to support their goal of purchasing property. Fortunately, their minimal debt made this process more manageable, allowing them to focus on forward momentum rather than debt reduction. Indebtedness introduces additional goals and challenges when formulating a long-term financial plan. It was important to remain adaptable and to update the plan as their financial situation evolved.

Step 5

Implementing the financial plan

At 29 and 26, time was firmly on their side, making early action both impactful and achievable. We implemented the plan by adjusting the husband’s pension contributions and ensuring his group risk cover was sufficient for their needs.

Step 6

Monitoring and reviewing the engine of progress

From 2016 onwards, regular reviews addressed their changing lives, proving that monitoring is where real progress happens.

2017: Dual incomes and planning for two

The wife found employment and this positive development prompted a comprehensive update to the financial plan:

A personal retirement annuity was recommended for her, as her employer did not offer a group retirement plan.

Comprehensive risk cover was set up for her to protect her ability to earn an income if she became disabled or to provide for her family in the event of her death.

Shared financial goals were re-evaluated to reflect her career trajectory.

2018: A new life, a new priority

With the arrival of their first child came new responsibilities:

Life cover was reassessed to ensure their child would be financially protected.

Their will was updated to appoint a guardian as well as establish a testamentary trust for their newborn child.

An education savings plan was started, taking advantage of long-term compounding. It is vital to start an education fund early in the child’s life.

2019 – Reaching the homeownership milestone

By 2019, they had optimised their budget and were ready to purchase their first home:

Risk cover was updated to include bond protection, ensuring that the home loan would be settled in the event of death or disability. This protects the surviving partner from financial strain and preserves long-term investments.

Their will was revised to reflect property ownership, ensuring the home would be transferred according to their wishes. This reduced the risk of delays or disputes in the estate and aligned their legacy planning with their new assets.

Cash flow and investment contributions were recalibrated to maintain retirement savings momentum while accommodating bond repayments and new expenses.

This review ensured that homeownership was seamlessly integrated into their broader financial strategy, a step forward, not a disruption.

2025 – A moment of reflection

During our most recent review, the progress they had made over eight years was clear:

Their daughter’s education fund is on track to meet future schooling needs.

Their retirement projections show a strong likelihood of achieving a 75% income replacement ratio, a testament to their dedication and the effectiveness of the plan. Currently only 6% of working South Africans are expected to get to this target and retire comfortably.

Their risk cover offers a safety net for when their lives do not turn out as planned.

Their journey has been built on consistent, collaborative planning and a willingness to adapt as life evolved.

Conclusion: A plan that stood

the test of time

The six-step financial planning process is not a one-time exercise; it is a structured, evolving journey. For this couple, each step is built on the last, fuelled by clarity, discipline and regular reviews. Their progress is a testament not only to the process but to their commitment to investing time in their future.

Every review, every decision and every update along the way proved one thing: it was all time well spent.

10 days can change an investment’s destiny

By Gareth van Deventer, CFP®

Best Practice Specialist

Remaining invested in turbulent times is not easy, but the cost of cashing out your investment in these times and reinvesting when things seem better can have a catastrophic impact on your future investment outcome.

There are many aspects at play when it comes to investing but patience, remaining invested and focusing on your long-term objectives are key drivers to investment success. When financial markets are negative and it just feels like your investments are bleeding, cashing out and running for the hills is probably the worst strategy.

Investing, by its very nature, means taking the good with the bad to reap long-term rewards. It is impossible to accurately determine when to move in and out of financial markets and employing this strategy is risky, often resulting in poorer outcomes than remaining invested. Missing out on the best trading days in bad economic years can significantly impact your investment outcome.

Over the last 25 years, three extreme global events have rocked financial markets. The dot-com bubble in 2000, the global financial crisis in 2008 and COVID-19 in 2020, placed severe stress on investment returns, yet South African (SA) equities (shares listed on the Johannesburg Stock Exchange) delivered an impressive 13.2% annualised return over that period. Even more fascinating is that if you missed the best 10 trading days in each year over the last 25 years, you would have experienced a negative 13% annualised loss over that period. Those 10 best days alone contributed an average of 30% per year to overall SA equity returns.

The table below shows the impact that the 10 best trading days had on SA equities during these three extreme events and how remaining invested through these times limited losses.

Return for that year

Best 10 days returns

Worst 10 days returns

Return excluding best 10 days

Interestingly, had you cashed out your SA equity investment at the height of each extreme event and then reinvested, missing the 10 best trading days, you would have experienced severe losses that could never be recovered. In other words, you would have destroyed wealth and ended up nowhere over the last 25 years.

What lessons can we take from all this?

Financial markets experience good and bad periods over time and knowing when to expect these is not possible

Daily investment returns are random

Investing and disinvesting at the perfect time, is not possible as the good and bad sneak up on us like a thief in the night, impossible to see and even more impossible to react timeously

Cashing out at the height of trouble and missing 10 of the best trading days in a year can negatively impact investment outcomes

Remaining invested gives investments time to recover from extreme market shocks

Negative investment returns are always followed by positive returns

Investing more when financial markets have collapsed could exponentially boost investment outcomes

Nobody can predict with certainty when the next financial crisis will land. But what is certain, is that after each crisis a recovery comes and if you miss it, it could fundamentally alter your investment future.

Remaining invested through both the good and the bad is the only prudent way to grow wealth and successfully reach your long term investment goal.

The importance of sleep on wellbeing

July 2025

By Alexforbes Healthcare department

Choosing the remote over your pillow? Loving some coffee at night, which in turn keeps you from sleeping? Scrolling on the phone before you sleep?

If you can relate, this article would be for you!

Practising good sleep hygiene may be the answer to improving overall wellbeing.

The benefits of sleep

Sleep is crucial for our health, both physical and mental, just like diet and exercise. While you are sleeping, your brain gets ready for the next day. Sleeping heals and repairs your heart vessels and poor sleep can even make you feel hungrier!

Here are some key points highlighting the importance of sleep:

Physical health: Adequate sleep helps repair and rejuvenate the body. It supports heart health, regulates blood pressure and strengthens the immune system.

Mental health: Quality sleep is essential for cognitive functions such as memory, problemsolving and decision-making. It also helps regulate mood and reduce stress, anxiety and depression.

Emotional wellbeing: Good sleep contributes to emotional stability. It helps manage emotions better and improves resilience to stress.

Performance and productivity: Sleep enhances concentration, creativity and productivity. It also reduces the risk of mistakes or errors.

Weight management: Sleep influences hormones that control hunger and appetite. Poor sleep can lead to weight gain.

Overall quality of life: Consistent, restful sleep improves overall quality of life, making you feel more energetic, alert and ready to take on daily challenges.

Implementing good sleep hygiene principles can help you become healthier and more productive.

What

good sleep hygiene?

Good sleep hygiene refers to the habits or practices that promote healthy and restful sleep. What are your current sleep habits?

Here are some tips on improving your sleep hygiene:

Establish a regular sleep schedule:

• Go to bed and wake up around the same time every day, even on weekends

• Aim for a consistent sleep duration

Create a relaxing bedtime routine:

• Wind down before bed with calming activities, such as reading, taking a warm bath, or listening to relaxing music

• Avoid screen time (phones, tablets, computers) for at least an hour before bed

• Consider a warm beverage to promote relaxation (avoid caffeine)

Optimise your sleep environment:

• Make sure your bedroom is dark, quiet and cool

• Use earplugs or a white noise machine to minimize noise distractions

• Ensure your mattress and pillows are comfortable and supportive

Pay attention to your diet and lifestyle:

• Avoid large meals, caffeine and alcohol close to bedtime

• Keep daytime naps short (no more than 30 minutes)

• Engage in regular physical activity during the day, but avoid strenuous exercise close to bedtime

• Avoid smoking, as nicotine can disrupt sleep

• Manage stress and anxiety through relaxation techniques, mindfulness, or other healthy coping mechanisms

• Consider keeping a sleep diary to track your sleep patterns and identify any potential problems. A smart watch is also able to track your sleep and provide valuable insight into your sleep patterns

Financial advice in action

Imagine a world where every household, regardless of income, has the financial confidence to face the future head-on. Yet in South Africa, it is estimated that only 9% of households use a professional financial adviser. That’s just 1.8 million out of 20 million households! This gap is staggering, especially when you consider the life-changing benefits of financial advice.

Research shows that households that work with financial advisers have 9.5 times more invested than those who don’t. And this isn’t just about numbers, it’s about transforming lives, building financial confidence, reducing stress and creating a more secure future for everyone, regardless of income level.

Professional financial advice comes in many forms because everyone’s needs are different. It’s not just about choosing the right investment portfolio. We spoke to a professional financial adviser about the kind of advice they’ve given over the years, advice that stood out and made a real difference in their clients’ lives.

The power of patience

James wanted to retire at 55. His financial adviser showed him what that would mean in rands and cents, and it wasn’t pretty. Instead of shutting the door on retirement altogether, they agreed to review his plan each year. James kept working, kept saving and by 63, he had enough to retire comfortably. Today, he’s one of the few South Africans with true financial freedom.

Retired and thriving

After years of coaching, one client retired with more income than she had while working. Her adviser helped her save more, settle debt and secure a better annuity rate due to her health, something she wouldn’t have known to ask for. She almost gave it all up to help a family member, but her adviser helped her stay the course. She’s now financially secure for life.

Avoiding a costly panic

When the markets crashed in 2020, many people wanted to pull their money out, right at the worst time. One adviser convinced several clients to stay invested. Those who listened recovered and even grew their portfolios. Those who didn’t missed out. Sometimes, the best advice is what not to do.

Macroeconomic and market developments

Global strategy (returns in US dollars) South African strategy (returns in rands)

The second quarter was marred by trade policy uncertainty and geopolitical tensions after US President Donald Trump unveiled sweeping ‘liberation day’ tariffs in April, while the United States (US) and Israel bombed Iran’s nuclear sites in June.

A brokered ceasefire saw oil prices retreat after the initial spike, while tariffs have had a relatively minor effect on inflation up to this point. However, their influence is gradually becoming noticeable in certain products.

First quarter GDP data shows that convergence in growth rates across developed markets is well underway, with the pace of expansion slowing in the US and the United Kingdom (UK) but picking up in the euro area and Japan.

In markets, global investors rotated capital out of US equities into Europe and Japan, drawn by attractive valuations and fiscal momentum, with Germany delivering an impressive 17% gain in the second quarter (Q2) alone.

Bond markets reflected shifting rate expectations and volatility, with global high-yield bonds leading the way, returning 7.56% as investors sought yield amid a weaker dollar.

Outlook

Locally, politics took center stage amid GNU tensions over the Budget and firing of the DA’s deputy minister of trade and industry.

On the data front, first quarter GDP data showed that growth remains lethargic, with the economy expanding by a mere 0.1% quarter on quarter (q/q). Consumer inflation printed below the South African Reserve Bank’s lower bound of the 3-6% target band for the third consecutive month.

South Africa’s bond market rallied by an impressive 8.05% for the quarter, buoyed by inflation dropping to a five-year low of 2.8%.

The technology sector shone brightest, soaring by 22.67% during the quarter, driven by digital innovation, while telecoms also impressed, with a 12.89% gain, boosted by 5G rollouts and M&A activity.

Foreign investors withdrew $5.9 billion year to date from South African equities, yet attractive valuations and the prospect of reform keep the market open to cautious re-engagement.

Ongoing geopolitical risks and trade tensions continue to threaten global growth, with uncertainty over the Israel-Iran ceasefire and the future of US trade policy post the 9 July tariff pause.

US growth is expected to be lower in the second quarter than early June estimates, according to the Atlanta Fed’s GDPNow and the New York Fed’s Nowcast.

US fiscal sustainability concerns are likely to remain top of mind for investors as the ‘One Big Beautiful Budget Bill’ continues to be deliberated on in congress.