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Speaker 1: Seven notes.

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Speaker 2: You're listening to the best of The Money Show.

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Speaker 1: The Money Show.

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Speaker 3: Welcome to the Best Bits of The Money Show, a

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Speaker 3: digestive some of the best interviews from the show this week,

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Speaker 3: some of the most important comments, and some of the

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Speaker 3: most important insights. If you'd like to hear more, please

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Speaker 3: go to our website or your podcast app and search

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Speaker 3: for The Money Show. And as always, there's bound to

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Speaker 3: be someone in your community, in your space, on your

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Speaker 3: WhatsApp group who you think might benefit from one of

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Speaker 3: the conversations might be worth just sending it along to

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Speaker 3: them to start. Some of the news stories that we

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Speaker 3: thought were important from the week that was, and something

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Speaker 3: that really dominated coverage about money during the holiday season,

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Speaker 3: Discovery and Discovery Health decision to eventually cover the costs

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Speaker 3: of the errors they had made with some of their customers.

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Speaker 3: You can imagine how the customers felt when Discovery Health

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Speaker 3: finally said over the last weekend that in fact, it

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Speaker 3: would pay back the money on their behalf. Also this week,

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Speaker 3: South Africa was removed from what's called the EU High

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Speaker 3: Risk List of third part jurisdictions. It's automatic, but it's

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Speaker 3: still important and a reminder that it follows the decision

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Speaker 3: by the Financial Action Task Force to remove us from

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Speaker 3: their gray list, and the British American tobacco company deciding

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Speaker 3: to close it's sole factory in South Africa. So bad

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Speaker 3: news for people in Heidelberg. Tonight we bring you a

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Speaker 3: mix of stories from the world of money from the

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Speaker 3: week that has been in our shape Shifter this week

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Speaker 3: was Aya banger Clawe, the Chief Commissioner of the International

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Speaker 3: Trade Administration Commission. He shared some insights on how he

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Speaker 3: ended up being such a specialist in development economics, his

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Speaker 3: interest in trade, and some of his influences.

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Speaker 1: Well, well, thank you, Steven for those kind words, and

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Speaker 1: I suddenly hope that many of the people I cross

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Speaker 1: swords with will also think of me as a first

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Speaker 1: rated economist. Thank you so much for inviting me, and

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Speaker 1: good evening to your listeners as well.

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Speaker 3: You've written about your family history a little, and particularly

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Speaker 3: in the sort of Eastern Cape, and I I came

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Speaker 3: across the column in which you described yourself as the

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Speaker 3: grandchild of peasants. What kind of family do you come from?

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Speaker 3: I mean that particular area of the Eastern Cape sounds

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Speaker 3: so much for the country and your your family's kind

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Speaker 3: of from You're from right there?

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Speaker 1: Well, yeah, so, Stephen, I'm from I'm from the northern

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Speaker 1: and very dry parts of the of the Eastern Cape.

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Speaker 1: I grew up in Cormani, which for many years was

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Speaker 1: known as Queenstown, which had started as a defense settlement,

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Speaker 1: not too dissimilar to some of the settlements we see

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Speaker 1: in Palestine now in terms of the kind of political

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Speaker 1: function it played in settled colonialism at the time. And

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Speaker 1: when I say I'm the kind of grand child of peasants,

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Speaker 1: I mean it in the true sense, because a lot

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Speaker 1: of my grandparents and great grandparents were people who had

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Speaker 1: come from that area, who also were farm workers, and

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Speaker 1: so they from time to time would migrate from from

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Speaker 1: that area to the neighboring farms of many of the

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Speaker 1: small towns bordering the Karoo in the Eastern Cape. And

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Speaker 1: so I come from that kind of stock, and I

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Speaker 1: grew up in that part of the world and spent

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Speaker 1: much of my formative years there until I came to

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Speaker 1: fits for university. And I also I mean I'm born

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Speaker 1: from two teachers who are sort of quite active in

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Speaker 1: their own communities, whether in the sports movement or even

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Speaker 1: in the trade union movement, and so I kind of

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Speaker 1: grub in an environment, and if you know anything about

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Speaker 1: that part of the Eastern Cape, you also know that

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Speaker 1: kind of politics and history is always very very near.

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Speaker 1: And so that's that's kind of where I come from.

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Speaker 1: And I think it also rarely has motivated my own

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Speaker 1: choices as to what ends I would put my own

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Speaker 1: economic training. As you were saying there, I guess you

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Speaker 1: know you and I worked for many years in the media,

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Speaker 1: but I think what has been a consistent thread, certainly

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Speaker 1: in my own work, whether in the ENGO space and

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Speaker 1: management consulting and now back again in government where I

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Speaker 1: had started actually my first job was in the provincial

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Speaker 1: Economic Agency, Joden has always been about, I guess this

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Speaker 1: sort of consistent marshaling of my own economic training to

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Speaker 1: very specific questions of a society and transition.

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Speaker 3: Really you grew up with that, And I was going

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Speaker 3: to ask where your sort of political consciousness came from,

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Speaker 3: but I think to an extent you've answered it with

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Speaker 3: what you say about your parents. But then you went

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Speaker 3: to Queen's College, and I mean, it's interesting you talk

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Speaker 3: about sort of settled towns for filling in political functions.

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Speaker 3: So do schools like that I went to one very

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Speaker 3: similar What was that experience like for you, I mean,

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Speaker 3: was it accommodating of your political consciousness at the time.

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Speaker 1: Yeah, well, it's I mean, it's interesting question, Stephen, because

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Speaker 1: you know, Queen's College is one of the oldest English

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Speaker 1: boys schools in the country and very much in an

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Speaker 1: English kind of settler colonial town. And I also went

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Speaker 1: to Queen's College at a very interesting time because we

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Speaker 1: were i would say, probably part of the first few

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Speaker 1: cohorts in the early nineteen nineties that as African and

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Speaker 1: black children were accepted into the school. And I must

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Speaker 1: say that the you know, if you think of the

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Speaker 1: people that have come out of that particular school, leave

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Speaker 1: aside all of the rugby and cricket players, who are

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Speaker 1: often quite well known, but if you think of a

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Speaker 1: lot of the sort of politic of those who have

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Speaker 1: a political bent, very few of them are of the

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Speaker 1: more left wing. I mean, if I think of Alistair Sparks,

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Speaker 1: if I think of Errol Mircraft who passed away a

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Speaker 1: few weeks ago, who had in the Federal chair of

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Speaker 1: the Democratic Alliance, Professor Andre Wodendhal, who's a historian and

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Speaker 1: many honors, would probably be more of a center right band.

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Speaker 1: But coming as I did, I think from a family

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Speaker 1: that sort of was involved very much in the politics

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Speaker 1: of the time, and I certainly at some point would

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Speaker 1: have had some tension in the school. And I think

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Speaker 1: as I came of age and as I got a

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Speaker 1: bit older in my teenage years, was also exposed to

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Speaker 1: quite a lot of civic work. And also I think

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Speaker 1: schools like that are distinguishable by the totality of involvement.

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Speaker 1: So you're not only playing cricket and rugby, you're also

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Speaker 1: involved in, you know, the debating society. You know. I

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Speaker 1: ended up, for all my sins kind of being involved

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Speaker 1: in the school newspaper, and I think a lot of

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Speaker 1: that formative experience of game involved beyond just the classroom

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Speaker 1: stood me in good stead. Notwithstanding, I think a lot

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Speaker 1: of the sort of tensions from just the worldview. And

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Speaker 1: also recall Stephen that by the time I left the school,

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Speaker 1: this was the start of the global financial crisis, and

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Speaker 1: so already even in that small town, we're becoming exposed

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Speaker 1: to all the economic machinations that were unfolding around us.

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Speaker 1: And I think that that itself, that moment, was quite

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Speaker 1: instrumental in influencing me to take up training in economics

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Speaker 1: after I left the school.

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Speaker 3: I mean, there's a reason why so many parents want

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Speaker 3: their children to go to school sort of like that

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Speaker 3: because of.

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Speaker 1: The indeed, especially because it's a public school, Stephen. That's

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Speaker 1: the other element that a lot of people often get

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Speaker 1: shocked when we say, look, this is a public school,

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Speaker 1: and I think there are many similar public schools that,

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Speaker 1: as we are seeing now with the results that are

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Speaker 1: coming out, that really have maintained a very distinguishable record.

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Speaker 3: So you go to VITZ and I don't want to

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Speaker 3: ask you about you VIT's experience, but why economics in

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Speaker 3: particular without the global financial crisis, I mean, that's a

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Speaker 3: big with that would still be economics.

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Speaker 2: Yeah, look, I mean I think.

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Speaker 1: The school I went to didn't offer economics as a subject.

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Speaker 1: I remember there was yeah, yeah, there was this one

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Speaker 1: teacher who, you know, whenever we would ask these political

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Speaker 1: economy type questions, and even one of our history teachers,

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Speaker 1: I remember what Missus Haxton, who was certainly someone who

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Speaker 1: really I think opened our minds to a lot of

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Speaker 1: things just about world history broadly, and whenever we would

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Speaker 1: hit up against some of these things, the question would

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Speaker 1: always arise from an economic advantage, but she would always say, look,

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Speaker 1: you know, economics better explains it. And I think that

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Speaker 1: that left a particular curiosity in my mind. When I

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Speaker 1: got to VITZ, I applied for another program and I

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Speaker 1: ended up kind of going across the West campus and

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Speaker 1: signing up for an economics and law major. I dropped

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Speaker 1: the law at the end of the first year took

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Speaker 1: up finances as a second major. Always knew Steven even

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Speaker 1: during my undergraduate training, that I would never work in

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Speaker 1: the bank, nor kind of work in financial markets per se.

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Speaker 1: But I think it was fascinating for me to study

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Speaker 1: finance at a time when financial markets were in flux,

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Speaker 1: at a time when you had Dodd Frank Act in

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Speaker 1: the United States, you had increasing scrutiny over the regulation

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Speaker 1: of capital markets in South Africa and the world more broadly,

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Speaker 1: especially after what had happened with the nineteenninety eight financial

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Speaker 1: crisis and the two thousand and seven eight episode that

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Speaker 1: was triggered by the Lehman brothers. And so it was

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Speaker 1: interesting for me to in the classroom then get the

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Speaker 1: tools to make sense of why so many people that

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Speaker 1: I had known had lost their jobs why so many

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Speaker 1: people that I had known had had had their holes foreclosed,

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Speaker 1: had their possessions are taken because they couldn't service their

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Speaker 1: own DEBTA obligations. And I think it gave me an

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Speaker 1: insight into not just political economy, but also I think

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Speaker 1: the world of high finance and what about that world

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Speaker 1: from an allocate advantage point was quite problematic, And I

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Speaker 1: think it's filtered through a lot in my work where

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Speaker 1: I try and make sense of this paradox of South

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Speaker 1: Africa having very deep sophisticated financial and capital markets and

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Speaker 1: yet you still, certainly from nineteen eighty five in South

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Speaker 1: Africa onwards, have a crisis of under investment where you've

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Speaker 1: got fixed investment reaching nowhere near kind of a quarter

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Speaker 1: of GDP, which is often seen as the measure of

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Speaker 1: any society that is on the mend trying to really

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Speaker 1: undertake structural transformation and change. And yet you've got all

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Speaker 1: this money sitting in household balance sheets and company balance sheets.

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Speaker 1: But the question of its allocation to fix the investment

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Speaker 1: that sins shafts, opens up factories, expands farms, mills and

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Speaker 1: so on is often a very problematic thing, and I

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Speaker 1: think it I then began to understand that not everything

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Speaker 1: could be explained within the tool box of finance, that

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Speaker 1: there were certain other elements that would inform the investment

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Speaker 1: behavior off a society beyond just you know, ISLM, macroeconomic

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Speaker 1: models and all the other stuff who were taltd with.

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Speaker 1: And I always say to people that I probably learned

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Speaker 1: more outside of the classroom advits than I did inside

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Speaker 1: the classroom.

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Speaker 4: Yeah.

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Speaker 1: University, Yeah, universities are those places where you know, as

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Speaker 1: an economic student, you can kind of hold court with

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Speaker 1: someone on gramsheet and kind of walk away with that

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Speaker 1: with a curiosity that will probably get you into a

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Speaker 1: pigeonhole and you end up, you know, thinking about so

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Speaker 1: many things flowing from that. And so for me, I

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Speaker 1: am very grateful that I was fortunate enough to have

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Speaker 1: that experience and that I was able to stay on

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Speaker 1: even after my undergraduate training. And what a lot of

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Speaker 1: people don't know, Stevean, is that my postgraduate training was

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Speaker 1: actually funded through a program that the DTI at the

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Speaker 1: time had initiated with the School of Oriental and African

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Speaker 1: Studies at so AS at the University of London, which

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Speaker 1: brought in a lot of these interesting academics. Ben find

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Speaker 1: the late Bill Freud and a few others who had

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Speaker 1: come from the more sort of progressive parts of the

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Speaker 1: economic thinking of the liberation movement, which I think had

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Speaker 1: been really something quite quite interesting for me because I'd

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Speaker 1: gone through the undergraduate training from a very particular advantage

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Speaker 1: point at VIZI, which I found quite fascinating, and I

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Speaker 1: ended up staying on for honors in the master's program

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Speaker 1: and then and then went to work there after.

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Speaker 3: Ayabogi, You you worked, you were doing many things, but

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Speaker 3: one of the things you were doing was talking about

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Speaker 3: economics in public and the columnic Business Day, and that's

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Speaker 3: the sort of audience i'd expect to understand economics. But

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Speaker 3: you were also working for a competitor of this radio

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Speaker 3: station on Metro M for a long time. How did

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Speaker 3: you find discussing economics on that platform? Because economics, I

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Speaker 3: think sometimes has this sort of curtain around it where

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Speaker 3: people are scared of it. And I mean often when

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Speaker 3: you can be talking about something and they don't realize

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Speaker 3: they're talking about economics, but you are. How did you

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Speaker 3: find that experience?

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Speaker 1: Well, you know, Stephen, I think the first thing that

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Speaker 1: became clear to me when we were at University was

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Speaker 1: that you had to demystify economic ideas. I think economics

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Speaker 1: was too important to only be left to experts of

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Speaker 1: people who who understood it and had studied it to

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Speaker 1: the extent that it affected all of our life. You

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Speaker 1: had to do away with what many people call the

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Speaker 1: tyranny of the experts as it relates to economic ideas.

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Speaker 1: If you were interested in a meaningful democratization process in

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Speaker 1: South Africa, you couldn't have as important a domain as

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Speaker 1: economic policy, for instance, being the sole preserve of people

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Speaker 1: who kind of had been skilled and it trained in

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Speaker 1: it and often spoken jargon that was alienating for most

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Speaker 1: of us. And I saw the role of the media

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Speaker 1: work as crucial both you know, as you say the

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Speaker 1: column in the Business Day, which I've been writing now

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Speaker 1: this year for a decade, and then also the five

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Speaker 1: years I spent at Metro, and what I found interesting

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Speaker 1: at Metro had been that we had to change, for instance,

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Speaker 1: as it relates to business news, this idea that business

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Speaker 1: news is synonymous financial news, so that a sense announcement

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Speaker 1: on any day would reflect the sum total of the

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Speaker 1: economic change in the society. We had to make economics

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Speaker 1: accessible as much to the taxi driver as it is

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Speaker 1: to the kind of suited up asset manager out in Santin,

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Speaker 1: and do so in a way where we kept some

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Speaker 1: rigor and conceptual fidelity to all of the organizing concepts

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Speaker 1: and principles of how it is that we understand the economy.

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Speaker 1: But you also, if you wanted to do that, Stephen

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Speaker 1: had to be very intentional about the economics of place

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Speaker 1: and time. You had to be intentional about starting from

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Speaker 1: people's own experiences. And I often make this example that

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Speaker 1: you know, it's one thing to know the financial results

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Speaker 1: of AVII, it's something entirely different to make your entry

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Speaker 1: point about understanding the books of AVII by going to

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Speaker 1: five rows users to Cavela to Baker's Biscuits, and beginning

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Speaker 1: to weave the story from there in order one to

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Speaker 1: make it more relatable, but also to begin to weave

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Speaker 1: the business content on any media platform in a way

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Speaker 1: that's kind of mutually understood with other segments and content

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Speaker 1: across a media platform, especially if you're in the public broadcaster.

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Speaker 3: I have Bondaw there our shape shifter this week, bringing

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Speaker 3: a wealth of experience and insight from his rise in

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Speaker 3: the world of economics and to the position he's in

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Speaker 3: now and the impact you can have on the world

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Speaker 3: of policy and trade.

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Speaker 1: And I found that initially very difficult to do. But

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Speaker 1: over time you began to see, because radio is a

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Speaker 1: medium that gives you continuous feedback, you began to hear

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Speaker 1: from people who were saying, I hear what you're saying

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Speaker 1: from this advantage point, I problematize or I engage what

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Speaker 1: you're saying from this specific perspective, and based on that,

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Speaker 1: I think that this is what might inform the corporate

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Speaker 1: strategy of this company, or I think from an economic

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Speaker 1: policy vantage point that this reform agenda has these complications

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Speaker 1: or these problems. And I thought that that was an

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Speaker 1: important part of our own democratic duty. I mean, take,

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Speaker 1: for example, Stephen, one of the things we don't observe

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Speaker 1: almost all of the African language platforms on the public broadcaster,

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Speaker 1: in a twenty four hour media cycle, we'll only have

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Speaker 1: at most two hours for current affairs and a space

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Speaker 1: for deliberation and discussion by the people who listen to

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Speaker 1: the platform over that period. And the more you're immediately

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Speaker 1: begin to understand kind of one from where this comes from,

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Speaker 1: but also what is so problematic about it because what

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Speaker 1: it does is that it begins to influence the broader

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Speaker 1: awareness and consciousness understanding that people have, and that translates

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Speaker 1: to so many things. I mean, you were talking to

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Speaker 1: earlier about January debt, you know. And to the extent

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Speaker 1: that we have financial discussions on radio, that influences people's

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Speaker 1: own decisions in their lives. To the extent that we

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Speaker 1: have current affairs discussions, it influences how people vote in

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Speaker 1: their ballots.

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Speaker 3: Higher Bondakawe there our shape shifter this week, bringing a

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Speaker 3: wealth of experience and insight from his rise in the

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Speaker 3: world of economics and to the position he's in now

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Speaker 3: and the impact he can have on the world of

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Speaker 3: policy and trade.

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Speaker 2: You will listening to the money shows the best bids.

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Speaker 3: This is unusual. This week we spoke to supure Moil,

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Speaker 3: the organizational behavior specialist. He gave us some insights into

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Speaker 3: ways to reclaim optimism as a strategic resource and how

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Speaker 3: to be positive without falling into the trap of that

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Speaker 3: toxicity which can also be positive. How to avoid positive

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Speaker 3: toxicity with superior Moil.

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Speaker 5: It's such a tricky thing stiven to have because I

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Speaker 5: think there's nothing wrong with positivity it's not a problem

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Speaker 5: at all. But I think we're having this performative or

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Speaker 5: shallow positivity. Right when you're trying to tell your boss

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Speaker 5: something that is not going right and they say you're

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Speaker 5: always complaining, you never look at the bright side. You

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Speaker 5: feel dismissed, you feel like someone is not listening.

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Speaker 6: So I think the main thing is when people feel

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Speaker 6: like they're being dismissed, when people feel like we're not

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Speaker 6: facing the reality that we have head on, as if

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Speaker 6: positivity wants to ignore the facts or it's a contextual

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Speaker 6: I think we're having situations where now there are people

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Speaker 6: who are really really pushing back around positivity. But I

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Speaker 6: think for me, it's not really about pretending that things

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Speaker 6: are not bad, but it's about broadening our perspective. One

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Speaker 6: of the key elements of positivity is that it broad

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Speaker 6: ins your perspective. It allows you to see whether that

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Speaker 6: different other paths that you can look at, you know,

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Speaker 6: where or pathway is that you can look at. One

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Speaker 6: of the problems with negativity, and shall we call it

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Speaker 6: toxic as well, is that it blocks any path of thinking,

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Speaker 6: so it doesn't broad in your your thinking, and that's

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Speaker 6: the main problem that we have I.

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Speaker 3: Mean, the one thing I don't know why it is,

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Speaker 3: but the form of communication that I think toxic positivity

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Speaker 3: comes through most and is email. And that's because it's

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Speaker 3: managers speaking to workers or bosses or CEOs or whatever.

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Speaker 3: And I know I've watched in international media actually people

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Speaker 3: have started taking this off, you know, they've started ripping

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Speaker 3: this off. And it's always in the form of an emails.

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Speaker 3: It's actually you can it's something that almost happens in

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Speaker 3: written form. It's quite hard to be toxically positive face

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Speaker 3: to face with someone.

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Speaker 6: Exactly, and that reachin form that The main reason it

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Speaker 6: does not work is that when not looking each other

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Speaker 6: in the eye, there's no benefit of oxytoxin as you

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Speaker 6: look some people in the eye, and it doesn't acknowledge

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Speaker 6: the pain. You don't really see whether the person can

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Speaker 6: acknowledge and really see some of the struggles that you

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Speaker 6: are having. It so it feels like nobody's listening to me.

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Speaker 6: There's some ivory tower email that is coming through, So

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Speaker 6: it does not really give you space. And the main

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Speaker 6: thing around what separates surfage positivity or what people call

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Speaker 6: toxic positivity with genuine one is the ability to hear

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Speaker 6: people out. Is the ability to feel like someone is

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Speaker 6: acknowledging my feelings, acknowledging that I mean, there's really tough

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Speaker 6: times that I'm going through, and then nudge me towards

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Speaker 6: positivity eventually. But the main thing is just that containing

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Speaker 6: and understanding and hearing people out most of the time

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Speaker 6: as giving. People would nudge themselves towards positivity anyway, once

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Speaker 6: they feel like you have had them. Most of the time.

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Speaker 6: It's the dismissal when people feel they're not being had

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Speaker 6: that is often called genuine positivity.

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Speaker 3: How do you be toxic? Yeah, so then how do

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Speaker 3: you be positive without the toxicity? I mean, you've got

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Speaker 3: to be You've got to take into account reality, You've

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Speaker 3: got to be looking speaking to people. I suppose you've

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Speaker 3: also got to really kind of make sure you know

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Speaker 3: what the real situation is.

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Speaker 6: Yeah, it's just a matter of listening, Styven, listen to people,

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Speaker 6: understand where they're coming from, and hear them where they're

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Speaker 6: coming from. It's just that interesting balance where once people

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Speaker 6: feel their head they're able to reframe. So we're definitely

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Speaker 6: not saying that people should wallow in negativity. But once

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Speaker 6: you listen to people and then afterwards you can face

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Speaker 6: reality head on with them. So if you look at

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Speaker 6: the science of languishing, for example, as opposed to flourishing.

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Speaker 6: So sometimes when you're having that feeling of may that

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Speaker 6: feeling that I'm tired, that something is just not making

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Speaker 6: sense most of the time, what can move you from

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Speaker 6: that feeling of languishing and towards flourishing. It's just someone

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Speaker 6: being a to listen to you, someone being able to

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Speaker 6: hear you contain your feeling. And because most of the

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Speaker 6: time people have thoughts, people have feelings they want to

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Speaker 6: be had, and people sometimes have these big feelings that

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Speaker 6: they just want somebody to listen to. So when we

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Speaker 6: can listen to people and then eventually we can reframe

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Speaker 6: and we can start looking at the evidence. And for example,

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Speaker 6: when you look at the noise that is coming out

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Speaker 6: of twenty twenty six steven in the global events, and

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Speaker 6: you look at that noise, you realize that actually negativity

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Speaker 6: is not going to help us at all. We definitely

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Speaker 6: do need positivity. But once you do not acknowledge that

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Speaker 6: there is so much noise in the global environment as well,

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Speaker 6: you just look like like dismissive and you look like

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Speaker 6: a person who is definitely toxically positive.

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Speaker 3: Important conversation I thought with Sapia in this week's Business

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Speaker 3: Unusual segment, unpacking the difference between positivity on the surface

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Speaker 3: and what's really a more mature, grounded optimism noticed.

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Speaker 2: The best of the Money show from this week.

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Speaker 3: This week come Personal Finance, joined by Warren Ingram, the

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Speaker 3: financial advisor co founder at Galileo Capital, looking at what

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Speaker 3: we learned from last year, the volatile year of twenty

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Speaker 3: twenty five, and why that's going to be so important

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Speaker 3: going into this year twenty twenty six.

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Speaker 7: I think it's one of those things where we so

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Speaker 7: focused on and I'm not saying as a critique, but

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Speaker 7: you know, as human beings, we focus on the human

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Speaker 7: stories and the human cost of things like the conflicts

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Speaker 7: in the Middle East and in the Ukraine, and often

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Speaker 7: we develop a baseline of negativity where we say, well,

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Speaker 7: those kinds of conflicts, I mean, they're horrific, and therefore

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Speaker 7: there must be bad for investment markets. And you know,

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Speaker 7: if that was true, the headlines would dictate the market

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Speaker 7: moves a lot more than they do. And I think,

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Speaker 7: you know, just to understand markets are affected by by conflicts,

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Speaker 7: but they would they would immediately start calculating. So, you know,

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Speaker 7: we just look at the at the start of this year.

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Speaker 7: You know, Trump installs themselves, you know, as president of Venezuela.

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Speaker 7: That the market doesn't just get stuck on that, on

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Speaker 7: that sort of dramatic headline. What the market does is say, well,

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Speaker 7: how big is Venezuela in the oil market, and it's

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Speaker 7: less than one percent. You know, what's their ability to

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Speaker 7: deliver a lot more oil to to the rest of

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Speaker 7: the world. It's it's very limited. So actually the price

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Speaker 7: of oil is not going to drop dramatically because there's

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00:25:38,480 --> 00:25:41,120
Speaker 7: a change of leadership and someone who just wants to

439
00:25:40,880 --> 00:25:44,320
Speaker 7: to drill, baby drill, and and so the markets tend

440
00:25:44,400 --> 00:25:48,280
Speaker 7: to do a lot more cold calculations. And and almost

441
00:25:48,480 --> 00:25:52,160
Speaker 7: not that investors ignore the human cost of bad news.

442
00:25:52,200 --> 00:25:56,720
Speaker 7: They just calculated and in a very sometimes very cold

443
00:25:56,800 --> 00:25:57,680
Speaker 7: calculating way.

444
00:25:58,960 --> 00:26:01,600
Speaker 3: Just a reminder the the personal Finance feature is brought

445
00:26:01,640 --> 00:26:04,919
Speaker 3: to you by Sunlam Corporate. They take employee benefits personally

446
00:26:05,280 --> 00:26:10,080
Speaker 3: because when U care, everyone benefits. Somenlum Corporate. One of

447
00:26:10,080 --> 00:26:12,000
Speaker 3: the things about this war, and I suppose is that

448
00:26:12,080 --> 00:26:14,480
Speaker 3: we mustn't forget that markets also move in cycles. In

449
00:26:14,480 --> 00:26:16,960
Speaker 3: the middle of a sort of AI cycle at the moment,

450
00:26:17,080 --> 00:26:19,040
Speaker 3: and that's boosted the US. And we're in the middle

451
00:26:19,080 --> 00:26:21,679
Speaker 3: of a gold cycle at the moment, and that's boosted us.

452
00:26:21,680 --> 00:26:24,480
Speaker 3: So all of the bad news is not quite that

453
00:26:24,560 --> 00:26:27,320
Speaker 3: the events are not as important as the cycle. Is

454
00:26:27,320 --> 00:26:28,560
Speaker 3: that one of the lessons from.

455
00:26:28,359 --> 00:26:33,960
Speaker 7: This, I think so, And I think also understanding where

456
00:26:33,720 --> 00:26:36,200
Speaker 7: where the future goes. So we look at let's look

457
00:26:36,240 --> 00:26:40,080
Speaker 7: at something like the AI cycle. It's you know, it

458
00:26:40,119 --> 00:26:42,480
Speaker 7: caused a massive run up you know, actually in the

459
00:26:42,560 --> 00:26:46,480
Speaker 7: year before last year, and so investors, you know, carried

460
00:26:46,520 --> 00:26:50,320
Speaker 7: on pushing certain companies a lot through twenty twenty five

461
00:26:50,640 --> 00:26:53,800
Speaker 7: as well. But at some point investors started to look

462
00:26:53,840 --> 00:26:57,119
Speaker 7: around and say, where else can I find opportunities and

463
00:26:57,280 --> 00:27:00,919
Speaker 7: what other markets will will present us were future growth

464
00:27:01,000 --> 00:27:04,840
Speaker 7: and so you know, yesterday's winner might not be tomorrow's winner.

465
00:27:05,240 --> 00:27:07,520
Speaker 7: And I think that that's what That's one thing that

466
00:27:07,560 --> 00:27:12,520
Speaker 7: started to happen. And secondly, very big economic cycles like

467
00:27:12,880 --> 00:27:16,760
Speaker 7: rising or falling interest rates tend to, you know, especially

468
00:27:16,800 --> 00:27:20,679
Speaker 7: in a very big economy, those tend to overwhelm the

469
00:27:20,720 --> 00:27:23,040
Speaker 7: new cycle a little bit. So if there is a

470
00:27:23,040 --> 00:27:26,800
Speaker 7: prospect that interest rates will continue to decline. Then that

471
00:27:26,880 --> 00:27:29,919
Speaker 7: will be a very big factor for investors, because you know,

472
00:27:29,960 --> 00:27:34,240
Speaker 7: the cost of borrowing goes down, the ability to invest

473
00:27:34,280 --> 00:27:36,360
Speaker 7: in shares with the prospect that you'll do a lot

474
00:27:36,400 --> 00:27:40,280
Speaker 7: better than cash generally raars its head. And so investors

475
00:27:40,280 --> 00:27:43,879
Speaker 7: start to to do, you know, better calculations in flavor

476
00:27:43,920 --> 00:27:47,080
Speaker 7: in favor of shares and and you know, fewer calculations

477
00:27:47,160 --> 00:27:50,119
Speaker 7: in favor of cash. And the same would apply to

478
00:27:50,480 --> 00:27:53,879
Speaker 7: the bond market. And I think last year was the

479
00:27:53,960 --> 00:27:58,240
Speaker 7: year where we saw the resurgence of emerging markets for

480
00:27:58,320 --> 00:28:01,239
Speaker 7: quite some time, you know, certainly I remember myself saying this.

481
00:28:01,280 --> 00:28:04,080
Speaker 7: Over the last few years, we've looked at emerging markets

482
00:28:04,080 --> 00:28:07,160
Speaker 7: saying that they're cheap, you know, that they're they're offering

483
00:28:07,240 --> 00:28:11,639
Speaker 7: good value, and and they didn't attract a flow of money.

484
00:28:11,680 --> 00:28:15,080
Speaker 7: But when the dollars started to weaken, interest rates in

485
00:28:15,119 --> 00:28:18,200
Speaker 7: America were going down, it started to move money away

486
00:28:18,240 --> 00:28:21,639
Speaker 7: from the US into emerging markets. And and that's you know,

487
00:28:21,680 --> 00:28:24,640
Speaker 7: another very big trend. And I don't think that flips,

488
00:28:24,840 --> 00:28:26,920
Speaker 7: you know, from one day to the X to the next.

489
00:28:26,920 --> 00:28:29,760
Speaker 7: You know that that's something that could become a bigger

490
00:28:29,800 --> 00:28:32,800
Speaker 7: cycle over a few years or you know, certainly not

491
00:28:32,920 --> 00:28:33,840
Speaker 7: days or weeks.

492
00:28:34,640 --> 00:28:37,000
Speaker 3: I suppose the other question is to ask what matters

493
00:28:37,040 --> 00:28:40,960
Speaker 3: and what doesn't. So we saw almost the near collapse

494
00:28:40,960 --> 00:28:43,800
Speaker 3: of the National Coalition over the budget last year, but

495
00:28:43,880 --> 00:28:46,440
Speaker 3: that was completely offset by what was happening in gold.

496
00:28:46,480 --> 00:28:47,960
Speaker 3: I mean, look at how our markets did.

497
00:28:49,880 --> 00:28:53,640
Speaker 7: I suspect that, you know, if if that gn U

498
00:28:53,680 --> 00:28:57,160
Speaker 7: had failed, uh and and you know we'd seen a

499
00:28:57,200 --> 00:29:00,560
Speaker 7: different coalition running the country, you know shortly thereafter that,

500
00:29:00,760 --> 00:29:03,080
Speaker 7: that we would have we would have taken quite a

501
00:29:03,120 --> 00:29:06,280
Speaker 7: lot of pain, you know, at least in the currency market,

502
00:29:06,640 --> 00:29:09,120
Speaker 7: and as you say that, that would have caused the

503
00:29:09,200 --> 00:29:11,200
Speaker 7: rand to take a little bit of pain, and then

504
00:29:11,400 --> 00:29:14,680
Speaker 7: that would have been offset by very strong commodities.

505
00:29:14,680 --> 00:29:15,760
Speaker 2: Again, so so.

506
00:29:15,760 --> 00:29:18,360
Speaker 7: I think it's it's it's you know, when things are

507
00:29:18,400 --> 00:29:21,120
Speaker 7: going for you, it's good to take advantage. But we

508
00:29:21,160 --> 00:29:22,960
Speaker 7: could have shot ourselves in the foot last year, and

509
00:29:23,400 --> 00:29:26,440
Speaker 7: you know, very fortunately we didn't. And we actually saw

510
00:29:26,480 --> 00:29:29,200
Speaker 7: that in a few areas because we also saw the

511
00:29:29,240 --> 00:29:32,360
Speaker 7: South African bond market doing very well, and so it

512
00:29:32,400 --> 00:29:36,840
Speaker 7: wasn't just shares, you know, it was also the bond market,

513
00:29:37,000 --> 00:29:40,920
Speaker 7: and interestingly, towards the second half of the year. You know,

514
00:29:41,200 --> 00:29:45,200
Speaker 7: even financials did well. You know, it wasn't just resources

515
00:29:45,200 --> 00:29:48,480
Speaker 7: shares and and you know South African industrial businesses which

516
00:29:48,480 --> 00:29:51,520
Speaker 7: have really lagged the market for a very long time

517
00:29:51,920 --> 00:29:54,320
Speaker 7: started I think they ended up. I can't remember one

518
00:29:54,360 --> 00:29:56,080
Speaker 7: hundred percent, but I think it is round about that

519
00:29:56,160 --> 00:29:59,480
Speaker 7: ten to fifteen percent for the year. So so we

520
00:29:59,520 --> 00:30:02,360
Speaker 7: actually had quite a broad, you know, uplift in the

521
00:30:02,920 --> 00:30:05,840
Speaker 7: JAC and certainly I don't think many people would have

522
00:30:06,000 --> 00:30:08,320
Speaker 7: would have sat on the first of January twenty twenty

523
00:30:08,360 --> 00:30:10,360
Speaker 7: five predicting anything like that.

524
00:30:12,440 --> 00:30:15,960
Speaker 3: I suppose the other issue, and I mean, I find

525
00:30:16,000 --> 00:30:18,080
Speaker 3: it interesting what I've been told in the past and

526
00:30:18,160 --> 00:30:20,760
Speaker 3: what I know now and in the past, so many

527
00:30:20,800 --> 00:30:23,080
Speaker 3: people older than me told me two things. The one

528
00:30:23,280 --> 00:30:26,280
Speaker 3: was by a home in joe Burg because it'll only

529
00:30:26,400 --> 00:30:29,720
Speaker 3: increase in value, and the other was that you should

530
00:30:30,400 --> 00:30:32,320
Speaker 3: get as much money as you can off shore. And

531
00:30:32,400 --> 00:30:34,480
Speaker 3: I've come to learn both of those things were not

532
00:30:34,640 --> 00:30:39,160
Speaker 3: good at good we're bad choices. I didn't make the second,

533
00:30:39,200 --> 00:30:40,000
Speaker 3: but the first I did.

534
00:30:41,280 --> 00:30:44,840
Speaker 7: Yeah, And I think, you know, let's give it a

535
00:30:44,880 --> 00:30:50,000
Speaker 7: little bit of context. The rand against the dollar, you know,

536
00:30:50,160 --> 00:30:53,120
Speaker 7: hit hit the current levels that we're seeing the last

537
00:30:53,160 --> 00:30:55,680
Speaker 7: time we were there was somewhere around twenty to fifteen,

538
00:30:56,200 --> 00:31:00,600
Speaker 7: so just just around about a decade ago, and I

539
00:31:00,720 --> 00:31:04,080
Speaker 7: can remember a lot of people, some very prominent commentators

540
00:31:04,120 --> 00:31:07,040
Speaker 7: in fact, you know, urging South Africans to cash in

541
00:31:07,120 --> 00:31:10,680
Speaker 7: their their their retirement funds, their retirement annuities or provident

542
00:31:10,760 --> 00:31:13,760
Speaker 7: funds if they could pay the tax, so give away

543
00:31:14,080 --> 00:31:18,680
Speaker 7: forty five percent to SARS and send your money overseas.

544
00:31:19,320 --> 00:31:23,160
Speaker 7: And for a while that that seemed like a decent decision.

545
00:31:24,200 --> 00:31:28,560
Speaker 7: But now, with the benefit of the cycle changing, what

546
00:31:28,680 --> 00:31:32,840
Speaker 7: we're seeing is the RAND, you know, recovering enormously, but

547
00:31:33,160 --> 00:31:36,440
Speaker 7: equally the JC and you know, and the bond markets

548
00:31:37,320 --> 00:31:41,480
Speaker 7: delivering very good returns. And I think it should paint

549
00:31:41,560 --> 00:31:44,600
Speaker 7: a really sort of powerful picture and create a very

550
00:31:44,640 --> 00:31:47,640
Speaker 7: strong lesson that I think we must learn is you know,

551
00:31:48,160 --> 00:31:51,600
Speaker 7: binary investment decisions where you say all or nothing, all off,

552
00:31:51,720 --> 00:31:55,280
Speaker 7: sure or all in South Africa, that those are both

553
00:31:55,480 --> 00:31:57,840
Speaker 7: really bad decisions. And I think, you know, we we

554
00:31:57,880 --> 00:32:01,200
Speaker 7: should hold people to count when they agenda rather than

555
00:32:01,440 --> 00:32:05,560
Speaker 7: you know, kind of deliver sensible information. One is, you

556
00:32:05,720 --> 00:32:07,320
Speaker 7: don't know what's going to happen. You and I are

557
00:32:07,320 --> 00:32:12,360
Speaker 7: sitting here we can speculate and you know, prognosticate about

558
00:32:12,400 --> 00:32:14,840
Speaker 7: the future. But the truth is we start we should

559
00:32:14,840 --> 00:32:17,960
Speaker 7: start every conversation with we have absolutely no idea what's

560
00:32:17,960 --> 00:32:20,080
Speaker 7: going to happen in the next decade. And when you

561
00:32:20,160 --> 00:32:22,600
Speaker 7: don't know what you're going to do, then making very

562
00:32:22,640 --> 00:32:27,440
Speaker 7: big decisions like all off sure is really a poor idea.

563
00:32:28,000 --> 00:32:30,320
Speaker 7: And I just did a quick stat and saw that

564
00:32:30,440 --> 00:32:33,840
Speaker 7: you know, the average global unit trust that invests in

565
00:32:33,880 --> 00:32:36,840
Speaker 7: global shares wherehen you measured in rands over the last

566
00:32:36,920 --> 00:32:40,160
Speaker 7: year did only I keep updating it as I get

567
00:32:40,240 --> 00:32:42,800
Speaker 7: more data, but I think it's delivered about six percent

568
00:32:42,960 --> 00:32:46,120
Speaker 7: for twenty twenty five. When you compare that to the

569
00:32:46,280 --> 00:32:49,320
Speaker 7: average unit trust that invests in the JAC last year

570
00:32:49,440 --> 00:32:54,160
Speaker 7: twenty eight percent, And the correct criticism will be that

571
00:32:54,320 --> 00:32:56,880
Speaker 7: I'm you know, I'm choosing one year that in one

572
00:32:56,960 --> 00:33:00,320
Speaker 7: year is no investment thesis. But when when you look

573
00:33:00,360 --> 00:33:04,360
Speaker 7: at the average balanced unitrust in South Africa over twenty

574
00:33:04,480 --> 00:33:08,080
Speaker 7: years has delivered just about ten percent, and you measure

575
00:33:08,120 --> 00:33:12,040
Speaker 7: the same the global balanced unit trusts measured in rands again,

576
00:33:13,080 --> 00:33:15,560
Speaker 7: so you get all the currency depreciation, all of that

577
00:33:15,760 --> 00:33:18,120
Speaker 7: locked in, and the return is ten point one In

578
00:33:18,200 --> 00:33:23,480
Speaker 7: other words, the differences is pretty much immateial. So investors

579
00:33:24,160 --> 00:33:27,920
Speaker 7: making these very big decisions and believing that South Africa

580
00:33:28,080 --> 00:33:30,280
Speaker 7: or the Rand or emerging markets are in a one

581
00:33:30,360 --> 00:33:34,600
Speaker 7: way bet are really suffering right now. And I think

582
00:33:34,640 --> 00:33:37,000
Speaker 7: that that's the lesson here is if you're an AI

583
00:33:37,200 --> 00:33:40,040
Speaker 7: investor and you think in Vidia is the only way

584
00:33:40,080 --> 00:33:42,640
Speaker 7: to go for the next decade, you need to learn

585
00:33:42,720 --> 00:33:45,400
Speaker 7: this lesson right now is it cannot do that. It

586
00:33:45,520 --> 00:33:49,600
Speaker 7: cannot repeat this performance for the future. It already is

587
00:33:49,760 --> 00:33:53,040
Speaker 7: Yesterday's when you need to be worrying about other investments

588
00:33:53,120 --> 00:33:55,480
Speaker 7: and finding new ways to grow your capital.

589
00:33:56,840 --> 00:33:59,040
Speaker 3: I mean, part of this is also the historic changes

590
00:33:59,080 --> 00:34:01,680
Speaker 3: we're living through. This is about how the dollar has

591
00:34:02,160 --> 00:34:05,880
Speaker 3: devalued against the rand. Essentially, yes, the rand's a bit

592
00:34:05,920 --> 00:34:09,000
Speaker 3: stronger against other currencies too, but that that also just

593
00:34:09,120 --> 00:34:11,960
Speaker 3: shows you that you really can't predict what's going to happen,

594
00:34:12,000 --> 00:34:13,799
Speaker 3: because that goes counter to what everyone told us for.

595
00:34:13,880 --> 00:34:14,440
Speaker 6: So long.

596
00:34:16,040 --> 00:34:18,840
Speaker 7: Exactly. I mean, I can you know, I can remember

597
00:34:19,719 --> 00:34:22,520
Speaker 7: working on the average. The average was the Rand appreciated

598
00:34:22,560 --> 00:34:25,600
Speaker 7: against the dollar by about six percent a year, and

599
00:34:25,960 --> 00:34:29,279
Speaker 7: that wasn't a forecast. That's just simply what happened. And

600
00:34:29,840 --> 00:34:32,440
Speaker 7: so you know, often when you tell people that, they

601
00:34:32,480 --> 00:34:35,320
Speaker 7: would be quite surprised, you know, because they felt it

602
00:34:35,480 --> 00:34:37,440
Speaker 7: was a lot worse, and they you know, it was

603
00:34:37,760 --> 00:34:40,400
Speaker 7: very motive. You know that that seems wrong or doesn't

604
00:34:40,440 --> 00:34:43,160
Speaker 7: feel right. My gut says something else. But you can't

605
00:34:43,239 --> 00:34:45,840
Speaker 7: rely on your gut. You've got to look at the numbers.

606
00:34:46,440 --> 00:34:49,320
Speaker 7: And so when the rand strengthens by nearly fourteen percent

607
00:34:50,239 --> 00:34:53,000
Speaker 7: in one year against the dollar, you know, that's two

608
00:34:53,080 --> 00:34:56,040
Speaker 7: years of recovery just in that one very short space

609
00:34:56,120 --> 00:34:58,879
Speaker 7: of time. And as you say, it didn't do much

610
00:34:58,920 --> 00:35:01,520
Speaker 7: against the rand, didn't do much against the Euro and

611
00:35:01,680 --> 00:35:05,120
Speaker 7: the and the ods dollar and the pound, and so

612
00:35:05,200 --> 00:35:09,360
Speaker 7: it's it is very much a dollar story. And you

613
00:35:09,440 --> 00:35:12,759
Speaker 7: know that's certainly Trump's economic strategy at play. That's that's

614
00:35:12,800 --> 00:35:15,880
Speaker 7: what he wanted, was a week a week dollar, and

615
00:35:16,200 --> 00:35:18,880
Speaker 7: if that continues, it's it's going to be very positive

616
00:35:18,920 --> 00:35:22,719
Speaker 7: for emerging markets. But again, we don't know that that

617
00:35:22,920 --> 00:35:25,880
Speaker 7: strategy works, you knows, as Trump wants it to. In

618
00:35:25,960 --> 00:35:28,560
Speaker 7: the next you know, twenty four months, maybe things go

619
00:35:28,680 --> 00:35:31,560
Speaker 7: in a different direction and the dollar actually strengthens. So

620
00:35:32,400 --> 00:35:35,759
Speaker 7: I feel it's one of those times where you know,

621
00:35:36,360 --> 00:35:38,800
Speaker 7: looking at global markets is not a bad idea. The

622
00:35:38,880 --> 00:35:42,000
Speaker 7: fact that the JAC, I think, the JAC, when you

623
00:35:42,080 --> 00:35:44,920
Speaker 7: measure it in dollar terms, delivered more than way more

624
00:35:44,960 --> 00:35:48,840
Speaker 7: than fifty percent last year. And that's that's phenomenal. And

625
00:35:49,200 --> 00:35:52,040
Speaker 7: there's certainly a good chance at the JAC because it's

626
00:35:52,120 --> 00:35:55,360
Speaker 7: not expensive. You know, it can continue delivering in rands.

627
00:35:55,400 --> 00:35:57,719
Speaker 7: I don't know what it'll do in dollar terms, but

628
00:35:58,600 --> 00:36:02,160
Speaker 7: you know, don't don't now throughout all the overseas investments

629
00:36:02,239 --> 00:36:04,440
Speaker 7: because they had a bad year or two. You've got

630
00:36:04,520 --> 00:36:07,399
Speaker 7: to be very careful that the tide can swing again.

631
00:36:09,080 --> 00:36:12,120
Speaker 3: We're speaking to Warren Ingram, the co founder at Galileo

632
00:36:12,239 --> 00:36:15,000
Speaker 3: Capital and a certified financial planner, looking at the lessons

633
00:36:15,080 --> 00:36:18,000
Speaker 3: we learned in twenty twenty five. We have a question

634
00:36:18,160 --> 00:36:21,240
Speaker 3: from Chris Warrant saying, I'm twenty four. I just started

635
00:36:21,280 --> 00:36:23,879
Speaker 3: my first corporate job, earning twenty five thousand around a month.

636
00:36:24,080 --> 00:36:26,680
Speaker 3: Where should I even begin with saving and investing? Getting

637
00:36:26,719 --> 00:36:30,239
Speaker 3: in the ground floor? Is Chris and Warren. We had

638
00:36:30,239 --> 00:36:32,279
Speaker 3: a question from Chris saying, I'm twenty four, I just

639
00:36:32,320 --> 00:36:34,680
Speaker 3: started my first job. I'm earning twenty five thousand around

640
00:36:34,719 --> 00:36:36,800
Speaker 3: a month. Where should I even begin with saving and

641
00:36:36,920 --> 00:36:38,640
Speaker 3: investing a person after your own heart.

642
00:36:38,719 --> 00:36:40,960
Speaker 5: I think I love it.

643
00:36:41,400 --> 00:36:43,959
Speaker 7: It just makes me so happy to get a question

644
00:36:44,080 --> 00:36:47,360
Speaker 7: like this, And I want to say to Chris, you know,

645
00:36:47,480 --> 00:36:50,279
Speaker 7: before you get that first salary and you get used

646
00:36:50,280 --> 00:36:52,319
Speaker 7: to spending all that money that will arrive in your

647
00:36:52,360 --> 00:36:57,160
Speaker 7: bank account, you should aim to spend or letter go

648
00:36:57,239 --> 00:36:59,840
Speaker 7: the other way around. You should aim to save around

649
00:36:59,840 --> 00:37:03,839
Speaker 7: a third of that salary every month. So if you're

650
00:37:03,880 --> 00:37:06,640
Speaker 7: earning twenty five and we round up that third, it's

651
00:37:06,719 --> 00:37:09,640
Speaker 7: roughly about eighty four hundred rand a month. So the

652
00:37:09,719 --> 00:37:11,880
Speaker 7: first thing I would do if I were you, is

653
00:37:13,000 --> 00:37:16,640
Speaker 7: take that eight four and start putting it into you know,

654
00:37:16,800 --> 00:37:19,200
Speaker 7: some kind of a money market account or something links

655
00:37:19,239 --> 00:37:21,480
Speaker 7: to your banking profile where you can start building up

656
00:37:21,520 --> 00:37:24,440
Speaker 7: your emergency fund. So you want to try and get

657
00:37:24,480 --> 00:37:27,640
Speaker 7: that to around three months worth of your expenses. So

658
00:37:27,680 --> 00:37:29,640
Speaker 7: I hope your expenses are going to be very low.

659
00:37:30,360 --> 00:37:33,080
Speaker 7: And once you're at three months worth of expenses, then

660
00:37:33,520 --> 00:37:36,719
Speaker 7: start looking at your tax resavings account. I think that's

661
00:37:36,760 --> 00:37:40,440
Speaker 7: such a fantastic investment for young people to maximize. So

662
00:37:40,920 --> 00:37:42,880
Speaker 7: try and under your thirty six thousand around a year

663
00:37:42,960 --> 00:37:47,160
Speaker 7: that you're allowed and then you know, with the balance,

664
00:37:47,280 --> 00:37:50,960
Speaker 7: try and start building up your retirement savings as you can.

665
00:37:51,280 --> 00:37:53,560
Speaker 7: So for me, I would try and blend you know,

666
00:37:53,680 --> 00:37:57,719
Speaker 7: tax re savings, a retirement saving and maybe a unit

667
00:37:57,719 --> 00:37:59,920
Speaker 7: trust as well, just for some accessible money when you

668
00:38:00,080 --> 00:38:03,640
Speaker 7: need to buy a house one day, against the advice

669
00:38:03,719 --> 00:38:07,839
Speaker 7: of some people, and maybe replace the cabrina and then

670
00:38:08,040 --> 00:38:10,480
Speaker 7: so I think that's a good deal. But number one,

671
00:38:10,840 --> 00:38:12,839
Speaker 7: try and save a third of everything you earn from

672
00:38:12,880 --> 00:38:14,520
Speaker 7: the very beginning so you don't have to take the

673
00:38:14,600 --> 00:38:15,560
Speaker 7: sacrifices later.

674
00:38:17,040 --> 00:38:19,080
Speaker 3: It's very interesting advice. And of course I should have

675
00:38:19,120 --> 00:38:21,440
Speaker 3: known would start with the emergency fund. That makes complete

676
00:38:21,520 --> 00:38:24,120
Speaker 3: sense back to some of the lessons of twenty twenty five.

677
00:38:24,200 --> 00:38:27,160
Speaker 3: And I mean you're when you look at cash, I

678
00:38:27,239 --> 00:38:30,040
Speaker 3: mean cash would really not be the place to put

679
00:38:30,120 --> 00:38:32,360
Speaker 3: money last year, despite everything that was happening.

680
00:38:33,320 --> 00:38:34,799
Speaker 7: Yeah, And the reason why I want to talk about

681
00:38:34,880 --> 00:38:38,640
Speaker 7: cash is because it gives us that very stable, predictable return.

682
00:38:38,760 --> 00:38:41,440
Speaker 7: So whether you're you know, money market funds last year

683
00:38:41,520 --> 00:38:45,320
Speaker 7: generated about seven percent as an average. Now it feels

684
00:38:45,400 --> 00:38:50,280
Speaker 7: like a good return when maybe not in comparison to shares,

685
00:38:50,719 --> 00:38:53,560
Speaker 7: especially not last year. But we're starting twenty six and

686
00:38:53,640 --> 00:38:56,320
Speaker 7: were really worried about all the volatility, and you know,

687
00:38:56,680 --> 00:38:58,800
Speaker 7: people are saying that the text shares are too expensive,

688
00:38:58,880 --> 00:39:02,040
Speaker 7: and you know, the geo politics is really wild. And

689
00:39:02,440 --> 00:39:05,239
Speaker 7: when there's so much volatility, one of the things that

690
00:39:05,320 --> 00:39:08,080
Speaker 7: we do as human nature is we try and find

691
00:39:08,200 --> 00:39:11,200
Speaker 7: sort of a stable harbor somewhere, you know, like a

692
00:39:11,320 --> 00:39:14,440
Speaker 7: port in the storm. And so often that the temptation

693
00:39:14,600 --> 00:39:16,680
Speaker 7: is to go and store your money in some way

694
00:39:16,719 --> 00:39:20,400
Speaker 7: stable and predictable. And so looking at seven percent, if

695
00:39:20,400 --> 00:39:22,480
Speaker 7: you're worried that you know you might lose thirty percent,

696
00:39:22,560 --> 00:39:25,839
Speaker 7: it looks like a good deal. But unfortunately you pay

697
00:39:25,880 --> 00:39:28,399
Speaker 7: away a chunk of your interest that you earn every

698
00:39:28,440 --> 00:39:31,160
Speaker 7: year to the tax man. And you have to look

699
00:39:31,200 --> 00:39:33,960
Speaker 7: at inflation. And so I think when you take off

700
00:39:34,480 --> 00:39:37,640
Speaker 7: whether it's forty five or thirty percent in tax and

701
00:39:37,800 --> 00:39:40,880
Speaker 7: you take off inflation, you're probably earning around one or

702
00:39:40,920 --> 00:39:43,680
Speaker 7: two percent a year after all of that's gone. And

703
00:39:43,760 --> 00:39:45,560
Speaker 7: you know, you contrast that with a stock market, and

704
00:39:45,800 --> 00:39:48,000
Speaker 7: especially a year like last year, you're doing way more

705
00:39:48,080 --> 00:39:51,759
Speaker 7: than fifteen percent after taxes and inflation. And so you

706
00:39:51,920 --> 00:39:54,960
Speaker 7: have to get ready now to embrace this kind of

707
00:39:55,080 --> 00:39:58,080
Speaker 7: craziness and volatility that we're going to live with for

708
00:39:58,239 --> 00:39:59,880
Speaker 7: quite some time. And I think we're going to live

709
00:39:59,880 --> 00:40:03,280
Speaker 7: with volatility, you know, both in South Africa and globally,

710
00:40:03,320 --> 00:40:05,680
Speaker 7: and we we should now get to the point of

711
00:40:05,760 --> 00:40:11,120
Speaker 7: saying that's normal and not overweight the idea of stability

712
00:40:11,239 --> 00:40:13,600
Speaker 7: in our investments and hoping that that will be protection.

713
00:40:14,280 --> 00:40:18,600
Speaker 7: I think stable investments actually give almost guarantee that you

714
00:40:18,680 --> 00:40:22,839
Speaker 7: won't beat inflation over long periods of time. So unfortunately,

715
00:40:23,280 --> 00:40:26,520
Speaker 7: you know, riding the volatility of markets and and you know,

716
00:40:26,600 --> 00:40:31,040
Speaker 7: making sure that you properly spread across local, global cash, bonds,

717
00:40:31,080 --> 00:40:35,200
Speaker 7: property shares, you know, is probably your best antidote to

718
00:40:35,239 --> 00:40:37,960
Speaker 7: all the craziness that's that's sure to happen in the

719
00:40:38,040 --> 00:40:40,360
Speaker 7: next you know, twelve twenty four to thirty six months.

720
00:40:41,239 --> 00:40:44,160
Speaker 3: Yeah, interesting conversation I thought with Warren Ingram the lessons

721
00:40:44,239 --> 00:40:47,520
Speaker 3: that we learned from last year looking at how volatility

722
00:40:47,719 --> 00:40:51,520
Speaker 3: is always with us, and essentially how you need to

723
00:40:51,600 --> 00:40:56,680
Speaker 3: diversify and how proper diversified equity exposure cross regions will

724
00:40:56,680 --> 00:40:59,080
Speaker 3: always outperform cash and the sort of all or nothing

725
00:40:59,480 --> 00:41:04,120
Speaker 3: offshore strategies and preserving and growing your wealth. Does that

726
00:41:04,200 --> 00:41:06,080
Speaker 3: mean we need to pay a bit more attention to

727
00:41:06,160 --> 00:41:08,160
Speaker 3: our investments or does it mean that we need to

728
00:41:08,880 --> 00:41:11,640
Speaker 3: have the right strategy and stick to the right strategy.

729
00:41:12,120 --> 00:41:12,839
Speaker 2: Yeah, I would.

730
00:41:13,000 --> 00:41:15,600
Speaker 7: I would say, actually, you know, once you've got your

731
00:41:15,640 --> 00:41:18,600
Speaker 7: asset mix correct and you've got the balance between local

732
00:41:18,640 --> 00:41:22,120
Speaker 7: and global investments, I would actually stop focusing on them

733
00:41:22,160 --> 00:41:24,600
Speaker 7: so much. You know, we tend to watch watch our

734
00:41:24,640 --> 00:41:27,040
Speaker 7: investments a lot more when we worried about the world,

735
00:41:27,200 --> 00:41:30,759
Speaker 7: and that that causes us to become overly emotional. And

736
00:41:31,280 --> 00:41:33,960
Speaker 7: you know, high levels of emotion are very destructive to

737
00:41:34,120 --> 00:41:37,400
Speaker 7: sensible investment decision making. So so you actually want to

738
00:41:37,440 --> 00:41:40,640
Speaker 7: look at your investments much less frequently than you would

739
00:41:40,680 --> 00:41:43,320
Speaker 7: have in the past. And when when the news is

740
00:41:43,400 --> 00:41:45,120
Speaker 7: bad and you know you've got a good spread and

741
00:41:45,160 --> 00:41:48,360
Speaker 7: a good allocation and the correct strategy, then you know

742
00:41:48,480 --> 00:41:51,360
Speaker 7: that the idea is focus on other things that you

743
00:41:51,400 --> 00:41:53,960
Speaker 7: know that impact your life and have meaning and purpose

744
00:41:54,040 --> 00:41:56,960
Speaker 7: and all of those things. But but watching your investments

745
00:41:57,040 --> 00:41:58,960
Speaker 7: is not going to add value at all, and in

746
00:41:59,040 --> 00:42:02,360
Speaker 7: fact probably raise your blood pressure levels and anxiety levels,

747
00:42:02,680 --> 00:42:04,840
Speaker 7: and that might force you to make it a bad decision.

748
00:42:05,080 --> 00:42:05,239
Speaker 4: Yeah.

749
00:42:05,360 --> 00:42:08,160
Speaker 3: Interesting conversation I thought with Warren Ingram the lessons that

750
00:42:08,320 --> 00:42:11,600
Speaker 3: we learned from last year, looking at how volatility is

751
00:42:11,960 --> 00:42:16,160
Speaker 3: always with us and essentially how you need to diversify

752
00:42:16,600 --> 00:42:20,840
Speaker 3: and how proper diversified equity exposure across regions will always

753
00:42:20,880 --> 00:42:23,760
Speaker 3: outperform cash and the sort of all or nothing offshore

754
00:42:23,800 --> 00:42:26,520
Speaker 3: strategies and preserving and growing your.

755
00:42:26,360 --> 00:42:28,920
Speaker 2: Wealth The best of the Money Show and.

756
00:42:30,760 --> 00:42:30,920
Speaker 6: Two.

757
00:42:31,680 --> 00:42:34,760
Speaker 3: Bronwin Williams, the partner at Flux Trends this week discussing

758
00:42:34,800 --> 00:42:39,600
Speaker 3: the book Africonomics, The History of Western Ignorance's by Bronwyn Everell.

759
00:42:39,840 --> 00:42:42,480
Speaker 3: One of those books that really it's all in the title,

760
00:42:42,560 --> 00:42:45,760
Speaker 3: but it shows you how people have misread African trade

761
00:42:45,840 --> 00:42:51,040
Speaker 3: innovation institutions and how it is that actually economics is economics,

762
00:42:51,520 --> 00:42:54,680
Speaker 3: but economics is also different economics in different places.

763
00:42:54,920 --> 00:42:57,280
Speaker 4: So it's pretty obvious from the title that the author

764
00:42:57,400 --> 00:43:00,680
Speaker 4: is coming assists with an agenda and with an extra grant.

765
00:43:01,200 --> 00:43:02,759
Speaker 4: But it was a really interesting reason for me. It

766
00:43:02,800 --> 00:43:05,880
Speaker 4: wasn't exactly what I expected when I picked up the pages.

767
00:43:06,680 --> 00:43:09,800
Speaker 4: It actually reminds me quite a lot of debts. The

768
00:43:09,840 --> 00:43:12,400
Speaker 4: First five Thousand Years by David Graeber, one of my

769
00:43:12,520 --> 00:43:15,480
Speaker 4: favorites to get into these sort of really wonky topics

770
00:43:15,520 --> 00:43:18,200
Speaker 4: about and it really does cover everything. So it does

771
00:43:18,280 --> 00:43:20,480
Speaker 4: cover some of the things that you might expect, especially

772
00:43:20,560 --> 00:43:24,960
Speaker 4: from critiques of the West's influence in Africa or global

773
00:43:25,040 --> 00:43:28,719
Speaker 4: South quotes unquote, looking at, of course critiques of colonization,

774
00:43:28,840 --> 00:43:32,800
Speaker 4: but also making some more kind of nuanced arguments about

775
00:43:32,880 --> 00:43:35,920
Speaker 4: some of the original sins that have set the African

776
00:43:36,000 --> 00:43:40,080
Speaker 4: content back so obviously compared to other parts of the world.

777
00:43:40,480 --> 00:43:42,719
Speaker 4: So of course we could spend time talking about the

778
00:43:42,840 --> 00:43:47,040
Speaker 4: of course, the resource kind of bates and switch, the

779
00:43:47,200 --> 00:43:50,200
Speaker 4: place that ended up with Africa's resources taken away and

780
00:43:50,400 --> 00:43:53,440
Speaker 4: the riches landing up somewhere else. But I think the

781
00:43:53,520 --> 00:43:56,520
Speaker 4: more interesting arguments in the book really speak to some

782
00:43:56,600 --> 00:44:01,680
Speaker 4: of the narratives and stories about our assumptions about Africa

783
00:44:01,719 --> 00:44:04,839
Speaker 4: and how that in turn influences our policies, even well

784
00:44:04,920 --> 00:44:09,160
Speaker 4: intended policies of NGOs and multinationals. It's just as info

785
00:44:09,239 --> 00:44:11,680
Speaker 4: thing and that some people working in AID actually have

786
00:44:11,880 --> 00:44:15,080
Speaker 4: good intentions. But also then of course the sort of

787
00:44:15,160 --> 00:44:19,520
Speaker 4: mechanics of the capitalist, globalist world that we have, and

788
00:44:19,719 --> 00:44:22,120
Speaker 4: I think one of the really really interesting ideas to

789
00:44:22,160 --> 00:44:26,640
Speaker 4: come out of that is this conversation around gifts and reciprocity,

790
00:44:27,040 --> 00:44:31,399
Speaker 4: and how we keep ledges, not just physical ledges where

791
00:44:31,520 --> 00:44:35,160
Speaker 4: rands and sense or gold and or have gone, but

792
00:44:35,280 --> 00:44:38,360
Speaker 4: also ledges of debt and what we mean by issues

793
00:44:38,400 --> 00:44:40,440
Speaker 4: of debts, which I think is why this book is

794
00:44:40,520 --> 00:44:45,520
Speaker 4: so particularly topical given what's going on with sovereign debts

795
00:44:45,960 --> 00:44:50,400
Speaker 4: worldwide at the moment and some of the underlying assumptions

796
00:44:50,480 --> 00:44:53,879
Speaker 4: and world views that underpin who needs to pay back

797
00:44:53,960 --> 00:44:57,439
Speaker 4: those debts and who actually took those debts on and again,

798
00:44:57,480 --> 00:44:59,760
Speaker 4: you could look at that quite literally and quite figurious,

799
00:45:00,440 --> 00:45:02,440
Speaker 4: but it was a really interesting story for those of

800
00:45:02,520 --> 00:45:05,840
Speaker 4: you who are interested in economic history but also the future,

801
00:45:06,480 --> 00:45:10,239
Speaker 4: in that the incentives we developed, the incentives we expect,

802
00:45:10,960 --> 00:45:15,239
Speaker 4: and our expectations around trading around reciprocity, of course, are

803
00:45:15,239 --> 00:45:17,600
Speaker 4: going to have influence on all of us, particularly this

804
00:45:17,920 --> 00:45:23,040
Speaker 4: very interesting multilateral moment when so many of those agreements,

805
00:45:23,280 --> 00:45:28,279
Speaker 4: both de facto and more explicit, are being renegotiated, and

806
00:45:28,320 --> 00:45:30,680
Speaker 4: there's many lessons we can learn, yeah, in terms of

807
00:45:30,800 --> 00:45:36,480
Speaker 4: renegotiating and negotiating more fair deals not just for our

808
00:45:36,600 --> 00:45:38,680
Speaker 4: continent to compare to the rest of the world, but

809
00:45:38,760 --> 00:45:42,800
Speaker 4: also more fair deals between citizens and states, again super

810
00:45:42,920 --> 00:45:48,160
Speaker 4: topical with all the gene veed protests going on against governments,

811
00:45:48,280 --> 00:45:51,719
Speaker 4: often with regards to who's going to pay back the

812
00:45:51,880 --> 00:45:55,560
Speaker 4: generational money and the obligations to creditors. Sitting on the

813
00:45:55,600 --> 00:45:56,439
Speaker 4: other side of the world.

814
00:45:57,880 --> 00:46:00,720
Speaker 3: So Bronwin, I mean, I'm sure you've seen this debate

815
00:46:00,800 --> 00:46:03,760
Speaker 3: that we have in South Africa about our informal economy,

816
00:46:03,920 --> 00:46:06,239
Speaker 3: the size of it, sort of how it works and

817
00:46:06,360 --> 00:46:09,160
Speaker 3: the formal economy. Is there an insight from this book

818
00:46:09,200 --> 00:46:11,960
Speaker 3: that might illuminate that when you talk about how we

819
00:46:12,560 --> 00:46:16,160
Speaker 3: have expectations of people, how our relationships are not how

820
00:46:16,239 --> 00:46:19,880
Speaker 3: financial relationships are not just about money, and obligations go

821
00:46:20,000 --> 00:46:22,280
Speaker 3: in lots of different directions in lots of different ways.

822
00:46:22,560 --> 00:46:24,759
Speaker 3: I mean, there must be an insight from the way

823
00:46:24,840 --> 00:46:27,719
Speaker 3: the book is understanding our continent and into understanding our

824
00:46:27,760 --> 00:46:28,360
Speaker 3: own economy.

825
00:46:29,480 --> 00:46:31,680
Speaker 4: Yeah, okay, First of all, though the providers are author

826
00:46:31,960 --> 00:46:34,839
Speaker 4: herself being not in African or she's spent some time

827
00:46:34,880 --> 00:46:36,600
Speaker 4: in Africa, has spent most of her time in the

828
00:46:36,680 --> 00:46:40,000
Speaker 4: central and western parts of Africa, so she doesn't really

829
00:46:40,080 --> 00:46:42,680
Speaker 4: speak too much to the South African situation, which I

830
00:46:42,719 --> 00:46:45,920
Speaker 4: think we all do know slightly slightly different to the

831
00:46:45,960 --> 00:46:48,680
Speaker 4: rest of the continent when you get into the minutia

832
00:46:48,840 --> 00:46:51,560
Speaker 4: of how the informal and formal economy all kind of

833
00:46:51,640 --> 00:46:54,200
Speaker 4: works together. But yes, there are some insights, yeah, not

834
00:46:54,360 --> 00:46:57,000
Speaker 4: direct ones, it's certainly ones that are either reader and

835
00:46:57,200 --> 00:46:59,880
Speaker 4: extrapolate there. And one of the things that comes to

836
00:47:00,080 --> 00:47:02,640
Speaker 4: here and also again in death the first five thousand

837
00:47:02,680 --> 00:47:06,400
Speaker 4: years that have become referring to, is how, particularly in

838
00:47:06,560 --> 00:47:10,400
Speaker 4: African traditional society, before you know, colonization got here and

839
00:47:11,880 --> 00:47:20,400
Speaker 4: usurped essentially reciprocity based society norms with the blunt instrument

840
00:47:20,600 --> 00:47:24,920
Speaker 4: of the law and the contract certainly have parallels to

841
00:47:25,040 --> 00:47:28,160
Speaker 4: our own informal economy here. So one of the things

842
00:47:28,239 --> 00:47:31,680
Speaker 4: she speaks about is exactly that how deals that are

843
00:47:31,760 --> 00:47:36,279
Speaker 4: done with the expectation of reciprocity and the expectation of

844
00:47:37,200 --> 00:47:39,200
Speaker 4: I give to you today, but tomorrow I'm going to

845
00:47:39,280 --> 00:47:42,760
Speaker 4: get something back that might not be formalized by a contract,

846
00:47:42,840 --> 00:47:46,600
Speaker 4: that could have arbitrage and then become exploited, which is

847
00:47:46,680 --> 00:47:50,879
Speaker 4: exactly what happened when you have asymmetrical information, when outsiders

848
00:47:50,960 --> 00:47:54,880
Speaker 4: come into an insider based economy and try to formalize

849
00:47:54,920 --> 00:47:59,120
Speaker 4: it with contracts and laws and black and white type

850
00:47:59,239 --> 00:48:01,360
Speaker 4: red tape use lots and lots of place in the

851
00:48:01,440 --> 00:48:04,640
Speaker 4: next step, and I certainly see very similar things happening

852
00:48:04,719 --> 00:48:07,960
Speaker 4: with some of the both well intentioned and more cynical

853
00:48:08,960 --> 00:48:14,439
Speaker 4: moves to formalize or less charitably kind of recolonize parts

854
00:48:14,480 --> 00:48:16,520
Speaker 4: of the informal economy that, as you and I know

855
00:48:16,800 --> 00:48:19,160
Speaker 4: many Melstiners do too, growing a lot faster on the

856
00:48:19,239 --> 00:48:23,680
Speaker 4: formal parts of our economy. Right, so there's an incentive

857
00:48:23,880 --> 00:48:28,239
Speaker 4: to go in and use sophisticated law and contract to

858
00:48:28,520 --> 00:48:33,279
Speaker 4: effectively negotiate a better deal and parties that have negotiated

859
00:48:33,360 --> 00:48:38,840
Speaker 4: between themselves when those negotiations are based on norms, on trust,

860
00:48:39,080 --> 00:48:43,879
Speaker 4: and on personal reputations. Again, a very interesting idea when

861
00:48:43,920 --> 00:48:49,000
Speaker 4: you compare that to our cryptifications of our economy and

862
00:48:49,080 --> 00:48:53,120
Speaker 4: trying to replace like smart contracts, even with negotiated verbal

863
00:48:53,280 --> 00:48:59,040
Speaker 4: contracts that remove nuance and replace it with rule by law.

864
00:49:00,800 --> 00:49:04,040
Speaker 3: Sure, we've got just a minute left. Is there anything

865
00:49:04,080 --> 00:49:06,040
Speaker 3: in the book that gives us a clue as to

866
00:49:06,239 --> 00:49:09,320
Speaker 3: how to I was going to say, grow the economy,

867
00:49:09,400 --> 00:49:10,919
Speaker 3: but that's a very sort of Western way of looking

868
00:49:10,960 --> 00:49:13,480
Speaker 3: at it, to get more incomes into more.

869
00:49:13,360 --> 00:49:17,600
Speaker 4: Homes, not really no, this is an economic historian, but

870
00:49:17,640 --> 00:49:20,760
Speaker 4: they are certainly cruisers to help to negotiate better deals

871
00:49:20,800 --> 00:49:24,799
Speaker 4: for ourselves and our descendants based on a thorough understanding

872
00:49:24,920 --> 00:49:30,280
Speaker 4: of obligations, both explicit and implicit, of other counter parties

873
00:49:30,440 --> 00:49:31,399
Speaker 4: across the world.

874
00:49:31,560 --> 00:49:34,160
Speaker 3: An important conversation with Ronan Williams there and understanding of

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00:49:34,239 --> 00:49:37,080
Speaker 3: some of the narratives that really show you where I

876
00:49:37,160 --> 00:49:40,920
Speaker 3: think so many sort of Western diagnoses of the situation

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00:49:41,040 --> 00:49:42,799
Speaker 3: in Africa have just got it so wrong.

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Speaker 2: Seven notes the best of The Money Show from this week.

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00:49:48,400 --> 00:49:50,160
Speaker 3: You've been listening to the best bits of The Money Show.

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00:49:50,200 --> 00:49:52,600
Speaker 3: A digestive some of our most important interviews from the

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00:49:52,640 --> 00:49:54,640
Speaker 3: show this week. If you'd like to hear more, please

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00:49:54,719 --> 00:49:57,000
Speaker 3: go to our website for your podcast app and search

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00:49:57,120 --> 00:49:59,439
Speaker 3: for The Money Show. Thanks for being with us this week.

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Speaker 3: We're back with The Money Show at six o'clock on Monday.

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Speaker 3: Have a good weekend.