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It's My Money with Lloyd Uren · Strictly Business

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  You're listening to Strictly Business Podcast with Lindsay Williams.
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  This edition of It's My Money is brought to you by Brenthurst Wealth, your partner
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  for global wealth creation.
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  Welcome to It's My Money.
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  It's My Money is brought to you by Brenthurst Wealth, South Africa's
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  multi-award winning boutique wealth manager.
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  With me today is Lloyd Uren from the Belleville Brenthurst Wealth office today.
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  And Lloyd, you know, sometimes you...
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  Look at market screens and they're flashing red and they're flashing green
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  and you read articles and you watch television and you listen to
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  podcasts and everything comes a little bit a little bit overwhelming, a little bit
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  complicated.
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  So I really liked the theme of today's podcast and that's the headline,
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  four timeless money lessons for today's investor.
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  In other words, you go back to basics.
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  Well, thanks very much for having me, it's always a pleasure to speak to you.
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  Thank you.
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  Yeah, absolutely.
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  I think we've spoken, you and I,
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  several times about sort of the fundamentals and basics of investing.
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  And it always comes back to the fundamentals and getting the first things
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  that need to be done correct.
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  So yeah, always coming back to the basics, getting those right so that we can kind of
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  take bigger steps in other facets along.
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  You introduce your article with a paragraph which is sort of almost
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  nostalgic.
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  You say, back then homes were affordable, jobs were stable, bank savings actually
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  earned interest, but today, of course,
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  that's all been turned on its head.
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  It doesn't matter what the circumstances are, though.
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  The fundamentals stay the same.
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  And you start with an interesting one, the first one, credit cards.
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  I know that I use my credit card relatively responsibly, but probably not
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  as responsibly as I should.
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  What are the pros and cons of a credit card, please, Lloyd?
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  Well, I think credit cards are one of those things that are pretty divisive.
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  You're either for them or you're against them.
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  And I've struggled to find a bit of middle ground in people I've spoken to.
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  But ultimately, obviously, it's very easy to overspend it when you kind of just
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  think,
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  oh, I've got all this extra money because they've given me a very nice limit to use.
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  And then all of a sudden, you've...
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  space.
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  spent 25 000 and you only had 20 000 coming in and you do that a few times and
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  now you're kind of sitting in
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  about 10 grand then 20 grand's worth
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  of debt and trying to pay that off every month with a very high interest rate that
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  kind of tends to be the big
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  pitfall and i think what everyone fears happening because they hear one one or two
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  stories of it's
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  happened to a friend of theirs or a family member and that's kind of the fear is
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  where the misunderstanding comes from i suppose and
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  One of, I suppose in the theme of the article, one of the good pieces of advice
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  I got from my own parents was using a credit
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  card as a way to show that you're a responsible lender.
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  And yeah, ultimately that's what it is.
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  So if you get given a credit limit of 20,000 Rand,
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  my own philosophy is sort of to cut that in half and use half one month, half the
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  next month.
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  That way you don't exceed the limit or you have a little bit of leeway if you have
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  any emergencies.
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  But it allows you to keep rolling over to the next month with some credit on hand as
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  well as allow you to pay off the full amount,
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  which ultimately helps you build a credit score because you are showing your bank or
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  your institution that you're a very responsible lender.
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  You can pay back your debt.
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  So I suppose, yeah, that's the strong benefit that it allows.
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  And you also get all these lovely benefits from forward-thinking companies like
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  Discovery, for example.
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  I mean, you don't realise that every time you swipe your card or...
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  do whatever you do with it, it can give you some sort of benefit down the road.
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  Absolutely.
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  I think Discovery especially have cracked the code in terms of their Discovery miles
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  program.
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  It kind of covers their insurance side and their banking side and all things health
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  and wealth.
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  So definitely, I think there's a lot of people who've moved over to Discovery,
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  especially and found they're able to pay for flights without spending actual money
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  or get a of
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  appliances for their homes or any sort of other maybe more fun items that they
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  wouldn't typically want to spend their
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  money on because they've almost earned that right to to get something for
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  themselves there was another thing as well just before we leave credit
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  cards when i got a card somebody said to me if you pay on on this date every month
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  you get a
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  certain amount of Interest-free credit, I mean,
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  you're essentially borrowing money from a credit card company and you pay it back,
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  obviously,
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  but that does incur an interest payment at certain times if you're over your
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  limit or you pay later or whatever.
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  But there's a certain formula that you get something ridiculous like 56 days
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  interest-free credit.
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  That's not in your article, but that's one to look at.
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  No, absolutely.
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  Number two in your article is...
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  investing isn't gambling.
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  My parents, my late parents, they wouldn't have known what the stock market was,
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  Lloyd.
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  Those were less enlightened times.
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  I mean, you're of a different generation to me.
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  But the fact is that investing was seen as gambling.
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  Yeah, absolutely.
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  And I think the key aspect that it comes back to on what makes it so
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  different and not seen as a, shouldn't be seen as a gamble these days is the level
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  of information.
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  I think back in the sort of 1950s and from there, you didn't have access to a cell
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  phone that could access the internet that could
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  tell you almost anything about any market in the world at any time.
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  Kind of, it had to come through in drips and drabs in the daily newspaper or over
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  the radio.
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  And now it's completely gone off the rails through the stratosphere on the amount of
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  information we can get.
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  And with that, there are a lot of intellectual people who are sifting
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  through this information and finding how it impacts
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  certain market regions and finding where opportunities for growth are.
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  So really, the amount of information that is available takes away a lot of the
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  uncertainty,
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  which I suppose gambling can't.
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  compete with in a sense because the statistics haven't changed the odds are
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  always going to be against you and those odds are always the same
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  so yeah i think the the level of information has really shown that uh
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  investing is more is a big
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  opportunity not a gamble yes especially if you're in for the long term which is
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  something we we and i know you
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  and your colleagues at ventures wealth do drum in a lot
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  you're in for the long term number three is an interesting point and it really It
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  makes me shiver,
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  actually.
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  Start now, not later.
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  How many times have people said to me, Lindsay, if in 1988, when you went to
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  South Africa,
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  you had put away a thousand rand a month or whatever the figure was,
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  do you know how much that would be worth now if you had to put it in an all share
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  unit trust or something?
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  Don't put it off.
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  Just start whenever you can, I think, is the message here.
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  Yeah, absolutely.
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  And I think it's probably the hardest part about starting your investment journey is.
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  Thinking that the seemingly small amount you're putting in is having no impact,
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  is having no benefit.
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  You could rather have that money on hand to spend when things are getting difficult
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  in the present.
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  But, you know, we've seen with a lot of our clients that after three years, five
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  years, ten years,
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  the amount of growth and compound growth that has accumulated to them for just
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  being consistent, starting with their
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  500 grand debit order, which turned into...
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  adding their bonus at the end of the year,
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  which turned into an extra contribution amounts every month that they really
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  started to
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  notice the gains that they were making.
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  And they've really been so pleased with just seeing where they've gotten to with
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  seemingly not knowing what they were doing.
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  They were just putting an amount away and not thinking about it.
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  Obviously, when you look at it every day, it becomes more of a, why isn't it growing
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  or why is it doing badly?
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  But if you take a few steps back and give it the time.
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  again, the time to do what it can do in the market,
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  you really start to reap the benefits down the line when it really becomes most
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  important.
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  Exactly.
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  It's also important that even if you're like me and you didn't start now because I
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  was just too busy doing other things,
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  apparently, you can pass it on to your children or your grandchildren, etc.
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  Now, final one is a savings account isn't a retirement plan.
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  Again, going back to my parents.
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  Their idea of investing was bunging the money in the bank or in those days, even
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  the post office in the UK.
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  Yeah, absolutely.
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  And it's a very different world we live in.
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  I remember speaking to my father earlier in the year and he was telling me about a
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  first time homebuyer's allowance that he was able to get
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  when he was my age.
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  And I just felt so hard done by because even just to pay rent is higher than to
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  sort of what paying a lease
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  is much more difficult now.
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  and Yeah, investing in a home is a lot more difficult of a task to do in this day
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  and
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  age compared to back then.
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  But there are opportunities to really get into the market at this point.
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  And yeah, the real growth comes from investing, not from saving.
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  I think we see inflation rolling on every year and sort of what you could buy with a
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  100 grand note a few years ago is a distant memory now.
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  so really to be able to put your money into a structure that works and is
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  invested into growth opportunities
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  while also maintaining your your current spending sort of account and your
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  emergency fund just sort of to
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  cover about six months to a year of your expenses you
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  do have to play a bit of a dual game and focus on both but putting towards the the
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  long term in a
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  growth opportunity investment like a retirement annuity, like a discretionary
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  investment or a tax-free savings account,
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  that that's where it's really going to matter for your retirement one day.
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  Exactly.
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  And if you're unsure of any of the things that you, the products that you've spoken
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  about, Lloyd, of course,
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  just go to your financial advisor, your financial planner.
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  We've both spoken about our parents during this chat.
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  You say their principles still matter, but the world has changed.
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  and you go on to say, just to round off the article, With smart strategies and the
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  right support,
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  you can turn good intentions into real financial progress.
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  And just I'll reiterate before you end our conversation,
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  I'll just say sometimes just get back to basis and cut out all the noise in your
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  life.
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  Do you want to just finish off, please, Lloyd?
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  Absolutely.
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  The good financial principles will always put you in a strong footing.
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  No matter how long or short the term you're considering.
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  I think, obviously...
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  When you start in the current moment, in the present, you're looking to work a
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  strong budget,
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  you want to put away some of the money of your income and you want to keep your
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  costs
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  as low and as controlled as they can be.
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  You want to take the excess of that and put it into investments.
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  And for the long term, you want to be contributing as continuously as you can.
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  If and when you get lump sums from bonuses or windfalls or inheritances, putting that
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  into them as well.
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  But consistency and discipline and working with someone who isn't looking to be,
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  well, in the best interest of your investments and to help you get to
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  retirement and to live a lovely financial life.
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  Lovely financial life.
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  That's going to get you where you need to go.
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  That's a great way to end, Lloyd.
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  Thanks very much for your wisdom.
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  Lloyd Uren is from Brenthurst Wealth speaking to us from the Belleville office.
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  And that was It's My Money.
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  It's My Money was brought to you by Brenthurst Wealth, an award-winning
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  boutique wealth management company.