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Wednesday 30 August 2017

Top Tips From The Sharpest Pencils

What is your number one personal finance or investing tip?

This is a question I have wanted to ask some of the experts for a long long time. This one question would force them to take all of their skills, knowledge and experience and distil it down into only one concept or piece of advice.

I have quickly realised that a blog post would be the perfect excuse for me to pry open their minds and extract the personal finance gold that they keep in there! So I rounded up all the personal finance hooligans I could get hold of, and asked them just one question:

If you could give only one piece of personal finance or investing advice, what would it be?

In an ominously good sign, 13 people responded to the question. The answers are listed below (in order to avoid being accused of any discrimination, they are in alphabetical order - sorry Kristia!)


Marc Ashton
Managing Director of Moneyweb
Twitter: @zamarcashton

I always get ribbed because whenever I am asked which personal finance book is the best, I invariably answer 'Rich Dad, Poor Dad' by Robert Kiyosaki. Putting your views on Kiyosaki to one side, I think the book emphasizes one key factor: Identify whether something is an asset and make sure you own lots of assets. Your car is not an asset. Your house ... - in some cases is an asset - but on the whole is probably not an asset in the truest sense.

While it is easy to say that if I had invested R1000 in PSG back in 1994 it would be worth R1m today or if I had held my Famous Brands shares for the last 16 years, I would be financially independent ... most of us don't think that long-term - no matter how disciplined we think we are. So I turn it around a little bit and I use my 19 year old as an example: I told her she had to buy a couple of shares in the company she works for (it's listed on the JSE) - not because her couple hundred Rand worth of shares is going to make her rich - but rather because it let's her have access to the shareholder meetings and she can point out that she is an owner and not just an employee wanting to take home a salary. She stands out from the crowd, she earns a dividend from the share and she understands what it is like to be actively involved in a business. To me, this is an asset.

Michael Avery
Host of Classic Business on Classic FM
Twitter: @MichaelJAvery

During these times of both muted and uncertain returns from equities, the best investment you can make is in paying down debt. That way you are guaranteed in securing a rate of return equal to the credit interest you are charged on your credit card, vehicle, mortgage or any other debt you have acquired.

Considering that in most instances this return will be in excess of CPI plus 5%, you will be hard-pressed to find a fund manager to deliver that outcome net of fees and investment costs.

Simon Brown
Founder of Just One Lap
Twitter: @SimonPB

Avoid debt and new cars.

Debt just means we're paying two - three times more for the same product and the only reason we're paying more is because we're in a hurry to own whatever it is. If instead we saved up for it and paid the cash price we'll be richer and this will compound over our life time to make a significant difference on our journey of wealth creation.

New cars are the biggest scam we willing walk into. A car is not an asset, it's merely a means of getting from A-B and while comfort and safety are important there is no upside to a new car except we pay a lot more for the privilege and the price crashes as soon as we drive the car for the first time. If you desperately want the new car smell, you can buy it in a spray can for literally tens (or even hundreds) of thousands cheaper then buying a new car.

Maya Fisher-French
Founder of Maya On Money
Twitter: @mayaonmoney

Know where your money is going each month. Most people will tell you they can't save because they have no money left at the end of the month, but could not give you a good idea of where their money went. If you like money, respect it by at least knowing what you do with it!

Brett Hilarides
Blogger at ETF Entusiast
Twitter: @etfenthusiast

I think a lot rides on the psychology of it all. The most important thing for me is to develop a deep understanding as to what money represents in your life. Understanding how it affects you, how you treat or respect it, and the ability to use it as a tool to build and own assets rather than just purely for survival and enjoyment.

Once you develop a more mature relationship with money you will have far more control over the pressures it can create or the guilt it can cause. You will be hungry to learn more and develop a partnership in ensuring you both work hard to create even more money.

Alec Hogg
Founder of Biznews.com
Twitter: @alechogg

On investing I'd suggest the following: Understand the limits to your circle of competence; read as much as you can to expand these; apply this knowledge rationally in deciding upon and then making an investment; and then commit to the hardest thing known to mankind - patience. 

Warren Ingram
Executive Director of Galileo Capital
Twitter: @WarrenIngram

Those that understand compound interest will earn it and those that don't understand compound interest will pay it. Therefore always try to ensure that you are debt free.

Jana Marais
Editor of Finweek
Twitter: @janamarais 

Whatever you do, never cash out your pension when you change jobs. I've done this twice after relatively short work stints - once to help finance a temporary move abroad, and once to pay off part of my student loan. Both times I told myself that the amount of money is not that significant, and that I'll easily make up the savings later on. Well, let me tell you - unless you have a lot of financial discipline, you'll find it nearly impossible to save up that capital again over and above your usual savings. And I haven't even calculated the opportunity cost of losing out on the extra time in the market I would've benefited from if I left my first job's then mediocre savings safely in a preservation fund back in 2007.

Patrick McKay
Blogger at Investor Challenge
Twitter: @worldisee

Buy a cheap, reliable two year old car and drive it until it's no longer cheap and reliable. Repeat. Then invest the savings you make on car payments, stupidly high insurance, ridiculously expensive tyres and monstrous depreciation.

Doing that over a working career will leave you with tens of millions of Rands more than someone who keeps up with the Jones'.

Charles Savage
CEO of Easy Equities & Purple Group
Twitter: @csavagegt247

It has to be to start investing as a kid, before you develop spending habits build investing ones. Warren Buffett started when he was 11 and he wishes he had started younger! imagine the world back then and how hard that must have been for him? Today it's easy. The longer your investment journey the better and nobody I've ever met ever said I wish I had started later.

Thati Segoatle
Blogger at The Disruptors
Twitter: @TheDisruptorsZA

I can't stress enough the importance of having a financial plan - a comprehensive, thoughtful financial plan. It will help you to see the big picture. When you have a plan, it's easier to make financial decisions, stay on track, and achieve your goals. It will give you confidence, and the direction to make sure that you move forward in all facets of your financial well-being. And for those dealing with major life change or transition such as job loss, marriage or divorce the process of creating a financial plan will help address the complexities these life changes often bring. When you have the right plan covering every area of your financial life, you can balance what you need and want today with the personal goals you have for the future.

Gareth Stobie
Managing Director of Coreshares
Twitter: @GarethStobie

I would probably default to one of Bogle's lessons.

Be an Investor not a speculator. Holding an index investment over the long term (like the S&P500 or the SA Top50), is more likely to generate you good investment returns than speculating on particular stocks.

Kristia van Heerden
CEO of Just One Lap
Twitter: @kristiavh

The most important financial decision you'll ever make is to keep your lifestyle expenses low. This one decision will help keep you debt free, ensure you have money left at the end of the month to put together an emergency fund and supply the surplus income you need to start investing. You don't even have to make any major life changes. Next time you get an increase at work, make a commitment to keep your lifestyle exactly as it was before you earned more income. Financial management can be as simple as that.


A huge thank you to all the people who took time to contribute to this article. There are some really great tips that came out, and I think if you pick even just one or two of them and really implement them, you will come out the other side significantly better off.

Now you may have noticed that there is one notable name missing from the above list. But first a story...

Because my father worked near(ish) to the University I attended, I was not given a car, and instead I would get dropped off at and picked up from the University everyday by my father. During my studies, I would have late classes a few days a week. Because my father was a 702 listener, the evening drive home would usually coincide with Bruce Whitfield's Money show. This always resulted in interesting, thought provoking and very educational discussions between my father and myself on the drive home, and was one of the big contributing factors to my interest in personal finance and being better with my money. In fact I would say that today I use far more of what I learnt on those drives home, than in all the late classes combined! So I was compelled to try get Bruce Whitfield's input for this article

I tried to get hold of him through the 702 website, as well as on Twitter, but no luck. This was somewhat expected though, as I fully understand he must have an extremely busy schedule and is probably more than a little sceptical of a small-time random anonymous blogger such as myself.

But as one final attempt to pry out his number one personal finance tip, I have just tweeted at him again, and I am hoping that all of you can turn up the peer pressure heat by retweeting my tweet which will hopefully have the knock on effect of leaving him no choice but to respond :)

Holding thumbs...
Needless to say, I will update this post should "Mr Personal Finance" himself reply!

Bruce Whitfield replied on Twitter (thanks for the extra pressure Kristia Van Heerden!) with this fantastic piece of advice:

Till next time, Stay Stealthy!
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