Always see the bigger picture

Let us start this letter on a positive note, shall we? On a recent trip overseas I was seated next to a Kuwaiti girl in her early 20s who had just qualified as an accountant and loved travelling. She did not know who I was, or where I was from. I was contemplating the recent bout of stage-6 load shedding back in South Africa and as one does, getting myself all worked up about our failed government. However, I could not help overhearing her conversation with a Norwegian guy on her other side, about their favourite holiday destinations. To my surprise, hers was Cape Town, South Africa.

There is no arguing the fact that South Africa has some very serious basic problems, starting with electricity and its possible domino effect into sewerage, water and general infrastructure. It is a fact that corruption takes a huge chunk of the taxes you pay every day and that things will probably not get better soon. But, we are not the only country with big problems. Now I know what you are going to say: that only losers compare themselves to still bigger losers and that one should always strive to become better – and I agree one hundred percent.

But, before you pack your bags for another country, just do some research. You may just decide to rather stay here and tackle the problems that impact your life directly. As an example, let us take a look at what life in Norway is like. We may be under the impressions that only the rand can depreciate against the dollar, but over the last five years the Norwegian krone (NK) has lost 34% of its value against the dollar. Okay, if I compare that to the rand, we have lost 54%, so I have at least some egg on my face – but there is a principle here. If we take it a step further, you will pay R462 for a cheeseburger and chips in Norway, R190 for a 500 ml draught beer and R88 for a coffee. If you want to eat something fancy like a pork shank, you will pay R586.

Your counter argument will be that wages in Norway are higher than here and you will be right, but perhaps not enough to disprove the fact that living in Norway is expensive, even for a Norwegian. So let us agree that in Norway you have a fantastically well-run public services office; that you either get eaten by mosquitoes in summer or freeze to death in winter; and that you get paid well to endure the expensive lifestyle and adverse climate. Then let us compare that to South Africa where you have to pay for your own “public services”; but you have a wonderfully temperate climate and a relatively cheap lifestyle.

The one piece of investment advice we can share with you regarding the above, is that much of your anxiety regarding the impact of the weakening rand on future lifestyle expenses and the affordability of travelling locally and abroad, can be negated by having some investments in US$. Most of us cannot simply emigrate or change our government, but we can all invest a substantial portion of our assets and income in diversified international markets and currencies. So your current mantra must be: shorter-term assets in SA; longer-term assets in the USA.

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