Markets don’t make you money

Markets don’t make you money; your habits… make you money.

As creatures of habit, we ultimately become our own best friend, or our own worst enemy. This is why it’s important to be mindful of how our emotions affect our choices and influence our behaviour.

We can remind ourselves of this time and time again, but still we might find ourselves slipping into old habits and allowing emotional decisions to vilify our investment strategies.

This is largely due to the fact that if we step back and take a broader look at the market performance of the past three to five years, most local markets have underperformed. Many will say that only offshore has been showing growth, but even that is another way of saying that the ‘grass is greener on the other side of the fence.’

We all know that the grass is greener where it’s watered!

But here’s why this concept throws us so easily: performance doesn’t follow calendar years.

We do. We follow calendar (or financial) years. The reality is that three bad years doesn’t necessarily mean that your investment strategy is wrong. There will ALWAYS be a better performing asset class, share or fund. There will always be that temptation to jump ship when we see another vessel moving ahead a little quicker than ours.

And this is typically where we lose our money. This behaviour assumes that the markets will make us rich, and forgets that it’s our habits that make us wealthy. Markets yield the best returns over time, and not at a specific time, which speaks to the importance of following the ‘buy and hold’ strategy rather than the ‘buy and sell’ strategy.

Emotional awareness and diligent behaviour have the biggest impact on our portfolio. Managing these two key elements to our future wealth are not easy as both can be easily swayed under the right conditions – and poor market performance (especially after a Black Swan) creates these exact conditions!

Don’t try to go it alone when you’re feeling like this.

Having an objective partner on your side to help you process the emotional turmoil that rides the wave of a crashing market is invaluable to building your wealth. People who work with an adviser typically enjoy 1-2% better returns; over 25 years that can be almost double the return of someone who invests without an adviser.

They will also be able to remind you that maintaining your premiums during volatility allows you to purchase shares or allocations at cheaper prices (effectively acquiring more stock) and benefit your portfolio even more in the future.

Remember, it’s not the markets that will make you wealthy; it’s your habits.

Why hobbies help

Time is our greatest investment opportunity – we should invest the time that we have in a diverse portfolio of activities that will provide us with positive returns.

Having a solid routine helps us to squeeze utility out of our time. However, if we get stuck in the same routine for too long it can start to feel monotonous and laborious. Especially so if we are spending our down time on low value activities such as watching TV or browsing social media.

Sometimes we need a break, but that doesn’t mean we shouldn’t be doing or achieving something with our time. A hobby can provide us with a sense of purpose, an outlet for stress, a creative challenge or all of the above!

Career coaches have confirmed that having a hobby can help you be better at your job. Not only does it show your employers that you have passions and a drive to do something with your time, it also helps to prevent burnout. When we are bored at home our workload can prey on our idle minds, a hobby provides us with a welcome distraction – engaging our brain on an enjoyable and unrelated pursuit.

With the massive success of websites like Etsy (an e-commerce platform focussed on handmade goods) it is clear that hobbies can do more than merely fill our time. Many hobbies are practiced in solitude and as such we often don’t realise how much our skills have progressed. Whether you are selling succulents, making bespoke leatherworks or teaching a craft, there is always an opportunity to turn a hobby into a side-hustle.

Hobbies can also help us adapt to retirement. Many people are left wondering what they will do with all of the extra time they have on their hands once they retire. But you will never hear that from a golfer, woodworker, painter or fisherman!

Perhaps the most important facet of a hobby is the (often indirect) social aspect. It provides us with interesting stories to tell. It lets us explore and play and be young at heart, shirking the stresses of life, one game of Bridge at a time. It connects us with people on a level that is fun.

The impact of the economy on small businesses

In a 2018 article, Tim Davis (President of The UPS Store) said this of small businesses:

“Small business is the backbone of the economy. … It’s these businesses that are driving local economies, providing jobs for local residents and impacting key community organizations, through charity and service.”

Whilst small businesses are crucial to the infrastructure of a robust economy, they are equally affected by the health of that very same economy that they drive.

If we think about our own bodies – everything is connected. Having good posture is not just about sitting up straight!

“To maintain proper posture, you need to have adequate muscle flexibility and strength, normal joint motion in the spine and other body regions, as well as efficient postural muscles that are balanced on both sides of the spine.”

When we think about our spine, or back bone, we tend to initially focus on the bones. We may think of a skeleton that we once saw in a book or classroom. But a healthy functioning body is more than just a skeleton – it’s everything in between and around it! Even the foods we eat and drink can have a serious impact on our health. Any change in one area of our bodies can affect everything else.

In the economy, financial distress caused by the effects of black swan events will cause the majority of small, medium and micro-sized enterprises (SMMEs) to come under severe strain, and possibly even leave their future survival uncertain.

During the COVID-19 pandemic, many countries are finding that as many as nine in ten small businesses are struggling or temporarily closed as a result of the impact of the virus (a black swan event) on the economy. A fraction are able to operate as normal and almost none would ever say that they are thriving. Decreased revenues and lack of financial resources mean that the backbone of the economy is heavily strained during these times and needs serious recovery and therapy time.

Cash flows dry up and small businesses are unable to operate for much more than three months without conditions changing. This affects their ability to pay rent (hitting landlords hard), salaries (hitting staff hard) and other service provider contracts (hitting other SMME’s hard).

Despite all of this, we find that the spirit and determination of small business owners to be far more resilient than the economy! It’s for this reason that the economy can indeed recover, and new opportunities can be found – but we all have to work together.

If you’re not a small business owner, try and find out from your immediate network how you can support local businesses. This may mean buying veggies from a local supplier, or using smaller retail outlets for your purchases rather than going through bigger branded chain stores. If you already use the services of SMMEs, try to pay their bills on time and encourage your friends to use them too.

This is how we boost the strength and resilience of our economy when major events occur. This is how we keep our friends and family employed and how we pull the very best of ourselves through the toughest of times.

What did you do with your first paycheck?

One thing we can always know for certain is the past; but with far less certainty, the future, and even ‘later today’… eludes us. Despite knowing this, we often fall into the trap of thinking that we should have done certain things better, because we can see (looking back…) what a difference it would have made in our lives today.

Some of the lingo we repeatedly hear says: “Do something today that your future self will thank you for.”

Market updates are full of articles telling us that if we’d invested $1000 in Amazon, Tesla or Google etc, it would be worth tens of thousands now. But a good financial adviser or wealth manager will tell you that this information only tells us one thing: we can learn from the past, but we can’t predict the future.

When it comes to personal financial planning, we need to be aware of what’s going on around us, but we can’t put that first. What’s going on in the world (past and present) should colour our decisions, but not form the heart of our personal financial plan; your personal financial plan needs to be about YOU!

Even when we look at our own personal financial situations, we can fall into the trap of looking back and wishing we’d played a few of our cards differently. Sometimes, this pertains to habits we’ve formed from our very first paycheck.

We can’t change what we’ve done with the last 12, 36 or even 120 paychecks, but we can decide what we will do with the next one.

1. Get into the habit of saving

When we receive our paycheck (or a few bulk client payments for those who are self-employed) it can feel so well-deserved and the urge to spend is overwhelming. We need a plan to avoid spending it all, thinking to ourselves all the time that we’ll save next month.

Warren Buffet says: “Do not save what is left after spending, but spend what is left after saving.”

Saving is about paying your future self a bonus. It’s a habit that will only benefit you – if you haven’t been able to form this habit from your first paycheck – try and start it this month.

2. Personal finance is personal

It’s really hard to see the things that our family and friends are buying and not feel tempted to make similar purchases, simply because they have done it first. If their money decisions make sense with your personal plan (like buying a practical car or investing in a course to upskill) – then learn from their homework and outcomes. But, if it’s outside of your dreams, your goals AND your income… don’t do it.

Many people look like they are doing really well, but they’re actually drowning in debt. Try not to be one of those people. If you are, remember that your finances are personal – they’re yours; you’re in control. We can work together to manage your debt, we can also work together to help you make personal financial decisions that make sense for you. Use your next paycheck to make decisions that are unique to your personal financial situation.

3. Avoid bad debt

Spinning off that last thought; avoid bad debt!

Not all debt is bad, but it makes no sense to pay the high interest rates attached to credit cards when a bit of planning and patience will allow you to buy the things you really need. Especially when times are tough, it’s easy to take out extra credit rather than reign in our expenses. This is the advantage that you have in a financial adviser – together we can help you make objective, positive choices for your next paycheck.

In a recent article on Allan Gray’s website, Phiko Peter wrote the following:

“You are at your most powerful today to take care of the “future you”.”

You can’t change what you did with your first paycheck – but you can change what you will do with your next one.

Crack the ice ahead of you

Spring is around the corner – bringing newness, freshness and invigoration. After a long winter, it’s easy to find your attitude has iced-over! Here’s how to crack the ice going forward…

Remind yourself of the plan and direction you have

Without a plan, we are completely lost. Having a solid strategy in place establishes our priorities. Having a plan makes the decision-making process so much easier. If all we have to do is ask ourselves, “Does this aid me on the path to achieving my goal?” then the answer is usually quite straightforward.

A plan shows us where we are going, but more importantly; it shows us how far we’ve come. The very act of making a plan turns an idea into a tangible goal!

Leverage the Support of Those Around You

Surrounding yourself with the right kind of people can be the difference between success and failure. Researchers at Harvard did a study in 2007 that analyzed a social network of 12,000 people, they found that your likelihood of eating unhealthily increased by almost 60% if you had friends who also started eating unhealthily. If our social circles can have such a profound physical effect on us, imagine the financial and mental implications of having positive support from our peers!

It is important to have people around us that we can trust with our plans and bounce ideas off of. People who can hold us accountable when our progress grows stagnant.

Prepare to overcome obstacles

Nobody ever did anything worth doing without failing first. When psychologists talk about the fear of failure (or atychiphobia), what they’re really talking about is the fear of shame.

It isn’t a lack of desire that keeps us from taking a step forward, it’s an unwillingness to find out if we truly have what it takes. This brings us back to the importance of a plan. We can get caught up in fantastic ideas about what the future might hold, but without a plan those ideas are nothing more than a vague possibility. Having a plan and direction breaks our grand schemes down into achievable goals. It sets us up for success by toppling the dominoes over one at a time.

If you’ve lost sight of your plans or are in need of some direction – let’s chat!

Start marketing yourself

Before we can think of saving, spending and investing – we first need to make money. Almost everybody would accept more money if it were offered to them. But, as is often the case in life, we need to put something in to get something out. One of the most effective ways to boost professional offerings, find new employment or elevate a business profile is by successfully marketing yourself.

Here are some easy ways to positively promote yourself:

Share what you know

Word of mouth is the best kind of marketing you can hope for. It is the verbal equivalent of a 5-star rating and it is so utterly personal compared to any other form of advertising. Your knowledge is an asset that gains value when it is shared (as long as it isn’t confidential or covered by an NDA).

Being generous with information will get you noticed by the people you help, and the people they know.

Networking is key

As the saying goes “It’s not what you know, it’s who you know”. Microsoft must have been well aware of this when they bought LinkedIn for a cool $26.2 billion in 2016 (for those that don’t know – LinkedIn is a career-focussed social networking site).

LinkedIn allows you to show off your career achievements and connect with like-minded professionals. It is the perfect platform to take advantage of the power of networking and market yourself to a focused audience.

Find your USP

A USP (unique selling point) is a niche factor that sets a product apart from its competition. Your own USP could be specialist training, astounding business achievements or a unique blend of past experience and personal interests. Once you’ve honed in on your USP be sure to let people know about it.

Remember, the best way to sell anything is by highlighting benefits over features. (For example: a feature of the iPod is that it has 2Gb of storage, the benefit is that you can carry around 1000+ songs in your pocket)

The job market is highly competitive, but the digital age has opened up many avenues for us to gain an edge. In addition to this, strain on the global and local economy makes it even more important for us to be accessible and approachable for new business. We live in a culture where people are most likely going to google you before that first engagement – make sure you’re happy with what they will find!

Lessons from the lighthouse

Here’s the thing about the lighthouse – it’s focus is always offshore. At the time of writing this article, the world is still flailing under the storm of the Coronavirus and the conditions have caused us all to rethink many of the foundations in our lives that we once thought secure.

Just like the view from the lighthouse, the seas can go from calm to savage in a matter of hours, the visibility can decrease from clear to cloudy in minutes and the boats in the bay may find themselves in sudden peril.

Do they stay – or do they sail off for calmer seas?

Whilst the lighthouse is always looking out for ships, it’s purpose is to warn them that there are rocks nearby. It’s not actually there to locate ships (even though it’s a helpful vantage point), it’s up to the ships to decide whether to risk the onshore conditions, wait it out, or find a different port.

Depending on the skill of the captain and the crew, the size of the boat and the value of the cargo, they can choose how they react to the prevailing conditions. Likewise, when it comes to investing and your portfolio – you too can decide how to react to the prevailing conditions.

For some, the option is clear: go offshore.

For others – they would prefer to handle the risk of the rocks that they know are there and try to navigate them safely into harbour.

It’s not a straightforward decision. Right now, there are enormous differences in the crests and dips of the current and forecasted waves as economists look at the short, medium and long term. The IMF (International Monetary Fund) forecasts global GDP to decline nearly 5% in 2020 and rebound 5.4% in 2021.

The lighthouse is warning us that there is a lot of forecast risk here and a lot depends on political, medical and economical stability and strength returning. Some feel that the global economy will only return to 2019 levels, in 2023, but possibly later.

The speculations are that our best operational capacity for the economy will be around 90% for the next three to five years. This means that we will have to consider our investment opportunities far more prudently, and consider other avenues of generating, stimulating and sustaining income.

Offshore investment products will be a good solution for most investors during the next few years and may very well accrue a heavier weighting in their portfolio. Before you make big decisions about your investment portfolio, ensure that you’ve consulted with us and that your choices are in line with your personal financial plan.

Don’t spend based on other people’s income

The practice of storytelling is ubiquitous among cultures all across the globe. Sometimes we seem to forget the power that a story can hold over people. We use stories to make sense of our world and to share that understanding with others. When it comes to something as important as finance it is important that the stories we tell ourselves are based in reality.

Yes, the stories that we tell ourselves. We can be forgiven for inflating the truth amongst friends, since most of the time everyone is aware that the story is unbound by facts in the name of entertainment value. But when creating the stories that we tell ourselves, the stories that we make financial and life decisions based on, our brains can play tricks on us.

A notable example of this brain trickery is known as the Relative Income Hypothesis. This hypothesis, developed by an American economist named James Duesenberry, states that an individual’s attitude to consumption and saving is dictated more by their income in relation to others than by an abstract standard of living.

In more basic terms, we base our spending habits on how we think our income compares with those around us – our neighbours, family and friends. A classic case of keeping up with the Joneses, except we have absolutely no clue what the Joneses financial situation looks like compared to our own. So, we create stories.

If our neighbour pulls up in a flashy new car we might be saying to ourselves, “How can they afford THAT?!”, “Their payments must be through the roof!”, “Are they more successful than me?”… only to find out a few days later that the car was on loan from a dealership while their regular vehicle was getting fixed. It is possible we might have even started looking at financing a new flashy vehicle of our own just to see if it would be viable.

That is the power that stories can have on us. We can go from financial contentment to debt in the space of a misunderstanding. It is important to remember that the only financial situation that matters is our own.

But, let’s say the flashy car was your neighbour’s latest toy to keep, would rivalling their new purchase really make us happy? We shouldn’t be feeling like we are stuck in a rat race. If we can nurture an abundance mindset we will see that life is full of opportunities.

If you’re running low on opportunities or feel like you’re financially stuck then let’s get in touch!

What the low interest rate means for you

In light of the difficult times recently, Southern Africa has been awash in low interest rates. When South Africa significantly cut its base interest rate from an already-low 6.25% down to 4.25%, it officially became the lowest interest rate the country has ever had. In late 2019, the Bank of Namibia’s Monetary Policy Committee reduced the rate to 6.5% from 6.75%, then lending rates at Bank Windhoek were slashed further come 2020.

Interest rates, particularly interest rate cuts, typically have complex and far-reaching effects on the market, but what does it mean for you?

From you as a consumer to you as an investor, we’ve rounded up the most significant ways the low interest rate affects you – and how to best capitalise on it.

Cash is not king (when investing…)

In the wake of the devastation of the markets, economy and the enormous volatility in recent history, the interest rate cuts came as a boon to consumers to keep their heads above water. But what is a help to the consumer is a hindrance to the investor. Yes, money not appreciating in value means that goods and services won’t cost more and a household’s day-to-day dollars will stretch further, but any money set away in savings won’t appreciate in value.

Now is not the time to be overweight in cash investments. “If you’ve got money in a bank deposit account, money market account or other “cash-type” vehicle, your interest rate earned will fall by a full 2%,” said Prudential earlier this year. “According to Prudential’s calculations, cash-related investments are now only likely to return around 0.2% p.a. more than inflation over the next three to five years. With its potential returns so much lower, the cash holdings in your portfolio could now be too high if you have a medium- to longer-term investment timeframe, acting as a drag on future returns.”

Risky business

Fortune favours the bold, especially in this kind of market. As we have mentioned above, simply leaving your cash to sit in an account as a means of saving will not get you any richer (in fact, it’s now worth 2% less!) and so higher risk, with higher yield, options need to be considered. For example, things like equities, investing offshore and gold have all found favour recently. 

A debt to pay

A recent communication from insurer Liberty outlined another useful aspect of the low interest rate. “This is the lowest interest rate cycle we’ve seen in a long time – cut off your debt and do not get into new commitments right now,” said Liberty economist Tendani Mantshimuli.

In addition to this, your home loan costs are lower, because the value amount in your bond is worth less than it used to be when interest rates were higher. It’s a great time to repay your debts faster, but try not to extend debt as it will be more affordable now, but will become expensive when the interest rate increases again and markets strengthen.

Now is the time to save

Compound interest is one of the most wonderful roads to wealth creation – it’s why financial advisers urge people to start saving younger. Unfortunately, it is hamstrung by low interest rates. In our current environment, any savings will take longer than it would have in the past to be worth as much and then to appreciate as much as when rates were higher.

For that reason, it’s even more important than ever to set aside as much for savings as you can, as early as you can, because more than ever you can’t afford to lose out on valuable time that will make you compound interest later. 

Ultimately, like every move of the market, low interest rates have their good sides and bad, opportunities and dangers. That’s why it always helps to stay in touch with your financial adviser who can help you make the most of exactly where you are.

Ways to save when times are tough

Most of us are chronic under-savers even in the best of times. Yet with the current economic environment, lots of previously hypothetical concepts like ‘what if I’m retrenched or have my salary cut?’ are far more concrete – and, unfortunately, more likely to happen.

There’s never been a time when saving is more important, but there’s also likely never been a time when it’s more difficult.

Do you want to put something away for a rainy day (or retirement) but don’t know how to stretch your money far enough to do so? Here are some ideas.

Change it up

Most of us want to budget, but the truth is that it’s tough and can be really… really boring. We want the benefits, but not to cut our creature comforts out of the picture. One of the most effective ways to have your cake and save it, too, is to put away all spare, leftover change. Got a cheeseburger for R53? Put away R7 to make it an even R60. These tiny amounts are not only indiscernible to the average person, even on a budget; they also add up fast.

There are apps and platforms that can help you do this – micro-saving on a daily basis makes it much easier than trying to commit to a large some at the start or end of every month. If you practice a cash-diet – you can even use a jar for these savings. Old-school can be cool.


We don’t have to eat so much meat. In fact, we don’t have to eat meat at all! Tally up your grocery bill, and you’ll often find that by far your most expensive items are from the meat, dairy and egg isles. Find some good recipes online and try to go vegetarian for dinner two nights a week. Calculate how much you would have spent on meat for those meals and put the money in a savings kitty instead.

Hard cash

It’s so easy not to stick to a tight budget these days, when money is nothing more than a few numbers on a screen. To help you save on day-to-day smaller expenses like weekly groceries, toiletries and your daily work cappuccino, try withdrawing the amount of money you’ve budgeted for those items, for that week. Seeing the physical money in your hands and being able to note how much or little is left is a powerful savings tool that can help with splurging only on what really matters to you.


Another way to be mindful about not only cutting expenses, but actively saving, is to write down all the money you spend and all the money you put away. Patterns might suddenly become obvious to you that weren’t before: ‘wow, I always spend too much money on groceries when I shop on an empty stomach!’ Knowledge is power in this case, and this mindfulness can help with saving cents and getting competitive with yourself about putting more and more away each month for the future. There are plenty of handy apps for it, or you could buy a hip notebook to jot them down in.

(Don’t) take the credit

If you have them, get rid of clothing accounts, cellphone contracts and credit cards as soon as you can. The interest in repayments on these is excessive – you’re often paying more than double what the item actually costs! Repayments like these also eat up your monthly budget without you even realising. Buy only what you can afford, don’t spend unnecessarily. Try keeping your same phone a little longer (or springing for a reputable second-hand option) and pay off credit card debt as fast and as often as you

Go pro

When saving and scrimping rands and cents, it might sound like madness to spend money on a financial adviser.

At the end of the day, these are just ideas – no one can grow your savings for you but you, and no one will have the best idea of what method works for you individually except yourself. Still, as a starting point, give these a try. With these tips, some planning and some determination, you’ll reach your savings goals in no time.