Author Topic: How to create a firm financial foundation  (Read 1716 times)

Nathan_Praetor

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How to create a firm financial foundation
« on: November 19, 2020, 10:37:12 am »
Why is it that the majority of people fail when it comes to setting up a firm financial foundation?

South Africans engage in the economy daily, from the blue collar miners to the well suited business men. We all strive to earn a decent income, we work for that raise or for that extra source of income, yet when the sun sets our finances are not in order.

Can this be blamed on our education system failing to teach pupils the basic principles of money, maybe we can even blame the way we have been brought up. BUT, despite the way we were taught in school or how we were raised, we have only ourselves to blame. Exercising proper financial management does not necessarily require a degree, however it does require some extent of knowledge. It requires the individual to possess the knowledge, as well as the understanding of how to apply the knowledge in a suitable and financial manner.

So let us talk about the following three questions and let us what you think:

1. What does it mean to have a firm financial foundation?
2. What methods should we pursue in order to acquire financial knowledge?
3. What prevents individuals to have a firm financial foundation?

gcr

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Re: How to create a firm financial foundation
« Reply #1 on: November 19, 2020, 01:05:16 pm »
My route was simple - I went into banking starting at the lowest level ex school.
Worked in every single department and worked my way to management levels.
Got friendly with work colleagues in the share department, bought shares and read the ticker tape a good few times a day.
50% of my 13th cheque or bonus were plowed into my share portfolio annually until I retired
50% of my retirement package went into a 32 day investment account (which has only been added to over the years) and 50% was trickle fed into the stock market
To me there are only 2 caveats for investing in the market (knowing the management team and their business history) and looking at the share price trend of the business over 10 - 20 years
There were a few other criteria which I adopted and revised/reviewed over the years
Not everything that counts, can be counted, and, not everything that can be counted counts - Albert Einstein

Hexadecimal

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Re: How to create a firm financial foundation
« Reply #2 on: November 20, 2020, 12:42:52 am »
Hi Nathan

Great question.
I believe it's up to the individual and what they want.

Financial freedom is a choice, not a number in the bank account. What assets I have are pitiful in comparison to what it should be at my age, BUT, I live a financially free life. This is not something that can be taught at school.

Everyone on this platform understands compound interest and dividends, money is not the issue, it's choice.



« Last Edit: November 20, 2020, 08:43:55 am by Hexadecimal »

Bevan

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Re: How to create a firm financial foundation
« Reply #3 on: December 02, 2020, 12:12:06 pm »
I studied mining engineering but left SA in late 90's and commoditised the international coal market in early 2000's. Made plenty of cash working in commodities (trading and investment banking) but I spent most of it on travelling the world, sex, drugs and booze. The rest I just wasted. I also ploughed millions into property in the UK just before the 2008 financial crash. C'est la vie!

I don't have millions to my name any more but I have something far more important. Something that people who are only rich really, really hate. A lifestyle that cannot be bought with money! This involved me moving to live off-grid and being able to grow and eat all our own food, for free! Plus we get a greater and greater surplus every year. I've never been healthier, drinking our own spring water, and our cow and goat milk. Chopping wood has added muscle mass, dropped my cholesterol, and keeps us warm in the winter (for free). Now I value wealth on the quality of your soil and water resources. And how much freedom you have from not paying monthly bills, and not having to deal with the government, or traffic, or mad crowded shopping malls, or a crowded subway or tube. I can go mountain biking or trout fishing in the mountains at the drop of a hat, and some of the best beaches in the world are an hour and a half away. We also ski (partially) in the winter.

Yes, Hogsback is in SA and the country is likely to implode at some point. But I've been to most countries in the world and our lifestyle, plus the chance to work with eager, young black Africans who are trying to change their lives for the better is incredible. We have some of the friendliest and happiest people in the world, who are also some of the poorest. I suspect there's a lesson there somewhere. The biggest concern to our safety is if govt. were to stop paying social grants, and/or our farmers stopped producing staple, affordable foodstuffs. But hey, the whole world is fubared and the USD is on the brink of collapse. Hence why the ZAR continues to strengthen even as the country continues to be downgraded.

The most amazing thing.... Our 10 acres of country bliss cost us R900,000. Of course I've ploughed some more cash in over the years but the question was how to create a firm financial foundation. Get out of the expensive cities and start living a less fragile, more self-sufficient, and ultimately much happier lifestyle. It's tough, especially in the beginning. But it's so much more rewarding in the end...
Audi, vide, tace, si vis vivere in pace. Pax vobiscum.
Happiness belongs to the self-sufficient - https://www.thrivecentre.co.za