The picture of our country’s economy is bleak to say the least and Finance Minister Tito Mboweni’s Supplementary Budget on 24 June 2020 did not herald any good news.
Ettienne Myburgh, CEO of Transparent Financial Services, says we can expect subdued economic growth for the next three years, which means declining work opportunities and lower salary increases (if any).
“Given the expected subdued growth rate and lower interest rates, now is a very good time to attack any debt that you might have in order to reduce your debt as quickly as possible,” he says.
According to Myburgh, the biggest benefit of debt reduction is, of course, increased disposable income over the longer term, and which ideally should be used for saving.
“A balanced investment strategy, as followed by our Funds will contain a fair share of off-shore investment,” says Myburgh. “This is beneficial, as the outlook for the Rand is rather poor, which should provide for good returns on those investments.”
Now is the time for being prudent, is Myburgh’s advice. “We need to prepare ourselves for low growth and follow government’s lead by reducing debt and ensuring our future is looked after by continuing to contribute to retirement funds.”