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Second Quarter 2016 – In Touch

Good day to all! Our weather may be mild,… unlike the financial environment! Despite the six-month reprieve from being cut to junk status, we are not yet out of the woods and over the next six months we still need to practice cautious spending and disciplined saving.

 

Second Quarter – In Touch

Second Quarter 2016

In Touch

investment news for you

jurgens group signage

Jurgens Group new look signage at the entrance

15 Bradford Road, Bedfordview

Good day to all!

Our weather may be mild,… unlike the financial environment! Despite the six-month reprieve from being cut to junk status, we are not yet out of the woods and over the next six months we still need to practice cautious spending and disciplined saving.

As you are all aware, local and international economies are under-performing and experiencing poor growth. At times like these, I caution you with regard to unnecessary financial commitments. One should seriously consider the necessity of any withdrawals from investment portfolios during this time. Although the withdrawal may seem slight, the long-term effects are significant and will invariably have negative effects at retirement age. For many, retirement age is no longer 65 years of age, but closer to 70 years of age.

In the last year, offshore investment demand has increased. This opportunity has proven difficult for many clients in the past due to the high minimum lump-sum investment requirement.

There is now a new product on the market which allows for overseas investment on a monthly debit order basis. This debit order is paid in Rands and converted to Dollars. Should you require any details on this product, please contact us and we can provide further information.

Hopefully our crisp winter weather will keep the spirits up and the flu bugs at bay!

Regards,

Mark

Updating of Risk Benefit requirements

We are currently upgrading our Risk Benefit client policy information. Please would you inform us of any changes to your occupation, income, education and smoker status. Any changes should be communicated to Andrea Geuthner at our offices.

The objective of updating any changes, is to give our clients the opportunity of improved risk benefits and cover at reduced premium rates if possible, more in line with current personal circumstances. In accordance with tax changes made to the Income Protection benefit, this too may need realigning. Changing your benefits from Accelerated to Stand Alone, is another possible option being considered. Over time, Life companies make changes and offer enhancements to risk benefits and this may be a good time to review one’s client’s ever-changing risk needs.

Please contact our office should you wish to review your policy schedule.

Medical Aid – Jeanene Swanepoel

Medical Aid Schemes have the right to suspend membership – main member and dependants – on the following grounds:

 

• A member fails to pay the contribution, within the time allowed in the medical scheme’s rules;

• Failure to pay any debt due to the medical scheme;

• Not paying the full amount due each month;

• Submission of fraudulent claims;

• Committing any fraudulent act (buying toiletries on medical card);

• Non-disclosure of health status (past and present);

• The medical scheme has the right to suspend member’s membership or that of his/her dependants, without prior notice to the member.

 

Surplus funds remaining in your Medical Aid Savings Accounts (MSA) at the end of the calendar year, are automatically carried over to the following year’s MSA.

When terminating your membership, your MSA is transferable to a new scheme, provided that your new plan has a medical savings account.

Should the member’s new Medical Aid scheme plan not have a savings component, the surplus funds from your previous scheme is due to the member.

Short Term News from Greg Brits

The principal of insurance is based on an event taking place that is sudden and unforeseen.

The challenge is though, for example, in a case where a concealed water pipe begins to leak due to rust deterioration over many years and is unbeknown to the insured. Maintenance or replacement of this leaking pipe was unforeseen, yet this type of event would not be covered by any insurance policy. This scenario is seen as gradual deterioration or wear and tear. Should the leak have caused water-damage to furniture or carpets, a claim for such damage, would be covered by your policy.

I have in a previous newsletter mentioned that Valuators can be arranged to have our client’s buildings valuated. There has been some concern shown by clients, that such valuations seem too high.

We have been assured that these values are in line with current building costs. Please bear in mind that the insurers base the replacement value of a building, on new-build costs. Many clients assume that the replacement value would be that of the selling or purchase price of the building or home.

In the event of a fire and the total loss of a building or home occurs, the insured may be very surprised when confronted by the actual costs to re-build “like for like” prior to the loss.

That is why we recommend that a thorough valuation be done to ensure that buildings and homes are adequately insured to avoid the insurer short-paying your claim.

Please contact our office so that we can assist with making these arrangements.

Vehicle remote jamming is on the increase! A friendly reminder, to please ensure that your vehicle has been securely locked by testing the handle. Any items left in your vehicle while it is unattended, should be locked in the boot or compartment where these are not visible to passers-by.

Tax Amnesty or an Exchange Control Amnesty

Source courtesy of: Financial Mail 26 May 2016

The latest version is the special voluntary disclosure programme (VDP) which is different from SARS’ ongoing voluntary disclosure programme. It is a chance for noncompliant taxpayers to disclose their offshore assets and income.

The incentive to do this instead of waiting for another “final, final” amnesty is that a new global standard for the automatic exchange of information between authorities is being introduced next year.

There will be one joint process involving both SARS and the Reserve Bank, so that both noncompliance with tax and exchange control contraventions, can be assessed together.

Applications will have to be made between 1 October 2016 and 31 March 2017. Trusts do not qualify for the programme, nor do people who have a pending audit or investigation in respect of their foreign assets or taxes. Relief is not very generous. Half of the money used to buy the offshore asset is taxed, as are all investment returns which accrued after 1 March 2010, and interest on tax debts will start to accrue only from that date. One benefit is that anyone who is accepted in the programme will be exempt from criminal prosecution.

When it comes to exchange controls, SA residents will be allowed to disclose and regularise their contraventions. There will be a levy of 5% of their unauthorised foreign assets in the event the funds are repatriated to SA and a levy of 10% if the assets are kept offshore.

Staff News

jurgens group miguel

Miguel Araujo joined Jurgens Group in May 2015 as a Financial Advisor. He started his financial planning career with Liberty Life’s Franchise Division for young graduates and in his first year, was awarded “The Chairman’s Young Financial Advisor of the Year Award”.

Being of Portuguese decent, he is a huge fan of football… and food. He enjoys travelling with family and friends and Thailand is definitely one of his favourite destinations.

Quote of the day

” If my mind can conceive it,

and my heart can believe it –

then I can achieve it”

Muhammad Ali

Services offered by Jurgens Group:

Investments – Local & Offshore – Financial Advice – Life Assurance – Medical Aid – Employee Benefits – Personal & Business – Short Term Insurance

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Fourth Quarter 2015 – In Touch

Hello to you all….

Yet again, the year has flown by and we find ourselves in November – I like to think it is not age that makes time seem to go faster, but rather that we are all so busy that we no longer make time to stand still and savour the moments!

Reflecting on some of the years’ events, a few stood out more than others:

Who would have imagined that Cuba and the USA would finally end fifty-four years of hostility, and that we would see the Pope meeting with Raúl Castro in Cuba?

After a period of seventeen months, there was finally some debris from Malaysia Flight 370 washed up on the shores of Reunion island – a great discovery for the families awaiting answers and some form of closure.

Having been fortunate enough to visit Japan this year; the 70th anniversary of the 2nd World War bombing of Hiroshima was very pertinent and moving.

Not only do we see regular pictures of Mars, but they have also discovered that there is liquid water on Mars.

Geologists the world over are loving South Africa and our buried treasures!

And lastly, who would have imagined that the trusted VW brand would be involved in the rigging of diesel emission tests?

These are but a few of the interesting events that occurred during this year.

It is unfortunate that stock markets – both local and international – have performed poorly this year. Uncertainty regarding the Chinese economy, Greek volatility, and interest rate decisions in the USA, has caused global instability.

This year our Rand has also depreciated significantly, but has not performed as badly as many other emerging market currencies.

Fortunately, a number of Unit Trust managers used the volatility to their advantage. Their foresight prevented losses and resulted in our cautious and moderately invested clients achieving returns in excess of bank investments.

At times like these, one needs to tread cautiously before making any financial commitments.

On a positive note, most medical aid companies have announced single digit increases for 2016.

On behalf of all the staff at Jurgens Finance, I’d like to take this opportunity of thanking you for your continued support, which is very much appreciated.

I wish you and your families a happy and peaceful Festive Season and a profitable 2016.

Regards

Mark

 

Short Term News … from Greg Brits  

It’s that time of the year again and not too many days to Christmas. Some of you may be going away so we will do our usual checklist to help prevent any losses while you are away.

Santam the industry’s largest short term insurer have released the following crime statistics for the 2014/2015 year –

·      A 21% increase in reported commercial vehicle hijacking claims.

·      A 21% increase in reported household robbery claims (theft by use of force or violence).

·      A 19% decrease in domestic house breaking claims (breaking and entering a property).

·      A 13% decrease in the theft of private vehicles.

·      A 13% increase in reported business robbery claims.

·      A 4% decrease in reported commercial vehicle theft claims.

The above stats are a concern so we must continue to be vigilant.

Insurers are taking a stance that if there is a lack of maintenance resultant damage will not be covered. As an example, should rain cause damage to the ceiling due to the roof not being maintained, the resultant damage to the celling will not be covered. Please have your roof inspected to see that there are no cracks or cement that has perished from the elements that can cause leaks, and renew any water proofing at least once a year.

Checklist while you are away:

Switch main water supply off if your house is totally unoccupied to prevent flood damage.

Test your alarm system to see if it is in good working order.

Lock main gate if possible as thieves tend to force these open.

Get a friend or neighbour to clear the pavement of markers and newspapers from Post Boxes.

Have timers or day / night switches installed to have lights come on at night.

Switch off geysers to save electricity.

Check to see that you have the correct cover in place.

Have our number handy should an unfortunate event occur. Our office does not close over the festive season.

Once you have completed the above go and enjoy a well-deserved break.

We would like to wish you a Merry Christmas and a Blessed New Year.

Life – Buy And Sell Agreements

A business needs to prepare for the event of one or more of the partners dying or becoming disabled. Putting a buy and sell agreement in place, can ensure a smooth transfer of shareholding between partners. This guarantees continuity for the business and peace of mind for the deceased or disabled partner and their family.

Traditionally, a life insurance policy is used to fund the sale and purchase of the shares or member’s interest. It is important that the policy be structured correctly to sufficiently cover the actual market value of the shares or member’s interest being purchased.

It is most important to note that the agreement will only be valid if the registered owners of the shares / member’s interest sign the agreement in the presence of witnesses. Be careful of in-community-of-property marriages, as the spouse will also have to sign the agreement. Many agreements fail because not all the parties have signed the agreement or have signed it incorrectly. Contact our office should you require assistance in concluding these agreements.

Employee Benefits – Estelle Susanna

This year has definitely been a less tempestuous year for the Employee Benefits Industry to say the least.  We haven’t had tax reforms or pension fund reforms that were on again off again, the whole industry has taken on a wait and see attitude.  If Cosatu allow the previous reforms effective 1 March 2015 to go ahead, they will be effective 1 March 2016.

A reminder – Provident funds to be replaced by Pension funds for member’s under 55, member’s will withdraw one third cash at retirement and purchase an annuity with the two thirds.  Contribution levels to increase to a maximum of 27.5%, capped at R350,000.

Wishing you a Blessed Festive Season and looking forward to being of service to you in the New Year.

Discovery Health – Introducing the Smart Plan

The latest in digital technology meets the best in healthcare as Discovery Health Medical scheme provides members with new access points into the health care system. The Smart Plan will be a fully digital experience, where members will be guided intuitively to the most appropriate healthcare providers, ensuring better health care journeys at the lowest possible cost. The Smart plan is the ultimate manifestation of a more effective Discovery Health system.

The most important aspect of this Smart Plan is that it provides members with unlimited GP consultations in the Smart Plan Network, with a R50 co-payment that applies for each visit. The balance of the consultation fee will be covered up to the Discovery Health Rate.

Members enjoy full cover for a defined list of acute medicine prescribed by a Smart Plan network GP, subject to a co-payment of R10 per item on the prescription. Prescription medicine must be dispensed at Clicks or Dis-Chem.

The Smart Plan provides full cover for all Chronic Disease List conditions as per the prescribed formulary list when using MedXpress, Clicks or Dis-Chem.

For more information please contact Simone Heyman by email to simoneh@jg.co.za or call Discovery on 0860 99 88 77.
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First Quarter 2015 – In Touch

Our annual Jurgens conference took place in Magaliesburg this year which was most enjoyable and a great motivational, team- building experience.

A question I am often asked is “How safe is your unit trust money?”

In a nutshell, to invest in unit trusts, your investment is regulated by law. Although these regulations cannot protect investors against market corrections or crashes, there are key role players put in place, making it very difficult for any one of the parties to disappear with your money.

The key role players are:

The Trustee is an independent Bank or financial institution appointed by the unit trust management company to safeguard the assets of the unit trust. The manager and trustee set up a unit trust together. The Trustee ensures the fund is managed according to the rules of the mandate and the Collective Investment Schemes Control Act.

The Financial Services Board (FSB) is the regulator of the unit trust industry and issues a licence to approved unit trust fund managers. The FSB has the power to request audits and the manager needs to submit regular reports to the FSB.

The Collective Investment Schemes Control Act (CISCA) regulates the way in which a unit trust should be managed and what information needs to be disclosed to investors. CISCA also limits exposure to any one holding or certain asset classes. The potential for your investment to be affected by fraud is thus curbed substantially when investing in unit trusts. If a company in which you are invested fails to adhere to any of the legislated regulations, this will have a limited impact on your total investment.

(Courtesy: Sanlam Investments, News and Insights)

Regards

Mark

Employee Benefits from Estelle Susanna

Tax changes that will have an impact on disability income policies effective 1 March 2015

A reminder : Effective 1 March 2012, all unapproved risk contributions are to be taxed as a Fringe Benefit in the hands of the employee.

The Income Disability contribution was then tax deductible by the employee, making the contribution tax neutral. The Income Disability benefit received was taxed.

With effect from 1 March 2015, the Income Disability contribution will continue to be taxed as a Fringe benefit and the employee cannot claim back the tax. All Income Disability, either new or existing claims, will be paid out tax free. This applies to Employee Benefits and privately owned Income Disability policies.

Inflation and the oil price from Chris Botha

Inflation slowed to its lowest rate since April 2011 at 4.4% in January compared to a year ago, as lower fuel prices and slower increases in food inflation offered relief.

The inflation data supports the case for stable interest rates for at least the next few months, which will offer over indebted consumers some respite.

The 4.4% also means inflation began the year well within the 3%-6% target band.

The Reserve Bank said in January it expected inflation to remain within the band.

Oil prices reached $115 a barrel in the middle of last year and fell to about $45 later in the year and in January, to about $62 a barrel.

Food inflation will play a role in how inflation performs in future. Annual food inflation moderated from 7.4% in December last year to 6.6% in January 2015.

Courtesy: Business Day

Short Term News from Greg Brits

The effects of load shedding has brought about more and varied claims for the insurance industry.
Consumers are encouraged to remain vigilant in order to ensure that resulting claims will be covered by their insurance policies. Load shedding has become part of our daily lives and may be so for at least the next 3 to 5 years.

Where insurance cover is subject to a burglar alarm warranty, and the alarm fails due to load shedding, should a loss occur during that load shedding period, the insurers have advised that they will deal with each case on its own merits.

If an alarm failure was solely due to load shedding, a client will not be prejudiced by that failure which is beyond their control. It is, however, expected that the insured will at all times act in a reasonable manner by ensuring that the alarm is activated and that the alarm back-up battery systems are fully functional and tested regularly.

To help our clients understand and protect themselves from risks that involves load shedding, the following precautionary measures should be followed:

  • Check and replace old batteries of alarm systems, electric gates etc to ensure that they are functioning and are able to sustain the power source during periods of load shedding.
  • Arm your alarm if you leave your residence, even if load shedding is expected. Should it malfunction during load shedding, you may have to prove that your alarm was in good working order at the time you left your premises for the insurer to consider your claim.
  • Switch off and disconnect all electrical appliances when load shedding occurs or when leaving the premises. This will avoid power surge damage when power is restored (except for fridges, of course).
  • Where possible, install a power surge protector to reduce the risk of damage to electrical appliances and DB boards.
  • Should you install a generator, please ensure that it is installed by a qualified electrician and that the relevant and compliant change over switches are used.
  • Connecting a generator direct to a plug point could have disastrous consequences, one being a fire hazard! This type of claim will usually be rejected by the insurer.
  • Power Surge cover is usually limited to a certain amount on insurance policies.
  • The risk of burglaries and armed robberies are higher during load shedding, be vigilant and keep security gates locked.

In terms of alarm warranties and how your insurer will handle a claim due to load shedding, please contact our office.

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Fourth Quarter 2014 – In Touch

I would like to take this opportunity to formally welcome Digby Levenson and Russell Sourgen to Jurgens Insurance Brokers, effective October 2014. They bring along much experience and expertise and we look forward to a productive and successful relationship.

You may have noticed that, from the beginning of this year, most financial institutions have reduced their fee structures. This is largely a knock-on effect from the long awaited Retail Distribution Review (RDR) report released by the Financial Services Board.

The RDR report, which was published recently as a discussion paper, will be implementing new rules regarding the financial services industry. Many of these rules being proposed are to protect you, the consumer. Ceasing of upfront commissions on investments, and a clearer breakdown of exact costs within all investment products, are two of the many changes being proposed in this report. We, at Jurgens Group, welcome these rule amendments, as it encourages transparency, lower fee structures and more disclosure.

South Africa is facing political challenges and with this in mind, as previously mentioned, diversifying your investments is vitally important. Our economy accounts for less than 1% of the world’s economy, and our currency remains under pressure.

On a positive note, the official inflation rate has remained at around 6% – a significant contributing factor is that the price of oil has reduced over the past few months – hopefully this will bring some relief to those of you travelling long distances over the festive season.

I would like to thank you once again for your continued support and loyalty in all divisions of our company.

To my colleagues and staff, a sincere thank you for your dedication and commitment during the past year.

Wishing all of you a safe, happy and relaxing festive season.

Regards
Mark

Employee Benefits – Estelle Susanna

It’s been a year of turmoil in the Employee Benefits industry with proposed changes, then legislated changes, months of workshops and training, only to be informed at the last minute, that these changes would be delayed, possibly as late as March 2016.

With all the retirement reforms proposed, the most important reform, that being compulsory retirement savings, has not yet been addressed. It’s devastating to process retirements for members who do not have sufficient provisions to retire on. However, they’re the privileged few; their employers have at least made some type of effort to provide a retirement savings scheme.

It won’t be long before Treasury realises that it is unfounded to impose prescribed minimums, tax rules and the Pension Fund Act on some of the South African workforce, whilst others don’t have the opportunity to contribute to any type of retirement savings.

Employers should have a sense of responsibility to provide a retirement savings facility for their staff and not wait for Government to impose a compulsory one.

Most young employees do not consider it necessary to start saving for retirement whilst in their 20’s. Unfortunately, employers who think that these employees are contributing in their personal capacities, are mistaken. Until South Africans develop a culture of saving; employers should take on the responsibility of ensuring that their staff members’ retirement needs are taken care of by means of a retirement savings facility.

On that note, less Christmas cake for employers and more bread for employees. Have a Blessed Christmas!!

Short Term News … from Greg Brits

We echo the sentiments of Mark by welcoming Digby, Russell and Debra from Bert Levenson Insurance who have joined forces with Jurgens Insurance Brokers. They bring with them, many years’ worth of experience as well as giving added value when dealing with the insurers. This in turn, means more leverage regarding premiums and services for our clients. We look forward to a long and beneficial relationship in the future, which will grow from strength to strength.

The insurers are currently taking a closer look at thatched lapas on client’s policies. There have been a few burn down claims recently which have affected the main residence. Should you have a thatch lapa on your premises, please let us know so that we can ensure it is covered correctly.

With regards to jewellery and watches, the insurers require that whilst not being worn, these items must be kept in a locked safe, bolted to the wall or floor.

As we head for the end of the year, here are some helpful tips should you be going away:

  • Do you have the correct travel insurance policy in place? The cover offered by credit card companies is usually inadequate. For more information, please contact our office.
  • Has your insurance policy been updated to ensure that there is adequate cover for additional goods purchased or items being taken out of the home on holiday?
  • Have you asked a neighbour or friend to keep an eye on your premises and to remove any markings or newspapers delivered which give the impression that the home is unoccupied? Do they have keys should they be required to access your property?
  • Give our contact details to a neighbour or friend so that they can contact us if assistance is required.
  • Test your alarm to see that is in good working order. This should be done at least once a month.
  • Turn the water mains off in case of a burst pipe or geyser to avoid your home being flooded.
  • If you are able to, try and lock the main gate to your home as this is usually the access point to your property for intruders.

Please note that our offices are open over the festive period and our staff are available to assist you in the event of an incident.

We would once again like to thank you for your continued support and wish you a blessed Christmas and a Happy New Year.

A Christmas holiday Parable:

One Christmas holiday, Sherlock Holmes and Mr Watson went on a camping trip. After a fulfilling meal they lay down in their tent for the night and went to sleep. Some hours later, Holmes awoke and nudged his faithful friend awake. “Watson, look up and tell me what you see. ” Watson replied, “I see millions and millions of stars. ” “What does that tell you?” Holmes questioned.

Watson pondered for a minute. “Astronomically, it tells me that there are millions of galaxies and potentially billions of planets. Astrologically, I observe that Saturn is in Leo. Logically, I deduce that the time is approximately a quarter past three. Theologically, I can see that God is all powerful and that we are small and insignificant. Meteorologically, I suspect that we will have a beautiful day tomorrow. ” “Is that all?” Holmes asked. “Yes,” Watson replied. “Why have I missed something?” Holmes was quiet for a moment, then spoke. “Watson you idiot! Someone has stolen the tent!”

Source: Perspective Vol 8 No4 © Perspective 2001

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Third Quarter 2014 – In Touch

It’s great knowing that spring is around the corner and that good rains will soon provide a much needed end to a chilly but relatively mild winter. As we have said in the past, the JSE is not currently offering the valuations and opportunities that we have seen in the last decade. Due to this, we have suggested increasing exposure to offshore markets.

An alternative option, which has created interest amongst many investors, is that of investing in stock markets on the African continent. Whilst this does pose risks over the short term, due to political volatility experienced in many African countries, it could provide competitive returns over the longer term.

It has previously been difficult to gain access to shares and unit trusts in African countries due to liquidity issues and extremely large minimum contributions.

The Stanlib African Equity Unit Trust Fund is a well-managed fund that allows access to African equities. Jurgens Finance has negotiated with Stanlib to market their fund at significantly lower minimum contributions than usually required. This is a higher risk fund and requires an investment horizon of at least five to ten years. We would not recommend more than a maximum of 5% of one’s total investment portfolio be invested in this type of fund. Should you be interested in finding out more about this fund, please contact me or one of my colleagues in the office.

Wishing you all a fresh and healthy start to spring and a memorable “first swim” of the season!

Regards

Mark

Short Term News from Greg Brits:

It was a surprise to all of us to experience the earth quake recently on 5 August 2014. A question from a few of our clients was whether their buildings insurance policy covered them for earthquake damage. We can gladly report that our clients do enjoy earthquake cover on their building policies.

Some statistics I found on earth quakes in South Africa showed that these are more common than one would think. There were 5 recorded earthquakes in 2013 and 3 recorded in 2014. I believe that the reason the 5th August “quake” attracted so much additional attention was due to the tremors being felt over such a vast area. With the epicentre in Orkney in the North West Province, it was felt as far away as Botswana and Durban and it lasted for 90 seconds. It also had the second highest recording of 5.5 on the Richter Scale. (The largest earthquake in South Africa was in 1969 which measured of 6.3 in the Tulbagh area).

There may have been a few claims in the Johannesburg region. One of the larger insurers reported losses up to R10 Million Rand for the latest event, mostly in the north west region closer to the epicentre, which is reasonably small considering the amount of buildings that are insured. As we head towards the hail season, please be more vigilant where you park your vehicles to avoid the need for an insurance claim and having your personal possessions damaged. Remote jamming of vehicles is still very prevalent, so please make sure your vehicle is locked by checking the door handle as opposed to trusting the remote control. The thieves are usually close by and as you attempt to lock your vehicle with a remote and walk away, they jam the signal, usually with another remote, preventing locking and then proceed to steal goods from your vehicle once you are out of sight. This usually happens within a minute of you walking away.

Please also remember to get valuations on specified items, as this assists when paying a claim, making the claims process a lot smoother. This is not only limited to jewelery and watches, it also includes sports equipment such as bicycles, golf clubs etc. If the insurer does not have such valuations, it’s always difficult to asses the actual loss and the detail thereof.

Regards,

Greg

The Parable of the lost money:

One evening a minister of religion was walking along a road and saw a distressed man under a lamppost. Asking if he could assist, the man informed him that he had lost his week’s wages. The minister offered to help search but without success.

Having a systematic approach, the minister asked where the man had lost his money. “Down the road”, he said. Being taken aback the minister asked, “If you lost the money down the road, why are we looking for the money here?”.

“Oh”, the man replied, “because there is more light under the lamppost”.

The moral of the parable is, if you wish to solve a problem, first identify the source and then find solutions.