Can we hang on?

SAA has gone into business rescue; our GDP contracted by 0,6% for the third quarter, which was worse than expected; and our JSE is barely positive for the year to date at 3,9%. But the worst news was the rolling blackouts experienced late last week, putting Eskom right back in the headlines. It is sad and frustrating to see how slowly the people in charge are moving to rescue our small economy.

On the plus side, though, our investments in the S&P500 are still up 24% for the year, in dollar terms.

It is that time of year when most schools have closed and a new batch of youth will go to their various tertiary education centres early next year after at least twelve years of school. It is rather ironic, however, that although the education system – including schools, universities and other institutions – teach people how to make money, they do not teach them how to manage money.

We have seen many examples of highly trained professionals having to work late into their seventies because they do not have sufficient investments to support their lifestyle and need the continuing cash flow. On the other hand, we have seen entrepreneurs with no education beyond school, but whose various investments and business ventures generate sufficient passive income to enable them to stop working for money at age forty and do as they please from then on.

We do endorse the idea that one should never really stop working because work gives us purpose – one of the five essentials to a happy life – but the sooner you can work because you want to and not because you have to, the better. So an understanding that one of the most important principles for good money management is to make use of compound returns, is essential.

But here we are preaching to the converted, because being a JWR client already implies that you do understand the importance of investment.

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