• How do I know if I am saving enough?

• What should I be investing in now?

• What does a good retirement plan look like?

• How much money do I need for retirement?

There are no general answers to questions like these as each person has different goals and different means to achieve them.

However what I did a long time ago, to permanently answer all the above questions for me, was to write out an investment plan that clearly states how and what I want to achieve with my investments.

And I urge you to do the same.

You can do it quickly and easily. And you will benefit hugely as it will give you a solid foundation from which you can make all your financial decisions.

Please take the time to do this; I know that you have 200 other things that require your attention but this is really important.

It will take a bit of thinking but will be more than worthwhile. Not just for your own peace of mind but it will also get rid if a lot of the continuous questions you have to answer concerning your finances because they will already be answered.

I have put together four questions to quickly get you 80% of the way to planning your financial future. Make yourself a cup of coffee or tea and take 15 minutes to answer the following:

What do you want to achieve financially?
How much money do you want to have accumulated or what income do you want to have at what age.


How and where will you save?
How much will you save monthly and yearly and where will it be held.

I have a goal of saving 20% of my net salary. It was very difficult at first until I implemented a system where the amount gets deducted from by salary as I receive it. I save automatically and because I do not have the money I don’t spend it.

I have found that budgeting, where you try to save something at the end of the month, just does not work.

I have a separate investment account that is used exclusively for investments. This is to ensure that I use the funds only for investments and am not tempted to spend it. Also all dividends, interest earned and investments sold are re-deposited into this account to be used for further investment.


How will I manage it?
How are you going to invest the savings you have accumulated? In investment funds or in equities or bonds directly? This will largely be determined by your risk tolerance. The lower your tolerance for risk the larger the bond part of your portfolio.

I have decided that my funds will be invested in equities using a value based investment strategy. Investments will be made in companies with low price to earnings and price to book ratios as well as low debt levels with good cash generation. Investments will be held for long periods in order to maximise profits as well as keep dealing costs and taxes as low as possible.

When and why will I take money out?
As mentioned I do not withdrawn any funds from this account for spending. The bulk of profits and savings are added to the account to be utilised for further investment.



After answering all the questions you have to make sure that the answers fit together. For example, if your have a low tolerance for risk you cannot use equity return expectations to achieve your goals.

Also you have to make sure that your end goal can be reached with your current savings, additional savings and historical returns of the instruments (equities, bonds, savings accounts) you are going to invest in.

What I have also found valuable is to visualise yourself at the age of 80 looking back and reviewing your investment successes and failures. This will give you a few additional ideas you may want to incorporate into your plan.


Review your plan every six months to keep it fresh in your mind and to ensure that you stick to it.

You have to feel so confident with your plan that you will be able to stay with it in good and bad times.


This has been my way to formulate your financial plan. A more comprehensive questionnaire can be found on the Morningstar website titled Creating Your Investment Policy Statement

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Prosperous investing

Tim du Toit

P.S. A media company in the wrong country at the wrong time...