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The mystical 13th cheque

Setshwano NgopeThe 13th cheque. Mystical. Elusive. Fleeting, for most at least. As the holiday season rears its head, most of us are still trying to make sense of the fact that we're less than a month away from the start of a new year, in a frenzy to balance planning for the year ahead whilst still wrapping up the last of the Christmas present shopping.

Financial management for the New Year, therefor, tends to be put on the back burner, at least for a while. When it comes to that big December pay day, those fortunate enough to benefit from the "13th cheque" or bonus could go either way, with some already dreaming up ways to blow their money and others thinking a bit more practically about using the cash to pay off school fees in January, for instance. Fortune would obviously favour the latter as the more financially sound option, but what about a third option?

There's many a way to ensure that you continue to make strong financial plans like paying off bills and debts, but at the same time actually working to make your money work for you even more in the long term. Here, that 13th cheque could spell the difference between a few months of peace of mind because you've paid up a term's worth of school fees, which is no small fortune, or many months of stress free money management as your rewards take you even further. What exactly do I mean? Well, it's no secret that investing your money can make it go much, much further. Yes, it requires a bit of patience, and even a bit of know-how, but thankfully, it is still nonetheless a lot easier than may first seem. This is where an investment vehicle such as Unit Trusts comes in.

Unit Trusts offer investors the opportunity to pool their money together with other like-minded investors who have similar objectives. The pool of money is invested by experienced investment managers in different assets, including a wide range of local and international equities, bonds, property and money market instruments. The various assets purchased are combined into a portfolio, and the value of this portfolio at any given time is split into equal portions or units. Therefore, when you invest in a unit trust you buy a certain amount of units.

Now, onto the bigger question: why shouldn't you enjoy that 13th cheque after a long year of hard work? You certainly deserve it, and truth be told, you should be able to spoil yourself a little. After all, some might argue that's part of what the holidays are about. The key, though, is to remember that you need not blow all of that hard earned money. Be practical but also realistic. Therefore, set aside a small amount of money that allows you just a little frivolity and self-indulgence. And the rest? Use this to invest in your future, and indeed, in the future of your loved ones.

A Unit Trust can help you increase the value of your money. If you do not have the time, resources and aptitude to manage your own portfolios, investing in Unit Trusts is a viable alternative as your money will be managed by a professional fund manager. This team of experienced professionals conducts research and chooses shares and other instruments that meet the goals established for each portfolio. You will also benefit from knowing, more or less, what you are investing in for the duration of your investment, as the securities held by the unit trust are listed in its prospectus and or factsheet.

By pooling your funds with that of other investors in a unit trust fund, you will get exposure to a broad range of investment vehicles. Moreover, unit trusts are easy to buy and sell, increasing your liquidity and making things convenient for you, the investor. Debit orders can be increased or decreased without penalty. You may redeem your investment as and when you require your monies at the established redemption price. Securities in the unit trust will be sold and cash will be distributed to your nominated account. In fact, it is also easy for investors to switch between funds as and when personal circumstances change. Most importantly, management companies such as Bifm Unit Trusts are obliged to repurchase units on demand, making unit trusts highly liquid, once again ensuring a high level of flexibility for you.

Investing in unit trusts isn't a quick route to wealth, or even a silver bullet cure to any financial woes come the New Year. It is, however, a vehicle that enables you to manage your finances with a long term view in mind. So, you can either pay off those school fees for the year right off the bat from that 13th cheque, or pay a little and invest a little so that come next year, or even beyond that, you're in the financial position to pay off such expenses with just a little more ease and without having to realise you've effectively evaporated your hard earned cash over the Christmas break. And who doesn't need that comfort?

For more information, go to www.bifm.co.bw or contact Setshwano Ngope, Head of Retail, Bifm, email: This email address is being protected from spambots. You need JavaScript enabled to view it. , tel: +267 3951564.

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