The first of three inner principles of successful investing is faith in the future.  In fact, it is at the foundation of most things we do as humans.  During the past couple of weeks this has become a key point of discussion in our portfolio review meetings with clients.  Not believing that our efforts will bear fruit is like walking in the wrong direction on an escalator.

The other two principles are commitment and discipline.  Once we believe, it is relatively easy to commit ourselves to a cause and to be disciplined in our approach.

According to a recent article by Prudential Investment Managers, there is about R295 billion sitting in South African current or cheque accounts.  This money is not earning any real interest.  Could this perhaps be a sign that South Africans have lost faith in a better future?

We recently did an analysis within Ternary and found that our clients who save or invest on a monthly basis are not increasing their monthly rate of saving to keep up with inflation.  This is of great concern to us as it affects your future.

The reality is that many South African banks do not pay much interest on current or saving accounts. So, if you are simply ‘storing’ your money in the bank, you are essentially missing out on returns that you could have been earning elsewhere.  With the way markets have been performing the past 5 years we are all looking for ways to protect our hard-earned capital, and cash has been one of the top performing asset classes over the past 12-month period, so it is no wonder we are seeing these statistics emerge.

It is important to remember that, while cash is very attractive, a savings account offers little to no risk which relates into low returns. If you consider inflation, it is likely that your money will end up losing value in real terms over the long term (5+ years).  An investment, meanwhile, comes with some degree of risk (you get to decide how much), but with the added benefit of relatively higher returns than cash.

As you know, Ternary believes that if you

  • stay committed to your financial strategy
  • keep saving and spending with the needed discipline and most important of all
  • keep believing in a better future

you will have a greater degree of certainty of achieving your financial goals.

Our recommendation is for you to let us help you take stock of where you are financially at present, and to let us help you with your future necessities.   One way of taking care of your future is to increase your monthly savings now, while you can.

We look forward to seeing you at our next meeting.  Please, however, pop in for a good cup of coffee, we love seeing you.

We appreciate your support and look forward to work with you towards a better future.