Financial Analyst

July is Savings month

What is there to save? And what are you doing to save?

I am always perturbed by some financial advisers giving tips of how one can save. One of some of these tips is saving from ones lunch money. A scenario is put to say that if you bring your lunch from home you can save on that allowance, e.g. in a case where you spend R50 a day for lunch, this amount can be saved, and when doing the math, by end of week one would have saved R250 and when you calculate this for a month a total of R1000 would be saved and when you further calculate that for a year, you kind of get about R12000 for the year.

If one is very honest and manages to save this amount of money for five years it could give about R60 000. Now my challenge with this is that can one retire securely on this amount of money?

I suppose the principle is good, and if one is to follow it diligently it could assist in cases where one can consider to invest a bigger amount that could give bigger returns. But then where would one get such big amount.

This now brings me to the financial system in our country. Firstly, the company that ones works for, doesn’t make its employees to be rich, its like you are given a survival salary to eat and wash yourself so that the next day you can come back clean and be presentable to the office. Secondly, what is the South Africa system on financial education. My guess is, the system even the pure education system is not teaching us to be financially independent, let one to be entrepreneurs, so that we can mend for yourself.

For our country to flourish economically, it should produce a lot of entrepreneurs not job seekers. Where are those job seekers going to get the work? When there is currently almost 27% of unemployment.

Now the sad reality after managing to get a job is that, we are MADE TO BE CONSUMERS. 120% of being a consumer, nothing of being innovative, of teaching the employed how to make or produce those products or services we are consuming. No means of how to reproduce those/ replicate.

We get very excited to be part of the middle-class, without owning anything. The bank will give loans, a mean a loans for your expensive car and house, and we all think we have arrived. The car and house is always branded assets, but not your assets.

I suppose one need to think of what are the strategies out there that could assist people and be financially sustainable. In my next blog a will look at different models that could be considered in future.

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Brenda Molatlhegi

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