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Speaker 1: And that is why Brian is here. Welcome Brian, it's

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Speaker 1: good to have you.

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Speaker 2: Thanks for having me ed.

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Speaker 1: It's Brian Dosh Guide primarily based in South Africa. I

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Speaker 1: see you have some Dash diaries, there's a podcast out there,

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Speaker 1: and you're looking to demystify finance for younger generations.

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Speaker 2: Yeah.

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Speaker 3: So doash Guide is a network of financial planners across

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Speaker 3: South Africa and we serve the families that we serve

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Speaker 3: virtually online, so we can deal with anyone wherever they

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Speaker 3: might be. And so what we're trying to understand is

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Speaker 3: what the needs of younger professionals are and then to

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Speaker 3: be able to help them make really good decisions now

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Speaker 3: to set them up for twenty thirty forty years time,

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Speaker 3: so they don't wake up maybe at fifty five sixty

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Speaker 3: and say I've got to stop working at some point,

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Speaker 3: what do I do about it? But rather to put

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Speaker 3: some good habits in place from your twenties early thirties

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Speaker 3: to make sure that you set up for the future.

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Speaker 1: For sure, you are known for a no nonsense approach.

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Speaker 1: You're moving away from the traditional model of selling products

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Speaker 1: for the for their commission. I I how just how commonplace,

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Speaker 1: how widespread. Is the latter selling for commission.

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Speaker 2: Yeah, definitely, it's it's very widespread. You know.

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Speaker 3: Unfortunately financial services, you know, if you, if you, if

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Speaker 3: you're focusing on financial advisors, the reputation that we have

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Speaker 3: is not stellar and it's because of I think the

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Speaker 3: misalignment of incentives. So what happens is financial advisors for

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Speaker 3: the most part get paid through either gathering your investments

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Speaker 3: and putting a percentage on it or selling a product,

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Speaker 3: an insurance product and getting a commission on it. So

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Speaker 3: that seems to have you know, worked for many advisors.

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Speaker 3: I don't know how many consumers that's worked for in

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Speaker 3: the past. And so with the way we run the

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Speaker 3: business is to say we get paid a flat fee

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Speaker 3: for providing financial advice. So it's a subscription based advice

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Speaker 3: service and you get certified financial planners who you can

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Speaker 3: pay monthly on an ongoing basis to just be there

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Speaker 3: for you in your corner and to help make decisions.

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Speaker 3: And so where this comes into the younger professionals, maybe

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Speaker 3: if I give you an example, maybe someone's listening now

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Speaker 3: who has either they are in this situation or they

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Speaker 3: have a child in this situation. You get someone who's

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Speaker 3: finished university. Maybe they're going to become a CAA and

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Speaker 3: they are going to do articles, and they're doing articles

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Speaker 3: at an order firm. Now they start getting paid a salary,

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Speaker 3: and now you think, what am I supposed to do

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Speaker 3: with this salary? So you go speak to an advisor,

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Speaker 3: and often what happens is because you don't have that

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Speaker 3: much money yet and that much in investments, the advisor

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Speaker 3: can't earn too much from you.

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Speaker 2: So what they do is.

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Speaker 3: It's common practice to flog inferior products to young people,

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Speaker 3: inferior products that have tons of commissions, and so your

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Speaker 3: money doesn't grow for many years because you're paying commissions

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Speaker 3: firstly to everyone else, and so that hurts you twenty

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Speaker 3: thirty years down the line when you realize this and

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Speaker 3: you have this realization of oh my gosh, I've been

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Speaker 3: funding directors of a financial services firm, but not myself.

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Speaker 3: And so what we've done is we've said, you need

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Speaker 3: low cost efficient products that just do the job for you.

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Speaker 3: You can you can get that, and you can pay

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Speaker 3: a monthly subscription fee to a financial planning firm and

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Speaker 3: to be able to get that service. So it deconflicts

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Speaker 3: the relationship as far as possible.

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Speaker 1: I want to understand that that young mind, I think

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Speaker 1: that'd be less inclined maybe to consider a death a

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Speaker 1: death policy or retirement policy. Would their goals be more

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Speaker 1: kind of shorter than maybe what they were long time ago.

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Speaker 3: Yeah, definitely, I think you know, and I'll agree with you.

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Speaker 3: I mean, if you're twenty twenty five, you bulletproof, so

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Speaker 3: you're not going to worry about you know, what happens

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Speaker 3: if I pass away, and you might not need to

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Speaker 3: worry about that, to be honest. What you might need

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Speaker 3: to worry about, though, is to protect your ability to

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Speaker 3: earn an income. So you can imagine, if you're twenty

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Speaker 3: five and God forbid, something terrible happens and you're in

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Speaker 3: a car accident or something and you can't really earn

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Speaker 3: an income anymore, you're going to be reliant on your parents,

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Speaker 3: on family and friends a state for the rest of

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Speaker 3: your life. So at that point in time, it's very

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Speaker 3: affordable to say, protect my income for the rest of

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Speaker 3: my working life, so you can protect what you have

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Speaker 3: already before you're trying to create something which you don't

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Speaker 3: have yet, which is additional wealth. So protect what you

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Speaker 3: have build a motor around it, and so that is

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Speaker 3: firstly protecting your ability to earn an income. And then

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Speaker 3: also in South Africa, I think you would agree get

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Speaker 3: a medical aid or get a hospital plan or something

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Speaker 3: like that. You don't want to rely on the state

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Speaker 3: for your health. You want to rely on a private

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Speaker 3: medical aid type of facility, and you can get that

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Speaker 3: quite at a quite affordable rate because once again you're

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Speaker 3: going to be able to prove they're probably going to

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Speaker 3: have too many ongoing health problems. And so you can

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Speaker 3: kind of think to yourself, fine, if I've got those

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Speaker 3: two things in place, I'm already doing a lot that

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Speaker 3: is right. Because the problem is you get that later

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Speaker 3: in life, you get punished for being older and being

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Speaker 3: in a higher risk category. But if you get earlier

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Speaker 3: in life, you will benefit from a lower premium pretty

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Speaker 3: much for the rest of your life. The sooner you

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Speaker 3: get it, the more you save. And the last thing

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Speaker 3: is you mentioned AI and disruption. Yes, I think in

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Speaker 3: South Africa the last time I checked, if you were a.

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Speaker 2: Corporate employee of your career, you will be.

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Speaker 3: Retrained something like two points something at times in your career,

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Speaker 3: so you will be displaced out of the workplace at

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Speaker 3: some point, So just build up savings that you can

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Speaker 3: fall back on if that does, unfortunately happen.

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Speaker 1: Are we thinking the paradigm remains the salary and the

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Speaker 1: reality is maybe a little different in the future, Maybe

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Speaker 1: that gig economy means money coming in not on that

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Speaker 1: kind of fixed basis a whole lot of stuff to

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Speaker 1: think through, and is the marketplace prepared for that kind

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Speaker 1: of unfolding reality?

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Speaker 2: Yeah, I think so.

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Speaker 3: I mean, to be honest, you need to be prepared

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Speaker 3: for the reality, not the marketplace, because you know, if

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Speaker 3: we adapt all the time to the working environment, if

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Speaker 3: we say I'm going to earn a salary for three

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Speaker 3: years and then before you know it, you see a

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Speaker 3: gap in the market, you go and employ yourself, and

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Speaker 3: you go and become an entrepreneur and jump on that.

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Speaker 3: You've got to just be Your finances have to be

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Speaker 3: robust enough to deal with that. And I think in

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Speaker 3: the world today, it's a lot easier to identify an

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Speaker 3: opportunity and pounce on an opportunity from an entrepreneurial perspective.

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Speaker 3: And I mean that because you can run a good

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Speaker 3: business from your cell phone, you can run it from

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Speaker 3: a laptop, whereas in the past you needed to have

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Speaker 3: a factory and a bajillion people working for you. So

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Speaker 3: now if you have to be flexible, and I think

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Speaker 3: the word today is pivot. If you need to be

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Speaker 3: able to pivot, then you need money to do that.

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Speaker 3: Often you need a cushion, a safety kind of mattress

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Speaker 3: or safety net, and so that's going to be money.

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Speaker 3: It's going to be kept aside in a very safe

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Speaker 3: kind of a bank account. You're going to try and

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Speaker 3: keep money there aside to provide you with what we

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Speaker 3: refer to as runway. So if you say you know what,

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Speaker 3: I'm going to take a leap of faith. I believe

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Speaker 3: this opportunity I've thought of was great. I've spoken a

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Speaker 3: few people. I can now go and take advantage of this,

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Speaker 3: exploit this in the market and make some money. But

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Speaker 3: for the first three U five six months I know

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Speaker 3: won't make a sale. You can't then spend the next

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Speaker 3: ten years building up that five six months worth of runway.

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Speaker 3: So you probably in this world today you need to

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Speaker 3: start doing that from a young age already because you

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Speaker 3: might just have to pivot quickly and then you need

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Speaker 3: that kind of runway available to fund your whatever.

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Speaker 2: The great idea is.

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Speaker 1: Absolutely gen zs are maybe known as the side hustle generation. Again,

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Speaker 1: how should a first time earn a handle? What taxes?

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Speaker 2: Says?

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Speaker 1: And gosh if I have both a salary and a

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Speaker 1: freelance gig.

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Speaker 3: Yeah, So the first thing is, whenever you start earning money,

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Speaker 3: there's like an acronym I want to I want people

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Speaker 3: to remember that is SBS and SBS stands for save

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Speaker 3: bills and then spending. So when you start earning, think

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Speaker 3: of what you need to put aside now to for example,

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Speaker 3: fund that side hustle, to fund that period where maybe

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Speaker 3: your employer let's go of a few people, or when

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Speaker 3: you jump, you jump onto some sort of an opportunity,

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Speaker 3: entrepreneurial opportunity.

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Speaker 2: So you need to save.

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Speaker 3: So you can start thinking of ten to fifteen percent

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Speaker 3: of your income you just put away in the beginning.

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Speaker 3: So even if you're earning ten to fifteen thousand a month,

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Speaker 3: put one one and a half thousand away, So that's saving.

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Speaker 3: The bills are important, So your first paycheck, I think,

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Speaker 3: you know, if you're living with mom and dad, take

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Speaker 3: some of the money and pay them a rent. And

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Speaker 3: you know, even if they don't necessarily need it. You're

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Speaker 3: going have to get used to doing that because it

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Speaker 3: just costs a lot of money to live, especially in

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Speaker 3: CAPE time.

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Speaker 2: So get used to paying rent.

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Speaker 3: Your fixed bills, and then also those insurances I spoke about,

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Speaker 3: and your medical aids, and then what is left you

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Speaker 3: you can spend so you can spend on.

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Speaker 2: The fun things.

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Speaker 3: Now that's not going to maybe make you tons of

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Speaker 3: money right now, because you might say, well mustafall. But

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Speaker 3: what you've done is you've implemented a system. You've implemented

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Speaker 3: good habits, and you've automated some things like debit orders

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Speaker 3: that go towards savings or whatever. Now as your salary grows,

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Speaker 3: those habits will remain in place, so fundamentally that ten

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Speaker 3: to fifteen percent might always go to savings, the rest

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Speaker 3: might always go to fixed costs, and then whatever's left,

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Speaker 3: the fat on top, that can be used to have

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Speaker 3: to have a nice life and to have fun.

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Speaker 1: So I think it's very clever, just this tendency for

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Speaker 1: gen zs, especially to live at home, to stay with

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Speaker 1: mom till they forty.

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Speaker 2: Yeah, it's clever.

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Speaker 3: I don't know how clever it is always for mom

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Speaker 3: and dad to allow that, but at the same time.

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Speaker 1: I wanted to be out. I moved out officially on

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Speaker 1: my twenty first birthday. I wanted that independent, but I

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Speaker 1: guess I could afford it back then. These days they can't.

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Speaker 2: It also depends where you want to live.

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Speaker 3: You know, if you, for example, if your parents, you'd

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Speaker 3: be very blessed and you have a nice home and neighborhood,

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Speaker 3: you might have to downscale quite a bit, you know.

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Speaker 2: When you move out.

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Speaker 3: And I think a lot of people these these days

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Speaker 3: might be a bit unwilling to compromise. But I tend

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Speaker 3: to find that it's the resistance or the struggle that

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Speaker 3: kind of helps you understand where the strength is. So

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Speaker 3: at the end of the day, you know, you get

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Speaker 3: used to the fact that you're going to pay for lodgings.

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Speaker 3: You don't have to live in the nicest place immediately.

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Speaker 3: There's often also the peer pressure that comes with you know,

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Speaker 3: you earn, you must now appear to be successful. Unfortunately,

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Speaker 3: that's you know, I've been around long enough now to

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Speaker 3: know that that counts for nothing in life. And the

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Speaker 3: people that we serve, a lot of people are either

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Speaker 3: business owners or they are employed, but they're in senior

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Speaker 3: positions in the corporate space, and they're not earning money

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Speaker 3: like you would think, like thirty forty million round a

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Speaker 3: year and they can just live these massive lives and

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Speaker 3: retire at fifty. But many of them are on track

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Speaker 3: to retire at fifty and they're employed because they got

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Speaker 3: into these habits from early on of saying I we'll

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Speaker 3: pay this amount for this and no more. I don't

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Speaker 3: need to brag, I don't need to show off. I

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Speaker 3: don't need to have a flex of a car. The

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Speaker 3: biggest flex in life is being at the age fifty

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Speaker 3: and just you working because you just want to.

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Speaker 1: Okay, So you interacting with gen zs and millennials on

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Speaker 1: a daily basis. My guest Brian nicol Of Certified Financial

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Speaker 1: Planning Planner, Certified Financial plan for dash Guide, and they

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Speaker 1: target young minds. Are young people perceiving maybe the arguments

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Speaker 1: that you are making, or are they pursuing the world

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Speaker 1: differently to you? What are they talking about? What's first?

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Speaker 1: You know? What comes to mind? What are they what

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Speaker 1: are they seeking in life?

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Speaker 3: Well, these days I found the younger professionals coming up

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Speaker 3: to be far more aware of the problems of poor

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Speaker 3: financial management than maybe ten years ago. So what we

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Speaker 3: tend to find is when we start working with the

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Speaker 3: families that we serve, we try to understand what the

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Speaker 3: real problem is.

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Speaker 2: Now.

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Speaker 3: What I mean by that is you can go to

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Speaker 3: a financial advisor. I mean, no one really wakes up

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Speaker 3: thinking they need to speak to a financial advisor, but

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Speaker 3: something might come up like oh I need to invest

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Speaker 3: offshore or I need this policy in place. But now

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Speaker 3: what we do is ask a few questions, why is

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Speaker 3: that the case? What is the real reason? You know,

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Speaker 3: what made you wake up and decide to see me today?

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Speaker 3: And then what we come to find is that generally speaking,

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Speaker 3: a lot of a lot of young professionals are actually

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Speaker 3: a bit concerned about ending up in a position where

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Speaker 3: they will be like their parents was. They can see

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Speaker 3: that their parents have overextended themselves. They've been living on

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Speaker 3: credit their whole lives, and so now they're learning from

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Speaker 3: that generation and saying, I don't want to be there

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Speaker 3: because I think I might have to help my parents

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Speaker 3: out and I don't want to do that to children

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Speaker 3: that I don't even have yet. And so there's this

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Speaker 3: kind of awakening that's happening. And also because I think

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Speaker 3: the access to media. There's a lot of finance podcasts,

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Speaker 3: both locally and abroad, podcast books and so on. It's

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Speaker 3: much more accessible now and the eyes have been opened

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Speaker 3: quite a lot to what the realities are of mismanagement

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Speaker 3: of your finances.

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Speaker 1: It's nearly ten twenty five chatting to Brian nicol Are.

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Speaker 1: We're talking money sense, getting a sense then of the

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Speaker 1: minds of youngest South Africans, also getting a sense of

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Speaker 1: what is the wise way to spend their income. So

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Speaker 1: it is that first check it is. Yeah, let me

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Speaker 1: just remind you if you have a question or if

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Speaker 1: you want to bring an alternative argument, you welcome via

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Speaker 1: WhatsApp on O seven two five six seven one five

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Speaker 1: six seven. You can call any time on O two

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Speaker 1: one four four six five six seven. I know what

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Speaker 1: I did with my first check I bought a beetle.

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Speaker 1: I bought a beetle with big, big back wheels, and

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Speaker 1: it looked cool. It was a rare beetle. I loved it.

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Speaker 1: I absolutely love it. What would you say is the

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Speaker 1: important considerations around that first.

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Speaker 2: Check in in real terms? Yeah?

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Speaker 1: Is it my beetle? The independence.

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Speaker 3: It might be, It might be if you have if

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Speaker 3: you can afford it. But what I would say is

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Speaker 3: if you and looky, there's many jobs where you need

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Speaker 3: to be able to afford transportation or whatever the case

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Speaker 3: may be. I would just say, because you can afford

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Speaker 3: afford an installment on a car, doesn't mean you should

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Speaker 3: have an installment on a car. So if you can,

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Speaker 3: for example, like you said earlier on living with parents,

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Speaker 3: for example, so you say you're living with parents, if

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Speaker 3: you can bum a ride for a while and save

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Speaker 3: up to buy a car or at least pay off

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Speaker 3: a big chunk of it, because the interest rates on

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Speaker 3: a car are not nice. It's like double digits, and

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Speaker 3: you don't necessarily want to be paying that what I

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Speaker 3: see the first paycheck, though, yes it is. It is

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Speaker 3: the beginning of maybe a journey towards independence. But converse,

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Speaker 3: if I kind of contrast that with what you mentioned

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Speaker 3: now maybe buying a car, maybe not a beetle now,

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Speaker 3: but maybe something else that's a bit more modern than that.

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Speaker 3: It was a cast cheapy, just okay, cool, that's well,

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Speaker 3: that's fine, that's very long. Then what you're going to

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Speaker 3: have is you're not going to be independent. You're going

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Speaker 3: to be relying on a bank then, so you're just

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Speaker 3: shifting from your folks to a bank. Folks are better

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Speaker 3: banks than a bank. They don't remove things from your

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Speaker 3: necessary So at the end of the day, if you

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Speaker 3: if you want real independence, it's taking full ownership of

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Speaker 3: something and it's not paying it off over twenty years.

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Speaker 3: So at the end of the day, I would say,

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Speaker 3: buy what you need to to be able to earn

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Speaker 3: your income, but keep it within within means. You still

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Speaker 3: need to have a nice life. You still need to

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Speaker 3: go with the friends to the music festival on the weekend.

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Speaker 3: You don't want to sit at home now and think

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Speaker 3: all my money is invested or paying for policies.

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Speaker 2: But here I am, and I'm really really sad.

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Speaker 1: They easy need to establish a credit record as well.

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Speaker 3: I guess that could serve you well, Yes, a credit

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Speaker 3: record can be important. What I would do, though, and

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Speaker 3: this is a tip, is to when you get paid,

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Speaker 3: put a lot of the money that you receive onto

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Speaker 3: your credit card that you know you're going to use

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Speaker 3: every month for growth reason that don't buy things like

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Speaker 3: eating out with your friends or the car installments on

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Speaker 3: a credit card, but use the credit card as a

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Speaker 3: way for cheaper purchases, because with the debit card, whenever

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Speaker 3: you tap or swipe is often you will see like

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Speaker 3: a five or six round fee that goes off. With

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Speaker 3: a credit card, it's often not the case. It's free.

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Speaker 3: So you do pay per month for a credit card,

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Speaker 3: but then over time you accomplishing two things. You're getting

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Speaker 3: cheap transactions are.

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Speaker 1: Serious or debit cards transactually more expensive.

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Speaker 2: To use generally speaking.

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Speaker 3: Yes, and also money that is in a credit card

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Speaker 3: is often ensured, whereas a debit card is not. So

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Speaker 3: if someone hacks into that account and steals that money

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Speaker 3: within the.

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Speaker 2: Credit card, there is recourse here.

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Speaker 1: Okay, so get yourself a credit card then would be

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Speaker 1: an important thing.

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Speaker 3: But then keep the amount of credit you have access

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Speaker 3: to super low. And you can do that. The banks

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Speaker 3: might on the phone, they might push back to tell

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Speaker 3: them that you know the phone calls being recorded, and

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Speaker 3: you're given an instruction, and then that normally gets their backup,

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Speaker 3: and just tell them, look, I want the minimum credit.

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Speaker 2: So if they say far thousand round, then it's five

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Speaker 2: thousand round. Then they're not there.

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Speaker 3: We might offer you seventy five thousand round, but don't

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Speaker 3: take it, but rather use it as your quick tap

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Speaker 3: or swipe to pay for the things you know you

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Speaker 3: will pay for, you know, at the at the store,

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Speaker 3: to buy your groceries every month, and.

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Speaker 1: Then SA save money for those short term goals maybe

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Speaker 1: the car. And you're saying if it's not if you're

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Speaker 1: unable to buy it cash a big portion of the cost. Yeah,

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Speaker 1: if you can cover that with cash and the balance

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Speaker 1: with credit, that is clever.

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Speaker 2: Yeah, rather do that because the less.

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Speaker 1: What percentage of cost would you suggest, Oh.

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Speaker 3: If you can get up to like fifty percent, that'll

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Speaker 3: be awesome. Once again, if your buddy down the road

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Speaker 3: is driving a brand new this or that, that's just

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Speaker 3: what your body is driving. You don't know what pain

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Speaker 3: they're going through to pay for that every month. To

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Speaker 3: look cool, I would say say, you know, get to

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Speaker 3: welcome back, have that car to do that, but otherwise

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Speaker 3: pay off as much as possible, as soon as possible,

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Speaker 3: because you don't want that to hamstring you. You don't

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Speaker 3: you know, whatever you paid off, that you can start

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Speaker 3: putting away to something else, building that runway for that

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Speaker 3: future venture, or that safety in netting anything goes wrong

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Speaker 3: at work.

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Speaker 1: They given in terms of race show just some of

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Speaker 1: the research that I touched on last night in terms

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Speaker 1: of ratio of spend fifty percent needs, thirty percent once

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Speaker 1: twenty percent savings debt. You happy with those ratios?

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Speaker 3: Yeah, I think starting out like the rules of thumb

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Speaker 3: that you kind of see out there, it's often fifteen

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Speaker 3: percent you put towards savings, and savings is a broad

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Speaker 3: term that can be investing in like retirement annuities, tax

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Speaker 3: free accounts or whatever. And then also that emergency fund.

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Speaker 3: And then yeah, fixed costs is however much fixed costs are,

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Speaker 3: which are your groceries, your insurance policies and such. And

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Speaker 3: then the balance of that, whatever that balance is, is

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Speaker 3: what you can kind of spend and not worry. So

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Speaker 3: you've you've got to manage two things and you can

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Speaker 3: do it. You can enjoy life now while you're building

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Speaker 3: your future as well. You just need to apply those

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Speaker 3: that system.

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Speaker 1: Brian Nichols, thank you. We're gonna have to wrap it

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Speaker 1: up there and go to news. Founder of Freedom and

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Speaker 1: Financial Planning, known for a no nonsense approach moving away

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Speaker 1: from that traditional model of selling products