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Transcript

S5 E9 Wealth Doesn’t Wait · The Swan Effect - Creating and Sustaining Your Financial Wellbeing

• 0:00
  Arthi Rabikrisson: Your legacy isn't just about numbers.
• 0:03
  Arthi Rabikrisson: It's about the confidence that comes with knowing your wealth is expertly managed.
• 0:09
  Arthi Rabikrisson: At Old Mutual Wealth, we offer solutions that go beyond investment management.
• 0:15
  Arthi Rabikrisson: We're your trusted partner in achieving financial success.
• 0:19
  Arthi Rabikrisson: Together with your financial planner, we uncover what matters most to you.
• 0:24
  Arthi Rabikrisson: Crafting a personalized plan tailored to your unique goals.
• 0:29
  Arthi Rabikrisson: Backed by a team dedicated to your wealth journey, we provide innovative strategies, in-depth research, and award-winning investment expertise.
• 0:39
  Arthi Rabikrisson: Partner with us to take your wealth further with advice-led personalized wealth management, offering clients and financial planners a full suite of industry-leading investment solutions.
• 0:52
  Arthi Rabikrisson: Visit www.oldmutual.co.za /wealth to learn more.
• 1:00
  Arthi Rabikrisson: Hi there, I'm Arthi Rabikrisson.
• 1:05
  Malika Petersen: Hello, I'm Malika Peterson.
• 1:07
  Arthi Rabikrisson: Welcome to the Swan Effect Podcast.
• 1:10
  Arthi Rabikrisson: We're your go-to podcast to simplify the complexities of money management, investing, and wealth management.
• 1:18
  Malika Petersen: So that you can gain confidence in your relationship with money and become financially literated, independent, and free.
• 1:37
  Arthi Rabikrisson: Hello listeners and subscribers from South Africa and across the world.
• 1:42
  Arthi Rabikrisson: We are entering a time of harvest and giving thanks in the Northern Hemisphere.
• 1:46
  Arthi Rabikrisson: But here in the Southern Hemisphere, spring seems to have sprung quicker than we thought.
• 1:52
  Arthi Rabikrisson: And we're actually headlong into a soaring summer with high, high temperatures already.
• 1:57
  Arthi Rabikrisson: The days are long, and pretty soon we will fully be into the festive swing.
• 2:02
  Arthi Rabikrisson: What do you say, Malika?
• 2:03
  Arthi Rabikrisson: And hi Malika as well.
• 2:05
  Malika Petersen: Hi, Arthi.
• 2:06
  Malika Petersen: Hi, listeners.
• 2:08
  Malika Petersen: I think it's the most wonderful time of the year as we give thanks, but also we make preparations too, right?
• 2:15
  Malika Petersen: I mean, and that should be like preparations around finance and on the wealth building side too.
• 2:21
  Malika Petersen: Listeners don't forget about those two things.
• 2:23
  Malika Petersen: Very important.
• 2:24
  Malika Petersen: In fact, I want to say that today's topic feels particularly close to everyday life because we talk so easily about building wealth, but most of us are building it somewhere between the grocery shop, school fees, a bond repayment, and whatever surprise the car has planned for us this month.
• 2:44
  Arthi Rabikrisson: Exactly, Malika.
• 2:45
  Arthi Rabikrisson: And those preparations, as you said, means we shouldn't be waiting any longer.
• 2:51
  Arthi Rabikrisson: I mean, how often do we have the thought, oh, I'll start when things settle down, or I'll invest when the debt is paid off?
• 3:00
  Arthi Rabikrisson: Or even something like, I'll look at my retirement when the children are older.
• 3:04
  Malika Petersen: Yeah.
• 3:05
  Arthi Rabikrisson: We get all these things.
• 3:06
  Arthi Rabikrisson: I mean, even things around paperwork.
• 3:08
  Arthi Rabikrisson: Oh, I'm going to organize the paperwork when work is less demanding.
• 3:12
  Arthi Rabikrisson: You know what I think?
• 3:14
  Arthi Rabikrisson: A future version of ourselves where we've got more money, more time, and fewer demands.
• 3:20
  Arthi Rabikrisson: But I think the reality is mostly not that.
• 3:22
  Malika Petersen: Yeah, I would absolutely love to meet this future person that I'm supposed to be.
• 3:27
  Malika Petersen: Because I think in my experience, life doesn't hand you a completely clear month, day, or even week, you know, with a little note saying, right, now you can start to build well.
• 3:39
  Malika Petersen: Just when one commitment comes off the budget, another one walks in.
• 3:44
  Malika Petersen: The geyser goes.
• 3:45
  Malika Petersen: A family member needs some help.
• 3:47
  Malika Petersen: The cost of living shifts, and all of a sudden the financial plan has to make space for better life.
• 3:54
  Arthi Rabikrisson: I'm so nodding my head as you're giving us all these examples.
• 3:57
  Arthi Rabikrisson: And what interests me is what that waiting actually does to us.
• 4:02
  Arthi Rabikrisson: Wealth is something that belongs to people who have already arrived.
• 4:07
  Arthi Rabikrisson: Then we think, oh, we're not qualified to make those decisions yet.
• 4:10
  Arthi Rabikrisson: And sometimes that feeling is less about that I can't afford to, and more about I'm not the kind of person who can.
• 4:19
  Arthi Rabikrisson: That's a very, very distinctive narrative and a very powerful story to carry, don't you think, Malika?
• 4:25
  Malika Petersen: Yeah, because what we're really discussing today isn't about how to become wealthy overnight.
• 4:30
  Malika Petersen: So if you thought that's the show, then no, it's not.
• 4:33
  Malika Petersen: But it's about how do we stop leaving the future out of the decisions that we're making today.
• 4:39
  Malika Petersen: We can acknowledge that money is tight without concluding that there's nothing meaningful that we can do.
• 4:45
  Malika Petersen: And this is why we're calling this episode Wealth Doesn't Wait.
• 4:49
  Arthi Rabikrisson: Yeah, exactly.
• 4:49
  Arthi Rabikrisson: And it feels like it's the right moment in our season to bring all of these pieces together.
• 4:55
  Arthi Rabikrisson: Because if you've been following us, listeners and subscribers, and new listeners, we've been exploring our theme over the season around debt, debt, and taxes.
• 5:05
  Arthi Rabikrisson: And we've spoken about what we inherit, what we pass on, what borrowing does to our choices, and also what conversations our children here at home.
• 5:15
  Arthi Rabikrisson: Today's question is well, what does all of that look like when the bills are still very much arriving in our inbox?
• 5:22
  Malika Petersen: Yeah, so no fantasy budget, right?
• 5:25
  Malika Petersen: No lecture about simply taking up coffee for yeah, that one more time, I swear.
• 5:30
  Malika Petersen: We're gonna talk about the trade-offs, the small practical shifts, and what a legacy can look like long before anyone feels wealthy.
• 5:39
  Arthi Rabikrisson: I like that.
• 5:40
  Arthi Rabikrisson: And I think, Malika, perhaps we'll also challenge our own way, our own thinking, sorry, along the way.
• 5:45
  Arthi Rabikrisson: Because you know, the question isn't only how much money we can leave behind, it's about what we're creating while we're here right now.
• 5:53
  Arthi Rabikrisson: So, okay, let's get into it.
• 5:56
  Arthi Rabikrisson: Malika, when someone hears legacy, what image do you think comes to mind?
• 6:02
  Arthi Rabikrisson: Because I suspect it's a large house, a trust, maybe your business, hand it over to the next generation.
• 6:08
  Arthi Rabikrisson: It's all these impressive things.
• 6:11
  Arthi Rabikrisson: And then someone listening to us is thinking, I'm literally just trying to make it to payday.
• 6:17
  Malika Petersen: Yeah.
• 6:17
  Malika Petersen: And I think, I mean, that's you hit the nail on the head that that's exactly the disconnect, right?
• 6:22
  Malika Petersen: We have made legacy look like an event that happens somewhere at the end, right?
• 6:29
  Malika Petersen: Where, especially when there's gonna we think there's gonna be enough to distribute.
• 6:33
  Malika Petersen: But the reality is that legacy is also a position in which you leave other people.
• 6:39
  Malika Petersen: It might be a home with less debt on it, it might be a child who understands how interest works properly to use it to their benefit.
• 6:48
  Malika Petersen: It might be a partner who knows where the important documents are or a family where the next emergency doesn't automatically have to be paid for with an expensive credit card.
• 7:00
  Arthi Rabikrisson: Yeah, I believe that's particularly relevant here in South Africa.
• 7:04
  Arthi Rabikrisson: Ffamilies often have very different starting points, and what one household calls a modest achievement can actually represent this enormous shift for another house.
• 7:16
  Arthi Rabikrisson: I've seen how much determination it takes for someone to become the very first person in their family to own an asset or to have just a little bit of breathing room financially.
• 7:27
  Arthi Rabikrisson: So I think you know what you're saying here is the value isn't only in the number on the statement, it's in what becomes possible afterwards.
• 7:35
  Malika Petersen: Yeah.
• 7:35
  Malika Petersen: And I think we need to be careful not to romanticize that, right?
• 7:39
  Malika Petersen: Yes, yes.
• 7:40
  Malika Petersen: Because becoming the first person in your family to do something financially can carry a huge amount of pressure.
• 7:49
  Malika Petersen: And I think sometimes you're building your own life and helping to hold up several others.
• 7:56
  Malika Petersen: We know this is very true for South Africans.
• 7:58
  Malika Petersen: So when we say start building legacy, we're not asking someone to ignore the needs in front of them.
• 8:05
  Malika Petersen: We're asking how you can begin to make those needs and your future coexists in a more realistic way.
• 8:13
  Arthi Rabikrisson: Yeah, there's an example, I think listeners will recognize Malika.
• 8:17
  Arthi Rabikrisson: So imagine everyone that there's someone in their 30s who's finally earning a decent salary.
• 8:24
  Arthi Rabikrisson: So on paper, they should be able to put money away.
• 8:28
  Arthi Rabikrisson: But they're helping a parent, they're paying a bond, they're covering school expenses, and perhaps even supporting a sibling.
• 8:36
  Arthi Rabikrisson: Every time they consider investing, they start to feel guilty because someone else needs something now.
• 8:44
  Arthi Rabikrisson: That's not simple budgeting in terms of a problem, it's also a conversation about boundaries, responsibility, and what love is supposed to look like.
• 8:54
  Malika Petersen: Yeah.
• 8:55
  Arthi Rabikrisson: And I think the answer isn't to stop helping, right?
• 8:58
  Malika Petersen: Yeah, to decide consciously what you can commit, what you cannot, and what needs to be reserved for your future self.
• 9:08
  Malika Petersen: Because if the entire plan depends on you being endlessly available, you may simply pass the same financial pressures down to the next generation.
• 9:19
  Arthi Rabikrisson: Malika, I've seen this happen already, right?
• 9:22
  Arthi Rabikrisson: So I'm so glad you're making such an important distinction.
• 9:26
  Arthi Rabikrisson: Legacy isn't necessarily leaving your children a fortune, everybody.
• 9:30
  Arthi Rabikrisson: It may be giving them choices you didn't have, or not leaving them with an avoidable crisis.
• 9:38
  Arthi Rabikrisson: And when you frame it like that, it becomes this active decision rather than just some ambition that's further down the line.
• 9:45
  Malika Petersen: I also think that we should acknowledge that we receive more money from previous generation, more than just money.
• 9:54
  Malika Petersen: Right.
• 9:54
  Malika Petersen: We inherit habits, we inherit stories, we inherit our fears.
• 9:58
  Malika Petersen: And some of those are useful.
• 10:00
  Malika Petersen: Others served a very different time.
• 10:03
  Malika Petersen: So you might inherit the belief that death is the only way to get ahead, as an example, or that investing is for people with a lot of money, or that talking about finances openly and honestly is disrespectful.
• 10:17
  Malika Petersen: We can respect where those beliefs come from and still decide that they don't all need to travel forward with us.
• 10:24
  Arthi Rabikrisson: That is such a great reminder.
• 10:26
  Arthi Rabikrisson: And I remember traversing all of those, Malika, in your examples.
• 10:31
  Arthi Rabikrisson: And I think that's such a lovely bridge as well to the practical part.
• 10:35
  Arthi Rabikrisson: Because now let's think about how do you change that story when there's actual debt on the table.
• 10:42
  Arthi Rabikrisson: So let's go there.
• 10:44
  Arthi Rabikrisson: Imagine our listener says, Arthi Malika, this is all well and good, but I have a credit card balance, I have car finance and a bond.
• 10:53
  Arthi Rabikrisson: Why should I even think about investing when I owe all of these different places money?
• 10:59
  Arthi Rabikrisson: I mean, that sounds and feels like a very reasonable objection, Malika.
• 11:03
  Malika Petersen: Yeah, and I mean it is a reasonable objection, right?
• 11:05
  Malika Petersen: And I certainly wouldn't tell that person to invest blindly while an expensive interest on a credit card is draining their income, right?
• 11:15
  Malika Petersen: Different debts have very different costs and purposes.
• 11:18
  Malika Petersen: We've discussed this before in our debt section.
• 11:21
  Malika Petersen: A high interest credit card that never seems to reduce is not the same conversation as a long-term mortgage.
• 11:29
  Malika Petersen: We first need to understand the rate, the repayment, whether the capital is coming down or not.
• 11:35
  Malika Petersen: Also, what it was used for, right?
• 11:37
  Malika Petersen: And how much pleasure each debt puts on the household.
• 11:42
  Arthi Rabikrisson: So the real issue isn't having a rule that says debt must always be cleared before any future planning.
• 11:49
  Arthi Rabikrisson: It's understanding which action makes the most sense given the actual numbers and the person's circumstances.
• 11:58
  Malika Petersen: Yeah.
• 11:58
  Malika Petersen: I think for some people it's about prioritizing getting expensive debt under control.
• 12:07
  Malika Petersen: Right.
• 12:08
  Malika Petersen: And creating a small emergency buffer so that the set any kind of setback or emergency doesn't force them straight back into credit.
• 12:17
  Malika Petersen: For others, an existing retirement contribution through work may already be doing the important long-term work.
• 12:25
  Malika Petersen: And we shouldn't overlook that just because there isn't a separate investment account with an impressive or big balance.
• 12:32
  Arthi Rabikrisson: Yeah, I agree with that, Malika.
• 12:34
  Arthi Rabikrisson: In fact, let's follow another example.
• 12:36
  Arthi Rabikrisson: Okay, let's call our character Lerato.
• 12:38
  Arthi Rabikrisson: She's 39 years old, working full-time, has one child.
• 12:44
  Arthi Rabikrisson: She's contributing to a retirement fund through her employer.
• 12:48
  Arthi Rabikrisson: She has a bond, a car finance, a credit card that grew after a few unexpected expenses.
• 12:56
  Arthi Rabikrisson: She also helps out her mom occasionally.
• 12:59
  Arthi Rabikrisson: At the end of the month, she feels as if nothing is really moving.
• 13:05
  Malika Petersen: Yeah.
• 13:06
  Malika Petersen: This is such an important point, Arthi.
• 13:09
  Malika Petersen: Because I think there are firstly there are so many Leratos out there, firstly.
• 13:13
  Malika Petersen: And it can be very frustrating to go to work every single day and then at the end of the month feel like nothing is moving.
• 13:20
  Malika Petersen: So I think first, you know, I would want Lerato to look at what is already happening rather than beginning from I'm currently failing, right?
• 13:31
  Malika Petersen: She has a home now, which is hopefully building ownership over time.
• 13:37
  Malika Petersen: She has retirement contribution, she is supporting her family.
• 13:42
  Malika Petersen: Those things aren't all the same as liquid savings, right?
• 13:46
  Malika Petersen: We understand that, but they tell a more complete story.
• 13:52
  Malika Petersen: Then we would look closely at the credit card.
• 13:54
  Malika Petersen: If it's expensive and the balance stays high, reducing that may give a more immediate financial breathing room, then chasing some kind of uncertain investment return.
• 14:04
  Arthi Rabikrisson: Actually, you know, as you're saying that, Lerato in our example, she might find that the thing she needs most is not another grand financial target, let's say.
• 14:15
  Arthi Rabikrisson: It's just a small amount of resilience.
• 14:18
  Arthi Rabikrisson: Because if the car tire suddenly needs an upgrade and there's no cash reserve, the card will come out again.
• 14:26
  Arthi Rabikrisson: So she can make an extra payment for three months, but then the fourth month can take her back to the beginning.
• 14:33
  Malika Petersen: Exactly.
• 14:34
  Malika Petersen: So I think I mean a plan might be to work on a manageable emergency buffer alongside an affordable strategy for expensive debt.
• 14:46
  Malika Petersen: Right.
• 14:46
  Malika Petersen: She should keep meeting the required repayments and understand any of her employer benefits before changing contributions.
• 14:55
  Malika Petersen: Then when one debt is settled, you get to one of my famous little shifts.
• 15:00
  Malika Petersen: Don't let the released repayment simply disappear.
• 15:04
  Arthi Rabikrisson: Yeah, I like this one as well.
• 15:06
  Arthi Rabikrisson: I mean, this is actually a moment where you could actually change the trajectory, right?
• 15:11
  Arthi Rabikrisson: Because if Lerato has been paying, let's say, 1,200 Rand every month on a particular debt, and that debt ends, she's already learned to live without that 1,200 Rand.
• 15:25
  Arthi Rabikrisson: So before the next subscription upgrade or weekend away claims it, she could decide that some of that moves automatically towards the future.
• 15:35
  Malika Petersen: Absolutely.
• 15:36
  Malika Petersen: And not because she must never celebrate or invest, enjoy life.
• 15:40
  Malika Petersen: But I don't want people to think that, right?
• 15:42
  Malika Petersen: Pay off the debt, go for dinner, enjoy the moment.
• 15:45
  Malika Petersen: But give that freed up money a new purpose.
• 15:48
  Malika Petersen: You know, I've got a one of my colleagues always says get your money a job, right?
• 15:52
  Malika Petersen: Some of that job might be bold, either build her emergency reserves, the job might be to strengthen long-term investing.
• 16:00
  Malika Petersen: The precise proportions and what goes to where will depend on her situation.
• 16:04
  Malika Petersen: But the crucial thing is that at the end of a repayment becomes the beginning of something new.
• 16:11
  Arthi Rabikrisson: You know, it's not always this neat upward line, huh Malika?
• 16:15
  Arthi Rabikrisson: Yeah.
• 16:15
  Arthi Rabikrisson: A person can make progress for a year, then you have a medical bill or maybe a period of unemployment.
• 16:24
  Arthi Rabikrisson: And you know, I think that's where actually a lot of the shame starts to creep in because people see a temporary step backwards as proof that they've just failed.
• 16:35
  Malika Petersen: Yeah.
• 16:35
  Malika Petersen: And I think it's important to note that financial planning has to make room for disruption.
• 16:40
  Malika Petersen: If a plan only works in perfect condition, it's not a plan, right?
• 16:45
  Malika Petersen: Let's be, let's be real.
• 16:46
  Malika Petersen: Right.
• 16:47
  Malika Petersen: You might need to pause an optional investment while dealing with an urgent need.
• 16:52
  Malika Petersen: And that's very different from abandoning that intention altogether.
• 16:56
  Malika Petersen: The goal is to know what matters first and then return to the longer-term plan as your circumstances allow that.
• 17:05
  Arthi Rabikrisson: Absolutely.
• 17:05
  Arthi Rabikrisson: I mean, I still remember in my career when I was unemployed for an amount of time.
• 17:10
  Arthi Rabikrisson: I mean, I actually did that exactly what you're saying.
• 17:13
  Arthi Rabikrisson: The optional investment, I put a pause on it.
• 17:16
  Arthi Rabikrisson: I said to my financial advisor, I can't do this right now.
• 17:19
  Arthi Rabikrisson: I'll come back to it when I can.
• 17:20
  Arthi Rabikrisson: And true word, when I was in a position to do that, I resumed.
• 17:24
  Arthi Rabikrisson: So I love what you're saying there.
• 17:26
  Arthi Rabikrisson: And what I like going back to Lerato's example is that we're not asking Lerato to become a different person or somehow to discover more incomes from somewhere overnight.
• 17:38
  Arthi Rabikrisson: We're helping her to use moments of change deliberately, meaningfully, right?
• 17:44
  Arthi Rabikrisson: Debt comes down, a buffer grows, and then future-focused contributions can also grow.
• 17:50
  Malika Petersen: Yeah, and I think sometimes the hardest part is talking to the people around you.
• 17:54
  Malika Petersen: If you've always been kind of the person who solves the entire family's money problems, right?
• 18:02
  Malika Petersen: Saying I can output this amount, but I need to protect my own retirement too may feel uncomfortable initially.
• 18:10
  Malika Petersen: But it's a boundary that can be part of building a healthier family pattern going forward.
• 18:17
  Arthi Rabikrisson: Malika, this actually just shows why a financial legacy is never just a spreadsheet.
• 18:22
  Arthi Rabikrisson: It's touching identity, it's touching family expectations and also, you know, what we are prepared to do differently.
• 18:30
  Arthi Rabikrisson: Okay, let me bring in taxes now, Malika.
• 18:33
  Arthi Rabikrisson: Because I think for some listeners, tax planning sounds like something reserved for our high earners, our wealthy, who we deem wealthy in inverted commas, people with accountants and lots of folders of complicated paperwork.
• 18:48
  Malika Petersen: And it really shouldn't, right?
• 18:49
  Malika Petersen: I mean, the starting point is always understanding the options that are legitimately available to you and what each option is designed to achieve.
• 18:58
  Malika Petersen: In South Africa, people often hear about retirement fines and tax-free investing and all of those things.
• 19:04
  Malika Petersen: Then both can be useful, but they are not the same thing.
• 19:07
  Malika Petersen: And the fact that something has a tax benefit doesn't automatically mean it's the right choice for each and every person.
• 19:14
  Arthi Rabikrisson: Absolutely.
• 19:14
  Arthi Rabikrisson: Okay, let's unpack that just a little bit more.
• 19:17
  Arthi Rabikrisson: We're not turning this into an episode on tax legislation or anything like that.
• 19:21
  Arthi Rabikrisson: But it's listeners, it's really about understanding the decisions you're making.
• 19:26
  Arthi Rabikrisson: And you know, we've just come out of our taxpayer season last month in October, and the financial year, it's creeping in quickly, right?
• 19:34
  Arthi Rabikrisson: In February next year.
• 19:36
  Malika Petersen: Yeah, absolutely.
• 19:37
  Malika Petersen: Too quickly, in fact, if you ask me.
• 19:39
  Malika Petersen: So I think let's simplify and kind of galvanize you to action listeners before the next tax year end arrives, right?
• 19:47
  Malika Petersen: Let's start with the retirement fund.
• 19:49
  Malika Petersen: A retirement fund is literally intended to provide for you later in life.
• 19:54
  Malika Petersen: Right.
• 19:55
  Malika Petersen: And qualifying contributions may be deductible within certain rules and limits.
• 20:01
  Malika Petersen: But there are also rules about access and how those benefits are taxed.
• 20:08
  Malika Petersen: A tax-free investment, on the other hand, which is often called the TFSA in South Africa, uses a different set of rules, right?
• 20:17
  Malika Petersen: It's an eligible investment growth that benefits from tax-free treatment, essentially.
• 20:22
  Malika Petersen: Within our annual and lifetime contribution limits, the investment holds inside underlying investment is still what matters because the returns are not guaranteed, right?
• 20:33
  Malika Petersen: So you have to understand them, speak to your financial advisor, etc.
• 20:38
  Malika Petersen: The details and limits can change.
• 20:41
  Malika Petersen: So check the current guidance and around your advice.
• 20:45
  Malika Petersen: I mean, ask your financial advisor rather than going to an old or new social media post, to be quite honest.
• 20:51
  Arthi Rabikrisson: Oh, it's true.
• 20:52
  Arthi Rabikrisson: Because the rules, as you said, and the limits do keep changing.
• 20:55
  Arthi Rabikrisson: And I can just imagine, Malika, someone seeing a post somewhere on one of these socials that's saying, put everything into a tax-free account, and then having to withdraw it six months later because whoops, we've got school expenses that need attention.
• 21:09
  Arthi Rabikrisson: It sounds responsible because the account has the word savings in the name, but perhaps actually that money is doing the wrong job.
• 21:18
  Malika Petersen: Exactly, right?
• 21:19
  Malika Petersen: So if money needs to be available for a near-term emergency or accessibility, etc., long-term investing has a different horizon and it's got different risks.
• 21:34
  Malika Petersen: So when you're withdrawing from a tax reinvestment, it doesn't reset the lifetime contribution allowance that you've already used.
• 21:43
  Malika Petersen: So it's really worth understanding the trade if we're treating it as an ordinary transactional same.
• 21:52
  Arthi Rabikrisson: And here's where Lerato comes back into our story, Malika, because she might already be contributing to the time at work, but not really.
• 21:59
  Arthi Rabikrisson: Know what the contribution is or even what her benefits are from her employer, let alone the investments and what they're intended to do, right?
• 22:09
  Arthi Rabikrisson: So before opening three new accounts, say, she could actually start by just understanding the ones she has.
• 22:16
  Arthi Rabikrisson: I mean, how often do we tell people to do this, but they don't?
• 22:19
  Malika Petersen: No, yeah, precisely.
• 22:21
  Malika Petersen: I mean, a small bit of knowledge can improve decision making.
• 22:25
  Malika Petersen: Perhaps she discovers she is already doing more than she realized, right?
• 22:30
  Malika Petersen: That there is an important gap or whichever, whichever it may be.
• 22:34
  Malika Petersen: And then she can decide whether her next available rand should address an expensive debt, some emergency liquidity, retirement, or any other long-term objective that she may have.
• 22:48
  Malika Petersen: And then obviously tax efficiency should support the plan, but not become the entire plan.
• 22:53
  Arthi Rabikrisson: Oh, I love that one.
• 22:54
  Arthi Rabikrisson: I that's the line I want people to hear, Malika.
• 22:57
  Arthi Rabikrisson: We sometimes get excited about a possible tax saving.
• 23:02
  Arthi Rabikrisson: We're not actually asking, can we afford the commitment or even understand what we are buying?
• 23:08
  Arthi Rabikrisson: If the money is needed next month, a theoretical benefit 20 years from now is not going to help you with next month's electricity bill.
• 23:17
  Malika Petersen: And I think this is one place where appropriate advice is work out.
• 23:22
  Malika Petersen: Wow.
• 23:22
  Malika Petersen: Yeah, I agree.
• 23:24
  Malika Petersen: Yes.
• 23:24
  Malika Petersen: Yes.
• 23:24
  Malika Petersen: Taxes and investments.
• 23:26
  Malika Petersen: I mean, we've we've said it before, it is extremely personal.
• 23:31
  Malika Petersen: And the rules, the regulations, the what's out there, what's available, etc., those do evolve.
• 23:38
  Malika Petersen: So we're basically giving you or empowering you listeners a way to ask better questions, right?
• 23:46
  Malika Petersen: This is not a blanket allocation formula.
• 23:50
  Arthi Rabikrisson: Yeah.
• 23:50
  Malika Petersen: At the very heart of it, the tax conversation is about being intentional with a structure that can help your money do its job.
• 23:58
  Malika Petersen: Yeah, absolutely.
• 24:00
  Malika Petersen: I love that.
• 24:01
  Arthi Rabikrisson: I love that reminder.
• 24:02
  Arthi Rabikrisson: Okay, Malika, I want us now to go to the part of list that I find most moving.
• 24:08
  Arthi Rabikrisson: We've spoken about children this season, but sometimes the gift to our children isn't something you just physically hand to them.
• 24:17
  Arthi Rabikrisson: It's actually something they don't have to carry in future.
• 24:21
  Malika Petersen: I mean, for example, taking your own retirement seriously reduces the likelihood that your adult children will have to fund every aspect of your later years, right?
• 24:37
  Malika Petersen: Now, I just want to go back quickly to the point that you made earlier on about different families starting different places.
• 24:44
  Malika Petersen: If you are currently taking care of your parents, for example, financially in their later years, providing your kids with an opportunity to not have to do so in your later years means that you've already left a legacy.
• 24:59
  Malika Petersen: I just want us to think about that, right?
• 25:01
  Malika Petersen: Then, of course, there are families where support across the generation is just part of the fabric of their lives.
• 25:10
  Malika Petersen: And that can be beautiful.
• 25:11
  Malika Petersen: We are not knocking that.
• 25:13
  Malika Petersen: But planning where you can is a way of giving the next generation more room to make choices rather than assuming they'll have to absorb all of your needs.
• 25:24
  Arthi Rabikrisson: I think that's so important, that piece about choices, Malika.
• 25:27
  Arthi Rabikrisson: I think about a family where perhaps you know one person knows every password, every policy, every account, even the repayments, let's say.
• 25:37
  Arthi Rabikrisson: And then everyone else just assumes, oh, that's sorted.
• 25:41
  Arthi Rabikrisson: You know, we have this one person.
• 25:43
  Arthi Rabikrisson: But then that person becomes ill, incapacitated, loss of life, even.
• 25:50
  Arthi Rabikrisson: And then the people who love them, I mean, they are left grieving, trying to reconstruct the financial life of the household.
• 25:58
  Arthi Rabikrisson: The greatest stress might not be the absence of money, it's actually the absence of clarity.
• 26:03
  Arthi Rabikrisson: And again, we have covered this in our legacy episodes this season.
• 26:07
  Malika Petersen: Yeah, and I think that's so true, right?
• 26:09
  Malika Petersen: I mean, I know we've covered it before, but I want to make sure that listeners understand, right?
• 26:14
  Malika Petersen: Often a practical response is not necessary to create some elaborate estate structure, but it's to make the basics visible and appropriate.
• 26:26
  Malika Petersen: You know, have a valid wall.
• 26:28
  Malika Petersen: Often people think they don't need a wall because they think, oh no, I have too little.
• 26:33
  Malika Petersen: Have a wall.
• 26:34
  Malika Petersen: No matter how little you have, have a wall.
• 26:36
  Malika Petersen: Yes.
• 26:37
  Malika Petersen: You know, yes.
• 26:37
  Malika Petersen: Know who the nominated beneficiaries are and review them when life changes.
• 26:43
  Malika Petersen: In fact, review them regularly, even if life doesn't change according to you.
• 26:47
  Malika Petersen: Just review them anyway, right?
• 26:49
  Malika Petersen: Understand the insurances that you have.
• 26:52
  Malika Petersen: Make sure that there's a trusted person that can locate the necessary documents and knows which professional advisors to contact.
• 27:00
  Malika Petersen: If finances are shared, they shouldn't exist only in one person's head.
• 27:06
  Arthi Rabikrisson: As you're saying all of this, it's reminding me of our earlier conversations, Malika, about planning and how planning is actually an act of love.
• 27:14
  Arthi Rabikrisson: We can't remove the grief.
• 27:16
  Arthi Rabikrisson: We can't guarantee life will be easy for the people that are left behind when death comes knocking.
• 27:23
  Arthi Rabikrisson: But you know, you can avoid leaving confusion on top of an already difficult time.
• 27:30
  Malika Petersen: Yeah.
• 27:30
  Malika Petersen: And we can also think about what children actually observe, right?
• 27:34
  Malika Petersen: A parent may say, we believe in saving.
• 27:37
  Malika Petersen: But the most powerful lesson could be watching the family talk openly about a trade-off.
• 27:46
  Malika Petersen: We could spend this money now, or we could put some of it away for something bigger and more important later.
• 27:55
  Malika Petersen: Right.
• 27:55
  Malika Petersen: Here's how we're gonna decide.
• 27:58
  Malika Petersen: And that's a very different experience from growing growing up believing that money is a mystery or a subject that you just shouldn't mention.
• 28:06
  Arthi Rabikrisson: I mean, even watching an adult, let's say, having a conversation and they're saying something like, I need a money decision that didn't work out, and here's what I learned.
• 28:14
  Arthi Rabikrisson: I mean, gosh, Malika, isn't there a lot of modeling in that alone?
• 28:18
  Arthi Rabikrisson: We don't have to pretend everyone, we've always done things perfectly.
• 28:23
  Arthi Rabikrisson: In fact, just being honest about the learning can be such a valuable part of the legacy.
• 28:29
  Malika Petersen: Definitely.
• 28:29
  Malika Petersen: And it doesn't require sitting a 10-year-old down for a 14-minute talk about investment products.
• 28:35
  Malika Petersen: It might be just involving them in saving towards a family holiday, or comparing needs and wants and prioritizing amongst those needs and wants, or just explaining why tempting buy now, pay later offer isn't necessarily the same as being able to afford something.
• 28:57
  Arthi Rabikrisson: I want to offer a different example as well, Malika.
• 29:00
  Arthi Rabikrisson: Imagine a person whose parents never had access to retirement products or even just formal financial advice.
• 29:08
  Arthi Rabikrisson: They remember the sacrifices that their parents made to educate them.
• 29:13
  Arthi Rabikrisson: Okay.
• 29:14
  Arthi Rabikrisson: Their own contribution to legacy, maybe to build maybe a more secure retirement, or even to teach their children to ask financial questions.
• 29:25
  Arthi Rabikrisson: And also making sure essential documents are in order.
• 29:29
  Arthi Rabikrisson: They may not even make headlines about their wealth, but you know what?
• 29:33
  Arthi Rabikrisson: Directionally, the family's financial story is actively being lifted and shifted as a result of these actions.
• 29:40
  Malika Petersen: And I mean, we shouldn't overlook that first shift, right?
• 29:45
  Malika Petersen: Maybe one generation gives the next generation an education.
• 29:50
  Malika Petersen: Right.
• 29:51
  Malika Petersen: The next creates a financial cushion.
• 29:54
  Malika Petersen: I come from a family like that.
• 29:55
  Malika Petersen: My grandmother was a domestic worker.
• 29:57
  Malika Petersen: First, she taught her children the importance of them having an education.
• 30:03
  Malika Petersen: They then created a financial cushion.
• 30:06
  Malika Petersen: The next learns to invest over decades.
• 30:09
  Malika Petersen: That's kind of where I think I am, right?
• 30:11
  Malika Petersen: And then generational progress doesn't always arrive as one huge inheritance pass from one generation to the next.
• 30:21
  Malika Petersen: But it's an incremental series of improvements that gives the next person a slightly different starting line.
• 30:28
  Arthi Rabikrisson: You know, what I really like about what you just said is it actually starts to take the pressure off needing to do everything in just one generation.
• 30:36
  Arthi Rabikrisson: It also asks a more interesting question than, oh, how wealthy do I look?
• 30:42
  Arthi Rabikrisson: To me, it's actually asking the question, what will be different because of the choices I made?
• 30:48
  Malika Petersen: And I mean that can include the difficult choices too, right?
• 30:52
  Malika Petersen: Not financing an image you cannot sustain, having a conversation about money before it becomes a crisis, or deciding that an increase in income won't automatically mean a lifestyle increase.
• 31:07
  Malika Petersen: Yeah.
• 31:08
  Malika Petersen: I think that's so important.
• 31:10
  Arthi Rabikrisson: Yeah, absolutely.
• 31:11
  Arthi Rabikrisson: I mean, actually, now that you're talking about that, you're reminding me of a recognizable moment from someone that I know who got promoted.
• 31:20
  Arthi Rabikrisson: And actually, Malika, within weeks, I mean, I can't even explain to you, weeks, that new income had disappeared.
• 31:26
  Arthi Rabikrisson: And guess where it went into?
• 31:28
  Arthi Rabikrisson: A nicer car, some high-end subscriptions, and literally just this uplift in terms of high standard of living.
• 31:36
  Arthi Rabikrisson: Now, look, there's nothing, nothing wrong with enjoying what you've earned, right?
• 31:41
  Arthi Rabikrisson: But unless you decide before the money arrives, I mean, actually, what you're saying, Malika, the lifestyle can decide for you.
• 31:49
  Malika Petersen: Exactly.
• 31:50
  Malika Petersen: You know, and I think one of one useful practice is to make a decision in advance about a portion of any extra disposable income coming in.
• 32:00
  Malika Petersen: Enjoy some of it absolutely.
• 32:02
  Malika Petersen: We're gonna say this again, but some of it has to improve your future.
• 32:07
  Malika Petersen: And that's not a punishment, it's allowing the benefit of your hard work to last beyond one month.
• 32:13
  Arthi Rabikrisson: I mean, I I think that's practical, but it's also just so wise, Malika.
• 32:16
  Arthi Rabikrisson: So wise.
• 32:18
  Arthi Rabikrisson: So we've discussed a lot.
• 32:19
  Arthi Rabikrisson: Okay, let's make it manageable for our listeners.
• 32:22
  Arthi Rabikrisson: Imagine someone switches off this episode and they're giving themselves 15 minutes with a notebook.
• 32:29
  Arthi Rabikrisson: Where should they start?
• 32:31
  Malika Petersen: Yeah.
• 32:32
  Malika Petersen: I think I'd start with three questions, right?
• 32:35
  Malika Petersen: And I mean, each reflecting our season.
• 32:38
  Malika Petersen: First, let's talk about debt.
• 32:40
  Malika Petersen: What is costing me the most freedom right now?
• 32:43
  Malika Petersen: Right?
• 32:44
  Malika Petersen: It may be the high interest balance or the fact that one emergency sends me back into debt.
• 32:50
  Malika Petersen: Look at that reality, not the shame.
• 32:53
  Malika Petersen: I think, guys, we've spoken about this so many times.
• 32:57
  Malika Petersen: It's fact, it's not feeling.
• 32:58
  Malika Petersen: Do not feel about it, fact about it, right?
• 33:01
  Malika Petersen: Second, the tax.
• 33:03
  Malika Petersen: Do I understand the financial structures I'm already using?
• 33:07
  Malika Petersen: And which legitimate options might actually suit my goals, right?
• 33:12
  Malika Petersen: That includes knowing what happens on your pay slip, what's going on in your retirement fund.
• 33:19
  Malika Petersen: Again, pure facts, black and white, no shame about it.
• 33:24
  Malika Petersen: No, I didn't know this before, I should have known this, none of that.
• 33:27
  Malika Petersen: Just the facts.
• 33:28
  Malika Petersen: Lastly, legacy.
• 33:30
  Malika Petersen: What one action could make life clearer or more secure for either future me or someone that I love?
• 33:39
  Arthi Rabikrisson: I would invite our listeners to stay with the answers rather than trying to rush and solve for all these questions.
• 33:48
  Arthi Rabikrisson: You know, because the first response to, well, what is costing me freedom?
• 33:52
  Arthi Rabikrisson: That response might be my credit card.
• 33:54
  Arthi Rabikrisson: But you know, if you sit with it, everyone, for just another moment, perhaps it also is about that you feel unable to say no when someone is coming to you for financial help.
• 34:06
  Arthi Rabikrisson: Or actually you and your partner haven't spoken openly about all of your commitments.
• 34:12
  Arthi Rabikrisson: That tells me, Malika, when you get to that level, it's a very different type of work that needs to be done.
• 34:19
  Malika Petersen: Absolutely.
• 34:19
  Malika Petersen: And I think that's that's what's important to then pick one action that is genuinely possible in the next 24 hours or a week.
• 34:28
  Malika Petersen: Let's call it give yourselves a week, right?
• 34:30
  Malika Petersen: It might be to check the actual interest rate on a loan.
• 34:34
  Malika Petersen: It might be to set an automatic transfer into some kind of emergency account, right?
• 34:41
  Malika Petersen: It might be to review your retirement statement, it might be to go and have a look at your role and check whether it still reflects your wishes, or make a time to have a calm money conversation at home.
• 34:54
  Arthi Rabikrisson: Yeah, I like that.
• 34:55
  Arthi Rabikrisson: I love those are also practical.
• 34:57
  Arthi Rabikrisson: Everyone, you could pick something like that on your list.
• 35:00
  Arthi Rabikrisson: I would also add one test.
• 35:03
  Arthi Rabikrisson: Okay.
• 35:04
  Arthi Rabikrisson: Can you describe what success looks like?
• 35:07
  Arthi Rabikrisson: You know, and maybe the answer that comes to you is Arthine, maybe it's I'm better with money.
• 35:11
  Arthi Rabikrisson: I mean, but that is so vague, everyone.
• 35:13
  Arthi Rabikrisson: To be able to say, okay, by Friday, I'm gonna have listed all my debts.
• 35:19
  Arthi Rabikrisson: I'm gonna understand what each one is costing me.
• 35:22
  Arthi Rabikrisson: I mean, standing back and looking at that, that is something you can do, right?
• 35:26
  Arthi Rabikrisson: We know the difference between a good intention and a decision is something that's actually entered your calendar, everyone.
• 35:34
  Malika Petersen: Yeah.
• 35:35
  Malika Petersen: Let's say you only have 100 Rand as an example, because we are talking about people that believe, oh, I need to wait till I'm wealthy to have legacy, right?
• 35:44
  Malika Petersen: Let's assume that you only have 100 RAM, or you kinda set aside anything right now, right?
• 35:50
  Malika Petersen: That doesn't disqualify you from this conversation.
• 35:54
  Malika Petersen: Your actions may be to understand what you already have, reduce a recurring expense, right?
• 36:05
  Malika Petersen: I'm not gonna say DSTV, but I am gonna say DSTV, or have a difficult conversation, right?
• 36:12
  Malika Petersen: We don't need to pretend everyone's financial capacity is equal.
• 36:18
  Arthi Rabikrisson: Oh, I'm so, so glad you actually said that, Malika.
• 36:21
  Arthi Rabikrisson: Because it, yes, I mean, I don't think we want the message today to become that anyone can invest if they just try harder.
• 36:28
  Arthi Rabikrisson: No, yeah, that's not what we say.
• 36:30
  Arthi Rabikrisson: Structural realities matter.
• 36:32
  Arthi Rabikrisson: We know this, we understand this.
• 36:34
  Arthi Rabikrisson: We come from a country where so much of this is part of our identity and it's moving across generations, right?
• 36:41
  Arthi Rabikrisson: Income matters as well.
• 36:44
  Arthi Rabikrisson: These unexpected responsibilities, they matter too.
• 36:48
  Arthi Rabikrisson: But we can be hopeful about our agency while really being honest about what are all the different constraints on top of us.
• 36:55
  Arthi Rabikrisson: So the aim is everyone, just take a thoughtful next step, right?
• 37:00
  Arthi Rabikrisson: Do not impose some impossible standard on yourself.
• 37:04
  Arthi Rabikrisson: It's one tiny new hat.
• 37:06
  Arthi Rabikrisson: Exactly.
• 37:07
  Malika Petersen: And over time, that next step can change as your life changes, right?
• 37:12
  Malika Petersen: One season you are reducing debt, another you are building cash reserves.
• 37:17
  Malika Petersen: Later you might be able to increase retirement or other investments.
• 37:21
  Malika Petersen: Your plan is allowed to evolve with you.
• 37:24
  Malika Petersen: I love that.
• 37:25
  Arthi Rabikrisson: I love that.
• 37:25
  Arthi Rabikrisson: Okay, so before we close, Malika, I'd love to hear your parting shot, but I'm gonna ask it to you in the form of a question.
• 37:33
  Arthi Rabikrisson: Okay.
• 37:33
  Arthi Rabikrisson: When you think about your own definition of legacy, has it changed as you've grown older or had different conversations about money?
• 37:43
  Malika Petersen: Yeah, I think it has, right?
• 37:45
  Malika Petersen: I mean, I like I said, I come from a legacy and ancestry where my family lived below the breadline, so to speak.
• 37:54
  Malika Petersen: My father growing up, they didn't have much, right?
• 37:58
  Malika Petersen: And I think that hunger for success always drove his building of a legacy, my building of a legacy.
• 38:07
  Malika Petersen: That hunger was always there.
• 38:08
  Malika Petersen: Our kids are very different, right?
• 38:10
  Malika Petersen: They're born into what I consider growing up as being privileged.
• 38:15
  Malika Petersen: They live a very different life to how I live.
• 38:19
  Malika Petersen: And it's we need to figure out how to install that hunger to build a legacy in them.
• 38:25
  Malika Petersen: Right.
• 38:26
  Malika Petersen: So I think earlier in life, legacy can feel like a number that you want to reach or something that you will leave one day.
• 38:36
  Malika Petersen: But I think the older I get, the more that I see that because of where my ancestors have brought us, where I have brought us, the impacts of it can't be a number anymore.
• 38:50
  Malika Petersen: The impact of the habits, the confidence, the understanding people have while they're still here is more important because that's what I can hand over to my kids.
• 39:00
  Malika Petersen: I think about the people who gave us opportunities even when they themselves didn't have much to give, and how we can build on that rather than measure ourselves against this amount.
• 39:12
  Malika Petersen: So I always say I listen to uh this wonderful, wonderful podcaster, and she's also a writer.
• 39:18
  Malika Petersen: Her name is Noah, but she talks about money being infinite, and that's why we can't achieve, we can't constantly be going towards that infinite amount.
• 39:29
  Malika Petersen: We have to believe that our habits, our confidence, and the way that we treat others is part of the legacy.
• 39:35
  Malika Petersen: What about you, Arthi?
• 39:36
  Malika Petersen: Same question.
• 39:38
  Arthi Rabikrisson: I was just taken away by how you were answering because it was so raw and so authentic.
• 39:42
  Arthi Rabikrisson: And Malika, honestly, we had to dive into our legacy.
• 39:46
  Arthi Rabikrisson: That's like a whole other series, actually.
• 39:49
  Arthi Rabikrisson: Okay, so on the question, definitely, my definition has shifted with age, with experience.
• 39:57
  Arthi Rabikrisson: I like to think it similar to what you were kind of saying, it's an evolution.
• 40:02
  Arthi Rabikrisson: And it will continue to evolve.
• 40:05
  Arthi Rabikrisson: And in a similar vein, talking about families, I think there's something quite liberating actually about the idea that we don't have to transform a family's financial future in one giant leap.
• 40:20
  Arthi Rabikrisson: Because if I think about what my grandparents offered to my parents who have offered to me, and now what I'm offering to my son, there's a whole kind of shift happening at each stage, at each generation.
• 40:34
  Arthi Rabikrisson: And it's not as if all the pressure is now sitting, like we said earlier, on my generation to fulfill the legacy project.
• 40:42
  Arthi Rabikrisson: So, everyone, we may not control the circumstances we started off with, but we can certainly question some of the stories we're carrying now and we're passing on.
• 40:52
  Arthi Rabikrisson: We can become more deliberate about where our money goes, and we can also be more open about the conversations we have with those coming after us, like our kids.
• 41:04
  Malika Petersen: Yeah.
• 41:05
  Malika Petersen: So perhaps, you know, our season's words fit together like this.
• 41:10
  Malika Petersen: This death asks, what from yesterday is claiming a portion of today's money?
• 41:17
  Malika Petersen: Right?
• 41:18
  Malika Petersen: Taxes ask, how do we use the rules and structures available to us more thoughtfully?
• 41:25
  Malika Petersen: And death asks, what will the decisions that we took today make possible for tomorrow?
• 41:30
  Malika Petersen: And not every answer is easy.
• 41:32
  Malika Petersen: And I think the point is that it's not necessarily three separate boxes.
• 41:37
  Malika Petersen: They shape and impact each other.
• 41:40
  Arthi Rabikrisson: You know, and if the bills are still arriving, everyone, which let's be honest, they will be, right?
• 41:45
  Arthi Rabikrisson: That doesn't mean the future has to be put on hold indefinitely.
• 41:49
  Arthi Rabikrisson: You know, you can start by understanding one debt, making one better informed decision, or having just one conversation that your family has avoided.
• 41:58
  Malika Petersen: Yeah, and remember, everyone, don't measure your legacy only by what you leave behind, right?
• 42:05
  Malika Petersen: From a number perspective.
• 42:06
  Malika Petersen: Look at what you're making possible while you're here.
• 42:09
  Malika Petersen: And take some time now to plan for it step by step.
• 42:12
  Malika Petersen: I really love that.
• 42:13
  Malika Petersen: I love that.
• 42:15
  Arthi Rabikrisson: Perhaps the question to carry with you this week, everyone, is what financial story am I helping the next generation inherit?
• 42:22
  Arthi Rabikrisson: And what one small part of that story could I change now?
• 42:27
  Arthi Rabikrisson: And with that, everyone, ciao, swanning out till the next episode.
• 42:33
  Malika Petersen: Ciao, swanning out.
• 42:34
  Malika Petersen: Thanks for joining us.
• 42:38
  Malika Petersen: We hope you found these ideas and guidance useful.
• 42:42
  Arthi Rabikrisson: We're both seasoned in the investments industry.
• 42:45
  Arthi Rabikrisson: Malika is at the cold phase of how, where, and why people invest the way they do.
• 42:52
  Malika Petersen: I certainly am.
• 42:53
  Malika Petersen: And you are team, you've witnessed different types of investment behaviors around money too.
• 43:00
  Malika Petersen: And now what is the global awarding coach to free us from the mindsets that stop us from becoming financially free?
• 43:08
  Arthi Rabikrisson: Do subscribe, share, and write a review or send us comments.
• 43:12
  Arthi Rabikrisson: We would love to hear from you.
• 43:14
  Arthi Rabikrisson: Catch you on the next episode of the Swan Effect Podcast.
• 43:18
  Arthi Rabikrisson: Bye for now.
• 43:20
  Arthi Rabikrisson: Ciao.