Data Loading...
Your Guide to Financial Literacy eBook by Sagicor
81 Downloads
76.61 MB
Twitter Facebook LinkedIn Copy link
RECOMMEND FLIP-BOOKS
Your Guide To Financial Literacy
sagicor.com
MONEY 101
INSURANCE
INVESTMENTS
BANKING
03 Money 101 Basics of Managing Money.............................................. 04 How to Get Started With Budgeting............................... 07 Overview of Investment Types........................................ 10 How to Manage a Credit Card......................................... 14 5 Tips for Building Generational Wealth........................ 17 21 Insurance Still Uninsured? Here’s How You Can Afford It................... 22 Break the Myths – General Insurance Tips......................... 25 Who is an Advisor and Why Do You Need One?................ 27 Getting Health Insurance for Yourself and Your Family.... 29 Pension101................................................................................ 32 36 Investments 10 Habits That Rob You of Your True Wealth...................... 37 Stop Being Broke - Wealth Tips.............................................. 40 Stockbrokerage Basics........................................................... 43 Books That Will Change Your Life......................................... 45 How to Identify Your Risk Tolerance..................................... 46 51 Banking Why You Need a Bank Account............................................. 52 How to Use Credit Cards Safely............................................ 53 Tips For SMEs........................................................................... 56
| 02
Money 101
Teach your kids about money by leading by example.
MONEY 101
INSURANCE
INVESTMENTS
BANKING
Basics of Managing Money
01
T he late Manchester United professional foot- baller George Best, quipped “I spent a lot of money on booze, birds, and fast cars. The rest I just squandered.” While I run the risk of losing some readers who are supporters of rival football teams from my first sentence, this quote is quite apt for this article as it raises the question, is it that we do not have enough or is there a possibility for us to do more with what we have? Financial Management is a most fundamental con- cept with which all should be au fait as we transi- tion into a phase of our lives where we obtain our
Contributor:
Kavon Walker Branch Manager Sagicor Bank Mandeville
It is sometimes not about how much you make but how much you save.
| 04
MONEY 101 | Basics of Managing Money
MONEY 101
INSURANCE
INVESTMENTS
BANKING
ing the surplus. A credit card is a product which, if used correctly, can aid in this budgeting process as at the end of the period, a written record of all one’s expenses is pro- vided. While a credit card has the amazing ability to give one a big picture view of expenses over a period of time, it along with other debts, is often abused resulting in problems. A key principle in managing money is to manage debt. Debt, especially relat- ing to credit cards, must be prop- erly planned for and the payments considered in one’s budget. The reason for obtaining debt should be something material that will result in increase in one’s wealth overtime.
independence and become respon- sible for ourselves and in some instances, for others. This article seeks to posit some tried and proven basics about managing money. No lesson on managing one’s finances is complete without men- tioning this simple but profound money management tool, a budget. This is simply a written record of one’s income(s) and expenditures over a set period. A budget requires and should help to instill discipline. Discipline is a key character trait necessary for one to master the basics of money management. A budget gives a clear outline of one’s expenses and can then allow for adjustments with the aim of increas-
| 05
MONEY 101 | Basics of Managing Money
MONEY 101
INSURANCE
INVESTMENTS
BANKING
There are however, unexpected events which happen from time to time in our lives and for which it is quite difficult to plan for such as sick- ness. There is however one important tool in the financial arsenal we have to combat the expenditure surround- ing these events, insurance. As we do not know what tomorrow holds, having adequate insurance coverage to take care of those unexpected expenses is important. A discus- sion with a Financial Advisor is key to acquiring the right coverage. This can go a far way with helping you or your loved one overcoming these dif- ficult periods in life which may occur from time to time. There is indeed a lot more that can be said on the basics of money man- agement. There is also a lot more that can be said on budgeting, managing debt, investing and insurance. How- ever, it is hoped that this will cause you to start the conversation, think about taking that small but critical steps needed to lead you to financial independence and to realize the truth in the gem, it is sometimes not about how much you make but how much you save.
As easy as it is to impulse buy by swiping or in these days, tapping the credit card, impulse buying must be avoided at all costs. Treats, which we all deserve for our hard work, should be carefully planned and budgeted. The surplus that is left over from your income over the relevant period, be it weekly, fortnightly or monthly in your budget, should then be invested. “Invested” is used in contrast to “saved” as investing is more involved and has an objective of generating a healthy return. One should realize that investing is not just for the wealthy. It is very much available to all and with the right counsel, exposure can be given to various instruments such as unit trusts, bonds, stocks etc. which can help one to earn more. In addi- tion to these types of investing, one may also consider investing in other income generating assets such as property and equipment. A conversa- tion with a seasoned Financial Advi- sor will help one to understand terms critical to investing which cannot be covered within the ambit of this arti- cle, such as diversification. Investing can help you prepare for events in life such as acquiring a house, a car or even retirement.
| 06
MONEY 101 | Basics of Managing Money
MONEY 101
INSURANCE
INVESTMENTS
BANKING
How to Get Started With Budgeting
02
B udgeting is the process of creating a plan to spend your money. Creating a secure financial future begins with simple steps and perhaps the most important step is budgeting for your every- day. In fact, Sagicor’s financial advice believe that budgeting is a fundamental component of wise finan- cial planning. Budgeting allows you to manage your spending and track your expenses and of course save better. With a budget, you will not be met with surprises and will be better prepared for emergencies or unforeseen expenses. Importantly, budgeting basi- cally allows you to avoid random spending and avoid imbalance of your income versus your expenses.
Contributor:
Shelly-Ann Morgan Manager Investment Client Services, KMA, Sagicor Investments
Coleen Antoinette Guest Writer
| 07
MONEY 101 | How to Get Started With Budgeting
MONEY 101
INSURANCE
INVESTMENTS
BANKING
No matter how much you earn, the only way to increase your wealth is to have your lifestyle grow slower than your income.
How to get started 1. Identify your expenses
Make a list of all your monthly expenses even what you may con- sider insignificant. Your fixed expenses such as rent or mortgage, utilities, groceries, transportation, and obligations such as monthly loans should be prioritised but do not leave out smaller expenses such as household help, children’s lunch money and even your own if you work out. Include in your monthly budget, your yearly expenses such as insurance for home or car and set aside a nest egg so when they are due, it does not pressure your monthly income. Consideration should also be given to flexible expenses like entertainment, clothing, or vacation.
2. Determine your Income
After making your general list, look at your actual income. How much money do you earn? Can your income cover the list of expenses you have identified? It is important that your expenses are not exceeding your income, and if this is your reality, your next step is to prioritise.
| 08
MONEY 101 | How to Get Started With Budgeting
MONEY 101
INSURANCE
INVESTMENTS
BANKING
3. Prioritise your needs from wants
It is important that you prioritise needs from wants when starting your budget.
It is important that you prioritise needs from wants when starting your budget. You can determine your needs from wants by simply doing without some- thing for a while and if after a while you recognise that you cannot live without it, then it may be a need. Buying a new living room suite may feel like a need but if the set you have is still functional, then it is a want, and you must decide if this is a priority. Ensure that you review your budget over time. Be mindful that your situation may change and so expenses can go up or down. Your household may expand with a new child, or a child may leave for university and add to your expenses. Check back on your budget periodi- cally to ensure that it is still meeting your needs or goals. Budgeting is your very first step towards a comfortable financial future! A good budget is one that ensure your expenses do not exceed your income and allows you room to save towards set goals. Start budgeting today.
Start budgeting today!
4. Review your Budget
| 09
MONEY 101 | How to Get Started With Budgeting
MONEY 101
INSURANCE
INVESTMENTS
BANKING
Overview of Investment Types
03
“If you are looking to improve the financial outlook for your future then choosing to become an inves- tor is the first step to create and maintain wealth. Think of the various types of investment options as tools that can help you achieve your financial goals.” says Alicia Thomas, Sagicor Investments Wealth Advisor. “In fact, although there are a lot of options for where to put your money, It’s important to weigh the types of investments carefully so you choose the solution that is right for you.”
Contributor:
Alicia Thomas Wealth Manager Wealth and Corporate Relationship Management Sagicor Investments
André Wayne Guest Writer
| 10
MONEY 101 | Overview of Investment Types
MONEY 101
INSURANCE
INVESTMENTS
BANKING
Below, I will take you through some of the investment vehicles available at Sagicor Investments.” Money Market Instruments are short term investments character- ized by a high degree of safety and relatively low rates of return. It is best suited for someone who has a low risk tolerance, and who will need funds in the short term but wants an investment vehicle that will provide rates higher than a savings account or someone who needs fre- quent interest income. “At Sagicor Investments we offer Repurchase Agreements (REPO) which pay the investor a fixed rate of return, based on a specified investment period. With a REPO, your funds are invested
The investment landscape can be extremely dynamic and ever-evolv- ing but those who take the time to understand the basic principles of the different asset classes stand to gain significantly over the long term. The first step is learning to distin- guish the different types of invest- ments that exist. Generally there are three main categories for investing: stocks, bonds and cash equivalents which are listed from most risky to most safe. According to Sagicor Investments Wealth Advisor, Alicia Thomas, “All investment types have their own general set of features, risk factors and ways in which they can be used by investors to achieve their overall long term financial goals.
| 11
MONEY 101 | Overview of Investment Types
MONEY 101
INSURANCE
INVESTMENTS
BANKING
and very secure.” Alicia Thomas, Sagicor Investments Wealth Advisor Collective investment schemes pool together the investments of many investors in a fund which is managed by a professional fund manager. Investors’ ownership in the fund is determined by the num- ber of units they hold, and they are referred to as unit holders. “At Sagicor Investments we offer both a unit trust option and a mutual funds option to our clients. A Unit Trust provides you with the flexibil- ity of individual or combined portfo- lio investment, depending on your investment goals. This type invest- ment gives the investor diversity and allows them to invest in instruments that, if purchased directly, would be more costly. Mutual Funds oper- ate just like a Unit Trust as it gives individual investors access to profes- sionally managed portfolios of equi- ties, bonds, and other securities. A unit trust differs from a mutual fund in that a unit trust is established under a trust deed, and the inves- tor is effectively the beneficiary of the trust.” Alicia Thomas, Sagicor Investments Wealth Advisor
at an agreed rate for a set period of time, with a specified maturity date. Interest can be paid to the cli- ent or reinvested with the principal for another period.” Alicia Thomas, Sagicor Investments Wealth Advisor Fixed-income Security is a debt instrument issued by a govern- ment, corporation or other entity to finance and expand their opera- tions. This type of investment pro- vides investors a return in the form of fixed periodic payments and eventual return of principal at matu- rity. “Our clients are able to access this type of option by investing in either bonds or treasury bills. Bonds represent a loan made by an inves- tor to an issuer/borrower (typically a corporate or governmental entity). In return, the issuer agrees to repay the principal investment amount (or face value) of the bond on a fixed maturity date and to make regularly scheduled interest payments (typ- ically quarterly or semi-annually) to the investor/bondholder. Treasury bills (T-bills) are the safest type of short-term debt instrument issued by a federal government. It is ideal for investors seeking a 1 to 12 month investment period, is highly liquid
| 12
MONEY 101 | Overview of Investment Types
MONEY 101
INSURANCE
INVESTMENTS
BANKING
Stocks (or equity) is a security that represents the ownership of a fraction of a company. This entitles the owner of the stock to a propor- tion of the corporation's assets and profits equal to the amount stock they own. Units of stock are called shares and investors are able to purchase stocks on the local and international market if they are considered long term, high risk investments. “Stock investors make money when the value of the stock they own goes up and they’re able to sell that stock for a profit. Some stocks also pay dividends, which are regular distributions of a company’s earnings to investors. On the other hand, a stock can also perform poorly or a company goes out of business which makes it a high risk option but one which can pay the highest returns if managed well.” Alicia Thomas, Sagicor Investments Wealth Advisor It helps to have the advice of a wealth management expert when you are investing so, speak with your Sagicor Investments Wealth Advisor today to decide which investment option is right for you.
The most important investing skill is keeping control of your emotions during booms and busts. Investing favours the patient and punishes the over confident.
Learn More About Investment Terms
| 13
MONEY 101 | Overview of Investment Types
MONEY 101
INSURANCE
INVESTMENTS
BANKING
How to Manage a Credit Card
04
A credit card is a popular financial tool or payment card, usually issued by a financial institution. A credit card provides you with access to a line of credit, usually unsecured, allow- ing you to pay for goods and services without using your cash resources. Most Credit Cards offer an interest free period between 30-45 days; however, interest will be charged if your monthly balance in not paid in full on the due date. Once you understand how to manage a credit card, it can be a valuable and convenient financial tool.
Contributor:
Monique Miller Assistant Manager Consumer Programs Cards & Payment Unit Sagicor Bank
| 14
MONEY 101 | How to Manage a Credit Card
MONEY 101
INSURANCE
INVESTMENTS
BANKING
The following tips will help you to protect your credit history, and get the most out of your Credit Card: 1. Understanding your credit card statement. A credit card statement provides a detailed summary of your purchase and payment history. Pay attention to the following: » The Balance Due – Pay this amount in full to avoid paying interest. » The Balance Due Date – Best practice is to ensure that your minimum amount due is paid few days before this specified date. » The Minimum Amount Due – Pay at least this amount monthly to keep your account up to date, “in good standing,” and avoid being charged a late fee. » The Interest Rate and Purchase Interest – Your credit card is assigned an annual percentage rate (APR). Pay your full statement balance due on or before the due date each month and avoid being charged purchase interest. 2. Spend within your budget. Keep your balance to an amount that you can afford to repay in full each month. Credit cards are great for every- day spend and emergencies. If you are unable to settle your balance in full, ensure it's well within your credit limit to avoid over-limit fees as well as leave enough funds available on your account to cover any interest or annual fees that may be due.
| 15
MONEY 101 | How to Manage a Credit Card
MONEY 101
INSURANCE
INVESTMENTS
BANKING
3. Cash Advance – Do or Don’t? Cash taken against the credit line on your credit card usually attracts additional fees, as well as a higher interest rates. Interest-free billing period is not applicable to cash ad- vance transactions, as such, interest on cash advances may apply even if your statement balance is paid in full. Taking a cash advance should be a last resort for emergencies. Where possible, pay for transactions with your card instead of taking a cash advance to pay by cash. 4. My Favourite Tip – Use your credit card to pay bills instead of paying by cash. Use funds reserved for your monthly bills, such as groceries and utilities, to make a payment to your credit card by transferring funds via bank account or cash deposit. As a result, you'll be 1) utilizing your credit card to pay for your monthly expenses 2) paying the minimum amount due on your credit card, and 3) earning reward points that can be redeemed for Cash Back to your credit card. 5. Making a payment. At Sagicor Bank, you can make payments to your account using any of the following methods: » Sagicor eBank to make payments from your bank account via our website or mobile app » E-mail requests to debit your account for payments via [email protected] » By Mail send completed payment slip and cheque payable to Sagicor Bank » Visit any Sagicor Bank Branch
The KEY to managing your credit card is to plan your spend, spend within your budget, and paying on time and in full.
| 16
MONEY 101 | How to Manage a Credit Card
MONEY 101
INSURANCE
INVESTMENTS
BANKING
5 Tips for Building Generational Wealth
05
As more people become conscious of their financial wellness, the importance of building a firm financial foundation for themselves and loved ones remains top of mind. F or many individuals, especially parents who want their children to have more opportunities than they did, leaving a legacy for the future genera- tion is an ultimate goal. According to financial experts, when a person achieves this goal it is called genera- tional wealth — passing on meaningful assets to the next generation in a family. But for many families, there has never been any money, real estate, securities, or family businesses to pass on, so the current generation must build the family's wealth. Building generational wealth involves asset acquisition and saving money beyond retirement needs which can be passed on to future generations. This sometimes is easier said than done, especially in light of the current economic situation. Though this can be a daunting topic for many, fortifying your fami- ly's financial strength can be achieved.
Contributors:
Eugenia Wilson Wealth Advisor Sagicor Investments
Tiffany Lawson Financial Advisor Sagicor Life
| 17
MONEY 101 | 5 Tips for Building Generational Wealth
MONEY 101
INSURANCE
INVESTMENTS
BANKING
Below, Eugenia Wilson, wealth advisor, Sagicor Investments, and Tiffany Lawson, financial advisor at Sagicor Life Jamaica, outline five tips for building wealth and changing the trajectory of your family's financial security. 1. Get comfortable learning about money Generational wealth isn't just monetary — it's also knowledge. Spend time to learn about money and how to invest it wisely. Not many of us were taught about money and managing finances, but understanding how it works beyond buying and selling items will aid in wealth building. “After learning how to manage money and invest for yourself, you will be better equipped to teach your children about money and personal finance, and empower them to multiply the wealth you build,” Wilson said. A little goes a long way, and a few thousands today could lead to millions in the future. Starting your investment portfolio right now could be your first step to creating generational wealth. Investing in real estate and the stock market are good financial tools to build wealth for the long term. Real estate is an appreciating asset that will almost always allow you to turn a profit given its many capabili- ties; while being a part of the stock market will allow you to benefit from the profits of the companies listed. “Many persons tell themselves they'll wait until they hit their first million to start investing, but the truth is many of us never get there. No matter how small, there's an investment option for everyone. Get started today,” Wilson encouraged. 2. Invest while you can, when you can
| 18
MONEY 101 | 5 Tips for Building Generational Wealth
MONEY 101
INSURANCE
INVESTMENTS
BANKING
3. Purchase life insurance.
Make the effort to invest in life insurance now to safeguard your family's financial future. Illness, unsettled debt, and burial expenses can put a financial burden on your family, and having life insurance can lessen that financial load. “Life insurance provides financial protection for your loved ones in the event of your passing. Also, with asset acquisition comes the necessity for cash in your estate for expenses such as estate taxes,” Lawson shared. 4. Put aside money for your child's education — open a trust fund. A trust fund is a vehicle that can take you to your destination of generational wealth using varying assets. Lawson explained that putting aside money for your child's education is a sure-fire way to avoid passing on generational debt, which can be a disadvantage to the child after completing school. It also safeguards against your child not being able to pursue higher education because of a lack of funding. “A college education sets up your children to be able to provide for themselves; education is something that can never be taken away. If you can help your children get through university with minimal or no debt, then you are helping to set them up for a brighter and more financially stable future,” she said.
| 19
MONEY 101 | 5 Tips for Building Generational Wealth
MONEY 101
INSURANCE
INVESTMENTS
BANKING
5. Teach your children about money. Explaining concepts such as savings, budgets and goal setting will help your children to learn good money practices. Try starting early by giving them a small allowance to manage or giving financial incentives for extra chores or finishing homework early so they understand the concept of hard work. “It makes no sense acquiring this wealth for future generations if you're not teaching your children how to manage that wealth properly. If they don't learn proper money management skills, it is likely the wealth you leave for them will be reduced significantly throughout their lifetime,” Lawson shared. Although the amount of wealth you can accumulate will depend on several factors, it can become your reality if you are willing to commit yourself to it. The financial and wealth advisors encouraged people to seek help from finan- cial professionals to develop the wealth-building strategies that work best for their families, based on their income and financial situation.
| 20
MONEY 101 | 5 Tips for Building Generational Wealth
Insurance
Protecting you and your family at every stage of life.
MONEY 101
INSURANCE
INVESTMENTS
BANKING
Still Uninsured? Here’s How You Can Afford It
01
You’re ready to get that new car, but before you hit the road, you will need to be insured to legally drive. Yikes! No doubt your everyday financial burdens, coupled with the economic strain of the COVID-19 pandemic, are enough to make you consider walking or taking the bus. Fret not! The good news is that there are quick and simple ways to bring your insurance premium down and make acquiring motor insurance more affordable.
Contributor:
Natalie Anderson General Insurance Advisor Advantage General Insurance Company Ltd. (AGIC)
It goes without saying, it pays to be a safe driver. Keep your premiums low by avoiding accidents and other road hazards.
| 22
INSURANCE | Still Uninsured? Here’s How You Can Afford It
MONEY 101
INSURANCE
INVESTMENTS
BANKING
Here are five tips to help you get the coverage you deserve at prices you can afford: 1. Look for discount opportunities. Hunting for discounts is the key to saving on your premium and there are several discount programmes available to you. At Advan- tage General Insurance, we offer many discounts including the Spousal, Referral and Tracking Discounts; discounts if you restrict the drivers on your policy, if you are a civil servant, if you regularly carry a baby in the car and so many more. We work hard to help you maximize your savings. 2. A higher deductible can save you over time. It’s simple math, increase your deductible and pay less. If you have a good driving record, you probably don’t need a low deductible anyway. (If your vehicle is damaged in an accident, the deductible is the amount you will have to pay towards repairs or that will be deducted from the settlement if your vehicle is stolen.)
3. Drive safely.
It goes without saying, it pays to be a safe driver. Keep your premi- ums low by avoiding accidents and other road hazards. Once you make a claim, you risk seeing a hike in your premium.
| 23
INSURANCE | Still Uninsured? Here’s How You Can Afford It
MONEY 101
INSURANCE
INVESTMENTS
BANKING
4. Evaluate your needs.
Select a policy/coverage that meets your needs and review and update it yearly. (There are many levels of coverage. Ask about our options. They could make a huge difference in what you pay.)
5. Ask for help.
Get help from a General Insurance Advisor (GIA). At Advantage General, we offer personalized service; we will take the business to you.
| 24
INSURANCE | Still Uninsured? Here’s How You Can Afford It
MONEY 101
INSURANCE
INVESTMENTS
BANKING
Break the Myths – General Insurance Tips
02
There’s a lot of information and various perceptions about General Insurance that abound which can be confusing. It’s time to separate facts from fiction. Here are the most common myths, busted! Myth 1: Third party coverage is always cheaper than comprehensive insurance. While it may seem that a lower-level coverage would cost less, this is often not the case. With third party coverage, your insurance company will cover losses to any third party vehicles or property, but loss or damage to your own property will not be covered. With that being said, you might want to consider the costs you would face if you got into an accident — with a third party policy you would have to cover your own repair or replacement costs. A fully comprehensive insurance policy might give you much more for your money and possibly save you thousands of dollars.
Contributor:
Alain Gardener General Insurance Advisor Advantage General Insurance Company Ltd. (AGIC)
A fully comprehensive insurance policy might give you much more for your money and possibly save you thousands of dollars.
| 25
INSURANCE | Break the Myths – General Insurance Tips
MONEY 101
INSURANCE
INVESTMENTS
BANKING
Myth 2: If a friend drives my car and causes an accident, it won’t affect my premium. This is false. Insurance coverage is tied to the vehicle being insured and not the person driving it. There- fore, it’s always best to remember that if you lend your car to a friend, you are also lending them your insurance.
Myth 3: My car insurance pre- mium won’t increase if I don't claim. In an ideal world this would be the case. However, there are many external factors at play that affect the cost of insurance, including market inflation and policy adjust- ments.
| 26
INSURANCE | Break the Myths – General Insurance Tips
MONEY 101
INSURANCE
INVESTMENTS
BANKING
Who is an Advisor and Why Do You Need One?
03
At Sagicor Life, our financial advisors are fundamental to what we do as a life and health insurance provider. But what do they do really? Sagicor Life Financial Advisors are experts in their own right, each boast- ing a wealth of knowledge on life and health insurance policies, as well as financial management on a whole. They help to guide you towards making wise financial decisions that assist you in reaching your personal goals and securing you and your loved ones.
I help my clients to get an idea of their finances and to control their finances. I provide my client with advice on how to manage their money, but not just their money, their overall financial habits. A lot of persons sometimes have bad financial habits. For most persons insurance is an actual need for their financial portfolio. I assess the financial needs and risks of individuals and help them to come to decisions to mitigate the risks, protect their income, accumulate money, and help with long term and short-term financial goals.”
Marlon Campbell Financial Advisor Sagicor Life
| 27
INSURANCE | Who is an Advisor and Why Do You Need One
MONEY 101
INSURANCE
INVESTMENTS
BANKING
‘Relationship beyond business’ Here’s what a financial advisor can do for you:
1. Free Consultation – Our financial advisors offer a free consultation for clients to help create your financial profile. During this consultation they will ask about your short and long term goals and your budgeting and current expenses.
“I help clients to create a customized roadmap for their financial lives. I use my knowledge of the industry and the experience of my mentors to advise my clients so that they can achieve the goals they want to achieve within a specific timeframe.” - Shamar Clarke Financial Advisor, Sagicor Life
2. Help You Achieve Your Goals – Now that a financial profile is in place, our advisors can help you achieve those goals. From assisting with the cre- ation of a budget, to plotting out your roadmap towards financial indepen- dence, your advisor can help you to identify the steps needed to achieve your personal goals.
“I assist individuals and families with achieving their future goals by creating strategies to help eliminate risk and build wealth over the long term. Helping them to achieve financial protection and peace of mind. Building a strong foundation to grow and protect their wealth with the use of insurance, investment, and financial planning.” - Nneka Alveranga Financial Advisor, Sagicor Life
3. Stay on Track – One of the advantages of having a Sagicor financial advi- sor is that they assist in keeping you on track to achieve your goals. Your advisor can schedule a periodic review at an interval most convenient to you, to review your financials and assess if any life changes have affected your needs or goals.
Thinking of getting started with insurance? Sign up for a free consultation today at https://www.sagicor.com/en-JM/Find-An-Insurance-Advisor
| 28
INSURANCE | Who is an Advisor and Why Do You Need One
MONEY 101
INSURANCE
INVESTMENTS
BANKING
Getting Health Insurance for Yourself and Your Family
04
Insurance in general is meant to protect you financially if something bad happens that is expensive to fix or recover from. You might get insurance for your car, life, your home or even property that you own. When you have insurance, you pay a little bit each month and in the event If there is an accident of any kind, the insurance company will help cover some of these costs for you. Health insurance does even more. It pays for the big, unexpected events, but also for some of the smaller, more expected things. For example, it helps with
Contributor:
André Wayne Guest Writer
the cost if you are in the hospital, and also when you get a routine check-up. This is great because it means you can take care of any small health problem as soon as you notice it, rather than waiting until the problem gets worse and you become really sick.
| 29
INSURANCE | Getting Health Insurance for Yourself and Your Family
MONEY 101
INSURANCE
INVESTMENTS
BANKING
If you don't already have health insurance, you may think you don't need it, but what happens if you're in a car accident or your child or spouse has a fall that causes them to injure themself? Did you know that a trip to the emergency room can be costly? Then what happens if you get hospitalized, and you need some medical care for a month or more? It’s a gamble that is not worth taking and with the right health insurance, you can manage these events that could affect you or your family without warning. If you do not have insurance, these bills will add up fast and have a devastating effect on your financial health."
Barbara Grant Financial Advisor Sagicor Life
No matter what type of Sagicor health insurance you choose to have, your plan will help you pay for the following important health care services: 1. Outpatient care - this is the kind of care you can access without being admitted to a hospital 2. Lab tests - this is for blood tests or any other related lab work you may need to get done 3. Prescription medicines - this allows you to obtain medication from your pharmacy at a reduced cost 4. Preventive wellness services and chronic disease management - this includes doctor’s visits to learn how to manage non-communicable diseases (NCDs such as hypertension, asthma, diabetes and heart disease, among others. 5. Emergency room visits - this is for serious, sudden problems that require urgent and immediate attention such as broken bones, heart attacks or bad accidents.
| 30
INSURANCE | Getting Health Insurance for Yourself and Your Family
MONEY 101
INSURANCE
INVESTMENTS
BANKING
6. Hospitalizations (such as surgery) - this is when you are admitted and you get treatment in the hospital for inpatient care. 7. Prenatal and postnatal Care - this is for expectant mothers before and after their baby is born. 8. Dental and vision care - this is for visits to the dentist for oral care and visits to the optician, optometrist or ophthalmologist for sight care of the eyes.
Companion Plan is designed for full time, enrolled students in Jamaica up to twenty one (21) years of age and provides a wide range of fea- tures including a major medical ben- efit of up to JMD$1.5 million dollars annually, based on the plan option chosen. In Jamaica today, we all need health insurance: you do and so do your children. It is no longer a "nice thing to have" anymore, it is a must-have and you have to safeguard your family’s health care needs with the best insurance coverage available and that’s with Sagicor. Speak with a financial advisor today and visit www.sagicor.com to learn more about Jamaica’s premier health care insurance provider.
Now more than ever, having the right insurance to secure your fam- ily’s health care needs is one of the most important monthly expenses that must be in your budget. To help you, Sagicor provides options that ensure you can protect your family in any health emergency. Whether it be their Child Protector Plan or their School Companion Plan, getting the very best health care insurance for your family is easy, with Sagicor. The Child Protector Plan is an under- written critical illness plan that is available for children ages three (3) months to fifteen (15) years. Among its features are a hospitalization ben- efit as well as an investment compo- nent with the insured amount ranging from JMD$1 million to a maximum of JMD$10 million dollars. The School
| 31
INSURANCE | Getting Health Insurance for Yourself and Your Family
MONEY 101
INSURANCE
INVESTMENTS
BANKING
Pension 101 05
“There is a whole new kind of life ahead, full of experiences just waiting to happen. Some call it ‘retirement.’ I call it bliss.” –Betty Sullivan Retirement is an important milestone in an individual’s life. It is a time of relaxation, introspection and free- dom from the responsibilities of full-time employment. Many individuals are unaware of the importance of retirement and the short period of time allotted for planning a stress-free life.
Contributor:
Shanika Williams Indexing Assistant Sagicor Life
Pension funds can provide retirement income that is guaranteed for life.
| 32
INSURANCE | Pension101
MONEY 101
INSURANCE
INVESTMENTS
BANKING
Here are tips on how to save towards your pension:
1. DEFINE RETIREMENT GOALS Retirement planning is an essential aspect of an individual’s lifestyle choice. Formulating clear goals for the future will assist in the financial planning in the early stages of employment. An individual may have several goals such as travelling overseas or owning real estate. It is essential that savers ensure that their targeted goals are attainable with the projected financial budget by planning early. 2. FOCUS ON FINANCIAL PLANNING Personal financial planning is focused on management of income and expenditure which includes savings and investments. The goals con- structed in the first stage will assist with financial planning, as savers will be able to afford the retirement lifestyle outlined in the first stage. If an individual, for example, decides to become a property owner, they will need to invest in real estate bonds as well as additional stocks and schemes. The goals outline will determine how much an individual has to save and how they can prepare for unexpected situations.
| 33
INSURANCE | Pension101
MONEY 101
INSURANCE
INVESTMENTS
BANKING
3. CONTRIBUTE TO A PENSION SCHEME/FUND Employees and individuals can participate in a pension arrangement that will provide income at retirement. Employees can choose to par- ticipate in a Superannuation Fund or a Retirement Scheme while indi- viduals can participate in an Approved Retirement Scheme . Sagicor manages these funds through their Employee Benefits Administration division which is regulated by the Financial Services Commission of Jamaica (FSC). The funds in the retirement plans are pooled together and invested in different types of assets such as real estate. Savers can gain return on investments. The returns also assists with developing the retirement fund that is available to contributors at retirement. An individ- ual however, cannot contribute over 20% to a scheme. 4. MONITOR STATUS OF FUNDS/SCHEME As the time progresses, there may be an increase in medical costs, transportation, groceries and other expenditures. The objective of the pension fund invested always provides returns equal to or greater than inflation. The fund ensures that benefits maintain its purchasing power after the contributor retires. Additionally, contributors of pension plan managed by the EBA are able to register online through the My Sagicor portal to view the current status of their funds. 5. ENJOY THE JOURNEY Retirement may seem to be in the distant future but it's never too early to start planning to enjoy what life has to offer at retire- ment. If you are interested in learning more, visit our website at https://www.sagicor.com/en-JM/Personal-Solution/Pension .
| 34
INSURANCE | Pension101
Investments
What's important is not timing the market...It's time in the market.
MONEY 101
INSURANCE
INVESTMENTS
BANKING
10 Habits That Rob You of Your True Wealth
01
Contributor:
Irrespective of how you define wealth, there are a few habits that you should avoid in order to achieve true wealth. While the list that follows is by no means exhaustive, it contains some of the most common missteps that individuals often make until they become bad habits. 1. A poor mindset Stop thinking that wealth is something that you can- not achieve. There are far too many experiences shared by individuals who started with nothing and despite several hardships are now wealthy, disprov- ing the myth that true wealth is not for everyone. Believe that you can achieve true wealth, plan for it, execute your plan and you will. 2. Lack of an Emergency Fund Not being prepared for emergencies can rob you of your wealth. Setting aside cash for unplanned situa- tions will help to reduce stress and avoid debt with the added benefit of keeping your financial goals on track.
Melicia Jones Wealth Manager Wealth & Corporate Relationship Management Sagicor Investments
Avoiding big financial mistakes is more important than making great financial decisions.
| 37
INVESTMENTS | 10 Habits That Rob You of Your True Wealth
MONEY 101
INSURANCE
INVESTMENTS
BANKING
3. No financial plan for retirement Recent graduates and entry-level workers often put off investing for their retirement until later, however, starting early is the key to unlocking your true wealth at retirement. Bonus tip: Contribute the maximum allowable amount to your company pension plan; this comes with an added tax incentive. 4. Being overly conservative with investments Keeping your savings in low risk money market instruments only, such as a bank savings account or Repurchase Agreement, could put you at risk of having inflation steal your spending power over time. 5. Impulse Spending Frequent impulse purchases, such as purchases driven by extreme emotions of euphoria, anger and sadness, can derail your financial goals. Instead, create a shopping list focusing on your needs. This will help to curb unnec- essary purchases and allow you to have more cash for investments that provide a return.
| 38
INVESTMENTS | 10 Habits That Rob You of Your True Wealth
MONEY 101
INSURANCE
INVESTMENTS
BANKING
6. Not shopping around Compare prices for goods and services you use regularly, especially for large purchases (e.g. car, house). Make use of the Internet to shop around to find the best prices. Remember to negotiate; most companies will negotiate if you can show that other companies offer the same products or services cheaper. Take advantage of coupons and deals when bargain shopping. 7. High interest loans High interest loans make it hard to attain your wealth aspirations. Consider refinancing installment loans, such as mortgages and motor vehicle loans at a lower rate whenever possible. 8. No debt reduction plan It is essential to have a plan to pay off debts early if you want to have a successful financial plan. Focus on paying off high interest loans first; as pre- viously mentioned, refinancing can allow you to pay down debt faster. Doing this will allow you to save more cash and pay down all your debts faster. 9. Only paying the minimum on credit cards Try to pay off your entire credit card balance instead of only paying the mini- mum amount monthly. A credit card is a high interest loan and if you only pay the minimum monthly amount you are not reducing your debt, rather, your balance may very well be increasing with accrued interest over time. Practise to clear your balance monthly while you enjoy the benefits of reward points and purchase protection that most credit cards offer. 10. Keeping up with the Joneses Trying to keep up with family or friends who spend lavishly or live beyond their means could influence you to make poor spending decisions and result in high debt. Stop caring what others think about your financial status and focus on achieving your goals at your own pace. Commit to sacrificing your short-term wants by focusing on creating financial freedom for yourself and try to stay out of debt and save more.
| 39
INVESTMENTS | 10 Habits That Rob You of Your True Wealth
MONEY 101
INSURANCE
INVESTMENTS
BANKING
Stop Being Broke -
Wealth Tips 02
F or generations, we had the mindset that wealth can be attained only if you have a certain last name, a specific skin colour or if you’re from a particular demographic. Don’t get me wrong, his- tory has proven that these conditions have unfortu- nately created limitations for many. However, as it is with peace, success and happiness, wealth can be attained by anyone! Your current financial situation can and WILL change. First, by changing your mind- set and believing that you deserve to be financially free, and secondly, by partnering with a financial institution that cares about you and your future. Leave the “mi bruk” mindset in 2020. Sagicor Invest- ments is committed to creating wealth for everyone. We believe that persons from all walks of life deserve to have access to premium rates, world-class ser- vice and expert advice. Don’t believe me? With only J$500 , you can have access to a multi-billion dol- lar investment; giving you a chance to invest in the same financial instruments as someone who has ten million dollars.
Contributor:
Eugenia Wilson Wealth Advisor Sagicor Investments
The earlier you begin to invest,
the more time your money has to grow.
| 40
INVESTMENTS | Stop Being Broke - Wealth Tips
MONEY 101
INSURANCE
INVESTMENTS
BANKING
In investing, simple almost always beats complex. The best investment is often the one that you can hold for the longest time period. Ensure that your Asset Allocation is appropriate for you.
Here are some tips to help you get started on your new financial journey. 1. Outline your investment goals Whether it is retirement, a real estate purchase or even to pursue higher education, jot it down. 2. Evaluate your current finances Be honest with yourself and create a budget if you haven’t already done so. You need to save in order to invest!
3. Read up
Your advisor is there to guide you every step of the way but learning a few basic terminologies will definitely assist you to make decisions about your portfolio.
| 41
INVESTMENTS | Stop Being Broke - Wealth Tips
MONEY 101
INSURANCE
INVESTMENTS
BANKING
4. Make your investments automatic Consider doing salary deductions, pay yourself first! 5. Don’t put all your eggs in one basket Discuss with your advisor about diversifying your investment portfolio to minimize your risk exposure. 6. Follow up It is important to study your portfolio, what works for you today, may not
Dollar-cost average for your entire life and you'll beat almost everyone who doesn't. The longer you stay invested the greater your chance of achieving your goal.
work for you tomorrow. It will also keep your advisor on their toes!
7. Keep informed
It is a good idea to read up on the types of investments that you have made or even keep in the company of other enthusiastic investors to keep up with market trends, locally and globally. Be deliberate, be open, be consistent and we will do the rest. Be the change in your family. Generational wealth begins with you!
| 42
INVESTMENTS | Stop Being Broke - Wealth Tips
MONEY 101
INSURANCE
INVESTMENTS
BANKING
Stockbrokerage
Basics 03
What is a stock? A stock represents a share of ownership in a com- pany. Owning stocks means you own a slice of a public company. When a company needs to raise money to expand, it may sell stocks to the general public. Owners of shares are referred to as shareholders. Why purchase stocks? Shareholders benefit when a stock price goes above the point they purchased. When they sell, they claim the profits made from price appreciation. Shareholders benefit by way of dividend (a distribu- tion of a company’s earnings to its shareholders). They also participate in the development of a listed company. What affects a stock’s price? » Supply and demand forces » Investor confidence » Future prospects of the company – Is growth/ decline expected? » Market conditions » News releases on earnings and profits/losses
Contributor:
Dominic Jones Wealth Advisor Sagicor Investments
Risk vs Reward Stocks have historically provided higher returns than less volatile investments. If you have decades to stay
invested, you have time to ride out the downturns.
| 43
INVESTMENTS | Stockbrokerage Basics