Speaker 1: Seven.
Speaker 2: You're listening to the best of the Money Show.
Speaker 1: The Money Show.
Speaker 3: Welcome to the best bits of the Money Show are
Speaker 3: digestive some of the most important insights, thoughts, comments and
Speaker 3: questions I suppose that have been on the show this week.
Speaker 3: If you'd like to hear more, if you think maybe
Speaker 3: someone you know, someone in your life could benefit from
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Speaker 3: for The Money Show. It's always a good idea to
Speaker 3: just send it on a little bit to start. Some
Speaker 3: of the news stories that we thought were important this week,
Speaker 3: the White House announcing it was imposing in another twenty
Speaker 3: five percent tariff on goods from India. That means the
Speaker 3: total tariff from on Indian goods into the US is
Speaker 3: now fifty percent. Business Leadership South Africa and Business Unity
Speaker 3: South Africa they've both urged esk HIM to stop its
Speaker 3: legal action against NURSER, the energy regulator, for awarding five
Speaker 3: electricity trading licenses to five different companies. I mean, it's
Speaker 3: an issue that gets to the heart of our sort
Speaker 3: of energy transition, what's changing regarding electricity in our society.
Speaker 3: And the global ratings agency S and P they flagged
Speaker 3: a fiscal risk as the ANC rarely said that it
Speaker 3: was very angry with the idea that the Reserve Bank
Speaker 3: and the Reserve Bank Governor, I supposed Eajo had announced
Speaker 3: the Monetary Policy Committee decision to target the lower end
Speaker 3: of the inflation band. Tonight, if we bring you a
Speaker 3: mixture of stories from the world of money from the
Speaker 3: week that has been this week our shape shifter July
Speaker 3: and Lauvell, the CEO of Tungala Resources, reflecting on his
Speaker 3: incredible story becoming one of our most successful coal mining executives.
Speaker 3: He spoke about leadership and also what he expects to
Speaker 3: happen in the coal industry and that some of the
Speaker 3: sector's pressing challenges, while also outlining his vision for a
Speaker 3: responsible transition to cleaner energy.
Speaker 4: Retarding is a good thing. I've finally met it to
Speaker 4: the NEF Center of Sevenotu Land. Thank you well. We're
Speaker 4: very grateful that you gave.
Speaker 3: I think whenever I were you know, the time I
Speaker 3: spent on Google looking, looking and preparing for tonight, and
Speaker 3: I noticed you included it in your LinkedIn profile as well.
Speaker 3: Is that you grew up in Gocomere, a particular part
Speaker 3: of Zimbabwe. It's near mass Vingo. If you look at
Speaker 3: it on a map, you went to a Roman Catholic school.
Speaker 3: They're still up, They're still going. The Sillver website I
Speaker 3: saw today. What was that kind of community like at
Speaker 3: the time. I mean, Zimbabwe's changed a lot over the years.
Speaker 5: You know.
Speaker 4: I mean Zimbabwe has been blessed with lots of mission schools.
Speaker 4: So all my schooling life was through mission schools. I
Speaker 4: went to Pacame for primary. Actually, go Coomere was a
Speaker 4: small part of my high school. High school education. I
Speaker 4: went to Sain Mission, one of the oldest missions in
Speaker 4: in in Zimbabwe, which was an Anglican mission. Then I
Speaker 4: went to Gocomere and something quite significant up beened at
Speaker 4: Cocomera because I met my my wife together for that long.
Speaker 3: Sure do you think so we talk about education all
Speaker 3: the time in South Africa? Was there something about the
Speaker 3: quality of that education that helped you along the path
Speaker 3: that maybe young people in many government schools here don't
Speaker 3: get anymore? You know.
Speaker 4: I hold the view that the Rhodesian government did one
Speaker 4: thing right for the black population of of den Rhodesia
Speaker 4: and Zimbabwe. They never denied us college education. We continue
Speaker 4: to get Cambridge education all the way into into independence,
Speaker 4: and when Robert and Gabe came on, the two things
Speaker 4: that your prioritize, actually, if you think about it, was
Speaker 4: education and free health. And they build schools everywhere, but
Speaker 4: with very good college education. And I think that set
Speaker 4: us up. And for people like me who education was
Speaker 4: a ticket to change your circumstance, I was really lucky
Speaker 4: to have been born where I was born.
Speaker 3: I mean I noticed that you spent some time at Columbia,
Speaker 3: and I was fascinated by this. I mean, Columbia is
Speaker 3: in the States, it's a big place, it's well known,
Speaker 3: it's fighting with Donald Trump. Everybody is.
Speaker 4: It's quite a.
Speaker 3: Journey from Gokumere to Columbia. I mean, did you ever
Speaker 3: while you were there look back and think, gosh, it
Speaker 3: started a long way away.
Speaker 4: You know that part of the jenny is an interesting
Speaker 4: one for a young person who grew up in the circums,
Speaker 4: is that I grew up because what tends to happen
Speaker 4: is never really sure how good you can be, Yeah,
Speaker 4: until you get to a place like Columbia, where you
Speaker 4: begin to mix with colleagues from all over the world.
Speaker 4: In fact, in my class there were forty of us
Speaker 4: from thirty four different countries, and all of a sudden
Speaker 4: you begin to understand what work class leadership looks like.
Speaker 4: But secondly, you actually just realize I belong, I can
Speaker 4: be just as good as the next guy. And I
Speaker 4: think it just gives you so much confidence and just
Speaker 4: liberates you to be yourself, to go out there and
Speaker 4: seek to be the best version not of the next guy,
Speaker 4: not of Jack Welsh, but of yourself.
Speaker 3: You get away from the idea, well, I can only
Speaker 3: be as good as this place, and in fact you
Speaker 3: become July and Lavel.
Speaker 4: The best version of July and Love and there's only
Speaker 4: one of you.
Speaker 3: I like the way you put that you studied metallurgy,
Speaker 3: you studied the science of metal. Was there something about
Speaker 3: money that you wanted to do? Already by that stage
Speaker 3: quite a.
Speaker 4: Young person actually, interestingly, I mean I told my friends
Speaker 4: that I'm a filled medical student because I lasted one semester.
Speaker 5: Than me.
Speaker 4: And then what happened was somewhere along the way in
Speaker 4: that first semester I met a guy called Herr Kover.
Speaker 4: He was a scene exative taking a director of Anglo
Speaker 4: American Zimbabwe. Then, and you started talking about mining and
Speaker 4: the things that you can do in mining, the difference
Speaker 4: you can make for communities where they were actually mining,
Speaker 4: the role that metals in minerals actually play in the
Speaker 4: developmental story of humanity. I really just felt, these guys
Speaker 4: are doing something really cool. It's different to actually spending
Speaker 4: time in a in a a in a theater. So
Speaker 4: I just switched immediate at fund my passion.
Speaker 3: Sure and you you you enjoyed that immediately. I mean
Speaker 3: you were studying its one thing to decide to do something.
Speaker 3: Now you're actually doing it, you're working in mining. Did
Speaker 3: you find that actually that passion stayed with you?
Speaker 4: You know? I was lucky to work for an organization
Speaker 4: as big as Anglo American because what it provided was
Speaker 4: such a varied experience. In fact, I've only worked for
Speaker 4: two organizations, Anglo American and tan Gela now, But in
Speaker 4: reality I worked in so many different places, so many
Speaker 4: different experiences. If you can, if you can imagine, I
Speaker 4: started in COLLT, I went to phero Chrome, from fero
Speaker 4: chrome to Nico to PGMs, which I enjoyed thoroughly, and
Speaker 4: full circle back to call different organizations. Although you're in
Speaker 4: Anglo American, you're experiencing so many different things, so many
Speaker 4: different markets, so many different commodities, different challenges, and it
Speaker 4: just grows you as a human being.
Speaker 3: So you spend a lot of time kind of in
Speaker 3: the science of mining, managing mining, and then at some
Speaker 3: point the kind of I don't know, did leadership tap
Speaker 3: you on the shoulder? Did someone tap you on the shoulder?
Speaker 2: Was quite a.
Speaker 3: Transition, going from kind of science of mining to sort
Speaker 3: of leadership.
Speaker 2: I mean, when do.
Speaker 3: You think you sort of first found yourself in a
Speaker 3: kind of leadership position.
Speaker 4: Probably round about the middle nineties. I made leadership positions first,
Speaker 4: first line management, quite air in my career as a youngster,
Speaker 4: and at that point in time, obviously you you're full
Speaker 4: of yourself. You think you're the best, You know everything.
Speaker 4: In fact, you almost think the guys who promoted you
Speaker 4: don't know enough anyone to change everything. So I've been
Speaker 4: fortunate to be in leadership positions probably for the greater
Speaker 4: part of my career. That transition, more often than not,
Speaker 4: is not something that you get prepared for because you
Speaker 4: train as an engineer mostly as an individual contributor. In fact,
Speaker 4: we engineers think we are the smartest thing in any industry.
Speaker 4: Go into and all of a sudden you're not being
Speaker 4: asked to get the best out of other people. And
Speaker 4: that's a transition. Just generally, both in mining and most
Speaker 4: manufacturing organizations, we don't prepare young people very well.
Speaker 3: For what makes it a good leader. And I suppose
Speaker 3: you know, I could walk past any bookshop and any
Speaker 3: airport in the world and they would have a leadership
Speaker 3: section and often think, you know, maybe I've got it, drng.
Speaker 3: But there's just a lot of nonsense there. In your experience.
Speaker 3: I mean, you've been with some of the best leaders
Speaker 3: in the world, some of the best leadership teachings in
Speaker 3: the world.
Speaker 4: What works?
Speaker 3: I mean, I can think of certain things off the
Speaker 3: top of my head, setting an example as one as
Speaker 3: being decisive maybe another what for you is the kind
Speaker 3: of key to it actually getting the best out of
Speaker 3: people because lots of people try and lead in their.
Speaker 4: Fail You know, you're so right. I mean, leadership is
Speaker 4: about followers. Sometimes we forget that to be a leader,
Speaker 4: you've got to have followers. But it also teaches you
Speaker 4: that in fact, to be a leader yourself, you have
Speaker 4: to be a good follower. So this idea of taking
Speaker 4: people along with you ill aspective of what it is
Speaker 4: and realizing that in fact people choose to follow you,
Speaker 4: there's not much you can do. It doesn't matter whether
Speaker 4: it's in politics or in business. Actually, when you stand
Speaker 4: in front of people with an idea that you want
Speaker 4: people to buy into, always remember that people are making
Speaker 4: a choice. Is this an idea that we're willing to
Speaker 4: give our very best to realize or not. So that's
Speaker 4: the first thing about leadership that I learned over the
Speaker 4: last three decades and a bit. The other one, really
Speaker 4: about what makes good leaders is to realize what delivers difference,
Speaker 4: and it doesn't matter whether difference is in sport or
Speaker 4: in business. Are delivering good results actually is about realizing
Speaker 4: that we're not shut of good ideas. In fact, you
Speaker 4: know what, you can hire a consulting organization could be
Speaker 4: McKinsey ben. They'll give you brilliant ideas, but there's one
Speaker 4: thing they will never give you is how to translate
Speaker 4: those ideas into results, which is executing. And therefore, how
Speaker 4: do you build good teams that are complimentary and willing
Speaker 4: to get together, to work together to deliver superior results
Speaker 4: better than the next guy. Because in minding, if you
Speaker 4: think about it. Generally, we all endowed with good resources.
Speaker 4: What differentiates the winner from the non winner is how
Speaker 4: well we execute to deliver that value into the marketplace.
Speaker 3: Is it about putting the right team together? Is it
Speaker 3: about you talk about a vision? Is it about something else?
Speaker 3: I mean, clearly, you've got to sell people on the idea,
Speaker 3: almost make them sort of you know, almost make them
Speaker 3: think it's not quite theirs, but give them ownership of it.
Speaker 4: You know, the idea of selling this concept that we say,
Speaker 4: you've got to sell the idea is important, but the
Speaker 4: idea itself must be compelling. But actually that's not the
Speaker 4: biggest part of building winning teams. Building winning teams is
Speaker 4: about bringing together a group of people who can compliment
Speaker 4: each other in a way that together they are better
Speaker 4: than some of the individual parts. And secondly, it's just
Speaker 4: about you as a leader realizing how do you surround
Speaker 4: yourself with people who are willing to go to war
Speaker 4: with you, who are willing to hold you on your
Speaker 4: shoulders that they can buy so much into whatever simple
Speaker 4: idea that you've got, that not only do they support it,
Speaker 4: but they can actually build it into a much better idea.
Speaker 4: Because ultimately, if you think about it. I mean, we
Speaker 4: all think the most transformational leaders are the ones who
Speaker 4: are we've got these blinding insights and ideas. Yeah, you
Speaker 4: do find the old anomalies like elln Mask, but most
Speaker 4: of us are just ordinary human beings who are able
Speaker 4: to orchestrate thousands of people who are willing to take
Speaker 4: sometimes which ideas which are not well formed and just
Speaker 4: molded into a winning formula.
Speaker 3: Is leadership in Southern Africa harder than in other places?
Speaker 3: We have very diverse groups of people. Sometimes we argue
Speaker 3: with each other until someone from outside Southern Africa comes
Speaker 3: and then we all fight together against that person. I
Speaker 3: sometimes think that is leadership harder in Southern Africa than
Speaker 3: in other places.
Speaker 4: You know, since since I've not had the opportunity to
Speaker 4: have a business in Australia and we set up business
Speaker 4: in Dubai, I used to believe on this mantra that
Speaker 4: if you have worked in South Africa and Southern Africa,
Speaker 4: you probably have very the best training and because it's
Speaker 4: quite tough to operate here. But the reality is actually
Speaker 4: you find every jurisdiction, every culture is it's a challenges
Speaker 4: and differences. It's not about whether it's hard to hear
Speaker 4: or not is whether we can, whether you're able to
Speaker 4: understand the lookal narrative and the live systems that make
Speaker 4: people work up day in day out wanting to give
Speaker 4: their best and your ability to harness that that latent
Speaker 4: energy to make people give that extra discussion effort and
Speaker 4: it doesn't meet a way.
Speaker 3: It is July and love or your special shape shifter
Speaker 3: Tonight the year Tunkala resources. I do you'll be pleased
Speaker 3: to hear July have some questions about mining. There was
Speaker 3: a time about five years ago when people started to
Speaker 3: get very excited about how the world was changing and
Speaker 3: moving away from coal. There's quite a strong environmental lobby
Speaker 3: in South Africa. We know, for example, what happens around
Speaker 3: Escum's coal fired power stations. Did you ever think, I mean,
Speaker 3: there are more and more ways to generate electricity. How
Speaker 3: long do you think we'll be using coal for?
Speaker 4: Still? Do you want me to disappoint you or you
Speaker 4: want me to tell it first? I don't know. Yeah, yeah,
Speaker 4: well knows, but I will knows other than to say
Speaker 4: that I think most people who have written the obituary
Speaker 4: for coal would be disappointed because the reality is and
Speaker 4: if you go back. I mean, I've been talking about
Speaker 4: CALL since since five years, which is the way we're
Speaker 4: talking about If you look at the imaging markets, Southeast Asia,
Speaker 4: Africa to some extent, where there's billions of people who
Speaker 4: still need to come out of energy poverty into the
Speaker 4: kind of modern energe services that the first world actually experience.
Speaker 4: What they need is access to a reliable, affordable source
Speaker 4: of energy. This idea that they've got to have a choice,
Speaker 4: a binary choice of either FALSI feels CALL in particular
Speaker 4: or renewables for me is a false choice. I think
Speaker 4: these energe sources can coexist, and that certainly is what
Speaker 4: we're seeing. And China is a very good example. China
Speaker 4: is deploying renewables faster than anybody else combined on the
Speaker 4: glob today, and yet they're building new past stations. Is
Speaker 4: that reality that if you want to continue to drive
Speaker 4: economic prosperity, particularly in the in the imaging markets, you
Speaker 4: can't wish away this energy source that most people would like,
Speaker 4: who would love to hate.
Speaker 3: No, sure, I mean I get that. I do wonder
Speaker 3: if we're kind of at peak coal, very close to
Speaker 3: peak coal, and then use it will start to get
Speaker 3: down possibly quite quickly.
Speaker 4: I think we probably are Pickcole, if you ask my opinion,
Speaker 4: the decline is going to depend on a number of things.
Speaker 4: And I think what has slowed down decline is in
Speaker 4: some instance the activists. They have been their one West
Speaker 4: enemies by exaggerating the extinction of humanity, if we continue
Speaker 4: to call that's one. But secondly, this idea of anerge
Speaker 4: security has become a far more dominant issue in developing
Speaker 4: energy policy in a lot of countries, and you beginning
Speaker 4: to see countries saying we can't rely fastly on a
Speaker 4: concentration of energy from one region and or only important energy.
Speaker 4: And therefore countries that have got coal within their own
Speaker 4: boarders are beginning to develop that is a resource to
Speaker 4: secure their own energy sources going forward. And I think
Speaker 4: that is what is going to slow the decline from
Speaker 4: what it ordinarily would have been.
Speaker 3: That was July and Lovelle reflecting on as leadership principles
Speaker 3: that have guided them already through a shifting landscape of
Speaker 3: Southern Africa's coal industry.
Speaker 2: The Best of the Money Show and.
Speaker 3: You're Consumer Ninja Wendy Nola. She was fascinating actually about
Speaker 3: the cost of home deliveries, and we're talking about food
Speaker 3: that comes to your door, hot and ready to eat.
Speaker 3: It's wonderful, it's also expensive and she at harvest can
Speaker 3: actually undermine your financial stability. It costs you money, and
Speaker 3: it costs you a lot more money than you might think,
Speaker 3: Wendy know.
Speaker 1: So I have to say it.
Speaker 5: It was a bank's press release which prompted this discussion,
Speaker 5: which is quite unusual for me. But yeah, so as
Speaker 5: you say, those little motorbikes are not just foods that
Speaker 5: has been ordered from delivery apps such as Uber Eats
Speaker 5: and mister d but also your grocery delivery. So we're
Speaker 5: not talking about grocery deliveries. We're talking here about people
Speaker 5: who who want to eat and then they click going
Speaker 5: to the app, click and it you know, there comes.
Speaker 1: The little motorbike with their food.
Speaker 5: And what Standard Bank did during the course of last month,
Speaker 5: which is saving some months or non saving months for
Speaker 5: most South Africans.
Speaker 1: As it turns out, they took a look at what
Speaker 1: kinds of.
Speaker 5: Things their clients were teeny spending their money on in
Speaker 5: otherwids habits that if they tweaked them a bit, because
Speaker 5: nobody wants to go called turky and anything.
Speaker 1: If they spent a little bit more.
Speaker 5: Mindfully, they could actually create a new habit of redirecting
Speaker 5: that money in the two have to go hand in hand.
Speaker 5: You've got to just save, you've got to spend it mindfully,
Speaker 5: put it away into a fund. Didn't account for emergency
Speaker 5: spending because it's not happening. Too many South Africans are
Speaker 5: saying they want to save for any day because we
Speaker 5: know through experience that rainy day has happen, and they
Speaker 5: happen quite often, but it's actually not happening. So here
Speaker 5: is how the bank's head of Money Management and Advisory
Speaker 5: direct us to put it.
Speaker 6: So in the context of savings month at Standard Bank,
Speaker 6: we want to have the conversation around practical ways, you know,
Speaker 6: to free up cash flow and to actually get the
Speaker 6: money to save. So as part of this exercise, we
Speaker 6: looked at individuals spending across different income categories and you know,
Speaker 6: categorized what people are spending on. So one of the
Speaker 6: things we looked at is subscriptions. Another thing we looked
Speaker 6: at is things like spending on takeaways and especially food
Speaker 6: a level, et cetera. So really to have a conversation
Speaker 6: around yes, we all know it's important to save, but
Speaker 6: how do I start practically doing it? And if we're
Speaker 6: saying times are tough and it's difficult, you know, to save,
Speaker 6: what are some of the ideas that we can start
Speaker 6: sharing with individuals to say, maybe look at this. And
Speaker 6: it's not necessarily to say stop spending on a certain
Speaker 6: item or certain category, but it's more to say, if
Speaker 6: you just take a bit of that money and you
Speaker 6: start redirecting it towards a savings account, you know, what
Speaker 6: can the impact of that be and how can you
Speaker 6: actually use that to kick start your savings?
Speaker 3: Okay, so that's what they wanted to do. What levels
Speaker 3: of sort of spending on food delivery apps do they
Speaker 3: actually find?
Speaker 5: Was quite an eye open Stephen I have to say,
Speaker 5: first of all, more than forty five percent of their
Speaker 5: clients across the board have no accessible emergency savings at all.
Speaker 5: And then among private banking clients between between twenty five
Speaker 5: thousand and fifty eight thousand a month, more than a
Speaker 5: third of them have no emergency savings at all either.
Speaker 5: So used to says we know that growing one's income
Speaker 5: isn't always easy because there are external factors. We can't control,
Speaker 5: but obviously we can control what we're spending on takeaways.
Speaker 3: Right, You've got to control what you can control. Now,
Speaker 3: we can't make as much money as we want, but
Speaker 3: we only spend as much as we need to and want.
Speaker 7: I suppose yeah, and you know those of us whose
Speaker 7: work or home address is very well known to the
Speaker 7: mister d's and that it eats drivers.
Speaker 5: The starting point would be, actually, let's look at it.
Speaker 5: Let's be mindful what what are we actually spending on
Speaker 5: these apps?
Speaker 1: And you don't have to do any maths. You just
Speaker 1: have to go into.
Speaker 5: Your audit history on the app or apps and it
Speaker 5: will tell you all. Standard bank starter shows that customers
Speaker 5: spend on average seven hundred and seventy five Rand a
Speaker 5: month on takeout and food delivery from fourteen major food
Speaker 5: fast food or quick service restaurants as the industry calls
Speaker 5: them qs are franchises, and as I said, that's not
Speaker 5: including groceries and supermarket meals. So it's the customers in
Speaker 5: the late twenties and thirties who are most guilty and
Speaker 5: adverted commers of this. They're hugely embracing it. This is
Speaker 5: the new this is the way to go, and higher
Speaker 5: the income that they're earning, the more they spend. Those
Speaker 5: earning more than sixty or around sixty thousand spent one
Speaker 5: thousand rand monthsly, going up to around one to three
Speaker 5: a month during holidays.
Speaker 1: Lower to middle income earners, those.
Speaker 5: Earning under twenty thousand spend four hundred and seventy two rand.
Speaker 5: At those earning twenty five thousand a month six hundred
Speaker 5: and fifteen random month.
Speaker 1: That's a lot, Stevens.
Speaker 3: So I mean it sort of edges up right. You
Speaker 3: don't kind of realize how much you're spending on this
Speaker 3: because you never sit down and work out what it's
Speaker 3: costing you a month.
Speaker 5: Well, that's the thing I think that applies. And I
Speaker 5: mean Dirett used to mention subscriptions as well. We don't
Speaker 5: want to go into that here, but that's the other
Speaker 5: thing that every month coming if your credit cars. And
Speaker 5: I think part of it, Stephen, is it's you're not
Speaker 5: handing over money. You're not handing over catches, not this
Speaker 5: conscious okay here, sixty eight rand or whatever. It's it's
Speaker 5: all clicked done coming off your card, you know, And
Speaker 5: it's I think that adds to it. And I just
Speaker 5: wanted to add something that that bank press release didn't mention,
Speaker 5: and I think a lot of people don't actually realize,
Speaker 5: is that the food's not costing you extra over and
Speaker 5: above what you would pay if you ordered and collected
Speaker 5: yourself or went and ate inside one of those QSR places.
Speaker 5: It's not just the delivery fee of twenty rand or whatever,
Speaker 5: but all the restaurants actually according to a news twenty
Speaker 5: for report back in twenty twenty three, they investigated this
Speaker 5: quite in depth, and most national chains charged between twenty
Speaker 5: percent and thirty percent more for meals than what their
Speaker 5: menu prices are for you know, normally, so that they
Speaker 5: add on their app costs for being on those apps
Speaker 5: to their customers, and that is a lot.
Speaker 1: Twenty to thirty percent.
Speaker 5: Then you're paying delivery on top top of it, and
Speaker 5: that's going to erode your bank account quite nicely if
Speaker 5: you are regular.
Speaker 4: Yeah, yeah, very quickly.
Speaker 3: Okay, So I mean, do you just stop doing it automatically?
Speaker 3: Do you go cold turkey or do it's another way.
Speaker 5: I don't think cold turkey is a good thing we're
Speaker 5: going to we're human beings resistant to that. So don't
Speaker 5: order as often or reduce the cost of the of
Speaker 5: your takeaways. So don't pay the delivery. If you don't
Speaker 5: pay the app, marke up price, go and collect yourself
Speaker 5: or sit in the restaurant. You know, it's it's this
Speaker 5: convenience click and there it comes on the scooter thing.
Speaker 5: That's that's taking away money. That if we save the money,
Speaker 5: don't just save the money that you put it away
Speaker 5: and have a goal and or just you know, when
Speaker 5: your car breaks down and you've got to suddenly find
Speaker 5: eight thousand rand. I mean for most people that will
Speaker 5: set them back for months and they're borrowing. Yeah, and
Speaker 5: that's more interesting. It's a dramas you know, there's one
Speaker 5: of two or three fewer takeaway meals or not having
Speaker 5: the scooter come to your door. You know, there's the
Speaker 5: trade off is that you've got piece of mind and
Speaker 5: it isn't this emotional trauma when suddenly you need to
Speaker 5: find extra money that you don't have.
Speaker 3: Yeah, okay, And I mean in the end, basically the
Speaker 3: moral of the story is, and this is something you
Speaker 3: learn when you leave your late twenties and nearly thirties,
Speaker 3: is that convenience costs absolutely.
Speaker 5: So it's other forms of food as well, I mean,
Speaker 5: if you go into a supermarket, there's so many products
Speaker 5: on the shelves that are screaming pick me because I'm
Speaker 5: quick and convenient, and we're all like, oh, well, I
Speaker 5: are so busy and luck let's do it the quickest,
Speaker 5: easiest way.
Speaker 1: All that convenience costs.
Speaker 5: So if you buy the instant oats instead of spending
Speaker 5: a whole two or three minutes cooking thoughts the traditional
Speaker 5: way on the stove, it's going to cost you a
Speaker 5: lot more over time. The pre cut and bagged veggies
Speaker 5: are great, so convenient rather than cutting your own button
Speaker 5: nut or whatever. All these purchase decisions might seem petty,
Speaker 5: the pre cooked.
Speaker 1: Sources instead of just spending two minutes do you yourself?
Speaker 5: They all add up, and all those habits collectively are
Speaker 5: what are some of the things that are stopping us
Speaker 5: or you know, from able to put a little bit
Speaker 5: away to help ourselves for when there's inevitable dramas happened
Speaker 5: to us.
Speaker 3: That was Wendy Nola offering an important reminder think about
Speaker 3: our food delivery apps are very convenient, They're great, especially
Speaker 3: on Friday night. They can also have a big impact
Speaker 3: on your financial will Beings.
Speaker 2: Seven, you will listen to the Money shows the best.
Speaker 3: Bits our personal finance segment. Warren Ingram, co founder of
Speaker 3: Galileo Capital. He looked at the Reserve Bank's recent interest
Speaker 3: rate cut. He explained what this means to you, but
Speaker 3: also some advice on how to make some smart financial
Speaker 3: moves as the landscape changes. Essentially, how to better manage
Speaker 3: an interest rate cut.
Speaker 8: It's it's almost one of the fundamental aspects of all
Speaker 8: of our lives. So it impacts the way we spend,
Speaker 8: it impacts the way we live, and for a lot
Speaker 8: of us, debt is a reality, and so interest rates
Speaker 8: become even more important, you know, the more debt we have,
Speaker 8: and as we know, our country is super indebted. Anything
Speaker 8: to do with interest rates has almost a multiplier effect
Speaker 8: on our lives.
Speaker 4: So you're right.
Speaker 8: I mean, I think quite a lot of people kind
Speaker 8: of get lost in the news of Okay, the Reserve
Speaker 8: Bank's done this and actually missing the point that it
Speaker 8: really it's bricks and mortar for us. It really has
Speaker 8: a day to day impact.
Speaker 3: Okay, So there are lots of different things we can
Speaker 3: do to try and take advantage of this. When interest
Speaker 3: rates go down, what's the good news. What does get
Speaker 3: cheaper because it's not good for everybody.
Speaker 8: It's not good for everybody. The thing that starts immediately
Speaker 8: is if I'm sitting with a huge amount of credit
Speaker 8: card debt or personal loans or overdrafts. If the banks
Speaker 8: are doing their job correctly, very soon after the Reserve
Speaker 8: Bank announces a drop in interest rates, it means my
Speaker 8: debt gets cheaper immediately thereafter. So you know, a day
Speaker 8: or a week later, they'll obviously hold out a little bit.
Speaker 8: Of the banks, you know, they never want to miss
Speaker 8: an opportunity, But it means that my credit card repayments
Speaker 8: get a bit less. And when you're paying, you're interested.
Speaker 8: Let's say twenty five percent a year, any breathing space
Speaker 8: that you get, you know, a quarter of a percent
Speaker 8: doesn't sound like a number, but let's say it's you know,
Speaker 8: your credit card, your personal earned, your car, and your mortgage.
Speaker 8: It becomes hundreds, if not thousands, if not tens of
Speaker 8: thousands of rands impact in South African's back pocket. That
Speaker 8: almost instantaneously, what gets less attractive.
Speaker 3: I mean it's not there are other things that happen
Speaker 3: as well. It's not just one thing.
Speaker 8: So what happens now is you get the people sitting
Speaker 8: with cash, especially retirees. You know, retirees will will often
Speaker 8: store bit too much money. They won't be listening to
Speaker 8: their financial planners and who say, don't you know, don't
Speaker 8: don't cold cash, and they'll start complaining because they're saying, well,
Speaker 8: you know, two years ago, I was, you know, earning
Speaker 8: ten thousand round a month of interest, and it was
Speaker 8: really great. Now two years later, interest rates to be
Speaker 8: coming down, coming down. Now I'm earning eight thousand. So
Speaker 8: cash becomes an unattractive place increasingly as interest rates come down.
Speaker 8: If all the prognosticators are right and we don't get
Speaker 8: any more interest rate cuts, it's still reasonably attractive to
Speaker 8: earn interest. Now the interest rates are still quite high, actually,
Speaker 8: but it is less and less attractive. And remember you
Speaker 8: might be getting paid seven percent interest. You're giving our
Speaker 8: friends at SARS three percent of that for tax, so
Speaker 8: actually then you're earning four percent. And you know, if
Speaker 8: your cost of living is going up at six or seven,
Speaker 8: then you're going backwards. So cash is the thing you
Speaker 8: don't really want to hold in a falling interest rate environment.
Speaker 3: Are they particular types of investments that sort of lose
Speaker 3: their appeal. Are they particular things that actually, I mean,
Speaker 3: is there a particular category maybe that really suddenly don't
Speaker 3: start to make sense anymore?
Speaker 8: Money markets, fixed deposits, even rs, retail servings bonds, which
Speaker 8: I really like. You know, they will now issue new
Speaker 8: bonds into the future at a lower rate, So that category,
Speaker 8: that class of investment will perform worse.
Speaker 3: Those will also be conservative investments, right, that kind of thing.
Speaker 8: Very cautious, very conservative. And why it's impactful is it's
Speaker 8: often the antidote to the very aggressive investment. So if
Speaker 8: you're retired and you need equities because you need to,
Speaker 8: you know, protect against inflation, you hold a lot of
Speaker 8: cash and that helps you and offsets all the volatility,
Speaker 8: and now all of a sudden, your cash is not
Speaker 8: a rewarding You're you're kind of forced to take a
Speaker 8: smaller nesting an emergency fund. So it does become a problem.
Speaker 3: Actually, are there investments that become suddenly a lot more attractive?
Speaker 3: Are there some things that actually, now, really when interest
Speaker 3: rates are low, when are cut, you actually need to
Speaker 3: start investigating a little bit more seriously.
Speaker 8: So government bonds or corporate bonds typically you'll find their price.
Speaker 8: The price of a bond goes up when interest rates
Speaker 8: go down, and then the other way around, so if
Speaker 8: interest rates go up, the price goes down. So now
Speaker 8: all of a sudden, you've got an investment which generally
Speaker 8: pays a rate of interest a bond. And now you're
Speaker 8: getting capital growth as well. So that's very nice. And
Speaker 8: you know that's impactful for you and me, for example,
Speaker 8: because we might have it in our ra or we'll
Speaker 8: see it in a balanced unit trust. So now we're
Speaker 8: getting capital growth our in those funds as well. And
Speaker 8: then property companies that trade on the Stock exchange or
Speaker 8: even you know, normal properties. The property companies, their prices
Speaker 8: tend to rise a bit when interest rates go down
Speaker 8: because they all have debt. They'll call it gearing whatever,
Speaker 8: but they've borrowed money, they're buying properties, so the less
Speaker 8: they have to spend on funding interest the better for them.
Speaker 3: I mean, there's a particular property company, a real estate
Speaker 3: company that before each Monetary Policy Committee decision the day before,
Speaker 3: sends me a press release with their CEO demanding that
Speaker 3: interest rates be cut. I mean, there's a pretty self
Speaker 3: interested argument, isn't it.
Speaker 8: It is and and I think, I mean, we probably
Speaker 8: don't have time to get into why the reserve banks
Speaker 8: doing what they're doing, et cetera, why interest rates are high.
Speaker 8: But having said that, that is a self interest argument,
Speaker 8: because actually the thing that really wipes us out is
Speaker 8: the cost of living is inflation. So whatever we can
Speaker 8: do to keep inflation down and keep it under control,
Speaker 8: which actually is interest rates, I think is a good thing.
Speaker 8: And it's a known factor. So the property companies must
Speaker 8: deal with it. It's it's known, it's a no known
Speaker 8: they can do their jobs despite the interest rate.
Speaker 3: So good to hear your questions tonight for Warren Ingram,
Speaker 3: the co founder of Galileo Capital, a certified financial planner.
Speaker 3: He's actually with us in the studio double one, double
Speaker 3: A three seven two two one four four six o
Speaker 3: five six seven. I'm sure you have a thought or
Speaker 3: two about where we are with interest rates right now
Speaker 3: after that cut last week. Okay, so, Warren, so interest
Speaker 3: rates get cut. It's the it's a Friday morning sort
Speaker 3: of wake up. And I'm reminded in the EWN News bulletin,
Speaker 3: Oh yes, made this announcement yesterday. So now they're down.
Speaker 3: What are some of the things that I should do
Speaker 3: almost immediately.
Speaker 8: One of the things to check is when interest rates
Speaker 8: come down, if you've got debt, the way that banks
Speaker 8: will help you is they'll either charge you a little
Speaker 8: bit less interest, and that means that that that first
Speaker 8: new repayment will will drop a bit. So if you
Speaker 8: were paying five thousand round a month on your debt payment,
Speaker 8: are they dropping it from five thousand to four nine
Speaker 8: hundred Do they do that automatically? My sense is if
Speaker 8: that is the case and they do drop it automatically,
Speaker 8: you can actually elect to maintain the original amount, so
Speaker 8: you then pay actually a little bit more. So if
Speaker 8: you said to them, don't do that, I'm happy to
Speaker 8: pay the five thousand. No one likes to pay a debt,
Speaker 8: but I can cope with the five thousand. I'm used
Speaker 8: to it now, Please don't drop it. If you can
Speaker 8: live with that, what it means is you're paying your
Speaker 8: debt down faster, and I think a lot of people
Speaker 8: don't take advantage of that opportunity. So what they do
Speaker 8: is they then spend a bit more. They've got a
Speaker 8: bit more breathing and they've got a bit more cash
Speaker 8: in the end of the month, So I think check
Speaker 8: your debt and try and keep your repayments the same,
Speaker 8: because you'll get that debt paid much faster. If you
Speaker 8: can't do that, have a look at the interest that
Speaker 8: you're paying on all of the investors, all of the
Speaker 8: debts that you've got, and the one that's costing you
Speaker 8: the most, at least continue repaying that one, so at
Speaker 8: least you pay down the most expensive debt, the high
Speaker 8: interest rate first. That would be the very first thing
Speaker 8: I do on the first day that those interest rates
Speaker 8: are going to come down.
Speaker 3: So it's likely that you're paying, say a higher interest
Speaker 3: rate on a car, but it is a smaller and
Speaker 3: of shorter duration debt than your bond. Yeah, but if
Speaker 3: you put more money into your bond more earlier, doesn't
Speaker 3: that mean over a longer term you'll get more value
Speaker 3: for that.
Speaker 8: You're right, except that for me, the interest rate you're
Speaker 8: being charged is actually the expensive thing. So I would
Speaker 8: rather take a little bit longer to pay off the
Speaker 8: mortgage at the start, to take a bit of time there,
Speaker 8: because if you get the car paid off quickly or
Speaker 8: more quickly, that means you can take the entire car
Speaker 8: payment chuck that into the mortgage as well, and then
Speaker 8: you make a really big impact. So I think there
Speaker 8: is no investment in the world that grows as fast
Speaker 8: as your credit card debt for example. Yeah, so actually
Speaker 8: paid on the credit card debt, then paid on the car,
Speaker 8: then pad on the mortgage in that order. The trick
Speaker 8: is not to then go new car just as you've
Speaker 8: paid off the old car. That's the thing where we
Speaker 8: all get caught out.
Speaker 3: Indeed, yes, it's thirteen minutes now to eight. You with
Speaker 3: the money, show your questions for Warren Ingram. Okay, what
Speaker 3: do you do with your investments? Rate suddenly go down?
Speaker 3: Is there are there any changes or anything you need
Speaker 3: to do with actually your investments? How do you how
Speaker 3: do you sort of approach that because you're thinking slightly
Speaker 3: longer term here?
Speaker 8: Oh and I think so we've spoken about your checking
Speaker 8: your debt and restructure the debt. Next question is do
Speaker 8: you do you does the mix I'm not allowed to
Speaker 8: say the D wordymore because you always rip you off diversification.
Speaker 8: So you've got a diversified portfolio. Is it still correctly diversified?
Speaker 8: So do you still have what you should what the
Speaker 8: correct allocation to shares to bonds to property. Remember, interest
Speaker 8: rates have gone down, so now the price of bonds
Speaker 8: has gone up. That does that skew your whole portfolio,
Speaker 8: because if it does, what you might want to do
Speaker 8: is just check the balance. The other one we didn't
Speaker 8: really speak about much and is falling interest rates are
Speaker 8: great for the stock market, So you might find that
Speaker 8: your bonds have gone up and the stock market part
Speaker 8: of your portfolio has gone up. So check the balance,
Speaker 8: make sure it's correct, and then reposition because interest rates
Speaker 8: don't change a lot, so to reposition your portfolio because
Speaker 8: of that is good news. It's a good thing to do.
Speaker 3: It's also a good moment to check your emergency fund
Speaker 3: if you're getting it, if you're saving just a touch more,
Speaker 3: maybe you can put some more money into that.
Speaker 8: Either top up your emergency fund, or if you've done
Speaker 8: well and your emergency fund is a bit overfunded, it's
Speaker 8: not so rewarding anymore to have extra cash, so maybe
Speaker 8: you drop it down. So for most of us it's
Speaker 8: actually top up the emergency fund, but for some of
Speaker 8: us it could be Okay, let me take some art
Speaker 8: and actually put it into equities or shares or bonds
Speaker 8: or something.
Speaker 3: Like that or in JJ's question, I want to know
Speaker 3: if there is an easy way to work out how
Speaker 3: much money I need to retire. And I suppose if
Speaker 3: someone were to say, how much money do you need
Speaker 3: to retire? All of it.
Speaker 8: And some more, yes, I think too. I want to
Speaker 8: kind of start with just the psychology lesson quickly, because
Speaker 8: when people do the number and I'll answer the question,
Speaker 8: they might get a little depressed. And maybe the thing
Speaker 8: to understand is when you do the calculation and you
Speaker 8: still got some time to go to your retirement, the
Speaker 8: trick is can you narrow that gap from one year
Speaker 8: to the next to the next. So if the gap
Speaker 8: is wide between what you have and what you should have,
Speaker 8: are you making that gap shrink? And if you are,
Speaker 8: that's progress. So don't lose hope when I give you
Speaker 8: the way of calculating, and I think you can do
Speaker 8: a fairly simple rule of thumb, which is you take
Speaker 8: all of your expenses in a typical year. Now if
Speaker 8: your kids are if you've got kids in there at
Speaker 8: school or varsity, whatever the deal is, remember they're not
Speaker 8: going to be there, hopefully hopefully by the time you've retired.
Speaker 8: You've done that job. So you take your expenses as
Speaker 8: there are today, and you just take out the expenses
Speaker 8: that you know will disappear. Then, if you buy a
Speaker 8: car every ten years or every five years, take one fifth.
Speaker 8: If it's every five years, one fifth of the car expense.
Speaker 8: Add that to your annual expense. So you get to number.
Speaker 8: Let's just say you end up spending one hundred thousand
Speaker 8: a year of normal expenses every year. Take that and
Speaker 8: multiply it by twenty five. That gives you your retirement number.
Speaker 8: It's not perfect. It's a rule of thumb, but gee,
Speaker 8: it pretty it is pretty good. I've done that rule
Speaker 8: of thumb, and then I check it with very sophisticated
Speaker 8: calculators and modeling tools and stuff that I don't really understand,
Speaker 8: and the two end up talking a fairly similar story.
Speaker 8: So that's the answer for JJ. And as I say,
Speaker 8: a year after ear if that gap between what you
Speaker 8: have and what you need is narrowing, you're doing your job.
Speaker 3: M okay. So there is actually a way to go
Speaker 3: and do it. I mean in the way that most
Speaker 3: people can understand.
Speaker 8: I think so, and I mean I think we can.
Speaker 8: We should all know what we spend. If you don't
Speaker 8: know to JJ if you don't know what you're spending,
Speaker 8: and you don't and you want to retire, come on,
Speaker 8: you've got to do some work, which is at least
Speaker 8: understand what you spend and then to be able to
Speaker 8: multiply that to get to that number. It's not that difficult.
Speaker 8: We don't like doing it because it's a bit scary.
Speaker 8: We don't want to see what we can.
Speaker 3: Yeah, okay, So there's a lot happening around residential property
Speaker 3: and and lower interest rates, and property prices obviously are
Speaker 3: going to be affected by interest rates, and generally speaking
Speaker 3: they go up. Hence my weekly email from the real
Speaker 3: estate agent.
Speaker 8: Yeah, and I think we're actually seeing a bit of
Speaker 8: anecdotal evidence that the property market in Joeberg, for example,
Speaker 8: is picking up again. You know, it's been a one
Speaker 8: way story right now, but you know, just the Western
Speaker 8: Cape all the time and Cape dance pumping, and now
Speaker 8: we're seeing more and more news about property prices in
Speaker 8: joe Buck picking up. And I think part of the
Speaker 8: story is around interest rates. So as interest rates come down,
Speaker 8: mortgages become more affordable, and so that becomes a positive
Speaker 8: pressure to push prices up. If you were marginal about
Speaker 8: where your rent versus your mortgage. This might just put
Speaker 8: it in the situation where your mortgage now becomes affordable.
Speaker 8: The thing about property prices is they don't move like
Speaker 8: the stock exchange. They don't go instantaneously. So if you
Speaker 8: were thinking about buying and you were on the fence,
Speaker 8: don't sit for too long. You can now use this
Speaker 8: as an opportunity to get in.
Speaker 3: We're speaking to Warren Ingram to Night of Waste note
Speaker 3: coming through on seven two, seven oh two one, seven oh.
Speaker 4: Two evening's diving into even that's a quick one man.
Speaker 9: So how much more president must you pay on the
Speaker 9: bond to rechuse it from I mean on a mounta
Speaker 9: basis to digit from twenty yeahs to fifty years for instance.
Speaker 4: So how much more as you put.
Speaker 9: In on top of the normal bond to regit it
Speaker 9: by fashion over the period I listened under anything you
Speaker 9: could do?
Speaker 3: Thanks Tiker. It's a great question, and I don't know
Speaker 3: if it's possible to actually work it out. If you've
Speaker 3: got a twenty year bond and you want to now
Speaker 3: reduce it to fifteen, you want to pay it back
Speaker 3: in fifteen years, how much more as a percentage each
Speaker 3: month would you need to pay I suppose it might
Speaker 3: depend on all sorts of things.
Speaker 8: Yeah, you know, and those maths problems to we were
Speaker 8: given at school with a story sums. It sounds like
Speaker 8: one of those and I was notoriously bad at though.
Speaker 8: So I don't have a good answer. I mean, I
Speaker 8: think you can probably do a calculation.
Speaker 4: Just go online.
Speaker 8: There's lots of these bond calculators and it'll tell you so.
Speaker 8: So a short answer to say, I don't know, but
Speaker 8: I do think you know, this kind of a drop,
Speaker 8: a quarter percent drop is not going to give you
Speaker 8: five years shorter on your bond. So if you continue
Speaker 8: to maintain your payments, it's going to take I don't know,
Speaker 8: six or nine months off, but it's not going to
Speaker 8: be five years.
Speaker 3: Yeah, TK, it's still worth doing. I've got to tell you.
Speaker 3: I think in the longer run it is still worth doing. Okay,
Speaker 3: So when interest rates go down, we start to see
Speaker 3: more people coming into the market, But do you also
Speaker 3: need to sort of factor that into your longer term plan.
Speaker 3: You can't just rush out and buy property now.
Speaker 8: Please don't do that. So you don't buy based on
Speaker 8: an interstrate cut Number one, interest rates could go up again.
Speaker 8: You know, if these tariffs just have a dramatic impact
Speaker 8: on our country and inflation goes through the roof, it
Speaker 8: might force the Reserve Bank to push rates up. I
Speaker 8: mean it's you know, we don't know what we don't know,
Speaker 8: so you don't buy based on that. The people that
Speaker 8: would look at this as an opportunity would be people
Speaker 8: that are renting and are seriously considering buying anyway, and
Speaker 8: this becomes the tipping point. But equally maybe that people
Speaker 8: who are in the property market now, who own a
Speaker 8: property and we're wondering what would push prices up. This
Speaker 8: is a piece of good news for you because this
Speaker 8: is going to push prices up across all sectors right
Speaker 8: across the country, not just in one area. So it
Speaker 8: is a very positive trend. But it's not the only one.
Speaker 8: We've had a few cuts already, so there is a
Speaker 8: point where it picks up that snowball.
Speaker 3: I mean, I suppose what people really want to try
Speaker 3: and do is to make the most out of any
Speaker 3: cup that they get, and it can actually be quite
Speaker 3: hard to know where to start. It might also help
Speaker 3: to know before there's a decision what you're actually planning
Speaker 3: to do to have a sort of a strategy.
Speaker 8: Yeah, I mean, please have a game plan for your money.
Speaker 8: And I think if you're sitting with a debt issue,
Speaker 8: doing that homework to say what costs me the most,
Speaker 8: that would be step one. Or if you're not in
Speaker 8: that position and you're looking at property, you know, do
Speaker 8: the calculation to say, can I afford the property today?
Speaker 8: Can I cover months and months of bondary payments? You
Speaker 8: know what happens if the geezer bursts, and what happens
Speaker 8: if I need to pint. If you can deal with
Speaker 8: all of those things, then this might just be the
Speaker 8: last thing that helps you just get on the line.
Speaker 8: But we don't make huge news. We shouldn't a bit
Speaker 8: because of a quarter percent inter straight cut. It's just
Speaker 8: another piece of good news.
Speaker 3: That was Warren Ingram bringing down the implications, breaking down
Speaker 3: the implications, I should say of the Reserve Bank's interest
Speaker 3: rate cut.
Speaker 2: Seven The Best of the Money Show from this week.
Speaker 3: This week our business book review Ian Man, the managing
Speaker 3: director of Gateways Business Consultants. He discussed conquering crisis. My
Speaker 3: Admiral William H mcgraven's a wonderful name. Mcgraven has extensive
Speaker 3: military experience, ian impact, some powerful leadership lessons on resilience,
Speaker 3: strategic thinking, and navigating disruption.
Speaker 10: One of the things about it is he's come up
Speaker 10: with a set of principles about, well, how did how
Speaker 10: to conquer a crisis situation. It's not as much to
Speaker 10: prevent it as how you deal with it once it's happening. Yeah,
Speaker 10: And the book says this is book you should read
Speaker 10: before you need to Yes. And I cannot emphasize that enough.
Speaker 10: Just to put in mc in context, he was a
Speaker 10: retired four star general. He led the US Navy Seals
Speaker 10: and that's the toughest people in the group, and was
Speaker 10: involved in in special operations literally for America around the world.
Speaker 10: He was the fellow who went after Bin Laden. He
Speaker 10: is the one's who's not personally but organized the taking
Speaker 10: out to Saddam Mussein. He also land up afterwards being
Speaker 10: the chancellor of the University of Texas. So he has both.
Speaker 3: Expressed something very appropriate appropriate there.
Speaker 10: But the key about him is that he's given he's
Speaker 10: got a set of ten principles that you've gotten that
Speaker 10: you really should be aware of whenever you're faced with
Speaker 10: the crisis. Now, the crisis can be on a level.
Speaker 10: They can obviously be a political crisis, but they can
Speaker 10: be a family crisis or a business crisis. And a
Speaker 10: couple of the couple of rules that he has now,
Speaker 10: I'll share just a couple with you. The first thing
Speaker 10: is he says that the first reports are always wrong.
Speaker 3: Yeah, what a great way to start, actually, because that's
Speaker 3: so often the case.
Speaker 10: And what it tends to happen is that when you
Speaker 10: start and say first reports are almost always going to
Speaker 10: be wrong, be skeptical, skeptical about what's really happening with
Speaker 10: the timing of the fact, what's really going on there,
Speaker 10: And you really need to be cautious about making any
Speaker 10: declarative statements before you've had a chance to say, I
Speaker 10: need to investigate what this is so you don't put
Speaker 10: your foot into it and cause a lot of trouble.
Speaker 10: And people don't do that, and I think that that
Speaker 10: gets things to spin out of control unnecessarily. Another issue
Speaker 10: he talks about is having a council of colonels. The
Speaker 10: Council of Colonels obviously military to their talk colonels, but
Speaker 10: I would imagine they have a council of people that
Speaker 10: you can trust in your organization. So whenever something comes up,
Speaker 10: it's very important that it's not only your opinion, but
Speaker 10: you actually have your counsel of people that you really trust,
Speaker 10: not necessarily at your level, above your level, below your level,
Speaker 10: that you can call into a room, actually a real
Speaker 10: face to face conversation. The other point there, I love
Speaker 10: I raise it very very nicely.
Speaker 2: He says.
Speaker 10: Bad news doesn't get better with time, and it's there's
Speaker 10: a strong tendency to to feel that you should cover
Speaker 10: up bad news for as long as you possibly can.
Speaker 10: And one he everything he talks about he has all
Speaker 10: based on experiences he's personally had in the military. There
Speaker 10: was a time when when they were they were a
Speaker 10: man came out of it, out of a he's in Afghanistan,
Speaker 10: trying to protect the people there, take out the bad guys,
Speaker 10: and and a man comes out of the area that
Speaker 10: they were worried about with the with the with a
Speaker 10: weapon and he's aiming at everybody, and they take him out.
Speaker 10: Turns out that he's the cousin of the president. Unlucky,
Speaker 10: and this is he said, this is the catastrophe he
Speaker 10: found up Betreus, who was running it at the time.
Speaker 10: Petressal quite friendly with the president, trying to develop a
Speaker 10: relationship with them.
Speaker 4: He says he was.
Speaker 10: He was very but this is this wasn't just a
Speaker 10: man being killed. This is the this is the president's nephew.
Speaker 10: And and because of that, he instead of trying to
Speaker 10: dull it down, he found him at half boss three
Speaker 10: in the morning, took him out of going him out
Speaker 10: of bed and told him what was happening. He got
Speaker 10: yelled at. They eventually solved the problem together, but he
Speaker 10: said he worked brilliantly through Petress after because petre said,
Speaker 10: I know I can trust you because you'll never lie
Speaker 10: to me and you'll never withhold any information. And I
Speaker 10: think that that's absolutely critical. Another thing that another instant
Speaker 10: they had in Afghanistan was they were tracking groups of
Speaker 10: people and they had you're tracking them with all sorts
Speaker 10: of really fancy stuff, but you lose you lose contact
Speaker 10: because the mountains. Because they got these guys and they
Speaker 10: really looked like a bunch of terrorists. Once they were
Speaker 10: absolutely pretty sure that they were terrorists, they did take
Speaker 10: them out. Now, the problem with them, whether they were
Speaker 10: terrorists or farmers is what they had to track, and
Speaker 10: they tracked them for hours. They've got incredible surveillance abilities.
Speaker 10: And the newspapers came out and said they that they
Speaker 10: bombed and killed a group of all they were were
Speaker 10: farmer and the reporters who were most vicious. The very
Speaker 10: next day, he invited them to come to the Jersey
Speaker 10: where they do the work and the analysis. He showed
Speaker 10: them exactly what they do. He showed them how they work,
Speaker 10: how they come to decisions, how they analyze, how long
Speaker 10: they track and before they make a decision. He said,
Speaker 10: by inviting them in to see what was actually happening,
Speaker 10: and he weaponized the truth. And by weaponizing the truth,
Speaker 10: he said the article in the newspaper, one of them stopped,
Speaker 10: stop vilifying without and the other one moved himself quite
Speaker 10: a lot.
Speaker 3: Just before we go any further, in the States, there's
Speaker 3: this idea where people who work in the military and
Speaker 3: military high ranking military offices must always be right. We
Speaker 3: don't have that here. A very different view. Does that
Speaker 3: sort of come across. He's used to clearly being obeyed
Speaker 3: and used to being seen as always right.
Speaker 10: That I think that could happen. But I think that
Speaker 10: what probably has happened. There's so many people that that
Speaker 10: there's of all people, you need to come across the
Speaker 10: one that you think is right just. And I think
Speaker 10: that when when he looks like a man of good values,
Speaker 10: but he also seems a man who's quite used to
Speaker 10: being one. One last thing and I'll show this you.
Speaker 10: He says that there's always time for more, for a
Speaker 10: morale check. He was at the University of Texas. He
Speaker 10: bought a huge piece of land on behalf of the
Speaker 10: University of Texas to do a development and went south.
Speaker 10: It was a complete mess and was waste of money
Speaker 10: and waste of time. And he's the press. He has
Speaker 10: to go before the he's the chancellors and everybody else
Speaker 10: in the chress press really takes him out. And he's
Speaker 10: sitting in his office and a man comes to his
Speaker 10: secretary and says, I'd like to speak to mccraven and
Speaker 10: I don't think now that's the right time. And he
Speaker 10: just shouts out. He shouts at moral check, and and
Speaker 10: he he said he knew what moral check.
Speaker 2: Moral check was.
Speaker 10: He said, in the army, when something gets beat up,
Speaker 10: always villified wherever it is, you go to them and
Speaker 10: you do a moral check. Moral check is to see
Speaker 10: that he's going that's okay. And so this man came
Speaker 10: in there said, you know, boy, you've you've caused so
Speaker 10: much trouble enough against and I always wonder how come
Speaker 10: you always get these top positions. Here go I missed
Speaker 10: the beginning, and they laughed together, and after by the
Speaker 10: time it was all over the discussions he was he
Speaker 10: said he was really glad that this man had told
Speaker 10: him and come there to support him. I think it's
Speaker 10: terribly important, and people are in those situations with it's
Speaker 10: your staff for other people, you know, seated that you
Speaker 10: have a moral check.
Speaker 3: That was Ian Man A compelling look into the book
Speaker 3: Conquering Crisis and the leadership wisdom of Admiral William H mcgraven.
Speaker 10: Seven.
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