Endowment Plan
Many people in South Africa don’t know what an endowment plan is. I know I didn’t know until I decided to start planning my finances and retirement. Endowment plans are normal savings plans that include a life policy component as well. It is essentially a mix between a retirement annuity and a life insurance policy where the policy holder either gets a lump sum paid to them when the policy matures or a lump sum is paid to a beneficiary in the event of their death.
The obvious benefit with this kind of policy is that if you don’t die when you think you might, you have a tidy little nest egg either to reinvest or to use in your retirement. In South Africa these are often also called a living benefit policy.
Endowment plans, retirement annuities, fixed deposits and stocks are all different kinds of investments that one can make to ensure a comfortable retirement. For obvious reasons, you would need to research the different investment companies that can assist you in creating an investment portfolio with your specific financial needs in mind. There are also companies, such as InvestmentHound.co.za, that will be able to point you in the right direction when choosing an investment broker to manage your finances.
There are literally millions upon millions of search results when “Googling” investments and investment options. Researching the best avenue for your financial needs can often be a daunting task. The most important thing you need to decide before investing is what you can afford to risk and what you wish to earn. Obviously we all want minimal risk and exceptional return but this is not the reality of investing. The current economic meltdown has seen investors that were investing wisely lose money, so it goes to reason that the more “reckless” investors may have found themselves very, very short. This must not deter the first-time investor though. It is merely a demonstration of the possible risks associated with investing in stocks. For this reason, many people prefer to invest in more reliable investments, such as retirement annuities and endowments.
Although these investments will reduce the risk significantly, the returns are often not quite as fantastic as many people would hope. But do not despair, on this site I will present you with some helpful tips and tricks to consider when you start investing.