Dear Investor Challenge
I love my job, it’s easily the best thing since the slow motion running scenes on Baywatch. I love the office politics and the free food I get during the endless hours of meetings discussing nothing in particular, and the hours spent behind my desk trying to find the balance between actual productivity and complete boredom.
I’m just scared that eventually I’ll have too much money and won’t need to go in to work every day. Once my wife sees that, she’ll definitely want me to retire, and that will mean I’ll go from being the big man at the office, to replacing her handbag yorkie taking instructions, all day long.
My days will then be spent getting dragged around Mr Price Home trying to decide which of the two identical shades of blue towels would best match our guest bathroom, and cleaning my perfectly disorganised garage so that it has space for the treadmill my wife has recently developed an allergy to.
All this while being called Schmoopie is already too much, but it will also almost certainly mean I won’t be able to get drunk at the annual Christmas party, and flirt with my inappropriately young secretary.
Is there any way I can avoid this disastrous chain of events from becoming a reality?
Their house? No but it’s a good guess. Houses are expensive, but this expense can cost you more than your house.
Beer? Boerewors? Biltong? No it’s not one of the 3 B’s either.
The wife? Hopefully not…
No I’m not here to sell you on some crazy pyramid scheme, in fact I’m going to recommend you completely forget anything related to pyramid schemes or multi-level marketing (MLM) exists, because well researched evidence points to the fact that 99% of participants involved in MLMs lose money. Even if you don’t you’re almost certainly going to annoy your family, and alienate your friends, just don’t do it. Starting one can be very profitable though if you don’t mind the risk of jail time, like this smart lady who managed to convince thousands of people to buy a cheese making kit earning her €145 million…
No, none of that rubbish, just an honest way to earn a few extra Rand so that you have more to save and invest. But first I’ll start off with a statement. It’s far easier to save more than it is to make more. That’s why whenever someone asks how they can get their finances in order, I always recommend they look at the burn side of their budget rather than the earn. It’s something you have complete control over, and in most cases is filled with excess, waste and debt repayments. There’s bound to be some low hanging fruit, so most people can find money to save somewhere. My wife did that last year, and though I still can’t figure out how, she managed to out-save me without even trying. We figured this out weeks ago, and I still get almost daily reminders…
But sometimes trimming the budget isn’t enough to get ahead, and you just need to earn more.
1) You’re bad at maths because you bought a new car
Quite a few of my friends read my blog. Some of them like Wendy* are even on board with the whole save enough to retire really young idea, but maths isn’t her forte as the following conversation should show:
Wendy: Can you believe Bill* just bought that big BMW*. So stupid, he makes less than I do. What do you think it cost?
Patrick: Well it was about 2 years old, so it’s probably worth around R300 000.
Wendy: R300 000! I’d never spend that on a used car. I’d much rather get a new one for that price. What an idiot.
Patrick: Well the minute you drove out of the showroom in a new R300k car you’d lose R60 000. After one year of owning it your total loss would be around R90 000. After a year of owning his used car, Bill would only lose R30 000.
Conversations like that often have a lot of uncomfortable silence following them, especially when Ms want to be frugal bought a brand new (though much cheaper) Kia a few months back.
*Names and even cars have been changed. I’ve learnt my lesson on using even relatively similar examples before.
I’d like to be rich one day. Properly rich, not just the “If you have a roof over your head and food in the fridge you’re richer than most of the world” rich, but actually very wealthy. A millionaire just won’t cut it, I’m aiming for a huge stash of cash. R10 million should do quite nicely.
I’m in Matric at the moment, and I have a part time job waiting tables on weekends. I make a fortune there, at least a couple of hundred a shift…
Next year I’m starting a teaching degree. I know it doesn’t pay well, but it really is what I want to do. The reasonable hours and long holidays are also going to be a bonus too.
So what are my chances of getting to R10 million with the totally shameful teachers salary I’m expecting to earn one day?
Teach to be
This work thing can be a royal pain in the ass sometimes. People are supposed to listen to me, but I really get no respect. When I wanted to sign a new deal with the Russians, my accountant stopped me. He did the same thing when I asked him to fund my girlfriends travel company, now she’s all upset with me too. Then a couple of months back I was told that I’d have to pay for my swimming pool and farmyard, even after they were all promised to me as perks for a job well done, it’s totally ridiculous!
Now last week my three best friends decided to leave my business. I’m going to miss them so much, they were always so generous, and then just the other day, even the youngsters around here said they want me out. It just feels like everyone around here hates me. There’s really no reason for me to stay here anymore, which brings me to the point in this letter.
How much money do I need to have saved up and invested before I’m good to go? I really don’t want to come up short and have to try live on that measly excuse for a state pension we have.
I have a machine that prints money. It’s legal too, and operates on nothing more than cheesecake. That’s right, nothing but pure cheesecake. I have two others that operate on a combination of cheesecake and a teeny tiny amount of electricity. My brother has two of these, and I’m buying one for my wife now too so we can use ours together. These machines are really quite common, I’ve been trying to get Orca to buy one that would run on beer, since he often has a surplus of that 🙂
My favourite computer game as a child (yes we had computers back then, much to my son’s disbelief) was Lemmings. In this game you’d have to rescue these humanoid lemmings who were too stupid to do anything else except follow their leader to their doom. Sounds pretty much like our government at the moment doesn’t it?
It’s April fools day, but since I’m still upset that I fell for two of them (Heyneke Meyer returning as springbok coach and myBroadBand launching uncapped fibre for R99 a month) I thought I’d spare you any more stupid practical jokes.
Instead, I’m offering you an antidote to the madness. A kind of an unApril fools joke. I’m going to list out the top seven financial products so dumb, we should all be wishing they were practical jokes instead of reality. So let’s count them down:
OK hands up, who still owns unit trusts? My goodness there are a lot of you on that side of the screen. Unfortunately there’s one on this side of the screen too. And another in the family, hi mom! We’re all a bunch of idiots. Great big foolish money hating idiots. I’m a completely self taught idiot. Nobody does that anymore, we all use coaches and gurus called financial advisers to guide us into idiocy. Before I graduated to idiocy I only used to save and not invest, so I was a moron then. One day soon I plan to leave idiocy behind and move on to madness. Madness is the Cum Laude of intelligence.
So why is it that I’m calling us a um, what is the collective noun for idiots? If we were American I’d vote for a trump of idiots, but since we live in Mzansi maybe it should be a malema of idiots, or perhaps a kraal of idiots. Back on track now, why do I think that ETFs are the holy grail and that unit trusts are the financial equivalent of a Kardashian? Well there are two main reasons I dislike unit trusts, and as someone who gets weird satisfaction in pointing out my current and former reasons for idiocy, I’m going to elaborate on both. Continue reading