Azola Zuma: To attain financial independence start investing in the stock exchange
Azola Zuma is the CEO Sanlam Investment Management. She started her career at Alexander Forbes as an asset consultant and later joined Vunani Fund Managers as executive director and head of business development. She is also the executive for Women In Focus at ABSIP. She holds a Bachelor of Business Science (Finance Honours), an MA (International Business) and an MBA (International Business & Management). She is an International Women’s Forum Fellow, based in Washington. In this interview she talks about her money habits and shares advice on what women can do to grow their wealth.
In this economic climate, have you downsized your lifestyle at all?
I absolutely had to. My
husband and I have just committed to a new bond post getting married in
2016. There is definitively more eating at home rather than out. And
more emphasis on keeping fit so as to be able to
handle the hard work we have to put in to generate more money so we can
invest.
How did your childhood influence your attitude towards money?
I
was partially raised by my grandmother and she taught me a principle of
self-sustenance from a very young age. She would receive money from my
mom for us but because she
had so many grand
kids under her roof she needed to ensure she got the best out of every
rand at her disposal. So we had a full on garden with all kinds of
vegetables and fruit trees. She also bred chickens and pigs. So money
was spent on seeds and feed for the animals and we went to the shops to
get the groceries she couldn’t provide herself. This taught me a
lifelong lesson to be able to budget and see how
best to stretch every rand I’ve got. At the age of eight I won a packet
of Cadbury Chocolate Eclairs from a competition I had entered. Instead
of eating the sweets and sharing them with my siblings and cousins, I
started a business where I sold my sweets at
school. This made a handsome profit. My grandmother also sold fatkoeks
through her young band of entrepreneurs, her grand kids. We sold them at school and
that’s where the entrepreneurial spirit in me was cultivated.
What are you doing to remain positive about your financial well-being during these tough times?
To remain positive, I have invested in a long-term asset property (whose growth over the
long term is in the double digits) and I am also invested in the
stock market so even though the real economy is struggling, my
investments are working for me. So the moral of the story
is diversify, diversify, diversify when it comes to financial well-being.
Out of all your responsibilities (bills, groceries, etc) , what do you find to be the most expensive nowadays?
Electricity!
And obviously rates and taxes for the property. Food inflation on the
back of the 2016 drought shot through the roof but food prices have
since stabilised but
still quite expensive. I am actually contemplating starting a garden
patch in my yard but with my schedule that is going to remain a
pipedream for the time being.
Do you and your husband share equal responsibility when it comes to your household finances?
Yes
indeed. Ours is a marriage of equals and so everything is done on a
50/50 basis although my husband has an added responsibility of ensuring
that I have petrol in my car
and that it is clean. I also do not take out the garbage.
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I grew up poor. I went through my entire junior degree years at university broke. I had to cope by working whilst I studied just to get through each month. I was funded by what used to be called TEFSA, now known as NSFAS and they paid for my tuition. I had to photostat some parts of my study books and I had to rely on borrowing books from friends for the rest of it. My mom could only send me the little money she had to borrow from loan sharks in order to assist me. Those were really tough times. But alas I had to do what I had to do to get through it and I haven’t been broke since my first job. Why? Because I live within my means – always have, always will.
If you have the choice between buying a home or investing in shares, which would you choose and why?
What’s the worst money mistake you’ve ever made, if you’ve made any? What did you learn from it?
How do you define financial independence?
My primary definition of financial independence is being debt free. Debt to me is like a swearword. I avoid debt like a plague
and only get myself into unavoidable debt like a mortgage or loans for
education and car loans. Everything else, if I cannot afford it then I
save up for it until I can afford to buy it cash. My secondary
definition of financial independence is having enough
savings such that if
I do not work for the next 20 years I wouldn’t suffer financially. So having an investment portfolio with balances
in the multiples of millions would qualify.
What is your number one financial priority right now?
Getting rid of the mortgage asap and putting more money in the stock market.
In the event of an emergency, are you prepared financially?
I would say yes but it would mean liquidating some of my investments.
Have you ever been broke and how did you did deal with that period of your life?
I grew up poor. I went through my entire junior degree years at university broke. I had to cope by working whilst I studied just to get through each month. I was funded by what used to be called TEFSA, now known as NSFAS and they paid for my tuition. I had to photostat some parts of my study books and I had to rely on borrowing books from friends for the rest of it. My mom could only send me the little money she had to borrow from loan sharks in order to assist me. Those were really tough times. But alas I had to do what I had to do to get through it and I haven’t been broke since my first job. Why? Because I live within my means – always have, always will.
Why do you think we so easily fall into debt these days?
People fall into the debt trap automatically because of the structural issues that have
to do with exploitation of workers in this country. People earn a
pittance for their labour. They also have to travel long distances to
get to work which means quite a significant portion of their money goes
towards transportation costs. Over and above that
they have a responsibility of sending their children to school while
maintaining a roof over their heads and putting food on the table. All
these things demand money people do not have. This is why early in 2017 a
national minimum wage was set at R 3500 per
month. The deputy president admitted this wasn't even a living wage. So
I guess the picture I paint above is for those members of our society
who are in the lower LSMs. I believe the reason the middle class easily
falls into debt it is because people are competing
with the Jones. They are not to be outdone by their neighbours and so
will rather go into debt so they are seen to be doing better than their
neighbours or friends. It’s the crass materialism that has gripped our
society and it’s obviously influenced by pop
culture and TV shows like Keeping up with the Kardashians.
If you have the choice between buying a home or investing in shares, which would you choose and why?
Both
for reasons mapped out above. Both are a way to wealth creation. A home
can be leveraged if you want to raise finance for a specific project
because it has value and
its value tends to go up over time depending on where it’s located and
developments around it. Investing in shares is one sure way of amassing
fantastic wealth and anyone who forgoes investing in the stock market is
doing themselves a massive disservice.
When you think of a comfortable retirement, what does that mean to you?
Travel
around the world endlessly without worrying about any of the costs
associated with it. Having assets that have no debt associated with
them. Having my kids financially
independent not requiring any support from me.
What’s the worst money mistake you’ve ever made, if you’ve made any? What did you learn from it?
Taking
R 250 000 and buying a second hand car in cash for my mother, only for
the car to have persistent mechanical problems. It remains a headache to
date and has been the
worst financial mistake I ever made. I am engaging with McCarthy the
people I purchased the car from but if I do not get any joy I will
approach the Consumer ombudsman
with the complaint.
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The only rule is once you have lent the money to family and friends then write it off immediately. So if I can afford to give money away then I do ‘lend’ it otherwise I generally don’t.
What are your money tips for our readers?
What was the last item you regretted purchasing?
A
small quirky handbag in Cape Town. This was a complete impulse purchase
and when I look at the bag now I ask myself how I will actually enjoy
it.
Do you have a budget? Why? Why not?
Yes,
it is crucially important to ensure that I do not live beyond my means
and keep a check of how much money I can afford to invest every month.
What tools or resources do you rely on to keep your own personal finances in order?
I
grew up in an era where we used to write essays at school by hand, on
paper. With all the technological advances and apps for everything I
still very much prefer writing
my budget on paper and doing a recon with my bank statement, which I
check online!
Do you have rules for lending money to friends or family?
The only rule is once you have lent the money to family and friends then write it off immediately. So if I can afford to give money away then I do ‘lend’ it otherwise I generally don’t.
What are your money tips for our readers?
Live
within your means, if you can’t afford it and you really must have it,
then save up for it. Maintain a budget and stick to it – also budget for
saving money then invest
it with Satrix for
first time investors . They have a product for investors even with very
small amounts to invest. Many people have fallen for get rich quick
tricks, there is no such thing
as being rich overnight!
Financial independence is a long term game and is very much shaped by
your daily behaviour towards money. To attain financial independence
start investing in the stock exchange, start
yesterday! Convince your stokvel members to invest in the stock
exchange. Thank me later!
Pic Credit: ABSIP
1 comments
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