1. A New Johannesburg – Feel the Beat
2. How Robert Kiyosaki Created The Sub-prime Crisis
3. That Sinking Feeling
4. Now May Be The Time For You To Buy Shares For Dividends
5. Whether It's Time To Buy Shares Is A Question Of Value
6. Who's Been Swimming Naked?
7. Beware A Meltdown Of Your Living Annuity
8. How To Create A Budget
9. How To eFile Your ITR12 Tax Return
10. Thought for the Month
A New Johannesburg – Feel the Beat
Reinvention is the mother of prosperity... that’s a new take on an old saying and it’s much like what what’s happening in and around Johannesburg’s Central Business District. Urban regeneration is nothing new. It’s happening all over the world, but the pace of change in Johannesburg is what is attracting attention.
Only 119 years old, Johannesburg is one of the youngest major cities in the world yet it has already been rebuilt four times. From its beginnings as a tented camp and subsequent tin shanty town, it has metamorphosed from a hub of four-storey Edwardian brick buildings into a city of modern skyscrapers. Covering an area of 2 300km2, the greater Johannesburg metropolis is larger than London or New York and is home to just over three million people. It’s huge, and like all major cities in the world, it has been through a series of waves of development and degeneration.
Perhaps the most marked – and certainly the most rapid – decline resulted from the mass exodus of retailers and businesses from the CBD to the city’s northern suburbs during the 1980s and 1990s. The concrete jungle became a pretty dangerous space. Crime and grime reigned supreme – and the city’s future looked bleak.
But as the country’s economic fortunes changed, so too did the outlook for the CBD. A nationwide property boom and escalating costs of rentals prompted a relook at opportunities within the city centre. Entrepreneurs, brave developers and even some of the established traditional businesses started to put their money where the moths were.
Since 2001, the private and public sector has invested around R9-billion on various urban renewal projects in and around the city with billions more expected to be spent as the rejuvenation effort gains momentum and 2010 approaches.
The revitalisation of Johannesburg’s CBD is seen as a catalyst for growth and job creation as well as for creating a work and living environment that is secure and decent. Despite the challenges posed by the crime rate, capacity shortfalls in public services, taxi management and informal trading, and the poor condition and mismanagement of some inner city buildings, major strides have already been made in addressing these challenges.
Safety remains both a concern and a top priority, with initiatives in place to improve urban management and security in Johannesburg. From as far back as 1993, Central Improvement Districts (CIDs) have been established where the private sector supplements and complements the City’s services (such as security and cleaning). The installation of a multi-million rand closed circuit television (CCTV) network that monitors known crime hot-spots has also reduced criminal activity, Heightened efforts by the Metropolitan Police Department will also help make the city a safer place to live, work and visit.
Johannesburg is undoubtedly the economic powerhouse of the African continent, with some 1 million commuters coming by rail, road and bus into the city every day and between 300 000 to 400 000 migrant shoppers each year. The daily spending power in the city is vast and people need places to shop, eat, meet, exercise, relax, play and of course ... live.
Already, over 250 000 people live permanently in the city – with more moving in droves, attracted by the lifestyle, affordability of property, and convenience of living close to their place of work.
Billions of Rands have been spent on property in the inner city, with around 10 000 additional residential units already been created through new developments, refurbishments and conversions of old office blocks. An estimated 45 000 to 50 000 new residential units could still be developed.
Collaboration between the private and public sector demonstrates the power of shared resources. Private sector companies such as Aengus Property Holdings have also seen commercial opportunities and have already built or converted distressed office blocks into top quality residential units.
Investors and owner-occupiers benefit from the Urban Development Zone tax incentive which government introduced four years ago, which enables a 30% tax deduction from all income earned in the first five years, once a building has been refurbished. Investors also benefit from the special rates rebate of 40% for all properties in identified inner city suburbs where at least 80% of the building is reserved for residential use.
Developers are having a good time, with demand far outstripping available stock. When Aengus property Holdings put two of their converted office blocks, the New York styled Tribeca Lofts development and the luxury Lofts@66 onto the market recently, units sold out in a few days.
There is massive shortage of residential property in the city centre - there seems to be an insatiable demand for housing - from basic accommodation to upmarket lofts and penthouses – and developers are working hard to identify suitable buildings, get the necessary approvals and deliver quality units to try and meet some of this demand.
Aengus Property Holdings has been a leading force in the energetic drive towards inner city regeneration since 2005, enjoying sell-out successes with its trademark conversions of inner-city commercial buildings into desirable, upmarket residential accommodation.
Rental demand for properties within the Aengus portfolio in some cases outstrips supply ten times. The typical tenant in one of Aengus’ 1 300 loft apartments, bachelor pads and penthouses, is young, employed at a blue chip organisation in the city and earns anything between R6,000 – R20,000 per month. These upcoming professionals want to enjoy the benefits of high-security, fashionable and furnished accommodation.
Subsidiary, Aengus Property Management, which was initially set up as a dedicated in-house service, has quickly carved a name for itself as a market leader in property management. Its reputation stems from its innovative, effective approach to issues such as security and access control, building cleaning, facilities management and maintenance as well as a track record of 100% rental collection with zero arrears.
An inner city lifestyle is enormously appealing. Traffic in the greater Johannesburg area is getting worse, and people want to live closer to their workplace from a convenience and a cost perspective. Living in the city is a very first-world lifestyle, and increasing numbers of trend-setting urbanites are discovering the benefits. The mix of shops, cinemas, restaurants, cultural and leisure centres, business, informal and formal trade and quality public spaces is a compelling combination and the push from investors, developers and property owners, will fuel the general upgrade of the inner city area.
In translating their vision into reality, Aengus Property Holdings has injected the city with a much-needed housing boost, given investors a high-end product and provided thousands of young professionals with a place they can proudly call home.
Johannesburg just may be the pot of gold at the end of the rainbow nation!
How Robert Kiyosaki Created The Sub-prime Crisis - Wayne Lee
And why some South Africans missed it.
Quite a strong statement bit here's my theory.
In 1991 I studied a Commercial Finance course which explained gearing. In my first job at "The Receiver" my manager had a property and I used to go fetch the rent with him. I put two-and-two together and started buying some for myself, friends and family. Not many people agreed with what I was doing.
That Sinking Feeling - Jackie Cameron
As banks, property players warn of more pain to come, some owners are considering selling up and cutting their losses. They are wondering whether their money would be better invested elsewhere - like a money market account or even shares.
After all, it seem they will lose money, not only when taking inflation into account but also looking at the face value of their properties, from now into next year. Big banks like Absa and Nedbank expect property prices to fall and do not think things will improve until at the very least mid-2009.
Even some normally-upbeat estate agency bosses, like Andrew Golding of the large Pam Golding Property group, think residential property prices will drop next year.
Owners with big bonds in relation to the price paid for the properties are worried, too, about something called "negative equity". This is when you owe more than a property is worth.
For many people, though, the issue is even more basic than weighing up where they are likely to get the best returns: they simply don't have the money at the end of each month to repay a home loan and other debts.
Now May Be The Time For You To Buy Shares For Dividends - Bruce Cameron
Mayhem, blood on the streets, global meltdown - no term would be an exaggeration to describe what happened on world stock markets this week.
And no one can really tell us whether this is the end of it all.
The market turmoil is a disaster for many millions of South Africans. Those with lots of debt or high exposure to equities - particularly if they are near or in retirement - will feel the pain.
But for those with money in the bank, now may be the time to consider buying equities, albeit very selectively and cautiously.
In my view, the main reason for buying shares is to take advantage of the profits that publicly listed companies pay in the form of dividends. And the less you pay for a share relative to the profits earned and distributed, the more you score.
And the sooner you buy the shares and the longer you hold onto them, the greater the profits you will earn in proportion to what you paid for the shares.
Whether It's Time To Buy Shares Is A Question Of Value - Bruce Cameron and Laura du Preez
Now could be an ideal buying opportunity if you believe shares are trading at prices that are less than their true value. We report on what the experts have to say about the prospects for company profits and share prices.
Warren Buffett, the world's most successful investor, got rich because he has always bought value.
In other words, he bought shares when they were under-valued and held on to them.
And right now there may be value in equity markets, both here and abroad.
If you invest in under-valued shares, you benefit from the capital gain when shares' prices rise to their correct values or beyond.
As the shares improve in value, you also receive a better return (dividend) as a percentage of the cost of your shares.
Underlying these two judgments is the simple word "profits" and the distribution of those profits.
Who's Been Swimming Naked? - Julius Cobbett
Warren Buffett once said it's only when the tide goes out that you learn who's been swimming naked. Similarly, now that the tide has turned on stock markets, fund managers have experienced widely differing results.
Fund manager performances differed by a massive 35 percentage points last quarter. That is for funds that may invest across all major sectors of the JSE.
The best-performing fund was Investec's Value Fund, with a return of 9,7%. The worst-performing fund was Stanlib's Nationbuilder which lost 25,3%.
Beware A Meltdown Of Your Living Annuity - Bruce Cameron
The people most at risk in the current market meltdown are pensioners who have invested their retirement savings in an investment-linked living annuity (Illa). If you are an Illa pensioner you must be very, very careful. If you are not careful you will face penury a few years down the line, particularly if the current market conditions prevail and inflation rates remain high.
The biggest single danger in opting for an Illa, instead of a guaranteed annuity, is that the responsibility for the underlying investments and the investment risk is entirely yours.
And investment risk is not the only problem.
While market collapses are sudden killers, inflation is a slow, cancer-like and ultimately very painful killer for everyone on a pension that does not increase with inflation. Combine the two in a living annuity and then throw in bad underlying investment choices and an unsustainable pension drawdown rate, and you have a short-term disaster from which you will never recover.
Creating a budget may not sound like the most exciting thing in the world to do, but it is vital in keeping your financial house in order. Before you begin to create your budget it is important to realize that in order to be successful you have to provide as much detailed information as possible. Ultimately, the end result will be able to show where your money is coming from, how much is there and where it is all going.
Difficulty: Easy
Time Required: 30 minutes to 1 hour
1. Gather every financial statement you can. This includes bank statements, investment accounts, recent utility bills and any information regarding a source of income or expense. The key for this process is to create a monthly average so the more information you can dig up the better.
2. Record all of your sources of income. If you are self-employed or have any outside sources of income be sure to record these as well. If your income is in the form of a regular paycheck where taxes are automatically deducted then using the net income, or take home pay, amount is fine. Record this total income as a monthly amount.
3. Create a list of monthly expenses. Write down a list of all the expected expenses you plan on incurring over the course of a month. This includes a mortgage payment, car payments, auto insurance, groceries, utilities, entertainment, dry cleaning, auto insurance, retirement or college savings and essentially everything you spend money on.
4. Break expenses into two categories: fixed and variable. Fixed expenses are those that stay relatively the same each month and are required parts of your way of living. They included expenses such as your mortgage or rent, car payments, cable and/or internet service, trash pickup, credit card payments and so on. These expenses for the most part are essential yet not likely to change in the budget.
Variable expenses are the type that will change from month to month and include items such as groceries, gasoline, entertainment, eating out and gifts to name a few. This category will be important when making adjustments.
5. Total your monthly income and monthly expenses. If your end result shows more income than expenses you are off to a good start. This means you can prioritize this excess to areas of your budget such as retirement savings or paying more on credit cards to eliminate that debt faster. If you are showing a higher expense column than income it means some changes will have to be made.
6. Make adjustments to expenses. If you have accurately identified and listed all of your expenses the ultimate goal would be to have your income and expense columns to be equal. This means all of your income is accounted for and budgeted for a specific expense.
If you are in a situation where expenses are higher than income you should look at your variable expenses to find areas to cut. Since these expenses are typically essential it should be easy to shave a few dollars in a few areas to bring you closer to your income.
7. Review your budget monthly. It is important to review your budget on a regular basis to make sure you are staying on track. After the first month take a minute to sit down and compare the actual expenses versus what you had created in the budget. This will show you where you did well and where you may need to improve.
How To eFile Your ITR12 Tax Return - Laura du Preez
This guide explains how you, as an employee with common allowances and deductions, can submit your ITR12 tax return online (eFile it).
Success is not final, failure is not fatal: it is the courage to continue that counts.
- Winston Churchill (1874 - 1965)
