- Player: Mahadi Granier
- Company: Khalala
- Launched: 2016
- Visit: www.khalala.com
In June 2015 Mahadi Granier made the single biggest — and scariest — decision of her life. She packed up her family and moved to Paris. Her husband, who is French, had found a job, but Mahadi was planning to stay at home with their five-month-old daughter and three-year-old son while figuring out her next move.
She wanted to be an entrepreneur, and she believed that throwing herself into the deep end and moving to a new country was the catalyst she needed. What followed has been a baptism of fire, but also one of the most rewarding experiences of her life. This is what she’s learnt about entrepreneurship since launching her business.
“You need to surround yourself with like-minded people who have the same drives and ambitions as you do.”
By the time Mahadi went on maternity leave for the second time, she had been employed in a senior position at the Department of Trade and Industry (DTI) for eight years. She had a comfortable, well-paying job. She had the perfect set-up. She commanded boardrooms. Yet she lacked job satisfaction.
“I had too much time to think while I was on maternity leave,” she says.
Searching for innovation
“And what I thought about was my life path. Government employment is so bureaucratic. There’s no innovation. I didn’t feel like it was an environment conducive to achieving bigger goals and ambitions. I realised that the energy was dragging me down, and that if I stayed in that role, I would eventually become like everyone I worked with — comfortable and complacent.”
Mahadi’s friends and family didn’t understand what she was going through, or why she wanted to make a change. It was that same confusion that triggered the realisation that she was living and working in an environment that was not conducive to taking a leap.
Taking the plunge
Mahadi saw only one alternative: This seemed like the right time to take that plunge. She needed to radically change her surroundings, and force herself into the unknown terrain of entrepreneurship.
“Sometimes you need to face your fears and take that big leap.”
Unfortunately, while the leap was big and bold, it wasn’t what Mahadi had expected. And yet, from that adversity emerged her business idea. “I realised it was a crazy prospect — new country, new market, new customers, without my social circle of influence.
I was moving to a market I knew nothing about, filled with consumers I didn’t know or understand. But that was the challenge. I wanted to go somewhere where there’s a higher level of expectation; where I was pushed to aspire to a higher bar.”
It was a massive culture shock. The language barrier in particular was greater than Mahadi had expected. Her dreams of arriving in Paris and starting a business were shattered. But that didn’t mean she was ready to give up.
Plan before you make your move
Instead, she chose to stay at home with her daughter, manage the integration of her family into a new culture, and research everything she could about France, Europe and the local business landscape.
“I had gone from boardrooms to stay-at-home mom, which in a way was the exact opposite of what I wanted for myself. But I’d had a reality check. If I wanted to do something real with my life, I needed to build the right foundations.
I also wanted to be a present mother. Part of my challenge was figuring out what kind of a role model I wanted to be for my children, and that meant also being fully present in their lives.”
Related: Black Like Me: Connie Mashaba
Achieving the work/life balance
As a result, Mahadi structured a schedule that allowed her to do both. “I woke up very, very early, and gave myself three hours of work and ‘miracle morning’ routine, before everyone woke up, Monday to Sunday, 5am to 8am. I then worked when my daughter napped, and in the evening after everyone went to bed.”
“Sometimes your greatest challenge can be your greatest advantage and opportunity as well.”
One of the core pieces of advice that aspiring entrepreneurs often receive is to do what you know. In Mahadi’s case, this was almost useless. She knew nothing.
Her past DTI experience was no help, and she was coming to the European market cold. But this also gave her an advantage. She had no expectations, and she was approaching everything with fresh eyes. She also had to seek out fellow South Africans who had already experienced what she was going through, and it was then that a business idea started to take shape.
Ask for advice
“I sought out South African entrepreneurs in France for advice. I had so many questions: Where are the South African entrepreneurs in France? What had their experiences been? What advice could they offer — after all, they’d done this already and they understood the landscape.
“They could tell me what to avoid and where to go. By tapping into this community, my research time was reduced. I found valuable resources and trusted sources. Then I realised that no one was facilitating what I was going through — helping South Africans start businesses in the French (and broader European) market. Here was a gap that could be exploited. I felt like I’d stumbled on a
An idea is only as good as its execution, and Mahadi knew she needed to be more focused than ‘South African businesses abroad’. She needed to do more research. She approached the South African Embassy in Paris with one key question: What was the South African export basket into France dominated by and where did the greatest, untapped opportunities lie?
Finding your niche
Mahadi has her Masters in International Business, and is passionate about the subject. She had put this to use in her role at the DTI, but she now had an opportunity to turn those skills and passion into a viable business that also empowered other entrepreneurs. She just needed to find her niche.
“Before you get too attached to an idea, you need to understand the landscape you’re working within.”
“The first thing I did was look at the existing trade agreements between South Africa and France and within the broader European Union. Second, I looked at the South African export basket into France and realized that it was dominated by agro-processing, automotive, aircraft and electro-technical sectors.
Finding diversification opportunities
“And so, while those exports are in value-added products, they were concentrated in a few products. This presented a diversification opportunity. One such opportunity lay within the clothing and textiles sector.
“On the demand side, the French and global fashion industry at large is always influenced by the same fashion houses — Prada, Louis Vitton and the like. They dominate the market, irrespective of the undeniable demand for a diversified fashion aesthetic. With the South African ambassador’s help, I carved a niche and just like that, an idea was born.”
One of the first designers that Mahadi reached out to was Laduma Ngxokolo, founder of ‘MaXhosa by Laduma’. What she learnt from studying his global success was that designs rooted in African-rich heritage, culture, tradition and customs and fused with western influence provide a unique combination and hybrid that not only energises the international audience but acts as a catalyst for success. This is a crucial determinant of global competitiveness.
Understanding new markets intimately
“But there was a greater observation as well. If you want to break into new markets, you need to understand them intimately — their tastes, their purchasing behaviours, what they’ll spend money on, what does and doesn’t work. I knew I could play a valuable role here, acting as a conduit on the ground. This gave me a competitive edge in playing a business facilitation role.”
Armed with this knowledge, Mahadi saw multiple needs. “First, I needed to empower South African designers to raise their level of thinking beyond local markets and open themselves up to new international audiences. Second, I am constantly interacting with buyers at trade fairs throughout Europe.
“I am gathering intelligence, forging business relationships, networking, gaining new business insights but most importantly, I’m identifying trade opportunities. Finally, I decided to acknowledge the undeniable power of social media as a vehicle to reach remote buyers.
“Therefore, I launched a digital magazine that I market exclusively through social media. To date, the magazine has been read in over twenty countries worldwide.”
“Finding the right partner is an essential step in the overall journey, and in achieving your goals.”
Thriving in the entrepreneurial ecosystem
Another key lesson that Mahadi has learnt — and indeed, is imbedded in her overall business model — is the fact that entrepreneurship is an ecosystem. Business owners work together. Very few successes are isolated.
To carry her idea forward, Mahadi knew she needed a partner in South Africa. After researching the fashion landscape back home, she realised that the best person she could approach was Sonwabile Ndamase, personal designer to Nelson Mandela, creator of the Madiba shirts, and founder of the South African Fashion Designers Agency (SAFDA).
For almost three decades, Sonwabile has been giving back to his industry, training young designers from rural areas to not only become fashion designers, but to build sustainable fashion businesses. He had been looking for ways to increase the reach of his programmes into Europe and Mahadi provided the ideal opportunity.
Creating international market access opportunities
SAFDA and KHALALA have entered into a collaboration agreement, formalising a partnership to work together to create international market access opportunities for young and emerging South African fashion designers in Europe.
Mahadi and Sonwabile are just at the beginning of this journey, and are currently reaching out to funders. With the right focus, dedication and some luck, the next generation of South African designers making international waves will be in the not-t
Watch List: 50 Black African Women Entrepreneurs To Watch
These female entrepreneurs are breaking barriers, transforming industries and inspiring change on the continent.
From creatives, to tech gurus and medical scientists, here’s how these African women have revolutionised their communities through their innovative and sustainable businesses:
- Portia Mngomezulu
- Nandi Dlepu
- Nthabiseng Ramaboa
- Ntombenhle Khathwane
- Sunshine Shibambo
- Mogau Seshoene
- Nontando Molefe
- Thato Kgathlanye
- Nothando Moleketi
- Allegro Dinkwanyane
- Sandra Mwiihangele
- Shakeela Tolasade Williams
- Reabetswe Ngwane
- Mabel Suglo
- Lucy Agwunobi
- Patience Maame Mensah
- Rachel Sibande
- Nneile Nkholise
- Nelisiwe Masango
- Sheila Afari
- Samke Mhlongo
- Kelebogile Mabunda
- Aisha Pandor
- Karabo Mathang-Tshabuse
- Zanele Matome
- Shingai Nyagweta
- Funke Bucknor-Obruthe
- Vere Shaba
- Khanya Mzongwana
- Portia Masimula
- Monalisa Molefe
- Nozipho Dube
- Rapelang Rabana
- Botlhale Tshetlo
- Lebo Mphela
- Sarinah Matema-Morgans
- Tsholo Wesi
- Theo Mothoa-Frendo
- Palesa Sibeko
- Mokgadi Mabela
- Sibongile Sambo
- Tam de Vries
- Constance Mapule Bhebhe
- Phendu Kuta
- Linda Mabhena-Olagunju
- Nobesuthu Ndlovu
- Regina Luki Kgatle
- Hlengiwe Vilakati
- Lilian Muhammed
- Bonolo Mataboge
Starting a business is not for the faint of heart, but that didn’t stop these 50 women from doing it. Across the continent, women have pursued entrepreneurship, some for the very first time at 50 years old, while others have never even been formally employed.
How Jacqui van der Riet Went From Receptionist To Co-Owning A R230 Million Business
Jacqui van der Riet might own an equal share of UDM International, a R230 million business that she’s been instrumental in building from the ground up, with the Chairman, but she started out as just another salaried employee. Not satisfied with answering phones, Jacqui started cold-calling potential customers, writing scripts and reporting conversion rates to clients. Her passion and perseverance helped land UDM its biggest client, and the business just grown from there. Here’s how a young mother with no qualifications got her degree while working and helped build a world-class business, brick by brick.
- Player: Jacqui van der Riet
- Company: UDM International
- Employees: 350
- Launched: 1994
- Turnover: R230 million
- Visit: www.udm.co.za
When the founders of a recently-launched direct marketing company walked into the offices of UDM in 2000, all that greeted them was the anticipation of success.
Jacqui van der Riet exuded confidence and energy. She knew that they were the company to help this dynamic group of people to launch and grow its sales. She’d done her research, written scripts and had her team prepped. They were selling educational policies for children and everyone was excited.
That first day, sitting with her new potential clients in the one small meeting room UDM had, Jacqui instructed her team to walk in and make a mark on the whiteboard each time they closed a deal. Within an hour they’d already come in seven times. The previous call centre that the life insurance company had approached had concluded that this sales campaign was not viable. The relationship kicked off the moment UDM proved otherwise.
Jacqui and her partner knew that this was their chance to build a brilliant business relationship and she put her head down, worked hard and figured it out as she went along. This was UDM’s chance. 20 years later, UDM’s turnover is R230 million.
Here’s how the woman who was hired as a receptionist and general admin person for a small call centre start-up went from earning an average monthly salary to owning 50% of the direct marketing machine she and her business partner have built from the ground up.
From PA to prodigy
Jacqui’s interview at Universal Database Marketing was far from usual. She met her boss-to-be at a lunch-time interview at his office in Randburg. Her goal was to negotiate a higher salary than she currently earned. She’d been told he’d already interviewed many women without finding the right person, so she felt she had negotiating power. She was 25, had two small children, was studying a BCom degree through Unisa, and hated her job at a legal firm, where she was constantly reminded of the pecking order, but didn’t see real room for growth.
She left the law firm for a job that paid almost double what she had been earning, but had no clue what UDM did, or what would be required of her. The company was a small start-up, direct marketing call centre. Its monthly turnover was low, like any new start up, and Jacqui was justifiably concerned that if that didn’t increase — and quickly — she wouldn’t have a job for long.
Her job description was personal assistant to the owner. Aside from the owner there was one other employee — a telemarketer who worked from 9am to 12 noon calling an insurer’s clients whose policies had lapsed and trying to reinstate them. Within days, Jacqui decided to start making sales calls as well.
“At first, I just wanted to see if I could do it,” she says. “I’d never even been exposed to a call centre before, and I saw it as a challenge, a way to learn new skills, and maybe even a way to make sales and boost the business.
“I soon realised that I didn’t only want to make calls, but I wanted to report back to our client on how we were doing, so I kept a record of how many dials we made, the number of contacts, and how many contacts were converted into sales. It was a very manual process — we kept records with paper and pen, and had little tape recorders that we needed to remember to take off pause to record each call. But the client loved the feedback. They were impressed with us.”
And then the founder of the company relocated to London, and sold the business to his brother, Jacqui’s partner and 50% co-owner of UDM today. “He asked me if I thought we could really make a go of it. I’d been learning a lot simply by doing the work — I was writing and tweaking scripts, tracking everything, and starting to learn the industry. I definitely wanted to give it a go.”
Like his brother, Jacqui’s new boss had connections in the financial world, and slowly they started signing clients, but always for small sections of each institution’s portfolio.
“We couldn’t take on permanent staff, but we needed people on the phones, so we turned to students,” says Jacqui. “We paid R20 per hour, and each student had to work 20 hours a week. I wrote the scripts and trained them, loaded the sales, created reports, and slowly figured out how to set targets and even discipline them. Remember, these were students, and we had nothing to do with their chosen careers. They were just there for the money. It was a big learning curve for me. I remember the first time I had to tell them that I was employing them to work, so could they please do what I was paying them to do. My hands wouldn’t stop shaking.
“I was learning everything on the fly. My financial management coursework helped me to develop targets, but there’s no degree for sales. If a script didn’t work I changed it. I made sure I still spent time on the phones so that I could see what worked, and what needed to be adjusted. I made sure that I was learning something new each and every day. I also tapped into my network — I called former employers and told them what I was doing and if they thought it would work. I was never afraid of asking ‘dumb’ questions. If I wanted to know something, I asked. It’s the only way to learn.”
With her hands firmly on UDM’s tiller, Jacqui believes the business got off to a slow, but sensible start. “Everything we did was with the mindset that it could be done,” says Jacqui. “I think that’s incredibly important. We never allowed ourselves to think that something couldn’t be done. We looked for solutions instead, and changed anything that wasn’t working, or wasn’t performing as well as we wanted it to.”
UDM’s big break came when a new life company called us in. Jacqui and her partner knew they had one shot to impress them, and she wasn’t going to let it slip through her fingers.
Be like Federer
Once they signed with UDM, the life company requested exclusivity. They wanted Jacqui and her team to focus exclusively on their products. UDM agreed. They would work out their current contracts, but they wouldn’t renew them, or take on new clients.
Putting all of your eggs in one basket is always a risk, but Jacqui also saw the opportunity. “Nothing is ever iron-clad, and there are always risks, but we were getting in on the ground floor with each other. Our success would rise or fall together. I believed it was a worthwhile risk and I still do. We understand each other, we speak the same language, and our values align. At the time we are the life company’s sale’s arm — we just happen to be independently owned. We both think this keeps us focused”
While the partnership has been fruitful for both businesses, there have been exciting challenges, most notably with the structure of UDM’s sales force.
“When we launched we were selling the life company’s difficult campaigns. From there, we started relatively easier and more profitable sales campaigns. Because they were more profitable, we were paid a higher fee for them. The result was that I promoted my best sales people onto the easier campaigns — our client paid us more, we paid our top sales people more, and the client benefited as their profits increased. It was win-win-win — until we started noticing the flaw in the entire system.
“We were moving our most talented sales people away from the difficult sales campaigns. The easier sales campaigns were flying, however, the more difficult campaigns were the crux of the business. Our client realised that if we didn’t change our process soon, we would continue to see a dwindling business.
“The realisation was one thing — we couldn’t believe we hadn’t seen the problem earlier, but at least now it was a challenge that we and our client could discuss. That was just step one though. Because we’d moved many of our best people off the vital, yet difficult sales campaigns, we were continually recruiting and training new potential sales stars to replace them. We had set ourselves up for a difficult, sustainable business model.
Companies always get nervous when they change anything associated with top earners, and this was no exception. We knew that if we didn’t do something, we would face a much bigger problem down the line. There was a solution — we just needed to find it.”
Jacqui knew she needed to solve three key issues. First, she had to find a way to convince her top sales people — all of whom were now accustomed to the ‘easier’ sales campaign to move back to the vital and difficult sales campaigns. Second, she had to ensure their high earnings remained the same or even improved, and finally, she needed to ensure that the ‘easier’ sales quantities didn’t decrease because her top sales people were not focused on them.
“I spent a lot of weekend hours figuring it all out,” she says. “I had to work out an incentive structure that ensured the company didn’t lose, our client didn’t pay more, but our staff were positively positioned. In discussions with our client, the first piece of the puzzle was put in place. The fee structure could be aligned with the new sales model. The incentives on the easier sales campaigns was where magic had been happening for 13 years — but there’d be no magic if the number of sales on the difficult sales campaigns diminished.
“Next, I turned my attention to our top sales people. I needed to make it amazing for them. What do people really care about? What would I want in their position? People love titles, recognition, and real perks. And so, we created an Elite floor. There are 28 positions open in Elite, and it’s never full. There are very specific criteria to qualify for Elite, and if you don’t cut it you’re out. You need to be like Roger Federer — you’re only as good as your last game, or in this case, your last months’ targets.
“If you’re in Elite however, you get the title, your own parking space, a weekly massage, food orders from a menu every day, snacks, and access to the Elite Shop when you’ve hit target three months in a row. The shop offers everything from tumble dryers and washing machines, to pool tables. Our Elite team also earn in excess of R100 000 per month if their targets are met.”
Once Jacqui had worked out the offer, she gathered her 20 top sales agents into a room and pitched the vision to them. “When they walked in, many of them had been crying. They’d heard rumours about what was happening, and they were not happy being forced back to the more difficult sales campaigns, so I approached the change from a different angle.
“I unpacked the whole picture: Why the change was necessary, what we would do, what the future would look like if we did nothing, what we could achieve if we made this change, and the structure, benefits and earning potential of the Elite floor. I then asked for four volunteers — the idea was to pilot it and prove it worked. All 20 put up their hands. We were in this together, as a team. We launched two years ago, and we haven’t looked back. Our difficult sales campaigns achieved a 30% growth in our first year, and more importantly, our client’s valuable ‘easier’ sales campaigns remained steady. In fact, the sales to conversion rates increased.
“We now move our most promising trainees onto easier campaigns in their latter weeks of training which has increased our permanent placements. Creating Elite was a risk for everyone, but one worth taking.”
Learning to fly
From taking up one floor in 2000, UDM now occupies two buildings, one with the insurance team, and the other focused on cosmetic sales.
“We’re always excited by new challenges, and our revenue from cosmetics has grown from nothing in 2010 to nearly R50 million, but we had a lot of lessons to learn to get to where we are today. I thought a customer service approach was the right move for a cosmetics brand, but we soon learnt you need sales people. We then moved some of our top insurance sales people over, but it’s a very different product, and that didn’t work either. I needed to move onto the floor, and get onto the phones myself to really understand what this side of the business needed, and from there we could start building the right sales team, structures and incentives.”
This wasn’t the first or last time Jacqui immersed herself in a section of the business. She is always moving between divisions, and regularly gets back onto the phones to test UDM’s scripts and experience the entire process from start to finish.
“When I come in from an outsider’s perspective, I can see if things flow smoothly. We often get used to processes, even if they’re a bit clumsy. The only way to make the right adjustments is if I experience everything myself, first hand.”
Integral to Jacqui’s approach is looking at each individual hub and evaluating how it can become a revenue generator. “We even look at our client services division and evaluate how we can get salaries paid more efficiently. Are we robust enough to pay bonuses immediately, and how do we simplify our systems to make them as flexible as possible? Nothing at UDM happens slowly. I want everything done today.”
In fact, everyone who works at UDM knows that anything can be done in a short period of time if you have a motivated and flexible team.
“There’s no such thing as requisition forms that get sent to one floor, then signed and sent to another inbox for a few days. Things happen immediately — that’s the precedent I set.”
Jacqui knows that to achieve this, she needs to be accessible at all times. “When your staff can see that someone is listening, and that they have power to implement changes, they respond positively. The culture becomes one of action, but they also speak up, and that’s how an organisation keeps moving forward.”
Another key to UDM’s success is incentives; everyone, from cleaners to supervisors, managers and sales people, is incentivised. “We’re very transparent with our base salaries, and the available earnings if targets are met. For cleaners, this means that set bonuses are paid for grocery stock control, the bathrooms being spotless within an hour after tea break and so on. Supervisors and managers have similar incentive structures, but their targets are related to their job scopes.”
According to Jacqui, the process works because of complete transparency. “Each of us knows what we are on and what our targets are. We know exactly what we’re aiming for, and what we need to do to achieve it. The sales agents know what they need to do, every hour of every day.”
Everything in UDM is tracked — Jacqui is copied in on all daily sales tracking reports. “I know what every team has done, each and every day. They have to explain to me why that day’s target wasn’t met, and what they’re going to do to make it up. If we’re 2% behind where we have to be this month for example, we need a plan of action to get 5% ahead — everything is tight and well calculated.”
Jacqui is the first to admit that it’s a tough and fast-paced work environment — but employees who can handle the mental and physical demands of their jobs are well-compensated and experience growth and development in their professional lives.
“I like churn. I’d rather lose the people who won’t cut it early on. This is a tough environment, so we’ve put a lot of measures in place to weed out anyone who won’t make it. We don’t want to waste their time or ours.”
One of those measures is the training academy. Thirty new recruits start a 12-week programme each Monday, but only the best stay on as permanent staff. UDM’s biggest churn is in the first year, but that’s fine. “I don’t want anyone sitting here who doesn’t want to be here and can’t do the job,” says Jacqui.
“I know the job is achievable, but you have to have the right mindset, work ethic and love for the job. I pay attention to the smaller details, for example, how people walk — based on this one small detail, I know if they’re going to excel with us.”
Jacqui is a firm believer that if people are paid well and receive recognition for their achievements, they stay. “It’s a massive learning curve for anyone coming into this business, but once they get it, there’s no way you don’t know where you are, or what you need to do to achieve your goals.
“Some managers make the mistake of expecting and accepting the mediocre. We don’t. Anything is achievable, I know that, and people often just need a leader who can break it down and show how exciting it is to achieve excellence. We’ve learnt that high achievers thrive on structure, under fair discipline and with great recognition. I think we have all of that here. In the first year the reality of the job sets in, and it’s tough. If you’re not making target here it’s quite a difficult place to be. We have high standards, and I’m proud of them. Everyone here has a high standard of living. 63% of our staff have been with us for over two years, and we have 30 employees who have been with us for over a decade. If you fit our culture, you stay — and we help you fly. That’s our ethos, and it’s worked for us.”
Psychology of success
1. Believe in your positive contribution
I wanted to become a partner in the business I was helping to build. When the opportunity arose for me to own equity in the business, I grabbed the opportunity and worked hard to ensure it paid off.
2. The first step of success is to show up and learn
Seize the moment. Be authentic. If you don’t understand something ask the dumb questions — you’re no dumber than anyone else. I’ve learnt that most people are just winging it. You need to learn, so don’t let the fear of looking like you don’t know something hold you back.
3. Figure out what your business needs
Most of what we’ve built started out with logic. I didn’t know anything about telemarketing, but because I got on the phones and started writing scripts, I figured it out. Put your head down and start — the more you do, the more you’ll learn.
4. Look for a way for everyone to win
I aim to please: Clients, the business and the people working for me should all benefit from what we do. This is a big thing for me. I look for win, win, win in every situation — and believe me, solutions that work for everyone can be found if you’re transparent, understand what everyone needs, and explain the business and personal logic of your decisions.
5. I have an innate drive
When I was born I came out checking the competition. This passion to do everything well has really pushed me in life. I always want to deliver better. You need that drive if you want to build something great.
Financial Wellness Coach Nelisiwe Masango Shares Retirement Wealth Advice
Budgeting is by far the biggest threat to wealth planning, says wealth coach Nelisiwe Masango. If you’re part of the majority of people who don’t have a monthly budget or who have one, but don’t adjust it regularly, you could be hindering your financial progress.
- Player: Nelisiwe Masango
- Position: Founder and Director
- Company: Bear Run Investments
- Visit: bearruninvestments.co.za/wp/
What are some of the most common mistakes people make as they embark on their wealth planning journey?
As a financial wellness coach, I’ve picked up a few common mistakes that people make, irrespective of their age, gender or race:
- Only 30% of people keep a record of their day-to-day spending, including receipts that aid in your monthly budgeting regime. Keeping a record of all your expenses, fixed and variable, will help you avoid overspending and being in a deficit at the end of the month.
- Almost 60% of people don’t have enough money left over at the end of the month. This becomes an issue because you need to have an emergency fund that can be accessed within 48 hours, as well as capital to invest for long-term purposes, such as settling your debt, buying a new house, retirement and your children’s education.
- 90% of people under the age of 35 do not have a retirement or pension plan in place. The biggest mistake that young people make is the assumption that ‘tomorrow will see to itself’. It’s of paramount importance to set money aside for retirement, whether you’re an employee or an entrepreneur.
Why are so few people able to retire at retirement age in South Africa?
We’re living in a very materialistic era and for many, its more socially acceptable to drive the latest German car than it is to own a house.
Society is falling victim to instant gratification. A negative attitude towards your financial future plays a significant role in how you view retirement. Having a stable pension plan, for some people, isn’t as exciting as dressing to the nines.
Therefore, we need to create a culture that perceives financial security and sustainability as a goal, especially with the youth. Statistics show that more pensioners are becoming poorer, resulting in some elderly people having to work throughout their 60s and 70s in order to get by. Time is an essential commodity.
The sooner you start saving and investing for your retirement, the easier it will be to make better financial decisions — such as buying a house instead of renting, saving a bigger deposit instead of getting a car on residual. As a result, your life will become more comfortable.
What is the most important thing to remember when planning for your retirement?
Retirement planning shouldn’t be complicated or overwhelming. Well-established companies generally deduct a portion from your salary and put it into a retirement annuity. This shouldn’t stop you from independently developing a pension plan with your financial advisor.
If your employer does not offer a retirement annuity deduction then it’s your sole responsibility to contact reputable asset managers and financial institutions in order to get the retirement plan ball rolling.
Once you have a retirement or pension plan in place, it’s important to check its performance regularly and make changes where necessary.
What happens if you’re in your 30s, 40s or even 50s or 60s and haven’t started saving for retirement?
It’s never too early or too late to start taking charge of your financial situation. The biggest thing you need to consider is your risk profile. As we get older we tend to become slightly risk averse due to the number of dependents and responsibilities that we have. It’s therefore advisable to get a risk assessment conducted prior to making any financial decisions and adjustments. Once you know the type of investor you are then it will be easier to select products that perform according to your expectations and comfort.
5 Simple steps to get you started
Get your finances in order by following Nelisiwe’s five-step plan:
- Create a budget and find out which luxuries you can do without (for example, making sandwiches at home instead of buying at the office canteen). Once you’ve made a few sacrifices, you’ll have extra money to save.
- Write down your financial goals, namely short-term, medium-term and long-term (for example, paying off your credit card, saving for a deposit on your new home or retiring comfortably at the age of 55).
- Take a risk assessment to determine your investor profile and risk appetite.
- Start investing in the products that best suit your profile
- Check these investments at least once a month but keep in mind that investing is a long-term habit and when you get extra money don’t be afraid to top up or increase your investments for a diversified portfolio.
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