Weekly Thoughts November 2011

Playing catch up is hard work, in whatever context it is.  I’m not quick off the line in my canoe at races or at our time trial and I often have to play catch-up to where I want to be.  Last night was no exception.  I had to work hard to catch up to the youngsters whom I expected myself to be able to stay with.  But I did it. 

However, until I’ve caught my breath again I’m more tired than I need to have been, and am vulnerable for a while to other paddlers blowing me off again.  At the Rugby World Cup there were a couple of teams who spoke of needing to get points on the board first and therefore not having to constantly play catch-up.

These themes took me to thinking of a young client and the savings she has achieved in her first year of working. 

 She has listened to my nattering that many of you have read over the years.  Having started in March of this year, she has already invested R9 000 into the unit trust funds inside her RA during her first year of working.  She emailed me recently to say that next year she will be having a new work experience and will need to contribute less.  No problem I said, we reduce the debit order.  But here’s the thing:  This money, going forward, already has forty years ahead of itself to work for her.  Now while it doesn’t sound like a lot of money, after forty years there’s a good chance that the income generated from this first year of investing will pay something like her water and lights bill one day when retired.

 I have gone on at length many a time that when a young person begins working, from month one they need to get a small amount of monthly disability income insurance and they need to begin saving to a retirement annuity.  As their income grows, they can begin to do other things and delve into other ventures.  Many other young ‘new workers’ have not had the commitment to see through the admin and paperwork to get this strategy going.  They might always be playing catch up one day, as many of us are.