What can we learn from the Spanish flu?
Another month has passed, and it is time for us to step back and get some perspective
Covid
Things are starting to get real on this front.
The negatives
As the disease has progressed, many of our friends and family getting ill and, in some instances, dying. I was really rattled by some deaths that were close to home this month.
We have rocketed up the Covid infection table and now have the 5th highest number of Covid infections in the world
Alcohol has been banned again
The positives
Based on what has happened in the rest of the world, New Covid infections follow a pattern.
It will get better! I have taken the bold step of booking a end of year holiday
The progress towards finding a vaccine is looking positive. The frontrunner is the one from Oxford University – this is particularly good news for many of my clients as it makes up 5% of the Sygnia fund that I have been recommending since last year
The death rate in South Africa is significantly lower at 1.5% than it was when Europe peaked at 6%. We haven’t peaked as a country yet but these initial numbers are promising
If you are interested in finding out more about Covid, the chief medical officer of one of the big life assurance companies will be hosting a webinar next Tuesday at 5.30pm. Drop me a line and I will forward you an invitation
JSE
The JSE grew by 3.4% over the past 30 days – despite a couple of ups and downs. We do expect there to be lots of these ups and downs over the coming months.
Interest rates
We are expecting interest rates to be reduced again – it is currently 3.75%. Great news for those with debt but bad for those who are living off fixed deposits
Spanish Flu
I attended a webinar on the Spanish Flu of 1918, given by my old history professor, Howard Phillips.
A couple of things he said resonated with our current situation:
1. There was an unprecedented number of orphans created because of the epidemic
This worries me - if a person gets Covid, there is a good chance that the partner will be infected. I am concerned that we could have an explosion in the number of orphans over the next year.
As parents, we need to plan for the unthinkable. Get the wills sorted and identify guardians and trustees.
2. There was a boom in life assurance
It is not a coincidence that companies like Sanlam and Avbob were founded in 1918. The financial ruin that families faced because of the breadwinner dying, highlighted the importance of having protection.
Let’s learn from the past and check that we have the necessary cover in place.
If you want a quick life assurance health check, do the following:
a) Add up all your debt including your home loan – you must have enough cover to meet this
b) Take your monthly budget and multiply it by 300 – this lumpsum will give your family enough income to meet their monthly obligations
Your life cover should at least be a + b
The above is very rough estimate and must not be seen as advice. I will gladly do it scientifically for you, using one of my fancy programmes.
Retrenchments
I have been spending a helping people get their finances sorted after being retrenched. There are two things that are often overlooked:
Medical aid
It is vitally important that there be no breaks in cover. You do not want to be underwritten and have waiting periods applied – especially when there is a deadly pandemic afoot.
Continuation options
Many pension funds allow retrenched employees to take out individual policies at the level of their company risk benefits without any underwriting. This is a great benefit for older people or those with a health issue. This usually has to happen within 30 days of the retrenchment.
If you come across any friends or family who are being retrenched, please pass on these tips.
Till next month
Keep safe
Regards,
