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Pensions Round-UP Part 1: Hedge Against Pension Fund Erosion With These 3 Options.'

4 years agoThu, 30 May 2019 10:31:15 GMT
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Pensions Round-UP Part 1: Hedge Against Pension Fund Erosion With These 3 Options.'

When you are an energetic youth full of life and energy, you rarely think of pension or “mudyandigere” as Shona puts it. The purpose of this 6 series Pensions Round-Up is to help the youth of today to think beyond the days of their youth and start prepping for the inevitable. Over the next 12 days, I will talk more about pensions. I will explore the different pension options in detail among other things.

The economic meltdown we are facing is disheartening. Worse still, a  decade ago we experienced something similar to this. No one alive today who was in Zimbabwe in 2008 would want a repeat of that awful time again. It’s so sad that early signs of the nosedive we are in indicate that we may be headed for those perilous times again.

What’s sadder (if there is such a word) is that life-savings are eroding in a whim. There are people who have retired now, who don’t have the strength to work for themselves anymore as age has caught up with them. They had faithfully paid their pension premiums for the decades they were in service. Now they can’t fend for their basic needs and they watch as their dollar loses value every day.

These 3 options will help an energetic worker today, to set up a secondary pension fund option. These options may derive a future flow of funds for them when they are retired and can’t run around anymore.

1. Real Estate

Most people buy stands, build the house they live in and never look back. When I say real estate I’m not saying buy expensive houses or land in Harare or any other city. Buy cheap land from rural district councils and build a small shop or shops there. Buy land in less expensive growth points and business centres and build properties there. Later on, you may sell them or receive a monthly or bi-annual income from them. The Build To Flip concept of Silicon Valley applies everywhere. In your old age, you can get even the minimum amount but it will supplement your pension. While at it its time you start building that rural home, life is so unpredictable.

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2. Investment Firms

Religiously paying your pension premiums is the way to go. But in the case of Zim, its almost the second time pension funds are being eroded. Have a stock market/Money market backup whenever possible. Look for investment groups like Datvest. They will offer you a lot of options that you can use to hedge against pension fund erosion. Datvest is just one of the investment firms that offer Pension Fund Portfolio Management Private Client Equity and Money Market Portfolio Management Fixed Income Investments Property Investments Unit Trust Investments. Old Mutual etc also offer similar services. Last year the lady from Old Mutual told us about a 10-year plan that would see you getting a life plan for $25 a month only a month other plans.

3. Set Up A Perpetual Income Joint Now

Setting up a business is very hard. In the case of Zimbabwe, it’s even a huge gamble which may sink you like a brick. However, there are small businesses we see today that started small 20/30 years ago. If a small joint is set up today, low maintenance, small margins, in 10/15/20/30 years time when you retire it will be low maintenance again because it will have passed all the stages a business goes through. If you are consistent, you will have loyal customers. This low maintenance joint will help supplement your pension, in case it’s eroded, you will have something to fall back on.

 

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