Careful management can deliver significant returns
There are approximately 49,000 South Africans who have net assets of more than $1m. However, if the often flamboyant appearances, flashy cars and grandiose spending habits are anything to go by, you would think that this number is much higher, says JSE-listed financial services firm and sponsor of the upcoming Investment & Retirement Expo, Efficient Group.
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With a 15-year history of managing the finances of a broad range of clients, Efficient Group says the hallmarks and behaviour of 'real' wealth is very different from the 'pretend version of rich' living.
Heiko Weidhase, CEO of Efficient Group, explains that 'real' wealth is achieved by not wasting income, living financially responsibly and through sound financial planning and investing. "Many wealthy people started out with relatively little money. Building wealth is a mindset, and anyone can attain this."
He cites a quote attributed to Albert Einstein - 'Compound interest is the eighth wonder of the world. He who understands it, earns it.. he who doesn't.. pays it.'
Extraordinary power
"Compound interest is an extraordinary power when it comes to basic wealth-building, yet few people understand its significance," Weidhase explains. In addition, a holistic approach to wealth-building should include a structured financial game plan which must be reviewed annually to keep abreast of your changing circumstances. The habit of saving should start from childhood - or, at the very latest when you get your first pay check.
"With careful management, savings of as little as R500 a month can deliver significant returns over time," says Weidhase. Contrary to this, poor financial planning and wealth management can see even those with large incomes left high and dry financially in their retirement years.
Having a financial advisor and an investment portfolio is not the preserve of the very wealthy. "Start small and build wealth," he says. "In fact, we have guided many of our clients from all walks of life to becoming very successful at managing their financial plans and growing their personal wealth," said Weidhase.
Efficient Group is the main sponsor of the Investment & Retirement Expo, featuring the Property Expo, from 24-26 October at the Coca-Cola dome in Northriding, Johannesburg.
