10 Money lessons from the past 10 Years
Geo Botha • April 3, 2025
March this year marked exactly 10 years since I joined Bovest back in 2015. After completing my B.com and honours degree, I first gained experience in the corporate world in Sandton, Johannesburg, before I joined our independent wealth management firm. Throughout the last 10 years I had the opportunity to work with people from all walks of life and from every interaction I learned something. Some inspired me and others deterred me.
It’s a difficult task to summarise them, but here are 10 money lessons I’ve learned over the past 10 years:
- Money will not solve all your problems.
- On one specific morning I arrived at work at around 7am. The cleaning lady, who was whistling and singing greeted me politely while mopping the floor and going around her business. 30 minutes later we had a meeting with one of our wealthiest clients who was completely stressed out and upset about something his business partner did. The vast contract of the two people’s Net worth and state of mind was a reminder that money will not solve all your problem, neither will money alone make you happy.
- Having money does not make you a better person.
- I see it often, people who have a large amount of wealth, who has a prominent position at work or runs a successful company might often has an aura of importance around them. They will think their opinion carries more weight and that somehow the universal laws do not apply to them as strictly as the ‘normal’ person.
- Money is NOT the root of all evil
- In contrast to the above 2 points, I see many wealthy people doing incredible noble things with their money. They provide food for the less fortunate, put children through college, create job opportunities for others 7 make the world a better place in various other ways. Without money this will not be possible.
- Having ambition does not make you materialistic.
- Talking about money, wanting to increase your income, or working hard to get promoted does not make you materialistic or egocentric. As humans we need to grow and aspire to be better that we were yesterday. It gives us purpose and direction. Money is on of the topics most often discussed in the Bible and making the best of your God-given talents is something we all should work towards. Don’t think small, because it makes others feel uncomfortable, we only have one shot in life.
- Tax planning plays a much bigger roles in investments than you think.
- I don’t know one single person who is happy to pay more taxes than he or she should, yet we often overlook the opportunities where we can minimise our tax payable. Paying less income tax is important, but for most parts out of our control, it’s saving tax on the growth and payouts of our investment where the big opportunities hide.
- Simple habits almost always guarantee success.
- Successful people are very good at focussing on their field of expertise, where they make their money and then outsourcing the rest. They don’t overcomplicate their finances, by trying to pick every hot stock or coin that is trending. They realise that automating their finances is incredibly powerful and treat their monthly investments like an expense, it automatically gets deducted from their bank account and they don’t need to waste their decision-making power on it.
- Compound interest cannot be overstated enough.
- We have all heard wonderful quotes about the power of compound interest and how your money can work for you. Yet most of us still lack the discipline and patience to allow it to work wonders in our portfolios. In every meeting I have with people close to retirement, who have given time the attention, they are in awe of how their money has grown in the latter part of their investment journey.
- We all are part of the ‘Money Game’ whether you want to play or not.
- If you bought something in the last 2 days, you are part of the economy, the money game. Money does not need to rule your every though, but ignorance is not bliss. Thinking that it’s noble to never talk about money or to think you don’t need money, will have serious consequences. In contrast, having a lot of money doesn’t mean you are winning at the game of money: If money is more important than your relationships, you’re not winning. If money influences your ethics, you are not winning. If your health is suffering in your pursuit of chasing money, you are not winning. Take control over your financial situation and not the other way around.
- Be aware of the ‘Lifestyle Creep’
- Sometimes also called the “bracket creep” Throughout life you are bound to gradually earn more as the years go by, however the silent killer, less talked about side of the equation is the growth of our expenses. This often happens in small increments and without us realising it: You buy slightly more expensive gifts for your children, you drink more expensive wine, you go out to restaurants more often or you upgrade your brand of make-up or gadgets are home. While none of these are bad in principle, it is worth paying attention to them and invest, before you spend on you ‘Nice to haves’
- Enjoy your money.
- This is probably the most simple and important lesson, but one that’s not easy to obtain. It’s only once you’ve mastered many other aspects of money and your mindset around finances that you can really enjoy your money in a guilt free manner that’s not guided by outside influences.
Know yourself, know what will bring you joy, work hard, give to others and enjoy your money.
The widely anticipated tariffs were announced last night via executive order, on America’s so-called ‘Liberation Day’ and in discussions with our partners at Morningstar, the following should be noted. The sweeping announcement is intended to ‘make America wealthy again’ as tariffs effectively tax foreign producers on their imported goods, as a percentage of their value. The US is currently the largest goods importer in the world and is currently running a trade deficit (imports more than it exports). President Trump has said that he will not negotiate, however, if countries are willing to lower their charges on US goods, the White House will reduce the rate in effect. Market impact US Equities have sold off sharply, particularly those reliant on imported goods, as well as foreign companies that have significant exposure to the US market. At the time of writing, the FTSE 100 was down 1.4% to below 8,500, whilst sterling had appreciated to 1.32 against the dollar. Bond prices have broadly risen as investors have sought perceived safer assets. SA equities and bonds responded negatively after markets opened. The All-Share was down around -3,5% by end of-day with the decline being led by Financials at -4.3%, while both Resources and Industrials were down approximately -2.4%. The yield on the SA 10-year government bond spiked sharply to 11.3%, a move of 0.8% off the previous day's close. The rand remains relatively range-bound between R18.60 – R18.80 despite general US dollar weakness against most major currencies. What we know about the Tariffs: The tariffs that were imposed last night are of a reciprocal nature, meaning that countries are free to retaliate with their own tariffs on the US. Below are some of the standout tariffs that Trump has imposed across the globe: · China 34% · India 26% · Japan 24% · EU 20% · UK 10% South Africa, which currently applies 60% tariffs on the US, was handed a 30% reciprocal tariff. The effective rate is likely to be lower given that key commodity exports, including gold and platinum, are currently exempted. What we don’t know President Trump has not made it clear whether the tariffs will remain in place indefinitely and whether indeed they will remain at the initial level. There are many factors that could impact their longevity, including legal ramifications and future election implications. It is also yet to be seen how and when other countries will react to these changes. Countries may look to increase their current tariffs on the US or indeed may consider reducing them. Additionally, President Trump has stated that the only way to gain exemption from the tariffs is to set up factories and build products in the U.S., so we await to see how countries and companies react to this proposition. What’s next? While volatility and policy uncertainty will likely persist in the short term, we recommend investors keep a cool head. The challenge is to avoid overreacting to the elevated day-to-day volatility and remain focused on your financial plan. Central Banks have been in a holding pattern in anticipation of actions taken by President Trump, and therefore this announcement may have an impact on future Central Bank policy and interest rates. From a longer-term perspective, we may see implications for economic growth across various regions, however, it is too early to tell at this stage. From an investment standpoint, we continue to focus on the fundamentals, maintaining a long-term mindset, whilst paying attention to valuations. Market volatility can provide investors an opportunity to rethink their portfolios and find some better-valued investments with more attractive returns, however, it’s important to note that while selloffs will produce bargains, investors shouldn’t buy simply because stocks look less overvalued. Investment is always full of uncertainty, and therefore the Bovest solutions are constructed with this in mind. Valuations are key in our decision-making process, whereby our research process identifies return drivers from oversold assets, offering investors a high margin of safety. Against that, we also hold defensive assets that can add ballast to portfolios during periods of turbulence, including high quality government bonds and defensive equities such as consumer staples. Diversification continues to be a strong portfolio strategy in these times of uncertainty. Regards, The Bovest Team
Inleiding Aftrede is onteenseglik ’n belangrike fase in ons lewens, en waarskynlik die belangrikste. Dit is die kulminasie van voorafgaande fases, soos opleiding en inkomsteskepping, en as ons nie gereed is vir hierdie fase nie, kan die lewe traumaties wees. Aftrede verg beplanning en beplanning is die gevolg van goeie gewoontes. Ons raad aan afgetredenes en mense wat beplan om af te tree, is om goeie gewoontes te kweek om hulle op die pad na ’n gelukkige aftrede te lei. Uit ons interaksie met kliënte wat op aftrede staan of reeds afgetree het, kon ons sien dat hierdie benadering prakties en logies is, met positiewe, tasbare gevolge. Baie faktore speel ’n rol in ’n gelukkige aftrede. In die VSA het ’n studie hierdie faktore gelys as goeie gesondheid, finansiële sekuriteit, liefdevolle familie en vriende en ’n doelgerigte of beplande aftrede - What Retirees Want. Dychtwald and Morison, 2022. p115. Hierdie aspekte word onder meer in hierdie boek aangespreek. By Bovest word kliënte se persoonlike omstandighede in ag geneem wanneer hulle finansiële advies vra. Ons wil mense help om hul finansiële situasie ten beste te benut om gelukkig te kan leef. Om gelukkig af te tree is egter nie ’n gegewe nie. Jy benodig persoonlike doelwitte wat opgevolg moet word met die begeerte om die nodige regte gewoontes aan te leer. Dit vereis dikwels dat jy bereid moet wees om van jou gevestigde gewoontes te verander. In die soeke na jou persoonlike geluk gaan jou gewoontes uniek wees. Hoe word Gewoontes Gevorm? Daar bestaan verskillende teorieë oor hoe om gewoontes suksesvol te vorm. By Bovest vind ons aanklank met James Clear se teorie soos vervat in sy boek Atomic Habits (Penguin Random House, London, 2018, pp47-48), wat vier stappe tot sukses verwoord: Stap 1: Raak bewus van ’n wenk, insig, doelwit of begeerte. Stap 2: Hunker om dit uit te voer. Stap 3: Wat is die reaksie wanneer jy dit uitvoer? Stap 4: Wat is jou beloning as jy dit uitvoer? Kom ons kyk na’n voorbeeld van gewoonte-vorming: · Stap 1: Iemand wat aftree se doelwit is om waarde vir geld te soek – hulle ontleed voortdurend die omgewing waarbinne hulle leef en pas hul begrotings en maandelikse uitgawes oppersoonlike behoeftes voortdurend aan. · Stap 2: Daar word navorsing gedoen oor watter uitgawe die beste waarde vir die beskikbare geld bied. · Stap 3: Die aankope word aangepas en die afgetredene voel tevrede dat daar waarde vir geld verkry is. · Stap 4: Aangesien daar binne begoting opgetree is, is die beloning dat daar fondse beskikbaar is om op ander beplande aankope te spandeer. Indien die koop ’n winskoop was, kan ons daarmee spog en selfs deur ons vriende geprys word as ’n winskopie-jagter! Deur hierdie vier stappe te herhaal, sal ons in die toekoms met meer gemak optree tot gewoontes van gesonde finansiële bestuur redelik moeitevry gevorm word.
