In the tough financial and economic times that we find ourselves in, the most astonishing thing that I see on a day to day basis is that clients make investments or pay their monthly retirement annuity contributions for years and years without asking one of the most important question of your investment journey….. what was my return on investment?
How can you make an investment with your hard-earned money without asking this fundamental question?
Today I want to motivate you to start asking the hard questions.
- What has my annual investment return been since inception?
- What is my annual investment cost?
The reality is that if you have an investment or retirement annuity that does not outperform inflation (4 – 6% p.a) you are getting poorer day by day.
It is however shocking to see that some of the insurance/investment companies doesn’t have the ability to report this to their clients as part of their standard business practice. As if they don’t want clients to easily access this information.
In most instances these companies investment cost are significant and therefore the investment performance after fees are usually embarrassing.
Why is this question so important? Let’s see what impact 2% can make on your investment outcome over a long period.
Example 1: R 5 000p/m invested over 20 years at 9% return will leave you with R 3 309 612
Example 2: R 5 000p/m invested over 20 years at 7% return will leave you with R 2 584 557
This 2% difference in performance has a massive R 725 056 (28%) effect at the end of the day.
You can either take control of your financial future asking the right questions and making the right decisions, or you can put your faith in a system that has disappointed so many people.
If you want to find out what your performance has been on any investment product, do not hesitate to contact us.
Heinrich Coomans | CA(SA) | CFP ® is a Director of SPI WEALTH. For enquiries contact, heinrich@spiw.co.za or 013 752 6566
