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Save Now for a Secure Future

  08/23/10 07:32, by Len, Categories: Budgeting, Retirement Planning, Saving

Source: Article by Gareth Stokes writing in the Mail & Guardian-online

There are three contributors to national savings: households, companies and the government, but each saves for different reasons. Households save to meet future expenses and for retirement, companies save after-tax profit for future expansion and the government needs surplus funds to meet its social and infrastructure commitments.

If we save too little as a nation we seriously undermine our ability to invest in infrastructure, such as roads, bridges, ports and power stations -- the assets essential for long-term gross domestic product (GDP) growth. Right now South Africa Inc is struggling to maintain a gross savings-to-GDP ratio of just 15,4% and households, which are included in that figure, are guilty of not saving.

If South Africa hopes to return to the savings and investment boom of the late 1960s and early 1970s, it has to encourage individuals to save. To this end, several organisations and companies in the domestic financial services industry dedicated last month to instilling a savings culture. The aim of National Savings Month was to educate individuals about the importance of saving and to encourage households to provide adequately for both short-term emergencies and long-term ­retirement needs.

Read the whole article here.

Another article written by Evan Pickworth in on the same matter can be found here.

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