By <a href="https://www.cnbc.com/tom-corley/">Tom Corley</a>



Unless you were born into a rich family,&nbsp;<a href="https://www.cnbc.com/2019/04/04/5-traits-that-separate-millionaires-like-jeff-bezos-mark-zuckerberg-bill-gates-from-those-who-never-succeed.html" class="">building wealth</a>&nbsp;can be very hard — depending on the path you choose.



Many people look at&nbsp;<a href="https://www.cnbc.com/2019/05/24/self-made-millionaire-5-biggest-money-mistakes-that-are-making-american-millennials-poor.html" class="">multi-millionaires</a>&nbsp;and desperately want to know: What’s their secret? How did they get there? What does it&nbsp;take?



Those are the things I wanted to know back in 2004, when I began my&nbsp;<a href="http://richhabits.net/rich-habits-study-background-and-methodology/" class="">“Rich Habits”</a>&nbsp;study, in which I spent five years interviewing and researching the daily activities, habits and traits of 233&nbsp;<a href="https://www.cnbc.com/2019/03/26/money-mistakes-millionaires-like-warren-buffett-bill-gates-google-eric-schmidt-never-make.html" class="">wealthy individuals</a>. All of them had at least $160,000 in annual gross income and $3.2 million in net assets.



During my research, I found there are four predominant paths toward accumulating wealth. The “Savers-Investors” path is the easiest, while the other three involve much more risk.



<h2 class="wp-block-heading">1. The Saver-Investors path</h2>



Just less than 22% of the millionaires in my study chose to take the Saver-Investors path. Not only is it the easiest way to build wealth, but if you&nbsp;<a href="https://www.cnbc.com/2019/05/15/self-made-millionaire-this-is-the-no-1-way-to-get-rich-ramit-sethi.html" class="">start early</a>, it almost always guarantees a lot of money.



The Saver-Investors in my group reached their first $1 million around their mid-to-late 30s, and accumulated an average net worth of $3.3 million by their mid-50s.



They also had four things in common:



<ol><li>They typically had a middle-class income (many reached a six-figure salary early in their career, and if they didn’t, they lived&nbsp;<a href="https://www.cnbc.com/2019/08/28/i-saved-100000-in-3-years-at-age-27-here-are-my-money-saving-tips.html" class="">very frugally</a>.)</li><li>They had a low cost of living and preferred to save, rather than spend lavishly.</li><li>They saved 20% or more of their income.</li><li>They started investing their savings early in life and continued to do so prudently for many years.</li></ol>



No matter what their day job was, this group made saving and investing part of their routine; they were constantly thinking about smart ways to grow their wealth.



The Savers-Investors path isn’t for everyone. It requires enormous financial discipline and long-term commitment.



<h2 class="wp-block-heading">2. The Dreamers path</h2>



This is perhaps the&nbsp;<a href="https://www.cnbc.com/2019/04/26/how-to-raise-money-smart-children-who-grow-up-to-be-successful-wealthy-financially-literate.html" class="">hardest path</a>&nbsp;to building wealth because it requires the pursuit of a dream, such as starting a business, becoming a successful actor, musician or&nbsp;<a href="https://www.cnbc.com/2019/03/28/harry-potter-novelist-jk-rowling-famous-advice-to-harvard-students-is-dark-but-so-brilliant-and-true.html" class="">author</a>.



Approximately 28% of the folks in my study were Dreamers, and they accumulated an average net worth of $7.4 million — far more than any of the other groups — over a period of about 12 years.



All of them told me that pursuing their dreams was one of the most rewarding things they had done in their lives. They loved what they did for a living, and their passion showed up in their bank accounts.



Those who want to take this path, however, must be willing to work long hours and able to handle financial stress. The Dreamers in my study worked more than 61 hours per week before finally achieving their dreams. Weekends and vacations were almost non-existent.



Trying to make ends meet was not easy. At first, getting a steady paycheck was “nearly impossible,” one Dreamer said. It was even harder for those who had families to support. To finance their dreams, some decided to put off buying a home, while others dipped into their retirement savings.



If you’re risk-averse, this path may not be for you.



<h2 class="wp-block-heading">3. The Company Climbers path</h2>



Climbers are individuals who work for a big company and devote all of their energy into climbing the corporate ladder until they land a senior executive position.



This is the second-hardest path to becoming a millionaire, and about 31% of the rich people I studied fell into this group. It took them an average of 22 years to accumulate a net worth of $3.4 million or more. In most cases, their wealth came from either stock compensation or a partnership share of profits.



To be a Climber, you must have strong relationship-building skills. Networking and making lasting connections with powerful people in your industry is essential.



Like Dreamers, however, Climbers also have long work hours. The ones I interviewed all arrived at the office early and left late. Many were required to travel frequently and even had to sacrifice a lot of their vacation time.



Profitability is a huge factor in determining a Climber’s success. If their company struggles financially, their time and investment there might not be rewarded to the extent they had expected.



<h2 class="wp-block-heading">4. The Virtuosos path</h2>



Roughly 19% of the participants in my study chose this path. Virtuosos are among the best at what they do in their profession. They are paid a high premium for their knowledge and expertise, which sets them apart from the competition.



It took the Virtuosos in my study about 20 years to reach an average net worth of $4 million. Some worked in the medical field, while others worked in law. A handful either worked for large, publicly-held corporations, or they were small business owners with highly profitable enterprises.



Of course, Virtuosos aren’t necessarily born with natural intelligence. They must spend many years continuously studying and learning. Formal education, such as advanced degrees, is usually a requirement.



This means investing an enormous amount of money and time before seeing any payoff at all. Not everyone has the ability to devote significant hours every day practicing their skill or the financial resources to pursue advanced degrees.



<a class="" href="http://richhabits.net/">Tom Corley</a>is an accountant, financial planner and author of <a class="" href="https://www.amazon.com/Rich-Kids-Raise-Children-Successful/dp/1626529868">“Rich Kids: How to Raise Our Children to Be Happy and Successful in Life”</a> and ”<a class="" href="https://secure.mybookorders.com/Orderpage/160">Rich Habits: The Daily Success Habits of Wealthy Individuals.”</a>



This article first appeared on CNBC <a href="https://www.cnbc.com/2019/09/27/4-main-paths-to-becoming-millionaire-here-is-the-easiest-way-says-money-expert.html">https://www.cnbc.com/2019/09/27/4-main-paths-to-becoming-millionaire-here-is-the-easiest-way-says-money-expert.html</a> and is republished with its permission.

There are 4 main paths to becoming a millionaire—and this is the easiest one, says money expert

By <a href="https://www.cnbc.com/ramit-sethi/">Ramit Sethi</a>



Change is a constant and continuous process in life. As we grow older, we change how we dress, what we eat, where we live and who we become friends with.



Yet when it comes to how we use our time and money ― especially for&nbsp;<a href="https://www.cnbc.com/2019/03/26/money-mistakes-millionaires-like-warren-buffett-bill-gates-google-eric-schmidt-never-make.html" class="">high earners and wealthy individuals</a>&nbsp;― we tend to be more resistant to change.



Here’s a little scenario to illustrate my point: I have a friend who earns more than $750,000 a year. He loves his job, but if you asked him how he’s doing, his biggest complaint would be:&nbsp;<a href="https://www.cnbc.com/2019/04/25/stop-saying-im-busy-harvard-study-reveals-how-successful-people-say-no-and-protect-their-time.html" class="">“I’m so busy.”</a>



So imagine my surprise when I visited him one day and pointed to the bags sitting on his kitchen counter.



“Oh, I just got back from the grocery store,” he said.



After a quick pause, I asked, “Have you ever considered having someone else do your grocery shopping?”



He looked at me like I was crazy.&nbsp;Pay&nbsp;to have someone do his grocery shopping? What kind of elitist would do that?



Here was an adult earning $750,000 a year, but behaving as if he still earns $50,000.



<h2 class="wp-block-heading">The hidden paradox of money vs. time</h2>



The concept of buying back your time is one of the most powerful productivity concepts I’ve learned as a business owner.



Buying back your time is all about convenience: By spending on things like Lyft rides, pre-cooked meals or a housekeeper, you’re actually&nbsp;savingmoney because you get back the hours that you’d normally spend doing things that don’t make you happy.



Most high earners fail to recognize the effectiveness of buying back time. Maybe it’s because growing up, their parents didn’t have more money than time, which changes the calculus of how they make decisions. As a result, those high earners never end up changing their approach to work and their personal lives.



This is a huge paradox of earning more money: Many people claim they value time over money, but if you look at their calendars, you’ll find that the opposite is true.



<h2 class="wp-block-heading">Buying back your time isn’t an act of arrogance</h2>



I used to scoff at people who flew first-class and think,&nbsp;Why would anyone spend an insane amount of money something so pointless? We’re all getting to the same destination.



But more often than not, those people were not stupid. They were high earners who understood value in a different way than I used to.



If you earn $40,000 a year, for example, spending $5,000 on a first-class flight is crazy. But if you’re a CEO who earns $450,000 a year, it makes perfect sense.



In business, misaligned beliefs on time and money can cost you dearly ― while getting aligned can become a force multiplier.



Sometimes, people who buy back their time are seen as showing off. But guess what? Many of us already do it:



<ul><li>Eating at a restaurant instead of cooking at home</li><li>Getting the car oil changed instead of doing it yourself</li><li>Taking an Uber instead of walking or taking public transportation</li><li>Paying retail price instead of looking for a good deal</li></ul>



I’d bet that some of you do these things every week and don’t consider it as “buying back your time.” But you actually are because you’re spending on convenience so you can focus on getting results and move on to more important things.



I’m really into fitness, for example, and Theoretically, I could read a ton of material on bodybuilding, structure my diet and fitness routine ― and stick to it.



But I know I’ll never be as efficient as my trainer, who lives and breathes fitness. By paying him, I can trade money for time and get the best results. (Again, I could be doing it all on my own, but I don’t have to; I’d rather spend that time on my business and with my family.)



<h2 class="wp-block-heading">Give it a shot―it might change your life</h2>



I still find it difficult to know when it’s “right” to spend money or time on something ― and I’m not alone.



Think about all the wealthy and successful people, like my friend who earns $750,000 per year, who are uncomfortable with the idea of delegating tasks to others. But if you’re working hard, you should be able to buy back your time.



The key is to ask yourself:&nbsp;What do I get out of it?



What do you get if you got three hours of your time back every week? Do you get to fly your parents out and put them up in an amazing suite? (If you’re Indian like me, the answer is no: They’ll be staying with you.) Do you get to do things you really enjoy, like cooking your own meal or composing music?



If you’re making more money than ever, aim to save at least one hour per week. Think about all the responsibilities that you hate (e.g., doing the laundry, grocery shopping, managing your finances) where there are great solutions available to outsource or systematize the work.



Then, as you get more advanced, you can tackle trickier topics like scheduling, email management and entire project management.



<a href="http://iwillteachyoutoberich.com/" class="">Ramit Sethi</a>,&nbsp;author of the New York Times best-seller&nbsp;<a href="https://www.amazon.com/Will-Teach-You-Rich-Second/dp/1523505745" class="">“I Will Teach You To Be Rich,”</a>&nbsp;has become a financial guru to millions of readers in their 20s, 30s and 40s. He became a self-made millionaire at a young age thanks to his&nbsp;<a href="http://www.iwillteachyoutoberich.com/" class="">website</a>&nbsp;(which he started as a Stanford undergraduate in 2004), book and personal finance courses.



This is an adapted version of a post that originally appeared on <a class="" href="https://urldefense.proofpoint.com/v2/url?u=https-3A__www.quora.com_What-2Dis-2Dthe-2Dgreatest-2Dparadox-2Dof-2Dbecoming-2Dwealthy-3Futm-5Fsource-3Dquora-26utm-5Fmedium-3Dawareness-26utm-5Fcampaign-3Dcnbc-2Dparadox-2Drepost&amp;d=DwMFaQ&amp;c=LO_8KzsOlAGvgA6hdGI4v02U_XLiES0sR51Zca0yIy4&amp;r=fnb6sKq7SKN8iiAQiVc8NQSbL93Ztb9TeGwNUoj2-0Y&amp;m=2n9dCazpBKNeP0sZNLEWPLc0xX64x1aJMuex4HNZRU0&amp;s=C44tttzUAhsbXoPxK8ckmvpylc5UfocO2HdM3gtkpaE&amp;e=">Quora</a>.



This adapted version first appeared on CNBC <a href="https://www.cnbc.com/2019/08/08/self-made-millionaire-this-is-the-greatest-paradox-of-getting-rich-people-fail-to-recognize.html">https://www.cnbc.com/2019/08/08/self-made-millionaire-this-is-the-greatest-paradox-of-getting-rich-people-fail-to-recognize.html</a> and is republished with its permission.

Self-made millionaire: This is the greatest paradox of wealth—and most people fail to recognize it

By <a href="https://www.cnbc.com/kathleen-elkins/">Kathleen Elkins</a> 



Before wealth manager and author <a class="" href="https://davidbach.com/">David Bach</a> made his first million, he was a brand new financial advisor in his early twenties, he tells <a class="" href="https://www.cnbc.com/make-it/">CNBC Make It</a>: “We had someone come and talk to our training class, and as he walked out the door, he handed us this chart.”



Ultimately, the chart “changed my life,” Bach says.



The chart shows two different scenarios:



<ol><li>You start investing at 19 and contribute $2,000 to your account every year until you reach 27. From 27 to 65, you contribute $0.</li><li>From 19 to 26, you don’t invest anything. You start investing at 27 and contribute $2,000 to your account every year until you turn 65.</li></ol>



In the first scenario, you’re only saving and investing for eight years; in the second, you’re saving and investing for 39 years. Still, the person who starts at age 19 would end up with more money in their portfolio in the long run.



Assuming a 10% rate of return, the first person would have $1.02 million by 65, while the second person would have $805,185, a difference of more than $200,000.



<figure class="wp-block-image"><img decoding="async" src="https://www.cnbcafrica.com/wp-content/uploads/2019/07/cnbc-picture-1110x539.png" alt="" class="wp-image-340296"/></figure>



As the chart shows, the sooner you can start putting your money to work, the more you’ll benefit from <a class="" href="https://www.cnbc.com/2019/02/11/how-compound-interest-works-and-how-it-can-help-you-save-money.html">compound interest</a> and the less you’ll have to save to reach your retirement goals.



In terms of where to set aside your dollars, “You have to have this money invested for growth,” Bach says. “You cannot put this money in a money market account or a CD, where it grows at 1% or 2%. You’ll never build wealth.” Instead, Bach recommends putting your money to work in a tax-advantaged&nbsp;<a href="https://www.cnbc.com/2017/08/09/definitive-guide-to-retirement-savings-accounts.html" class="">retirement account</a>, such as a 401(k), Roth IRA or traditional IRA, where it will grow over time.



Retirement-specific accounts offer tax benefits, but there are other ways to invest your money: You can look into low-cost&nbsp;<a href="https://www.cnbc.com/2014/05/06/what-is-an-index-fund.html" class="">index funds</a>, which&nbsp;<a href="https://www.cnbc.com/2017/06/14/index-funds-are-the-smartest-way-to-invest-your-money.html" class="">Warren Buffett recommends</a>, and online investment platforms, such as&nbsp;<a href="https://www.ellevest.com/" class="">Ellevest</a>&nbsp;or&nbsp;<a href="https://www.betterment.com/" class="">Betterment,</a>&nbsp;known as&nbsp;<a href="https://www.cnbc.com/2017/03/13/man-vs-machine-how-to-figure-out-if-you-should-use-a-robo-advisor.html" class="">robo-advisors</a>.



No matter how you choose to invest, the most important step is to open at least one account and start contributing to it consistently.



“Start investing today,” says Bach. “Because the miracle of compound interest starts working the day you put it in place — but the key to compound interest is that it takes decades. It doesn’t get done in days. When you try to get rich quickly, you stay poor forever. This is about building wealth for your lifetime.”



This article first appeared on CNBC <a href="https://www.cnbc.com/2019/07/08/self-made-millionaire-david-bach-a-chart-changed-the-way-i-think-about-money.html">https://www.cnbc.com/2019/07/08/self-made-millionaire-david-bach-a-chart-changed-the-way-i-think-about-money.html</a> and is republished with its permission.

Self-made millionaire: A simple chart changed the way I think about money

By <a href="https://www.cnbc.com/kathleen-elkins/">Kathleen Elkins</a> 



Investing is one of the most effective ways&nbsp;<a href="https://www.cnbc.com/2018/12/19/early-retiree-chris-reining-quit-saving-your-money-and-put-it-to-work.html" class="">to build wealth</a>. Some experts even say that&nbsp;<a href="https://www.cnbc.com/2019/02/26/ramit-sethi-saving-isnt-the-key-to-building-wealth.html" class="">the only way to “truly grow” your money</a>&nbsp;is to put it to work.



If you have an extra $500 to $1,000 and are ready to dip your toe into the markets, “you should put your money in just one thing: the S&amp;P 500,” certified financial planner&nbsp;<a href="https://creativeplanning.com/peter-mallouk/" class="">Peter Mallouk</a>&nbsp;tells&nbsp;<a href="https://www.cnbc.com/make-it/" class="">CNBC Make It</a>.



The S&amp;P 500 index fund holds 500 of the largest companies in the U.S., from Google to Disney to ExxonMobil. It allows you to take advantage of the success of major corporations without the risks associated with buying individual stocks.



“It’s the lowest cost investment that exists,” says Mallouk, who is the president of wealth management firm Creative Planning. “You can buy it at a discount custodian, like a TD Ameritrade, Fidelity or Charles Schwab, where the trading fees are exceptionally low. And with those 500 stocks, you now own about 80% of the market capitalization of the entire United States.” In other words, an S&amp;P 500 fund covers about 80% of the U.S. stock market, so it’s an easy and affordable way for investors to capture core U.S. stock market performance.



Plus, “you have global exposure,” Mallouk says, “because these companies get a lot of their earnings overseas: McDonald’s has shops in China, and Walmart has locations in Europe. So you wind up with a low cost, diversified portfolio that’s invested in the global economy.”



Chairman and CEO of Berkshire Hathaway Warren Buffett agrees with Mallouk’s recommendation.



“It has been a tough time to beat the S&amp;P,”&nbsp;<a href="https://www.cnbc.com/2019/04/25/buffett-says-investors-would-be-served-equally-well-by-sp-or-berkshire.html" class="">he told CNBC earlier this year</a>, adding: “I think it’s the best investment — because most people don’t know how to pick stocks. And, most of the time I don’t know how to pick stocks.”



<a href="https://www.cnbc.com/2017/11/09/mark-cuban-index-funds-are-the-best-way-to-invest-your-money.html" class="">Mark Cuban also champions index funds</a>: In a 2017 interview with Hayman Capital Management founder Kyle Bass, the business titan&nbsp;<a href="https://www.marketwatch.com/story/mark-cuban-tells-kyle-bass-ai-will-change-everything-weighs-in-on-bitcoin-2017-11-04" class="">said</a>that if you don’t know much about markets, the best way to invest your money is to put it in a cheap S&amp;P 500 fund.



At the end of the day, an extra $1,000, if managed correctly, can go a long way, Mallouk says: “If you put $1,000 in the S&amp;P a little over 10 years ago, today, you’d have more than $3,000. Even if we go back before the 2008 crisis — if we go back 11 years — still, you’d have more than tripled your money.”



This article first appeared on CNBC  <a href="https://www.cnbc.com/2019/06/03/wealth-manager-invest-your-money-in-the-sp-500.html">https://www.cnbc.com/2019/06/03/wealth-manager-invest-your-money-in-the-sp-500.html</a> and is republished with its permission.

The smartest way to invest your first $1,000, according to a wealth manager

By Genevieve Jozaffe-Naidoo, Training Management and Organisational Development (TMOD) Manager
Care is a verb at Continental Tyre South Africa, which is why the company has consistently been named a Top Employer in South Africa.
It is critical for all employees to know and understand how wealth is created and distributed within the organisation.
Equally, every employee needs to appreciate their individual contribution towards common goals. To this end, our leadership team has established line-of-sight for each employee. 
Growth and profitability can only be achieved through shared purpose and values (Trust, Passion to Win, For One Another and Freedom to Act), coupled with employees’ talents, motivation and willingness to learn.
Our values unify how we engage and challenge our actions, results, successes and opportunities. Trust and transparency talk to just some of the lived values of our leadership team – sacrificing short-term gains for long-term growth. The leadership team have committed their time, efforts and minds being of service down the line to create “one Continental”.
Over the past few years, there has been significant investment in building our people capability. Hosting development programmes aimed at enhancing critical skills was just one of the interventions we undertook.
2018 has certainly challenged our business. This year – in the spirit of building capability – business sustainability and humanising the scoreboard has been our priority. Political and economic uncertainty, both locally and globally, has created added pressure to deliver affordable, quality products consistently. These challenges have brought us full circle to our values.
Our people have responded well to these challenging times. Dialogues and joint action planning define our culture, with various platforms accommodating multi-faceted conversations. We are motivated to change our lived experiences by creating alliance and value, striving always to be an attractive and progressive employer.
Participating in the Top Employer awards has been of tremendous use in raising our awareness on policy, process and practice. Additionally, it has added value to our brand. Continental Tyre South Africa’s 70-year presence in South Africa is evidence of our leadership and learning agility. Our organisation is fully geared toward shaping our future in motion.
OUR PEOPLE, OUR CULTURE, OUR FUTURE.
&nbsp;
Content supplied by Continental Tyre South Africa

How Continental Tyre’s values are creating value

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Forbes Africa has launched first ever book titled Africa&#8217;s Billionaires. It&#8217;s filled with inspiration stories from the continents wealthiest people. Chris Bishop, Founding and Managing Editor of Forbes Africa joins CNBC Africa for more.

Forbes Africa launches Africa’s billionaires

The issue of extreme income inequality in South Africa remains unresolved. Persistent high rates of income inequality impact negatively on political inclusion, social cohesion, and crime. Using the US CIA&#8217;s most recent GINI index estimates of income inequality, South Africa is ranked second worst behind Lesotho. 
Countries with a GINI index closer to zero, like Sweden (0.25) and Germany (0.27), have a more equal distribution of family income than countries like South Africa (0.63) and Haiti (0.61). The GINI index paints only a partial picture because a low score does not always indicate a healthy economic situation. The GINI index for Pakistan, for example, is 0.3 but most Pakistanis have much lower incomes and less economic mobility than South Africans.
Is it possible to achieve wealth, high economic mobility, and income equality within a society? In a functioning market, financial profits or losses signal to firms and people, whether their goods and services are in demand. Consequently, for this signalling to work in an unhampered market, income cannot be distributed evenly. But, if people and firms are equipped with the skills and knowledge to consistently adapt to new markets, better levels of equality can still be achieved.
<h3>Wealth generation</h3>
In the modern world, income and wealth generation are based more and more on knowledge and information. The need for workers to acquire a range of skills and to continuously adapt these skills underlies the learning economy. Productivity is driven by tapping into new ideas, innovations and technologies on a global scale. A process that relies heavily on ICT.
South Africa ranks 88 out of 175 countries on the International Telecommunication Union&#8217;s ICT Development Index, despite having high rates of mobile phone penetration and high secondary school enrolment. Ranked first on the Index is South Korea, a remarkable achievement for a country that was one of the poorest in the world 50 years ago.
Few countries have embraced the knowledge economy as much as resource poor South Korea. The country&#8217;s 15-year-olds are consistently ranked highly in reading literacy, maths and science scores in PISA tests. The working population is highly educated and unemployment is low. The country scores 0.3 on the CIA&#8217;s GINI index despite having the second lowest public social spending (10.4% of GDP) amongst the OECD countries.
A strong emphasis on the importance of education, secure property rights, an independent and efficient judicial system, a competitive private banking system, and an excellent ICT sector have helped South Koreans to prosper. The country has moved from rags to riches at an astonishing pace. Intergenerational income mobility is high, and South Koreans are wealthier than South Africans when comparing every income group, from the poorest to the billionaires.
<h3>Distribution of income</h3>
Policy makers can attempt to distribute more income from the abundantly rich to the poor to lower inequality, but this cannot be done on a global scale, and it is a strategy that views the size of the &#8216;wealth pie&#8217; as being limited. Economics is not a zero-sum game. In a resource-based economy, your potential wealth is restricted by finite resources. In a knowledge-based economy, your potential wealth is unrestricted.
Raising taxes on high income earners or creating capital movement controls will often have the opposite of desired effects. In today&#8217;s connected world, skills and businesses are mobile and wish to operate in an unrestricted business environment. Many South African entrepreneurs are choosing to move to other countries because it is difficult to take businesses beyond the incubation phase into a global market.
Mark Shuttleworth, another local tech entrepreneur who now lives in the Isle of Man, believes that exchange controls prevent small South African businesses from building global operations. South African tech entrepreneur Vinny Lingham, who now lives in California, believes that a lack of competition and Telkom are stifling the ICT industry.
<h3>Remove the glass ceiling</h3>
South Africa needs to raise and, ultimately, remove the glass ceiling that bureaucracy has placed on entrepreneurship and our information society. Capital movement controls should be lifted and a more competitive ICT industry established. The ability to move capital freely will also attract foreign investment. South Africa should fully privatise the telecommunications sector and relax regulations and the ‘spectrum bottleneck’ preventing expansion and new entrants.
Less bureaucracy, and a strong focus on ICT and education will help South Africa to embrace the information age and create new wealth opportunities for everyone. Better equality can be achieved without discouraging businesses and entrepreneurs. Taxes that redistribute income are difficult to implement fairly, administratively intensive, expensive, and open to corruption. We should focus more on implementing policies that uplift the poor, rather than trying to tackle inequality with taxes. If there is not enough pie for everyone, make more pie.
Luke Muller is an independent economist.

Op-Ed: Tackling inequality in the information age

<a href="http://www.cnbc.com/marguerite-ward/" rel="author">Marguerite Ward</a> | <a href="http://twitter.com/forwardist">@forwardist</a>
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Jeff Bezos, founder and CEO of Amazon, is now the second richest person on the planet.
On Wednesday, his personal fortune jumped to <a class="inline_asset" title="https://www.bloomberg.com/news/articles/2017-03-29/bezos-rises-to-become-world-s-second-richest-with-amazon-surge" href="https://www.bloomberg.com/news/articles/2017-03-29/bezos-rises-to-become-world-s-second-richest-with-amazon-surge" target="_self">$75.6 billion</a> following a rise in Amazon&#8217;s stock. He eclipsed legendary investor <a class="inline_asset" title="http://www.cnbc.com/2017/01/30/warren-buffetts-best-advice-for-young-people.html" href="http://www.cnbc.com/2017/01/30/warren-buffetts-best-advice-for-young-people.html" target="_self">Warren Buffett</a> and now stands just below Microsoft co-founder <a class="inline_asset" title="http://www.cnbc.com/2017/02/08/why-bill-gates-and-warren-buffett-say-your-friends-are-crucial-to-your-career.html" href="http://www.cnbc.com/2017/02/08/why-bill-gates-and-warren-buffett-say-your-friends-are-crucial-to-your-career.html" target="_self">Bill Gates</a>.
While there&#8217;s no playbook for becoming one of the world&#8217;s richest individuals, Bezos&#8217; career has been marked by risk-taking and learning from failure, and sheds light on what it takes to be incredibly successful.
http://cnbc.africa/news/technology/2017/01/04/amazon-is-selling-tvs-that-you-can-talk-to/ 
After graduating from Princeton University, Bezos joined a startup and then worked on Wall Street before he quit and, against advice from his family and colleagues, ditched his stable job to dive into what was then a little-known gambit called the internet. 
In the years that followed, Bezos launched Amazon, the source of his incredible wealth. 
 This infographic, created by Funders and Founders designer <a class="inline_asset" href="http://fundersandfounders.com/how-elon-musk-started/" target="_self">Anna Vital</a>, explores his climb to the top.
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In addition to leading Amazon, Bezos plays key roles in some of the most cutting edge companies in space travel, AI, cloud computing and other emerging sectors.

This is how Jeff Bezos became the second richest man on the planet

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<a class="inline_asset" title="http://www.cnbc.com/2017/02/02/billionaire-warren-buffett-discusses-the-book-that-changed-his-life.html" href="http://www.cnbc.com/2017/02/02/billionaire-warren-buffett-discusses-the-book-that-changed-his-life.html" target="_self">Warren Buffett&#8217;s</a> enormous wealth is only matched by his <a class="inline_asset" href="https://www.forbes.com/sites/schifrin/2015/10/04/not-for-investors-only-top-10-nuggets-of-buffett-wisdom-for-life-success/#5ec784b83971" target="_blank">incredibly valuable wisdom</a>. So when the Oracle of Omaha says he has a simple rule to improve your life financially and personally, you should pay attention.
In a lecture to USC Business School students, Warren Buffett&#8217;s right-hand man, Charlie Munger, <a class="inline_asset" href="https://www.farnamstreetblog.com/a-lesson-on-worldly-wisdom/" target="_blank">revealed a strategy</a> that Buffett has used time and again to build success.
More from Elle Kaplan: 
<a class="inline_asset" title="https://medium.com/the-mission/these-writing-hacks-from-stephen-king-will-immediately-improve-your-success-c8456b192cd4#.atftmsqi0" href="https://medium.com/the-mission/these-writing-hacks-from-stephen-king-will-immediately-improve-your-success-c8456b192cd4#.atftmsqi0" target="_blank">How to Become an Insanely Good Writer, According to Stephen King 
</a><a class="inline_asset" title="https://medium.com/the-mission/how-to-crush-your-goals-in-2017-according-to-harvard-psychologists-1e82beb80677#.bvdporw45" href="https://medium.com/the-mission/how-to-crush-your-goals-in-2017-according-to-harvard-psychologists-1e82beb80677#.bvdporw45" target="_blank">How to Crush Your Goals in 2017, According to Harvard Research 
</a><a class="inline_asset" href="https://medium.com/the-mission/how-to-create-a-brand-new-chapter-in-your-life-starting-today-8aabcb0d9007#.z93ruy32f" target="_blank">How to Create a Brand New Chapter in Your Life — Starting Today</a>
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Warren Buffet preaches that he could:
&#8220;Improve your ultimate financial welfare by giving you a ticket with only 20 slots in it so that you had 20 punches — representing all the investments that you got to make in a lifetime.&#8221;
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Once you punched through the card, you couldn&#8217;t make any more investments at all
Buffett said that, &#8220;under those rules, you&#8217;d really think carefully about what you did and you&#8217;d be forced to load up on what you&#8217;d really thought about. So you&#8217;d do so much better.&#8221;
In a nutshell: We&#8217;re tempted to take advantage of every opportunity possible (especially when it comes to money), but our opportunities are actually incredibly finite. As I&#8217;ll explain, by narrowing down these opportunities beforehand, you can focus on the successful ones with your limited resources, instead of jumping at every opportunity that presents itself.
This &#8217;20-Slot-Rule&#8217; is a concept that doesn&#8217;t just speak to making smart investments, however. It also applies to all areas of life and business that require our decisions to be well informed and incredibly selective.
Without further ado, here are some simple tips for following Buffett&#8217;s &#8217;20-Slot Rule&#8217; to improve your life:
Use the rule to find your true motivation
Warren Buffett may be the savviest investor on earth, but even he knows there are certain tasks beyond his realm. In 2013, <a class="inline_asset" href="http://piersmorgan.blogs.cnn.com/2013/10/22/warren-buffett-on-cell-phones-email-and-material-goods/" target="_blank">he told talk show host Piers Morgan</a> that he has sent exactly one email in his entire life, and the <a class="inline_asset" href="http://www.berkshirehathaway.com/" target="_blank">Berkshire Hathaway website</a> itself makes <a class="inline_asset" href="http://www.myspace.com/" target="_blank">Myspace.com</a> look like the internet&#8217;s Mona Lisa.
Does the Oracle of Omaha have the intelligence that it would take to learn how to update the web page and turn it into something snazzier? Of course. Is it worth his time? Definitely not.
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<a class="" href="http://video.cnbc.com/gallery/?video=3000589121" data-videoid="3000589121" data-videotype=""><img loading="lazy" decoding="async" title="Warren Buffett made $53,000 by age 17" src="http://fm.cnbc.com/applications/cnbc.com/resources/img/editorial/2017/01/31/104251946-makeit_warren_buffett_first_jobs2_mezz.600x400.jpg?v=1485878732" alt="Warren Buffett made $53,000 by age 17 " width="600" height="400" /></a>
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If you have a finite amount of skills, goals, or business opportunities you can cash in on within your life, that means being incredibly choosy.
So focus on what you do best — your <a class="inline_asset" href="https://medium.com/the-mission/86-400-193e4866d62c#.lidql7lh8" target="_blank">Genius Zone</a>. If you don&#8217;t have that yet, spend some time figuring out what you bring to the table better than anyone else. It&#8217;s worth the investment to find what you do effortlessly and gravitate towards.
Use the rule to make yourself wealthier
<a class="inline_asset" title="http://www.cnbc.com/2017/01/30/warren-buffetts-breakfast-never-costs-more-than-317.html" href="http://www.cnbc.com/2017/01/30/warren-buffetts-breakfast-never-costs-more-than-317.html" target="_self">Unlike Buffett</a>, our wealth is relatively limited. But when you start thinking of your wealth in terms of &#8220;slots,&#8221; you can direct it towards what really matters and stretch it a lot further. For instance, is your excess budget being punched in the &#8220;$4 latte&#8221; slot every day, or towards a future business or investment account?
The truly wealthy, like <a class="inline_asset" title="http://www.cnbc.com/2017/02/07/warren-buffett-and-sheryl-sandberg-agree-on-most-important-decision.html" href="http://www.cnbc.com/2017/02/07/warren-buffett-and-sheryl-sandberg-agree-on-most-important-decision.html" target="_self">Buffett</a>, got that way because they&#8217;re able to think about each dollar and investment carefully through a long-term lens. They know that investing in future endeavors is the ultimate luxury in life, and they&#8217;re able to see the long-term value of each dollar in their wallet (or purse).
You don&#8217;t have to <a class="inline_asset" title="http://www.cnbc.com/2017/02/14/how-one-woman-saved-24000-in-one-year-by-not-buying-anything.html" href="http://www.cnbc.com/2017/02/14/how-one-woman-saved-24000-in-one-year-by-not-buying-anything.html" target="_self">live the frugal life of a monk</a>, but the next time you get a tax return or have some extra money because you just got a raise, carefully consider which &#8220;slot&#8221; to use.
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<div class="caption">Warren Buffett attends the &#8216;Becoming Warren Buffett&#8217; World Premiere at The Museum of Modern Art on January 19, 2017</div>
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Use the rule to become incredibly productive
Buffett&#8217;s rule refers to much more than our money — for instance, one of the most frequently used phrases in job listings is &#8220;multitask.&#8221; It&#8217;s something most of us (including yours truly) wind up doing during a hectic workday.
But it&#8217;s been <a class="inline_asset" href="http://news.stanford.edu/2009/08/24/multitask-research-study-082409/" target="_blank">scientifically</a> proven that doing a million things at once trains our brain to become easily distracted, and it even takes up to four times longer to process new information that way.
Instead, you should treat your task list like a punch card. Realize you can only take on X number of tasks every day, and think carefully about which ones you want to give your full, laser-focused attention to. By prioritizing, you&#8217;ll have intense focus on each project rather than sloppily attempting to tackle everything at once.
When you have a clear motivation, how you work and why you work will drastically transform, and — most importantly — you&#8217;ll feel happy and passionate about what you do.
<a class="inline_asset" title="https://medium.com/the-mission/why-warren-buffetts-20-slot-rule-will-make-you-insanely-successful-and-productive-252a3745a5bf#.6nvrnl5vp" href="https://medium.com/the-mission/why-warren-buffetts-20-slot-rule-will-make-you-insanely-successful-and-productive-252a3745a5bf#.6nvrnl5vp" target="_self">This piece originally appeared on Medium.</a>
<a class="inline_asset" title="https://twitter.com/ellekaplan" href="https://twitter.com/ellekaplan" target="_self">Elle Kaplan</a> is the Founder and CEO of <a class="inline_asset" title="http://www.lexioncapital.com/" href="http://www.lexioncapital.com/" target="_blank">LexION Capital</a>, a fiduciary wealth management firm in New York City serving high-net-worth individuals. She is also the Chief Investment Officer and Portfolio Manager at <a class="inline_asset" title="http://www.lexionalpha.com/" href="http://www.lexionalpha.com/" target="_blank">LexION Alpha</a>, her systematic hedge fund that will soon be open to new investments. It is one of the only women-owned and -run hedge funds in the nation.
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Why Warren Buffett’s ‘20-Slot Rule’ will make you insanely successful and wealthy

Imagine that you go to your 20-year school reunion and are catching up with old school friends. You speak to John who says that he got a three-year qualification in mechanical engineering and now owns an engineering workshop. You also speak to Steve who studied for 14 years and is now a specialist physician with his own medical practice. John was an average scholar and Steve was the Dux in your matric year. Who is likely to be the wealthier of the two by the time you see them at the 20-year reunion?
Studies have shown that John, with his mechanical engineering workshop, is likely to be the wealthier of the two. There are a number of reasons for this interesting situation. The first is that John, after getting his three-year technical qualification, started generating an income while Dr Steve still had another 11 years to go before he started generating the income of a fully qualified specialist physician. While John saved money during those 11 years, Dr Steve spent most of what he earned as he worked and studied to complete his qualification.
Let’s say that, once fully qualified, Dr Steve ultimately generates an income three times the income of John the engineer and they both save 10% of their respective incomes. Once he starts working, it would take Dr Steve 10 years to catch up to John with the engineering business. They would have been out of school for 24 years before Dr Steve caught up to John the builder’s wealth position.
In reality, though, it would probably take longer. Dr Steve would not be able to save 10% from the start of his career because of student debt and he would probably incur even more debt to set up his private practice. Ultimately, in this story, Dr Steve’s superior income would give his wealth the potential to catch up and overtake John the builder’s wealth. But there is another obstacle lurking out there for Dr Steve to overcome before he achieves that.
This hurdle has to do with the status ascribed to Dr Steve. Doctors and others with advanced degrees are expected to fulfil the role of an upper-class citizen. John the builder would not be out of place in a modest home with a non-descript bakkie or sedan. The cost of setting up and maintaining his domestic situation is much lower than servicing the high status lifestyle that Dr Steve would expect.
Professionals often say that society expects them to live in expensive homes, dress in expensive clothes and drive expensive cars. We judge a book by its cover, often judging professionals by their outward appearance rather than their net worth. And unfortunately for them, the pressure to maintain an impressive outward appearance can restrict the growth of the professional’s wealth.
Another disadvantage of living in affluent neighbourhoods is that you are bombarded with cold-calls from so-called investment experts. In a survey by the authors of “The Millionaire Next Door”* some professionals said they had bad experiences with these cold-callers to the point where they will no longer invest in equity investments, thus further impeding their wealth.
Research shows that people who spend on luxuries tend not to be price sensitive to most things, but they ironically become very price sensitive to paying for good legal and financial advice that would help them get ahead.
Successful wealth accumulators on the other hand are price sensitive to most things but interestingly less price sensitive when it comes to buying services that will help them control their family’s consumption behaviour. They will also happily spend good money on legal and financial advice which they know will help them.
Surveys show that the more time you spend on the purchase of luxury items the less likely you are to become wealthy. The reason is that time and energy are finite resources and research has shown that when you allocate a lot of that resource to the activities of researching and purchasing big ticket items you have less time available to plan your investments. This sounds obvious but what is not so obvious is the inverse correlation between time spent purchasing luxury items and wealth accumulation.
Many purchasers of luxury cars spend a disproportionate amount of time researching (sometimes for months at a time) a particular vehicle before buying it. If they had spent even 25% of that same time planning their investments they could be much wealthier today.
Such buyers often argue that they got the vehicle at cost or even below cost but when they talk about paying as much for a car as you do for your house they are still massively out of pocket despite the discount.
It’s all a question of focus.

Well educated people can lag behind in wealth

For many wealthy individuals and families the beginning of the year serves as an opportune time for personal introspection making it the ideal period to review financial goals and strategies for dealing with the challenges of growing and preserving wealth in a volatile economic climate.
Eric Enslin, CEO of FNB Private Wealth and RMB Private Bank, says “High-net worth individuals take into account a variety of economic, regulatory and investment factors as well as family and career aspirations when planning for the year ahead. Advisors are required to thoroughly assess the state of their clients’ long-term wealth growth, while guiding them on how to overcome and understand some of the key issues and trends that keep them engaged around the dinner table.”
Enslin has identified four industry trends affecting high-net worth individuals that advisors should take into account when reviewing long term wealth strategies. 
Fintech – the rapid growth of fintech should not be seen as a threat to advisors, but rather an opportunity to tap into innovation through the use of tools, analytics and technology to better understand and efficiently cater for the dynamic and ever changing needs of high-net worth individuals.
Life expectancy – according to the ‘Ageing World Report’ released last year in March by the U.S. Census Bureau, 8.5 percent of the world population is aged 65 and over, and this older population is expected to continue growing over the next 35 years.
Increasing life expectancy continues to put more pressure on advisors to exercise greater flexibility when helping clients to plan financially for retirement. This has a huge impact on the accurate projection of medical and living costs.  
Economic uncertainty – the current challenges facing South Africa and the possibility of a sovereign credit rating downgrade in 2017 is growing concern amongst high-net worth individuals. This is likely to increase the prospect of investors looking for more exposure to offshore investments as means to diversify their wealth.
There will be increased pressure on advisors to offer sound advice taking into account the diverse risks and opportunities of investing offshore.
Local and global legislation – ongoing changes in legislation significantly increase financial demands and risks facing wealthy individuals on a yearly basis. Therefore, it is essential for them to regularly review and adjust their risk and wealth management strategies accordingly.
“As an example, high-net worth individuals are waiting with bated breath for the outcome of the much debated, Draft Taxation Laws Amendment Bill from Treasury which will impact taxation on personal trusts. From a global perspective, concerns around the long term impact of Brexit on the global economy are ongoing,” says Enslin.
“Although wealthy individuals and families take a long term view when devising growth strategies, each year has a unique set of challenges, making it essential for advisors to constantly familiarise themselves with the issues and opportunities that keep their clients awake at night. This gives high-net worth individuals piece of mind knowing that they are receiving the best advice to achieve their goals and continue reaching important milestones in their wealth journey,” concludes Enslin.
 
END
For more information contact: 
FNB Corporate Communications
Senzi Dlamini: <a href="mailto:Senzi.Dlamini@fnb.co.za">Senzi.Dlamini@fnb.co.za</a> or 087 335 8277﻿

Trends affecting wealthy individuals in 2017

Investing is a process, not an event. Although any decision about how to invest your money is important, the analysis shouldn’t stop when your money is in the market.
In fact, one might argue that your attentiveness should increase once you’ve invested – and not because you should feel compelled to make any changes, but because you have a vested interest in achieving the best possible performance.
Craig Gradidge of Gradidge Mahura Investments says there is a simple question one should be asking: “Have my investment objectives changed?” And, if so, “how do the changes affect the structure of my portfolio?” These answers will help guide you in making the necessary changes that will keep your portfolio performing in line with your investment objectives.
Most questions relating to your investments are valid and you should be asking them. However, one of the more common questions (arguably the most frequently asked) is not valid: ”What is my plan if markets drop?” As highlighted in previous articles, it’s easy to fall into the trap of trying to time the market, which is impossible to do on a consistent basis. Instead, time in the market is key.
The questions you should be asking almost always relate to context:
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<li>1.     Do your investments still suit your investment time frame?</li>
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America’s Financial Industry Regulatory Authority (Finra) says “for many people, the number one long-term goal is a financially secure retirement. But it&#8217;s also a goal with a long time horizon. The general rule is that the more time you have to reach a financial goal, the more investment risk you can afford to take.”
But the organisation adds that it’s important to bear in mind that “no goal is short-, medium-, or long-term forever, and so the timetable for your financial goals will evolve over time. For instance, retirement will be a long-term goal when you&#8217;re 35, but will probably be a short-term goal when you&#8217;re 65.” And a shifting investment time frame will affect how you should allocate your assets.
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<li>2.     Do the products in your portfolio still meet your investment needs?</li>
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Different investment products have differing terms, tax treatments and cost structures. It is important to understand the impact of the product on the ability of the underlying portfolio to meet your investment objectives. For example, a product geared towards a certain outcome – such as a Retirement Annuity – is difficult to compare to an open-ended unit trust (even if both rely on similar underlying investments). There are certainly term and tax differences. 
Also be aware that any switching that will affect the investment outcome can come at a cost – which is why it’s so important to do your homework before investing your money.
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<li>3.     Are you chasing past performance with your investment decisions?</li>
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This is an easy mistake to make and Finra reiterates the often-quoted line that “past performance is no guarantee of future results”. But Gradidge says investors would do well to select a fund based on “an established track record of the manager or the mandate”, as well as on risk-adjusted performance and cost considerations. Risk-adjusted performance measures how much risk is being taken by a fund manager to produce a result. In other words, they might achieve great returns, but at an unreasonably high risk. Or they might net a slightly lower return at a much more tolerable amount of risk. This measure helps build a more accurate comparison.
“Historical returns consistently show that a well-diversified stock portfolio can be the most rewarding over the long term,” explains Finra. “It&#8217;s true that over shorter periods ‒ say less than 10 years ‒ investing heavily in stock can lead to portfolio volatility and even to losses. But when you have 15 years or more to meet your goals, you have a good chance of being able to ride out market downturns and watch short-term losses eventually be offset by future gains.”
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<li>4.     How vulnerable is your portfolio of investments? And is your asset allocation still balanced? Do you need to rebalance?</li>
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Market performance will change the relative values of your asset classes over time. For instance, if your portfolio is structured to be 80% in equities and 20% in bonds and cash, and equities outperform strongly, you may find that your balance is now 90% to 10% (or possibly even more distorted).
“A risk assessment of your portfolio should be part of the review and rebalancing process,” says Gradidge. He adds that it is “important to understand what your asset allocation looks like and if it is still suitable. If not, then rebalance.”
Performance aside, “the asset allocation you choose to help you meet your financial goals at an earlier time in life may no longer be the ideal allocation after you&#8217;ve been investing for some time, for instance as you approach retirement,” says Finra. For more on rebalancing, see our Q&amp;A here.
 
For more information on investing for retirement, speak to your financial adviser.
This article is part of an investment series by Discovery Invest.
Discovery Life Investment Services Pty (Ltd) branded as Discovery Invest is an authorised financial services provider. Registration number 2007/005969/07. For more information on Discovery Invest, contact your financial adviser.
This material is provided for educational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell investment funds.﻿

Questions that will keep your investment portfolio performing

Calculating your net worth is important as it helps you understand your financial health at a point in time, by providing an accurate indication of whether you have more (or less) assets than debt. This can help indicate how close you are to achieving a debt-free retirement – one of the key goals of retirement planning &#8212; and whether you are on target to building up enough assets to provide a suitable retirement income.
Focusing only on your assets ‒ or only on your debt – provides only one half of the picture. Instead, thedifferencebetween your assets and your debt gives a clearer indication of where you stand. As Discovery financial adviser, Louw Venter, explains, retirement planning aims to get an investor to retirement without debt – and knowing your net worth can help show how close you are to this goal.
Calculating your net worth
Calculating your net worth is relatively simple: List the value of all of the assets you own, including your house, investments, savings, retirement funds and other assets. (The jury is out on whether cars are included given that it’s a depreciating asset. Some advisers do, others don’t.) From this total of assets, subtract all of your liabilities. For the average person, this would include a home loan and other debt such as credit cards and personal loans. ﻿
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A useful signpost
“The net worth calculation is important in the context of retirement planning,” says Warren Ingram, the executive director of Galileo Capital. “Ultimately you want to get to a point where you have sufficient assets to fund your monthly expenses once you’re retired.”
Remember the 4% rule? William Bergen’s famous calculation can be used to indicate the figure you need to accumulate to provide a suitable income for at least 30 years. Calculating your net worth can show you how far or close you are to this goal.
Take 50-year-old Joe as an example. He has calculated that he needs needsR16.2 millionsaved at retirement to give him an annual income of R648 000. If Joe works out his net worth on a regular basis, he can tell how close or far away he is to that R16.2-million goal, and whether his net worth is increasing over time in order to achieve that goal.
The value of tracking net worth
Ingram adds that the net worth figure in isolation is not as important as measuring it regularly and keeping track of its movement from one year to the next.
“If your net worth is increasing, which it should be, your position is improving from a financial and retirement planning point of view.”
As Venter points out, a successful retirement strategy requires that your income leads to a “debt-free, income-generating asset base”, and monitoring your net worth over time can indicate whether your assets are growing and your liabilities are reducing.
If your net worth flatlines or reduces from one year to the next, you need to understand why, says Ingram. “Is the stock market down? That is no reason to panic.” If your debt has increased, you want to look at it more closely. Typically, flatlining (or worse, a declining) will mean you simply aren’t accumulating enough assets. For most people that means not saving or investing enough. 
“The classic mistake is to focus on the asset side of the equation and people rush to try rather invest more,” says Ingram. “But debt compounds against you. Looking to beat prime (at 10.25%) is a tough ask.”
 
For more information on investing for retirement, speak to your financial adviser.
This article is part of an investment series by Discovery Invest.
Discovery Invest is an authorised financial services provider. Registration number 2007/005969/07. For more information on Discovery Invest, contact your financial adviser.
This material is provided for educational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell investment funds.

How your net worth fits into retirement planning

The basics of investing are easy &#8212; perhaps easier than you might think. In recent months, we’ve covered a broad range of investment topics such as “Timing the market” and “<a href="https://www.discovery.co.za/portal/individual/investment-news-jan16-financial-personality">Understanding your financial personality</a>”. But, while much groundwork and theory has been dealt with, there are some seemingly simple questions that you still may be too embarrassed to ask your friends around the braai.
Is there a minimum amount I need to invest?
This is one of the most common questions any investor starting out will have. In theory, you could buy a single share in any company listed on the JSE for whatever that share is trading at (it could be less than R1) – although brokerage and trading fees will be punitive on a transaction like this because they’re geared towards significantly larger purchases. In terms of investment products bought via an investment institution, the costs of these will vary, but the minimum investment amount is generally R500.
What is a unit trust?
A unit trust is a group investment run by a fund manager, who invests the money in various asset classes, such as shares or property. Individuals investing in the unit trust are given exposure to these assets, without them needing to pick and/or buy these assets themselves. The unit trust fund is divided into equal units, each containing the same proportion of the fund’s assets (for example, if the fund is 20% invested in Anglo American, 20% of each of your units will offer exposure to Anglo), and individuals are granted units based on the amount of money they invest. Unit trust prices can go up and down, depending on the value of the underlying assets. ﻿
<img loading="lazy" decoding="async" src="/media/19310000/unit.jpg" width="504" height="567" alt="Unit"/>﻿
Can I cash in my investments whenever I want?
There isn’t a definitive answer to this questions, because it depends on the investment. For example, with most Retirement Annuities you are only able to access your money at age 55, while endowment policies are designed to pay out after a specific number of years. Under very limited circumstances you might be able to access your money (for example, health issues that prevent you from working), but early withdrawls often come with penalties.  Unit trusts are much more flexible when it comes to withdrawls, although access to your money can depend on how you’ve invested in a unit trust.
What is a dividend?
“A dividend is a share of company profits,” says Simon Brown of investment educator JustOneLap. Companies aim to make a profit, and they will utilise the profit in various ways, such as reinvesting in the business or entering new markets. However, a company may also decide to  allocate a portion of net profits to shareholders – and this is called a “dividend”. Not every company will pay dividends, and those that do will pay according to their own payout schedule. Dividends are usually paid in cash, but can also sometimes be issued as shares.
How are shares and bonds different?
With shares, investors are buying a share in a company. Bonds, on the other hand, are a “debt investment”. Investors buying bonds will be lending a company or a government money for a fixed time period, and will be paid a fixed amount of interest in return. For example, investors are able to buy RSA retail savings bonds issued by the South African government. The money the government raises from the sale of these bonds is used for infrastructure projects.
Do I need a financial adviser?
“The right financial adviser can add value,” says Brown, “and there is certainly merit in finding an independent financial adviser.” Most people don’t know what to ask and there is an element of discovery, learning and homework that they need to take responsibility for themselves. And while most people would be okay to manage a few unit trust or exchange-traded fund investments, having the discipline to do so, keeping track of a portfolio and adjusting accordingly can be more challenging. Telling you not to panic in 2008 (when there was a notable stock market crash) would probably be the best illustration of the value of an adviser. “The right professional advice is always a good thing, and you should be happy to pay for this,” says Brown. Insist on openness and full disclosure.
 
For more information on investing for retirement, speak to your financial adviser.
This article is part of an investment series by Discovery Invest. ﻿

Six investment questions you’re too embarrassed to ask

When it comes to fighting malaria, Bill Gates and Ray Chambers are both inspired and concerned: With victory in sight, will the world&#8217;s new leaders commit to finally beating this persistent parasite?
In exclusive interviews with Reuters in Davos, Gates and Chambers both voiced concern about leadership changes in the U.S. and in United Nations bodies and what these might mean for funding and commitment to global health.
&#8220;The imponderable is what happens with President Trump,&#8221; said Chambers, the United Nations special envoy for malaria.
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&#8220;We&#8217;re just not sure.&#8221;
Falls in deaths and infections due to the mosquito-borne parasite in the past 15 years are &#8220;one of the greatest success stories in the history of public health&#8221;, Chambers said.
And Gates, whose Gates Foundation commits vast funds to global health projects, said the world has never been closer to ending malaria &#8220;once and for all&#8221;.
But with the disease still killing a child in Africa every few minutes, those eager to finish the job are worried that the presidency of the United States &#8211; a crucial funding source for international malaria control efforts &#8211; is now passing to a man whose commitment to global health projects is uncertain.
And with looming leadership changes at organizations key to global health and development aid &#8211; the heads of the United Nations, the World Health Organization, the Global Fund to Fight AIDS, Tuberculosis and Malaria, and the World Bank &#8211; malaria champions say the risk of setbacks is unnerving.
&#8220;With malaria there&#8217;s no standing still,&#8221; Gates said. &#8220;Malaria is very complicated.&#8221;
 
WELL ON THE WAY
It is almost a decade since Gates first dared to revive what in global health circles is known as the &#8220;e-word&#8221; in relation to this ancient disease.
&#8220;We will not stop working until malaria is eradicated,&#8221; Gates declared in 2007.
Now, half the world&#8217;s nations are malaria-free, and since 2000, global malaria deaths have dropped by 60 percent. In Africa, where the vast majority of malaria deaths occur, the malaria death rate has come down by more than 70 percent.
But there&#8217;s still much to do. Despite a steep rise in malaria spending from 2000 to 2010, it has now plateaued.
Funding in 2015 was less than in 2013, with combined international and domestic sources totalling $2.9 billion. Even this is only 45 percent of what malaria experts say is needed annually to reach a target of a 40 percent reduction in malaria incidence and mortality by 2020.
The U.S. is by far largest international malaria donor, accounting for about 35 percent of total funds in 2015, followed by Britain, at 16 percent.
The U.S. government-funded President&#8217;s Malaria Initiative has been a powerful force in the past decade, and monies for that rose above £600 million in 2016 from $30 million in 2006.
 
TRANSITION, RISK AND OPPORTUNITY
Gates said he hoped the new Trump administration would continue crucial malaria commitments, which he noted were ratcheted up by the previous Republican President, George W Bush, and maintained at those levels by President Barack Obama.
In a recent meeting with Trump, Gates said, they talked about malaria, among other things, and had &#8220;good discussions&#8221;.
&#8220;I wouldn&#8217;t say we see a huge risk of those funds going away, but (this is) a time when we&#8217;re trying to raise the ambition,&#8221; Gates said. &#8220;Whenever there&#8217;s transition it&#8217;s an opportunity. We want to step in and work with the new people.&#8221;
Faced with uncertainty, Gates and Chambers have convened a new global group of influential philanthropists, business people, bankers and political leaders to plug commitment gaps.
The End Malaria Council includes African leaders such as the President of Chad, Idriss Déby and former Tanzanian President Jakaya Kikwete; Nigerian billionaire Aliko Dangote; and Luis Alberto Moreno, head of the Inter-American Development Bank.
It will work on new ways to help affected countries and regions fight their own malaria battles, with the hope that this will encourage major donors to stay on board.
&#8220;There&#8217;s a real desire coming out of the United States government, the UK government and others to see endemic domestic countries contribute more of their own capital towards fighting these diseases,&#8221; said Chambers. &#8220;We need innovative, unique and creative ways of financing this.&#8221;﻿

Malaria champions unnerved by Trump uncertainty at crucial time

Leaders from business and policy-making are not expecting a return to 1930s-style trade war, despite the populist backlash in parts of the world against globalization and free trade.
Nevertheless, the reality is that nationalism and protectionism are on the rise globally and the case for globalization needs to be made, agreed panellists in a session at the World Economic Forum Annual Meeting.   “There is no winner in a trade war,” stressed Min Zhu, President, National Institute of Financial Research, People&#8217;s Republic of China. Indeed, raising tariff barriers on both sides would cut China’s annual GDP by around one-third and US GDP by one-half. Rhetoric coming out of the incoming US administration is concerning, he added. “China will continue to support globalization and is willing to work with all countries,” he said.   “Protectionism is rising and that is worrying,” said Cecilia Malmström, Commissioner for Trade at the European Commission, Brussels. Trade is the best tool we have to fight poverty and promote growth. “However trade needs to be more inclusive, transparent and values-based,” she added.   David M. Cote, Chairman and Chief Executive Officer of Honeywell International, stressed the need to learn the lessons of history. “Since the Phoenicians, we’ve known that trade between countries raises the standard of living,” he said. We just need to find a way to make it work, he added. He said it is important not to take political rhetoric at face value and, instead, suggests a wait-and-see approach.   David Abney, Chairman and Chief Executive Officer, UPS, USA, also does not foresee a trade war. With so much to lose, cooler heads will prevail, he said. “Trade is not a zero-sum game,” he added. Nevertheless, leaders have not done a good enough job communicating the aggregate benefit of open trade and globalization. “We need to do much more to equip displaced workers with new jobs and 21st-century skills,” he said.   “We should not talk ourselves into a trade war,” stressed Roberto Azevêdo, Director-General of the World Trade Organization (WTO), Geneva. He emphasized the need to deliver positive news on trade. Periodically, we must deliver important breakthroughs, he said, such as the Bali 2013 Trade Facilitation Agreement, which increased global exports by around $1.3 trillion.
 The 47th World Economic Forum Annual Meeting is taking place on 17-20 January in Davos-Klosters, Switzerland, under the theme Responsive and Responsible Leadership. More than 3,000 participants from nearly 100 countries are participating in over 400 sessions.
﻿

Trade: Best tool to fight poverty and promote growth

In a session at the World Economic Forum Annual Meeting, Antonio Guterres, Secretary-General of the United Nations, said his priority at the UN would be reform of the organization’s peace strategy and architecture to recalibrate focus towards prevention – and not just resolution – of conflict. Pointing out that peace-keeping consumes over 70% of the UN’s budget, he said, “Today, most of our operations take place in countries where there is no peace to keep. Peace-keepers become, inevitably, parties to the conflict.” By preventing conflicts and helping countries that finally emerge from conflict, the UN will be able to limit its peace-keeping role.   Guterres, who assumed office on 1 January 2017, said his efforts at conflict prevention and resolution would not be limited to taking diplomatic action, but would attempt a comprehensive approach based on the UN’s core principles of ensuring peace, security, sustainable development and human rights. “The best prevention is sustainable and inclusive development,” he said, pointing out that while the world is witnessing unparalleled technological progress, increasing volumes of trade, reduction of poverty and progress in living conditions, inequality has increased substantially. Meanwhile, the globalization of communication has made everyone aware of rising inequality, leading to frustration and fuelling conflict.   The Secretary-General pointed out that multilateral governance is as important in a multipolar world as in the unipolar system that has existed until recently, recalling that the World Wars occurred because there was not enough strength in the international institutions when competing centres of power emerged.   Having served on the UN Human Rights Commission (UNHCR) for 10 years before his current appointment, Guterres said that it is unfortunate that 2016 saw the closing of borders and disintegration of the compact on refugee protection that obligated countries to protect those fleeing persecution in their home countries. He said the UN General Assembly is attempting a renewed global compact on refugee protection, which needs solidarity particularly from countries that form the first line of reception. Guterres said that countries must take a fresh look at migration, which is here to stay, and is part of a solution and not a problem. It needs to be managed better, and stronger international cooperation is needed to make migration painless and a force of good for both migrants and receiving communities.   Guterres expressed optimism that the 2030 Agenda for Sustainable Development and the Paris Agreement on climate change will re-energize the UN and mobilize governments, businesses, communities and civil society to form new partnerships. He underlined the need for partnering with business, pointing out that the Sustainable Development Goals offer a return on investment of $30 billion annually. He stressed that the Fourth Industrial Revolution offers opportunity for creating a new platform for partnership at the higher level, which is crucial to deal with such advances as genetic engineering, artificial intelligence and cyberspace, for which dialogue is important.   He also reiterated his resolve to reform the management of the UN, including changing rules on staffing and budgeting, for instance, as well as decentralizing and streamlining systems to make the UN a more nimble, efficient and effective organization.   The 47th World Economic Forum Annual Meeting is taking place on 17-20 January in Davos-Klosters, Switzerland, under the theme Responsive and Responsible Leadership. More than 3,000 participants from nearly 100 countries will participate in over 400 sessions. ﻿

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