What it means when your RAF claim is settled.
When your Road Accident Fund (RAF) claim is settled, it means both parties have agreed on the compensation due to you. The RAF will now process your RAF payment for release.
The purpose of the Road Accident Fund is to not only compensate victims for their injuries, loss of income, etc. but also to help them get their lives back on track. With many victims being unable to work after the accident, the RAF payment should now either be:
- A source of income over the rest of the victim’s lifetime, or
- Be used as funding into a business or investment that generates income without the victim’s active participation.
For some victims, opening a business could be an option, where other victims, might need to use your RAF payment for future health care and accommodation.
Your personal needs dictate your investment strategy.
Regardless of what your personal needs are, the reality is that the money needs to last or create revenue for the rest of your life. Before you use your RAF payment on entertainment, clothes, new cars or going on holiday; take a good look at your own future earning potential and assess the situation accordingly.
In many instances your entire future life will depend on the decisions you take now with the money from your RAF payment. Fortunately, there are people trained in financial planning that can assist you in this regard (commonly known as Financial Planners). Do however make sure they are Certified Financial Planners (CFP). This will ensure they have obtained the proper financial planning accreditation. CFPs will be able to provide you with the appropriate advice on how to invest your RAF payment particularly suited to your circumstances. If you do not know any CFPs, drop us an email and we will recommend someone to you.
Investing your RAF payment in other businesses.
Another way to earn a passive income from your RAF payment is to invest in other people’s business ventures. SMEs are in constant need of funding in order to get their businesses up and running. This is however a very high risk approach to multiply your money and you should investigate the opportunity very thoroughly. Perform a proper due diligence before you invest any of your RAF payment in other people’s businesses.
Risk vs. Reward.
The possibilities to invest your RAF payment are endless and will depend on your:
- Immediate cash flow needs;
- Future earning potential and needs;
- Personal risk-taking profile.
Nothing is for free and even more so when you are investing your RAF payment! So be careful out there and get appropriate advice!