“I wish someone had told me” is a series of posts that feed into our inquisitive nature at CN&CO. Each week we hear from someone in our network about something interesting or surprising that’s recently happened or occurred to them – or lessons they learnt. These blogs are a way to pay it forward and form part of CN&CO’s belief that the world can be a better place – and we all have a responsibility to make it so. This week’s post is by Alexander Heath who is doing som work with Carel.
Hi, I’m Alexander Heath. I am 23 years of age, and I would like to have a financial plan for my life ahead.
I am currently enrolled at GIBS doing a Postgraduate Diploma in Business Administration and doing my internship with CN&CO and EasyEquities. The exposure to these businesses has enabled me to better understand the importance of investing. Investing in what, though? It can be daunting to decide where to start. Yes, I have invested in myself completing my degree, but now it’s time to start investing in my financial security. I have come to understand the mistakes I have made in my past as a scholar and as a varsity student. The first of these is my understanding of the investment environment and the importance of investing or putting money aside every month, no matter the amount. The younger you start, the better off you will be in the long run.
The main reasons around not investing or saving from a young age can be:
- “I don’t have the disposable income at the moment; I need the money I currently earn to cover expenses.”
- “I don’t feel like I am at the point in my life where I can put my savings into an investment.”
- “I have never been interested in investing and never knew the benefit.”
- “I don’t have the capital resources at the moment and if I tie what I have up in investments now, then I won’t have any money for myself for the things I want to do.”
Stop making excuses! It is way too tempting to spend disposable income on material items. If I were more informed, I should have put those extra rands into a more sensible product like a tax-free savings account (TFSA), a great starting point for your investment journey. This is a smart move as we in South Africa live in a highly taxed environment. The TFSA enables you to have a little break from tax that you would normally need to pay.
The importance of setting up a long-term financial plan is vital. Start young to ensure your financial safety. There are many unknowns that you will encounter along the way, and a month-to-month salary is not enough for financial comfort.
Compound interest is very powerful as you get interest on your interest. This is just like the old theory of the grain of rice on the chess board. Starting with one grain on the first block and two on the second block and then four on the third block and so on. You end up with 18 quintillion grains of rice on the board!
I take a lot of guidance from people like Supersaver Julia, who has featured on The Money Show with Bruce Whitfield and details her success of having the correct mindset when it comes to investing. Supersaver Julia put one third of her salary into investments and managed her expenses throughout the process by driving the same old car and living in a small apartment near work. As her salary grew, so did the contributions to her investments. All in all, this set up Supersaver Julia for the long term and she has since been able to live through times of not receiving a salary at all. She’s also started her own family, upgraded her car and home, and started her own business.
EasyEquities is here for your future wealth and well-being, for your money to grow to your heart’s content. Unlike a bank where your money is eaten up by bank charges, EasyEquities puts the ball in your court to make the decisions you want to with regards to growing your money. You can choose individual shares or put your trust in the experts to manage your money through unit trusts. The choice is yours!
So, to sum it all up, start as soon as you can with any amount you want. Some suggestions of where you can start accessing cash to fund your first investment account:
- Instead of receiving material gifts such as clothes or shoes, rather ask for that money to be contributed towards your investment or tax-free savings account.
- Don’t be tempted to buy that second pair of shoes; put that money towards the company that you love to buy those shoes from.
- Try your best to put a percentage of your income or allowance into a tax-free savings account.
Take ownership and responsibility for your financial security. There is no better time than to start than now. Consistency is key with your contributions towards your investments and don’t put all your eggs in one basket; diversify your investment portfolio to lower your risk.
Join EasyEquities here