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Don't cash in your retirement savings

Personal Finance

I’ve worked at Personal Finance for nine years, in two stints: my first was on my return to South Africa in 2001, after a couple of years working abroad.

I landed a job at Personal Finance as a sub-editor and quickly realised that I was profoundly financially illiterate. I had just turned 30, and although I had saved a large sum of money working overseas, I had already begun to waste it. I had accounts with three clothing retailers, plus a credit card, and I thought investing was the preserve of the wealthy. The following four years were a steep learning curve. I closed all my accounts, bought two properties and began to realise that investing is what makes you wealthy.

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After four years, I left the job to take up a position as the managing editor of a start-up magazine. The magazine job wasn’t for me. I sold my primary residence, went into freelance reporting and almost lost my shirt. (I even cashed in my retirement savings.)

All the knowledge in the world does not make you wise. Wisdom is the application of knowledge. At the end of 2011, I came back to Personal Finance as a reporter.

I’m five years into my second stint and deeply grateful for the life skills that this job has given me. I’ve learnt that there is probably nothing more important that preserving your retirement savings when moving jobs. I’ve learnt that saving is a way of rewarding yourself for your hard work. I see saving as “paying myself first”, and I do it to ensure that I will not be a burden on the state or my family. I save to give my son a good education in the hope of setting him up for success. I’ve learnt that the cost of credit is huge. An excellent credit record is imperative and can secure you a good lending rate, which will save your hundreds of thousands of rands in interest over the term of a home loan.

I’ve interviewed countless clever people who are great with money. Two stand out. One is debt counsellor Philip Nortje, who was the first person to say to me: “We don’t have a debt crisis in this country; we have a financial literacy crisis.” The second is Stephen Nathan, the chief executive of 10X Investments. Nathan told me that when his children have referred to other people as “richer than us”, he says to them: “We don’t know that; what we do know is that they spend more than we do.” He teaches his children that wealth is not what you spend, it’s what you keep.

I’m not where I want to be, but I am saving more and more.

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