• Change of culture needed

    The right leadership will help SA shed its culture of violence, says Mandi Smallhorne.

  • 10 tips to find bargains

    Susan Erasmus gives advice on how bargain hunters can get the most bang for their buck.

  • Inside Labour

    Labour's bitter breaches need to be seen in historical context, says Terry Bell.

All data is delayed
See More

Policy payout: what should I do?

Dec 20 2012 07:33
Rand notes

(Picture: Shutterstock )

Related Articles

Reality check for business owners

Surviving the first 3 to 5 years

Funding frustration

SA's own Sergey Brin and Larry Page

Red tape hassle

Make the most of 2013

An entrepreneur wants to know what to do with his policy payout. A Fin24 user writes:

I am a 39-year-old business owner and recently had a policy payout - a cash amount of R65 000.

My question: do I reinvest the amount somewhere else, buy something like unit trusts etc, use it to buy some shares or pay off my credit card and other accounts/cards, the total amounting to more or less the above-mentioned amount?

Christo Botes, executive director at Business Partners, answers:

You are a privileged business owner to have limited debt.

I assume that the business does not need any capital injection to expand, and that the cash flow generated from the business is adequate to pay the day to day expenses and suppliers of your business.

I also assume that the R65 000 policy payout was made to you in your personal capacity outside the business.

You are still relatively young and with your business being on a sound footing and able to pay you a decent salary, you can also service your personal debts such as your credit card and other accounts/cards.

Normally these cards/accounts do not bear interest if they are serviced and kept up to date every month.

I would therefore as a first choice reinvest the amount for rainy days that might come and/or for in 20 years, when you are approaching 60 and might have to start thinking of scaling down.

The type of investment depends on your risk appetite, but at your age it might be wise to be a bit more aggressive with higher growth share investments with long-term potential.

 - Fin24

Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers.

Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.

*Share your experience of setting up your own business, or simply ask a question. Our business panel can put you on the right path.

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.



Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Add your comment
Comment 0 characters remaining

Company Snapshot

Brought to you by BizNews

More from BizNews

We're talking about:


Johannesburg has been selected to host the Global Entrepreneurship Congress in 2017. "[The congress] will ensure that small business development remains firmly on the national agenda and the radar screen of all stakeholders, the Small Business Development minister said.

Top 10 richest musicians of all time

Check out the gallery to find out who they are!


Luxury living

10 most expensive cars In the world
10 of the most expensive things that will leave your jaw hanging!
Seven of the most expensive children's toys ever made
5 millionaires turned murderers

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

How do you see your boss? He/sheis:

Previous results · Suggest a vote