Day: 6 October 2023

Growing Your Wealth Sustainably: A Guide to Sustainable Investing Sustainable Investing. Photo Credit: Canva

Growing Your Wealth Sustainably: A Guide to Sustainable Investing

tshepisosishuba Posted on 12 months ago

In a world increasingly aware of environmental and social issues, sustainable investing has emerged as a powerful financial strategy that not only aims for financial returns but also promotes positive change. This approach, often referred to as “ESG” (Environmental, Social, and Governance) investing, allows investors to align their financial goals with their values and contribute to a more sustainable and equitable future. In this article, we will explore the concept of sustainable investing, its benefits, and how you can get started on your sustainable investment journey.

Editorial Note: We earn a commission from partner links on Money Unscripted blog. Commissions do not affect our editors' opinions or evaluations.

Understanding Sustainable Investing

Sustainable investing goes beyond the traditional notion of seeking financial returns alone. It involves considering the broader impact of your investments on the environment, society, and corporate governance. Here’s what each component of ESG investing entails:

Environmental (E): Investments that consider environmental factors aim to support companies and projects that are committed to reducing their carbon footprint, conserving natural resources, and mitigating climate change. This includes investments in renewable energy, clean technology, and sustainable agriculture.
Social (S): Socially responsible investments focus on companies that prioritize social issues such as diversity and inclusion, labor practices, human rights, and community engagement. These investments support businesses that contribute positively to society.
Governance (G): Governance-related investments assess how companies are managed and governed. This includes evaluating corporate leadership, transparency, accountability, and ethical practices. Companies with strong governance practices are often considered more attractive to sustainable investors.

The Benefits of Sustainable Investing

Alignment with Values: Sustainable investing allows you to invest in companies and initiatives that reflect your personal values and beliefs. It’s a way to put your money to work in a manner that aligns with your ethical and environmental principles.
Long-Term Resilience: Companies that prioritize sustainability are often better equipped to weather economic and environmental challenges. Sustainable investments can provide resilience and stability in your portfolio over the long term.
Financial Performance: Contrary to the misconception that sustainable investing yields lower returns, numerous studies have shown that ESG-focused investments can be financially competitive with, or even outperform, traditional investments.
Reduced Risk: Sustainable investing often involves rigorous risk assessment, which can help identify and mitigate potential risks in your portfolio, including regulatory, reputational, and environmental risks.

Getting Started with Sustainable Investing

Define Your Values and Goals: Start by identifying your values and what you hope to achieve through sustainable investing. Do you want to combat climate change, promote social justice, or support ethical business practices? Clarifying your objectives will guide your investment decisions.
Research and Education: Educate yourself about sustainable investing options. Familiarize yourself with ESG criteria and research companies and funds that align with your values and financial goals.
Seek Professional Advice: If you’re new to sustainable investing, consider consulting a financial advisor or an ESG investment specialist. They can help you build a diversified portfolio that meets your criteria.
Diversify Your Portfolio: As with any investment strategy, diversification is key to managing risk. Spread your investments across different asset classes, industries, and geographies to reduce risk.
Monitor and Stay Informed: Keep an eye on your sustainable investments and stay informed about developments in the ESG space. Companies may change their sustainability practices, and new investment opportunities may arise.

Ways to Engage in Sustainable Investing

ESG-Focused Funds: Consider investing in mutual funds or exchange-traded funds (ETFs) that specifically target companies with strong ESG practices. These funds are professionally managed and offer diversification.
Impact Investing: For those looking to make a tangible difference, impact investing involves directly investing in projects or businesses that align with your values, such as renewable energy projects or affordable housing initiatives.
Screening Investments: Conduct your research or work with a financial advisor to screen potential investments for sustainability criteria that matter most to you.
Proxy Voting: If you own shares in a company, you may have the opportunity to vote on important sustainability-related issues at shareholder meetings.
Engage and Advocate: Use your voice and influence as a shareholder to engage with companies and advocate for improved sustainability practices.

Bottom Line

Sustainable investing offers a path to grow your wealth while making a positive impact on the planet and society. By aligning your investments with your values, you can contribute to a more sustainable and equitable world while potentially enjoying competitive financial returns. As the world continues to grapple with environmental and social challenges, sustainable investing represents a meaningful way to be part of the solution.

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South African Taxes Explained Introduction to South African Taxes. Photo Credit: Canva

South African Taxes Explained

Staff Writer Posted on 12 months ago

Taxes are a fundamental aspect of every nation’s economy, and South Africa is no exception. Understanding the South African tax system is essential for every citizen, as it directly impacts your financial well-being and contributes to the nation’s development. In this introductory article, we will delve into the basics of taxes in South Africa, shedding light on the key concepts, types of taxes, and the role of the South African Revenue Service (SARS).

Editorial Note: We earn a commission from partner links on Money Unscripted blog. Commissions do not affect our editors' opinions or evaluations.

The South African Tax System: An Overview

The South African tax system is designed to fund government operations, public services, and infrastructure development. Taxes are collected from individuals, businesses, and other entities to ensure the government has the necessary resources to function effectively. These funds are allocated to various sectors, including education, healthcare, social welfare, and public safety, benefiting the entire nation.

Types of Taxes in South Africa

South Africa levies various types of taxes, each with its specific rules and regulations. Here are some of the most common taxes you’ll encounter:

Income Tax: This is perhaps the most well-known tax, and it applies to individuals, businesses, and other entities. It is based on the income earned, with different tax brackets and rates depending on your earnings.
Value Added Tax (VAT): VAT is a consumption tax added to the price of most goods and services. It’s collected by businesses and paid to SARS. VAT is currently set at a standard rate, with certain goods and services being exempt or subject to a reduced rate.
Capital Gains Tax (CGT): CGT is a tax on the profit earned from the sale of assets like property, investments, and businesses. There are exemptions and deductions available to reduce the tax liability.
Property Tax: Property owners are subject to property rates and municipal taxes, which contribute to local government revenue. Additionally, when buying or selling property, transfer duty and CGT may also apply.
Customs and Excise Duties: These taxes are levied on imported and locally manufactured goods. They help protect local industries and generate revenue for the government.
Dividends Tax: Dividends tax is levied on the shareholders of companies when they receive dividends. The company is responsible for withholding and paying this tax to SARS.

The Role of the South African Revenue Service (SARS)

SARS is the government agency responsible for collecting taxes and ensuring compliance with tax laws in South Africa. Their primary functions include:

Tax Collection: SARS collects taxes from individuals, businesses, and entities across the country. They also provide various services to facilitate tax compliance.
Tax Administration: SARS administers tax legislation, sets tax policy, and ensures taxpayers meet their obligations under the law.
Education and Enforcement: SARS educates taxpayers on their responsibilities and enforces compliance by conducting audits, investigations, and implementing penalties for non-compliance.
Service Provision: SARS offers online services and resources to make it easier for taxpayers to file returns, make payments, and access important tax information.

Bottom Line

Taxes are a crucial part of South Africa’s economic landscape, funding essential services and public infrastructure. Understanding the various types of taxes and the role of SARS is essential for all South Africans. In the upcoming articles, we will explore each type of tax in more detail, providing you with valuable insights on how to navigate the South African tax landscape effectively. Stay tuned to learn more about income tax, VAT, capital gains tax, and many other important tax-related topics.