aka Evidence of my lack of desire to continue living

#ProudlySA

aka Evidence of my lack of desire to continue living
The view from the top of the Orlando Towers in Soweto. Just before you jump to your death bungee jump. Obviously, I didn’t die. Or did I?

When I’m not buying amagwinya okanye ikota at local establishments, or gushing over locally developed finance and investment apps, I’m actively seeking out a multitude of other ways that local is lekker.

One way is in the sphere of personal finance resources specific to the South African context.

While I’ve been very fortunate to learn so much from what is largely an American blogging niche via the many websites, podcasts and free resources that are found for free on this lovely thing called the internet, I have experienced the analysis paralysis that comes with everything making complete sense and then being thrown off by the nagging question:

This all sounds great for Americans/Canadians/etc. but how much of this is applicable in a South African context?

Can we make similar assumptions about market trends, volatility, average rates of return, inflation, real return, asset allocation, retirement planning? What about all that 401k/IRA/Roth/HSA/Backdoor Roth stuff that we don’t have in South Africa; if I find the closest thing to it can I apply the same assumptions and simply implement the advice in Rands? What about our tax laws? Can I apply the same age-based risk profile choices as American investors and just invest in the South African stock market, or do I need international exposure because we are not a developed market? Does it make sense to buy cars/vacations/recreational toys in cash in South Africa or are we trading at more of a disadvantage because no one does that? What are our options with regards to rewards and credit card churning and the like? How do we access and improve our credit scores? Does it make sense to invest in real estate as a financial independence accellerent in this interest rate environment? Is anything on those blogs other than the advice to increase savings in relation to income even applicable to me? Isn’t our economy going to crash anyway over the next set of elections and their inevitable accompanying protests??? AREN’T WE THE NEXT ZIMBABWE???????

If any of these questions have plagued you and prevented you from making the most of your financial situation, I get you. I understand you. I was you. A part of me still is. So how did I overcome these fears and the analysis paralysis?

Firstly, I believe in the South African economy, despite all the Doom’s Dayers and political analysts who say that we are destined to be the next Zimbabwe. I believe that around 1994, this very same seed of fear and disease was being sown by all the ex-pats who were looking to jump ship because surely the changeover in political power and subsequent inevitable civil war would crash the markets and our economy. Surely the rand was a dying currency. While that fear–and the subsequent panic by investors–disrupted the markets temporarily, it was soon back to business as usual. Our economy hasn’t been thriving, but the general long-term market trends have held steady. This is because markets are made up of businesses and businesses are made up of people. And people adapt.

Secondly, and related to that really, I believe in South African minds. When these questions started plaguing me initially, I calmed down and did the rational thing. I closed my laptop and threw it on the ground.

 

You can’t trust the system!

I kid, I kid.

What I really did was look for the voices of South African writers and bloggers on the topic. It was tough going at first. Google “personal finance South Africa” and you’ll get page after page of banks and financial institutions pushing products and financial advisory services, with a few short “woe is us, how ever shall we save?” articles thrown in for good measure. But I persevered until I finally stumbled on some sites that, in aggregate, really put into perspective how this personal finance thing works in our context, our economy, with our historical data and legislation.

Here are my top picks of local is lekker online resources. I’ll just link to them with a brief description for now. In future, if I write specific reviews for each, I’ll link them up on this page too. I’ll also update it as I find appropriate resources going forward.

  1. The South African Index Investor
    This one is really not the most exciting place to start, but I found it the most useful for putting my concerns about the numbers into context. The site is a little dry-looking, but there is a gold-mine of research papers and lectures specifically written for the South African investing environment and it really helps that there is always a link to the international equivalent research. This sounds boring and laborious how I just described it, but the site’s founder, Daniel R Wessels, actually has a witty, practical and readable way of conveying what could be intimidating subject matter. Come back to this site once you have a basic idea of your long-term investment philosophy so it can help reinforce why your choices are mathematically sound (and they will be, if you’ve done your homework).
  2.  The Money Show with Bruce Whitefield
    This is a great primer for the beginner who just wants to get a handle on some of the jargon in the world of finance and find their bearings. This radio show has 15-minute (average) podcasts on topics like saving, retirement planning, buy-and-hold mentality, index investing…it’s entertaining and informative. There’s even an (unintentionally) hilarious episode where the resident financial advisor gets depressed and shaken out of his usual perk because of recent political shenanigans (think last year’s revolving-door finance minister fun), and it almost sounds like he’s telling everyone to sell their assets and go to Australia! So this is as real and as human as it gets. Although it’s hardly Dave Ramsey level life-changing, it’s appeal lies in the distinctly South African flavour–if you can get over the fact that it’s predominantly hosted by two White males who only speak English throughout.
  3. WellSpent
    This. Site. Is. Bomb. In fact, it’s a step by step instructional guide into personal finance principles and SA-specific condiderations. I recommend you start at the beginning of the journey viewer and follow the posts chonologically, as each builds on the principles of the last. Sure, you won’t get the zealous heat of the FI(RE) community’s oft-touted >50% savings rate, and they do waffle quite a bit about financial advisers, but consider this site an epic gateway drug. I really love this website and wish I’d read it as a student, even before reading any of the international blogs that had me slightly stressed and confused.
  4. 22seven 
    I’ve spoken about the 22seven app before. Where American bloggers reference Mint and Quicken and even Personal Capital, we’ve got our own freshly ground, home-brewed app that helps you track your spending, set your budget, track your total net worth and generally be badass by linking all your accounts including your outstanding bond or your investments or the money you owe Auntie Sari. Everything is in one secure place and you need only log in to know exactly where you stand on any given day.
    What I haven’t mentioned before is 22seven’s awesome blog. The team at 22seven seems young and fresh enough to understand the #struggle, but informed enough to give sound, concise recommendations and guidance. Similarly to how the 22seven app gives you bite-sized nudges every week or so to help you identify where your money is leaking to, the blog helps you identify strategical and philosophical leaks. It’s pretty dope.
    What 22seven doesn’t do (yet?) is something that I know Personal Capital (American, sorry) and the Sygnia Investor Portal (local, but only available to, well, investors) does: shows the longterm impact of fees on a portfolio, projecting retirement thresholds and timelines, and helping you adjust for certain goals.
    (The Sygnia Investor Portal is insane. I’ll write more on that some other time.) Seeing a portfolio holistically like that is something I think 22seven would do well in developing further.
  5. Ad-break!
    Just so we stay on theme, here is an hilarious excerpt from one of the best local reality shows on the circuit called Date My Family. I wish the subtitles were more accurate, but that’s neither here nor there:

Classic!

 

6. Miscellaneous resources
These are all tied to specific financial service providers, but are available to everyone regardless of whether you use that provider or not. Glorious information age!

  1. The 10x Financial Education Page. You can also click around the site for their Retirement Myths series and their FAQs.
  2. The Sygnia Robo-Advisor is the first of it’s kind in SA. While I wouldn’t build my plan around it, it’s fun to plug in numbers and see what’s up. The part where they ask for your name and e-mail address is annoying at first, but they don’t e-mail you unless you elect to use the advisor’s plan at the end of the simulation (I didn’t). So, technically, you can input any information if you’re just giving it a try. If you do choose to invest via the platform, you’ll have access to the more comprehensive portal I mentioned earlier (this is not a salespitch*. You don’t need the portal. It’s a nice-to-have.)
  3. The Capitec Bank Money Management Portal is extensive. It has a money management podcast series, if you’re a melodramatic radio-soap-opera-podcasty type, calculators for savings/bank charges/budgeting/billsplitting…just go crazy on it and play around.

7. Tax Tim
I’m definitely going to review this in a post of it’s own. Yet another example of local innovation, this website helps ordinary South Africans plan and then navigate their way through tax season. The Q&A page is frequently updated, they keep abreast of all the new tax developments for the average (and above average) taxpayer and their tax calculator helps you anticipate what Auntie Sari will (hopefully) owe you come tax time, along with ways to find more refunds if you qualify. All this and you haven’t even bought their badass tax filing product. That Ubuntu spirit, man.

As a word of caution: don’t try to cram all these resources into an afternoon of reading. Even a week is too little. Information overload can lead to analysis paralysis which leads to the soul sucking decision to do nothing out of fear. I tried to suggest resources that you can digest a bite at a time, with fun interactive interfaces that can engage you while you wait in line at the shops or have your morning tea. If you’re a binge-reader, binge away by all means, but do make sure to go back and revisit the fundamentals so you don’t get lost in the details like I did at first.

I’ll update this list as I find new (or better!) resources. Please feel free to make recommendations. I’ll be writing a post soon about which international blogs (and books, of course) got me on the path to intentional money management. I’m sure others may find these useful too, especially after equipping themselves with the local information that can be put into context while reading those posts. I might even create a code-breaker page to help South African’s demystify American financial jargon (e.g. when you read Roth think essentially of a TFSA with slightly different rules) so as to make linking to those sites more sensible where relevant.

Or I might just procrastinate my life away. Only time will tell.

Until then, keep it homegrown.

 

 

 

 

*In case it bears repeating, I am not reimbursed by any of the pages linked above for these recommendations, and I specifically tried to include pages where you don’t have to buy anything to access their resources. I’m just trying to create a resource pit-stop for other young (or old!) South Africans who want to start planning for the future in easy to understand, locally relevant terms. Also, I’m a people doctor not a money doctor 😉

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