# Personal Finance: The silent thief that quietly takes your money

An episode of [Personal Finance with Warren Ingram](https://invisiblenetwork.ai/podcast/1075744322), 14 Jul 2026, 21 min.

Audio: https://traffic.omny.fm/d/clips/5dcefa8e-00a9-4595-8ce1-a4ab0080f142/1ecba37a-6d83-4ee9-a295-a57100b7f2df/0b065acc-b22d-463a-a6b9-b4870128e641/audio.mp3?utm_source=Podcast&in_playlist=8be69053-e7ba-4c54-87a1-a63a00c79838

Stephen Grootes speaks to Warren Ingram, financial adviser and co-founder of Galileo Capital, about what inflation is, how it quietly erodes the value of our money over time, and the practical steps South Africans can take to protect their wealth from its effects. The Money Show is a podcast hosted by well-known journalist and radio presenter, Stephen Grootes. He explores the latest economic trends, business developments, investment opportunities, and personal finance strategies. Each episode features engaging conversations with top newsmakers, industry experts, financial advisors, entrepreneurs, and politicians, offering you thought-provoking insights to navigate the ever-changing financial landscape. Thank you for listening to a podcast from The Money Show Listen live Primedia+ weekdays from 6 pm to 8 pm (SA Time) to The Money Show with Stephen Grootes broadcast on 702 https://buff.ly/gk3y0Kj and CapeTalk https://buff.ly/NnFM3Nk For more from the show, go to https://buff.ly/7QpH0jY or find all the catch-up podcasts here https://buff.ly/PlhvUVe Subscribe to The Money Show Daily Newsletter and the Weekly Business Wrap here https://buff.ly/v5mfetc The Money Show is brought to you by Absa Let's keep the conversation going online: 702 on Facebook: https://www.facebook.com/TalkRadio702 702 on TikTok: https://www.tiktok.com/@talkradio702 702 on Instagram: https://www.instagram.com/talkradio702/ 702 on X: https://x.com/CapeTalk 702 on YouTube: https://www.youtube.com/@radio702 CapeTalk on Facebook: https://www.facebook.com/CapeTalk CapeTalk on TikTok: https://www.tiktok.com/@capetalk CapeTalk on Instagram: https://www.instagram.com/ CapeTalk on X: https://x.com/Radio702 CapeTalk on YouTube: https://www.youtube.com/@CapeTalk567 See omnystudio.com/listener for privacy information.

## Transcript

[0:00] Speaker 1: For The Money Show Personal Finance with Warren Ingram twenty
[0:05] Speaker 1: four minutes now to eight at the time Warren Ingram,
[0:07] Speaker 1: of course as a financial advisor and co founder at
[0:10] Speaker 1: Galileo Capital.
[0:11] Speaker 2: Tonight, we're talking about the silent thief that takes your
[0:16] Speaker 2: money without you ever realizing. And we're talking about something
[0:21] Speaker 2: we talk about all day on The Money Show in
[0:24] Speaker 2: so many different ways. We're talking about inflation. Warren, good
[0:30] Speaker 2: evening to you, and inflation is actually the whole point
[0:34] Speaker 2: of investing. It's why we do it. And what's so
[0:38] Speaker 2: I'm going to use the word insidious about it is
[0:41] Speaker 2: if you're not careful, you won't notice inflation.
[0:44] Speaker 3: It feels to me like a slow poison to the
[0:47] Speaker 3: value of your money because you feel fine today, and
[0:50] Speaker 3: you feel fine tomorrow and the next day. But over time, suddenly,
[0:55] Speaker 3: you know, you wake up one day going, gee, I
[0:57] Speaker 3: don't feel so good anymore. And it's the same with
[1:00] Speaker 3: your money. What you buy today and what you buy
[1:02] Speaker 3: tomorrow is probably not very different. But we all talk
[1:05] Speaker 3: about it. You know that, gee, what we were buying
[1:07] Speaker 3: a year ago, we can't get the same value today.
[1:11] Speaker 3: And and you know we all have these wonderful theories
[1:13] Speaker 3: about why and you know, why is in inflation coming
[1:16] Speaker 3: down and all of these things, But the reality is
[1:19] Speaker 3: it's it is part of life, and and you know
[1:22] Speaker 3: it's going to be part of life for as long
[1:24] Speaker 3: as we have a monetary system, and isn't a better one.
[1:27] Speaker 3: So guess what we've got inflation? And I guess our
[1:31] Speaker 3: next point then is we need to figure out how
[1:33] Speaker 3: we look after ourselves so that we protect our money
[1:37] Speaker 3: and our investments from inflation into the future, rather than
[1:41] Speaker 3: always just being surprised by it and having no antidote
[1:44] Speaker 3: to the slow poison.
[1:46] Speaker 2: Okay, your questions for Warren about inflation all other issues
[1:49] Speaker 2: if you like, double one, double A three oh seven,
[1:52] Speaker 2: O two two one four four six, O five six seven,
[1:54] Speaker 2: and of course voice notes for him as well on
[1:57] Speaker 2: seven two seven, O two one seven or two. Let's
[2:00] Speaker 2: start with the definition or is a good place to start.
[2:02] Speaker 2: I was taught in school, how would you define inflation?
[2:06] Speaker 2: Lots of different definitions, some of them are very textbookie Warrant,
[2:09] Speaker 2: How do you, as a personal finance guru, explain.
[2:11] Speaker 3: It far away from the textbook if I can help it, Stephen,
[2:15] Speaker 3: Otherwise we're all fall asleep. So I think maybe the
[2:20] Speaker 3: two things to understand. There is a country inflation rate,
[2:23] Speaker 3: and that's the number that gets quoted by every economist
[2:26] Speaker 3: known to humankind, the CPI Consumer Price Index, and that's
[2:30] Speaker 3: the average of the average of the most average basket
[2:33] Speaker 3: of goods that some actually fictitious person would spend their
[2:37] Speaker 3: money on. And so no one is perfectly average. And
[2:40] Speaker 3: so when I hear people complaining that, you know, the
[2:43] Speaker 3: inflation rate was quoted at four four point two percent,
[2:46] Speaker 3: and actually my cost of living has gone up by
[2:49] Speaker 3: ten percent, that's the point. Your cost of living is
[2:52] Speaker 3: not the inflation rate. You're not the average person, unfortunately.
[2:56] Speaker 3: So each of us will have a rate at which
[2:59] Speaker 3: the things we buy on a normal day to day
[3:01] Speaker 3: basis are changing, and changing, unfortunately, usually means going up
[3:06] Speaker 3: in price. So you know, if you drive a cart
[3:09] Speaker 3: to your tank of petrol, if you eat out at restaurants,
[3:12] Speaker 3: it's the plate to feed you were buying last year,
[3:14] Speaker 3: what does it cost this year, and the travel that
[3:17] Speaker 3: you do all of those things. So it's measuring the
[3:20] Speaker 3: rate at which those costs that you spend are changing,
[3:23] Speaker 3: and it's not some big conspiracy theory that, you know,
[3:26] Speaker 3: the reserve banks lying to us about the CPI. It's
[3:30] Speaker 3: just a different measure. So unfortunately, there isn't really a
[3:33] Speaker 3: measure for any of us to measure the rate of
[3:36] Speaker 3: change of our own cost of living. I wish the
[3:39] Speaker 3: economists would actually do it, but there isn't one. So
[3:42] Speaker 3: the best we've got is this average thing called CPI,
[3:45] Speaker 3: and you know, the Reserve Bank is trying now to
[3:48] Speaker 3: get it to a rate of about three percent. They
[3:50] Speaker 3: give themselves a little bit of leeway somewhere between two
[3:53] Speaker 3: and four, but the hope is that they get to three.
[3:56] Speaker 3: That's their target.
[3:57] Speaker 2: Okay, So I mean the inflation. The Reserve Bank tries
[4:01] Speaker 2: to inflation between two and four and a target of three.
[4:03] Speaker 2: But that's not very high. I mean, so, I mean
[4:08] Speaker 2: you would hardly notice over a year. Why does it
[4:10] Speaker 2: become such a big problem.
[4:13] Speaker 3: Because you use that lovely word, I hope said correctly insidious.
[4:18] Speaker 3: So you know, a rate of change can be small
[4:22] Speaker 3: from one day to the next, and maybe even from
[4:24] Speaker 3: one year to the next, but then we have this
[4:26] Speaker 3: thing called compounding. And so I just use an example
[4:29] Speaker 3: of five percent, which feels to me maybe more reflective
[4:32] Speaker 3: of a lot of our own sort of experience around
[4:35] Speaker 3: cost of living. And so when you start at you know,
[4:38] Speaker 3: your cost of living changing and going up by five
[4:41] Speaker 3: percent a year doesn't seem like much, but just to
[4:44] Speaker 3: take it over a longer period of time, if you
[4:46] Speaker 3: buy a basket of goods today for one hundred bucks
[4:48] Speaker 3: and your cost of living is going up by five
[4:51] Speaker 3: percent a year, in ten years time, you'll need to
[4:54] Speaker 3: spend one hundred and sixty three rund to buy the
[4:56] Speaker 3: exact same stuff. So you haven't gone and and upgraded
[5:00] Speaker 3: or anythink you're still buying the same old basket, but
[5:03] Speaker 3: now it costs you one hundred and sixty three and
[5:05] Speaker 3: in twenty years it's it's gone up to two hundred
[5:08] Speaker 3: and sixty five, so you know, nearly three times the price.
[5:12] Speaker 3: And all you've done is had a cost of living
[5:14] Speaker 3: going up against you at five percent a year. So yes,
[5:18] Speaker 3: I mean it doesn't sound like much. And I think
[5:20] Speaker 3: that's the problem is that it doesn't feel like a
[5:22] Speaker 3: big move day to day, but it certainly compounds against you.
[5:26] Speaker 3: And that's really the problem with compounding is that it's
[5:29] Speaker 3: a wonderful thing when it's working for you, and absolutely
[5:32] Speaker 3: horrible when it works against you.
[5:34] Speaker 2: So in other words, if you want to stay the same,
[5:36] Speaker 2: you need to earn more money every year. If you
[5:38] Speaker 2: want to you're running to stand.
[5:39] Speaker 3: Still, exactly right. And and you know, five percent is
[5:43] Speaker 3: a pretty pretty steep target to to kind of grow
[5:47] Speaker 3: your money at and and for people who are working,
[5:50] Speaker 3: you know that they're trying to grow their income levels
[5:53] Speaker 3: at the very least by the cost of living changes
[5:56] Speaker 3: for themselves and then trying to make sure that their
[5:58] Speaker 3: investments are going So so you quite right, I'd say
[6:02] Speaker 3: maybe the analogies, you're probably jogging fairly quickly just to
[6:06] Speaker 3: stand still. So what you've got to do is make
[6:08] Speaker 3: sure your investments can run a bit faster than a jog.
[6:11] Speaker 2: Okay, So then just keeping cash is not going to
[6:15] Speaker 2: work for you. And that's really the big lesson. And
[6:17] Speaker 2: that's why we invest.
[6:19] Speaker 3: I think it's an important thing to talk about because
[6:22] Speaker 3: we kind of get lured in by interest rates. You know,
[6:25] Speaker 3: we look at a nice fixed deposit or or something
[6:29] Speaker 3: like that, and we set ourselves, well, you know, the
[6:31] Speaker 3: world's really uncertain at the moment, and we've got you know,
[6:34] Speaker 3: the Americans and you know, in the Middle East and
[6:37] Speaker 3: the Russians in Ukraine, and you know there's a lot
[6:38] Speaker 3: going on kind of elections everywhere, including South Africa coming up,
[6:43] Speaker 3: and so you know, I can just lock in a
[6:45] Speaker 3: really nice interest rate at my bank. Let me just
[6:47] Speaker 3: do that, And so it is really worth talking about
[6:51] Speaker 3: because I think a lot of people do that, and
[6:52] Speaker 3: some people don't trust banks, so they keep their money
[6:55] Speaker 3: under the proverbial mattress or in the couch or whatever
[6:57] Speaker 3: it is. And just to understand, yea, and when you
[7:00] Speaker 3: do that, you are then eroding the value and the
[7:04] Speaker 3: buying power of that that money. So if you keep
[7:06] Speaker 3: it in a bank account and you get a higher
[7:08] Speaker 3: rate of interest, you might now feel that everything is
[7:11] Speaker 3: good and and I'm not losing every day. My money's
[7:14] Speaker 3: going up. But unfortunately cash rarely almost never actually tracks
[7:19] Speaker 3: the rate of your cost of living, so so the
[7:22] Speaker 3: buying power of your money does go backwards, even while
[7:24] Speaker 3: you haven't lost a cent.
[7:26] Speaker 2: Okay, your question for on Ingram on inflation personal finance
[7:30] Speaker 2: tonight double one double A three oh seven two two
[7:32] Speaker 2: one four four six O five six seven, And of
[7:35] Speaker 2: course you've voiced note questions as well on seven two
[7:37] Speaker 2: seven O two one seven O two sixteen minutes now
[7:40] Speaker 2: to eight. Weren't the people who save the most. These
[7:43] Speaker 2: are savers who take I suppose a very low risk
[7:47] Speaker 2: because that's why the investment doesn't grow. And then if
[7:50] Speaker 2: you're if you aren't earning a salary that's tied to
[7:52] Speaker 2: inflation but you've retired.
[7:55] Speaker 3: Yep, those are the probably the two big categories. So
[7:58] Speaker 3: some people are really good at being disciplined. They spend
[8:01] Speaker 3: less than they earn every single month, and they you know,
[8:04] Speaker 3: they diligently do the big job, the tough job, and
[8:07] Speaker 3: and and then what they do, which which is really catastrophic,
[8:10] Speaker 3: is that they then allocate the bulk of their money
[8:13] Speaker 3: to very low risk investments. But you know, back to
[8:15] Speaker 3: our fixed deposit kind of an example. And so that
[8:20] Speaker 3: they are the ones that really get hurt by a
[8:23] Speaker 3: very big change in cost of living because if they're
[8:26] Speaker 3: if the interest that their earning is not keeping pace
[8:28] Speaker 3: with inflation. And maybe just to emphasize, you know, even
[8:31] Speaker 3: if you lock in a very nice rate, you managed
[8:34] Speaker 3: to get yourself an interest rate of eight percent at
[8:37] Speaker 3: a bank, somehow understand that you're probably giving away two
[8:41] Speaker 3: or three percent of that to tax. So so you've
[8:44] Speaker 3: bought certainty by being low risk and getting a nice
[8:47] Speaker 3: fixed deposit, and you've done You've done the job. But
[8:49] Speaker 3: what you've forgotten about is tax and then the cost
[8:52] Speaker 3: of living erodes, erodes the buying power of your money.
[8:55] Speaker 3: So the low risk diligence saver is really losing out.
[8:59] Speaker 3: Then back to the retirees. There are retirees, for example,
[9:03] Speaker 3: who would lock in a pension. They would they would
[9:05] Speaker 3: get a life annuity. And you know, if you work
[9:08] Speaker 3: for for government, you might decide, I'm just going to
[9:11] Speaker 3: get a guaranteed pension. And that's okay if your guaranteed
[9:15] Speaker 3: pension is escalating at the rate of which your cost
[9:17] Speaker 3: of living is escalating. But if your cost of living
[9:20] Speaker 3: is going up at ten percent as an example, and
[9:23] Speaker 3: you're getting five percent a year increases on your pension,
[9:27] Speaker 3: you could be losing you know, a lot of money.
[9:31] Speaker 3: And just back to that example. So someone who spends
[9:34] Speaker 3: fifty around a month to live comfortably now as a retiree,
[9:38] Speaker 3: let's just say that they're getting that inflation rate of
[9:41] Speaker 3: five percent in about fourteen years, they need one hundred
[9:44] Speaker 3: thousand rand to fund the same lifestyle. And if their
[9:48] Speaker 3: escalations are not at five percent. If they're at three percent,
[9:52] Speaker 3: let's say that they go to the reserve banks new target,
[9:54] Speaker 3: they are not going to be able to live the
[9:56] Speaker 3: same lifestyle they were in the past.
[9:58] Speaker 2: Okay, that that all sort of makes sense. So I mean,
[10:02] Speaker 2: if you retire on say fifty rand a month, sounds
[10:06] Speaker 2: like a nice amount. What happens over time?
[10:10] Speaker 3: I think you've got to be very careful of how
[10:12] Speaker 3: you allocate your investment money. So you know, understanding that
[10:17] Speaker 3: that you're okay today, what you always want to do
[10:21] Speaker 3: as a as a retirees make sure that you're not
[10:23] Speaker 3: absolutely maximizing the amount of income that you're drawing out
[10:27] Speaker 3: of your investment. So you know, if you if you're
[10:30] Speaker 3: you know, if you've got a reasonable withdrawal rate, you
[10:32] Speaker 3: want to leave behind some of the money that's growing
[10:36] Speaker 3: in your in your retirement front, so that that the
[10:38] Speaker 3: growth rate that you're getting on your investments is at
[10:41] Speaker 3: least matching ideally actually a little bit faster than you know,
[10:44] Speaker 3: the cost of living, and so you start to make
[10:47] Speaker 3: the money work a bit harder than what it's what
[10:50] Speaker 3: it's compounding against you. And now all of a sudden,
[10:53] Speaker 3: you know, back to our jogging analogy. Your your your
[10:55] Speaker 3: investments are are are running and your your cost of
[10:59] Speaker 3: living is jogging. So how you're starting to get ahead
[11:01] Speaker 3: and every year as the cost of living goes against you,
[11:04] Speaker 3: so your investments are able to protect you from from
[11:06] Speaker 3: that rate of change.
[11:08] Speaker 2: Okay, yeah, I mean that does that does make sense.
[11:12] Speaker 2: There must be particular ways to beat inflation. How do
[11:16] Speaker 2: you go about doing that? Because we talk about risk
[11:20] Speaker 2: averse savers being the ones who actually lose out, So
[11:23] Speaker 2: then this is really about managing risk.
[11:26] Speaker 3: Yeah, and and maybe the starting point is you understand
[11:30] Speaker 3: the assets that can actually work harder than inflation, and
[11:34] Speaker 3: that the biggest one for for all of us will
[11:37] Speaker 3: be you know, investing in the stock exchange. So whether
[11:40] Speaker 3: you're investing some of your money into the local and
[11:42] Speaker 3: some into the global markets, those are the two markets
[11:46] Speaker 3: that will give you the best chance of of of
[11:49] Speaker 3: really doing a lot better than than inflation over time,
[11:53] Speaker 3: and and sometimes to kind of double or treble the
[11:56] Speaker 3: rate of inflation. So so you know, people who you certainty,
[12:01] Speaker 3: just understand that the stock market is almost the opposite
[12:05] Speaker 3: of certainty. It's it's going to give you an incredible
[12:07] Speaker 3: roller coaster ride, and you know, when when the news
[12:11] Speaker 3: flow is noisy and loud and scary, sometimes it becomes
[12:14] Speaker 3: tempting to look for in an alternative. But if you
[12:18] Speaker 3: are focused on the thing that's actually the worst for
[12:21] Speaker 3: your money, which is inflation, then then you should start
[12:23] Speaker 3: to embrace some of that uncertainty, because you know that
[12:26] Speaker 3: uncertainty is kind of that that butterfly in your stomach
[12:29] Speaker 3: that you get every now and then when you look
[12:30] Speaker 3: at your statements, tells you that that hopefully you've got
[12:33] Speaker 3: investments that are going to beat inflation over time. So one,
[12:37] Speaker 3: I think you've got to bump up your allocation to
[12:39] Speaker 3: to shares, but both local and global. And then make
[12:43] Speaker 3: sure that you know that emergency fund that we've spoken
[12:45] Speaker 3: about on the show a lot, make sure that you
[12:47] Speaker 3: you know it is fully funded so that if something
[12:49] Speaker 3: goes wrong at the wrong point in time, that you're
[12:52] Speaker 3: not then having to draw money from your your stock
[12:55] Speaker 3: exchange investments. You can rather draw it from your emergency fund.
[12:59] Speaker 3: And that's the that will keep you safe when things
[13:01] Speaker 3: are going wrong. So I think understanding that you know
[13:05] Speaker 3: when you're investing for a five year period or longer,
[13:08] Speaker 3: the stock exchange property companies that trade on the local
[13:12] Speaker 3: and global markets, and even government bonds are what we
[13:15] Speaker 3: would call productive assets. Those are the things that beat
[13:18] Speaker 3: in flesh over five, ten, fifteen year period. In the
[13:22] Speaker 3: short term, they're going to work against you and they're
[13:24] Speaker 3: going to be unsettling, but they do protect you over time.
[13:28] Speaker 2: And this is really about a balanced portfolio. You need
[13:31] Speaker 2: to manage that. That's really the best place to something
[13:34] Speaker 2: you really need to look at because of the balance
[13:36] Speaker 2: it gives you.
[13:38] Speaker 3: Yeah, I think, you know, for someone listening, it goes
[13:40] Speaker 3: to you, I don't actually know how much I've got
[13:42] Speaker 3: in shares, And what I've got is a bunch of
[13:44] Speaker 3: unit trusts, you know, in my RA and in my
[13:46] Speaker 3: company retirement fund and my tax free and you know
[13:49] Speaker 3: some other stuff that I own, and I can see
[13:50] Speaker 3: it on statements. What you don't want to see there
[13:53] Speaker 3: is a bunch of funds called cautious or moderate. You
[13:56] Speaker 3: need to see funds that are called balanced or growth.
[13:59] Speaker 3: And that will tell you something on its own, which
[14:01] Speaker 3: is probably that you've got a decent, decent allocation to
[14:06] Speaker 3: the stock market already, and for most of us, you know,
[14:08] Speaker 3: having just a very well balanced allocation to a balanced fund.
[14:13] Speaker 3: It's probably the thing that's going to protect the buying
[14:15] Speaker 3: power of your money, so it doesn't need to be complex.
[14:17] Speaker 3: We're not talking about rocket science stuff yet, but just
[14:19] Speaker 3: making sure that you get that mixed correct now, so
[14:23] Speaker 3: that you protect yourself.
[14:24] Speaker 2: All right, we have a question from NICKI for your Warren.
[14:27] Speaker 2: Nicky says, Hi, I noticed my investments have not done
[14:30] Speaker 2: well since the start of the year. I have a
[14:32] Speaker 2: large portion of my money in offshore markets. I'm not
[14:34] Speaker 2: sure what to do to protect my investments now, Yeah, Nikki,
[14:38] Speaker 2: I mean you and Elon. We'll have a response for
[14:40] Speaker 2: you from Warreny in just a moment.
[14:42] Speaker 1: For the Money Show Personal Finance with Warren Ingram.
[14:47] Speaker 2: Eight minutes now to eight the time your questions for Warren.
[14:50] Speaker 2: Of course, Nicky's asked, I noticed my investments haven't done
[14:53] Speaker 2: well since the start of the year. I have a
[14:55] Speaker 2: large portion of my money in off shore markets. I'm
[14:57] Speaker 2: not sure what to do to protect my investments now. Now, Warren,
[15:01] Speaker 2: I don't think he's the only one thinking like this,
[15:03] Speaker 2: because I think it's actually quite scary in a way,
[15:06] Speaker 2: in so many different for so many different reasons.
[15:10] Speaker 3: It is. I'm probably struggling to kind of hide my
[15:13] Speaker 3: frustration at the question. To be very honest, Stephen, I think,
[15:18] Speaker 3: you know, one of those things when if we were talking,
[15:21] Speaker 3: you know, let's say December last year, investments did incredibly well,
[15:25] Speaker 3: you know, and and global markets had done very well,
[15:27] Speaker 3: the JC had done very well, and you know, even
[15:30] Speaker 3: to the end of you know, if you go twelve
[15:32] Speaker 3: months from now, twelve months from from you know, from
[15:35] Speaker 3: the end of June backwards, you know, investors have done
[15:38] Speaker 3: phenomenally well out of out of the j C and
[15:41] Speaker 3: and in dollar terms, you know over the last year
[15:43] Speaker 3: that they've done very well on global markets. So when
[15:47] Speaker 3: when things have gone well for a sustained period of time,
[15:49] Speaker 3: which is exactly what's happened, then you know, guess what.
[15:53] Speaker 3: It's called a roller coaster for reasons. So when it
[15:55] Speaker 3: goes up and up and up, and it's going very well,
[15:58] Speaker 3: don't get accustomed to that. It can only ever go up.
[16:01] Speaker 3: It must come down. That's the whole point about markets.
[16:04] Speaker 3: If they're guaranteed returns that were only good all the time,
[16:08] Speaker 3: no one would be working and everyone would have been
[16:10] Speaker 3: retired in La la Land. Unfortunately, we live in the
[16:13] Speaker 3: real world. Which means markets go up and they go down.
[16:16] Speaker 3: So if your market, if your portfolio hasn't done well
[16:19] Speaker 3: for the last little while, I mean the JAS is down.
[16:22] Speaker 3: You know, the average general equity UNITRUST in South Africa
[16:25] Speaker 3: is down for the first six months of the year.
[16:27] Speaker 3: It's normal. And I think that's the point here. You know,
[16:30] Speaker 3: we can kind of say to people, don't worry. You know,
[16:33] Speaker 3: everything's fine. That is true. But the danger that people
[16:37] Speaker 3: pose is probably themselves to their own investments. In other words,
[16:40] Speaker 3: you start to think, well, fifteen percent a year is normal.
[16:43] Speaker 3: When I only get one percent, then you know I
[16:45] Speaker 3: should change all my investments and throw out what I've got. No,
[16:49] Speaker 3: that's not what you should do. What you should do
[16:51] Speaker 3: is let this ride out. This is normal. This is
[16:54] Speaker 3: what happens in markets. And don't be fooled by the
[16:58] Speaker 3: years when you get fifteen or twenty percent and that
[17:00] Speaker 3: you know, you need to be realistic and say, well, actually,
[17:03] Speaker 3: over long periods of time, if I'm getting ten or eleven,
[17:06] Speaker 3: I'm doing incredibly well. And and this is the price
[17:09] Speaker 3: I pay. The volatility is the price I pay. So
[17:12] Speaker 3: number one, don't get impatient. Number two, don't panic. You know, this,
[17:16] Speaker 3: this too shall pass. And and so you know, people
[17:19] Speaker 3: that that kind of judge your investments over three or
[17:21] Speaker 3: six months are just doing them solves a huge disservice
[17:24] Speaker 3: and causing me gray hair.
[17:26] Speaker 2: So I mean, the problem, I suppose is when you
[17:28] Speaker 2: have a year like last year on the JC and
[17:30] Speaker 2: S thirty percent, you just get spoilt, isn't it? And
[17:32] Speaker 2: isn't that really the issue exactly?
[17:35] Speaker 3: And I think that's the that's really the comment is,
[17:37] Speaker 3: you know, I mean, it's understand that it's not nice
[17:41] Speaker 3: to see your investments go down, especially when the news
[17:43] Speaker 3: flow is just incredibly you know, rocky, and it just
[17:46] Speaker 3: sounds like the world's coming to an end. But it's
[17:48] Speaker 3: been like this many times in the past and we're
[17:51] Speaker 3: all still here. And markets do go up, and so
[17:54] Speaker 3: you know, exercise a bit of patience and a bit
[17:56] Speaker 3: of restraint and and and just you know, have a
[18:00] Speaker 3: bit of context. When things haven't done well for six months,
[18:03] Speaker 3: maybe zoom out of it and say, what have my
[18:05] Speaker 3: investments done over three years and five years? And you
[18:08] Speaker 3: know that guy and already that talks about investing always
[18:10] Speaker 3: says long term and long term starts at five years.
[18:13] Speaker 3: So what has that done and if it's done okay
[18:15] Speaker 3: for five years, then maybe you're okay now and maybe
[18:18] Speaker 3: this is the price we pay. It is a little
[18:19] Speaker 3: bit of up and down for now okay.
[18:21] Speaker 2: So certainty then, I mean, I think a lot of
[18:24] Speaker 2: people are. Are you quite keen on certainty? I mean,
[18:27] Speaker 2: I suppose we all are. So your avoid shares, you
[18:30] Speaker 2: avoid property companies. How then do you, you know, how
[18:33] Speaker 2: do you sort of get the balance right? Because the problem,
[18:36] Speaker 2: of course then is that you need to make sure
[18:39] Speaker 2: that your investments have an opportunity to grow, and that
[18:41] Speaker 2: means making an investment, not just saving. That's the difference.
[18:46] Speaker 3: It's it's possibly the most expensive decision you'll ever make
[18:50] Speaker 3: is to lock in certainty. Buy a guarantee. In other words,
[18:53] Speaker 3: you know, go to the bank and give me a
[18:55] Speaker 3: fixed deposit, you know, give me a capital guarantee on
[18:58] Speaker 3: an investment where you know I'll never lose money. Those
[19:02] Speaker 3: two things to give you psychological certainty. It feels great.
[19:06] Speaker 3: You know, you feel good today and you feel good
[19:07] Speaker 3: tomorrow because you never go down. But what you've done
[19:10] Speaker 3: with that certainty is also give yourself the guarantee that
[19:14] Speaker 3: your capital will not grow faster than inflation. And that's
[19:17] Speaker 3: why we talk about the so much as we just
[19:19] Speaker 3: don't want you to kind of feel the false sense
[19:22] Speaker 3: of security of you know, I'm okay now because because
[19:25] Speaker 3: my portfolio didn't go down yesterday or last week, or
[19:28] Speaker 3: last month, or even for the first six months of
[19:30] Speaker 3: the year. And what you're missing out is, yes, and
[19:33] Speaker 3: the buying power of your money is getting eroded, and yes,
[19:36] Speaker 3: you're you know, after tax, you're in a way worse position.
[19:38] Speaker 3: And in ten years time, the person that kind of
[19:41] Speaker 3: tolerated the uncertainty is in a way better position than you.
[19:44] Speaker 3: Even though there might have had a few sleepless nights.
[19:47] Speaker 3: You're in a position where the buying part of your
[19:48] Speaker 3: money won't allow you to eat properly anymore. And that's
[19:51] Speaker 3: the point here. It becomes very hard choice when you're
[19:54] Speaker 3: much older and you know, late in life, when you
[19:56] Speaker 3: can't re readjust to investments. So my comment is, brace
[20:00] Speaker 3: a bit of uncertainty and don't go for certainty at
[20:02] Speaker 3: all costs because it's really incredibly expensive.
[20:05] Speaker 2: And then we've got thirty seconds Warren. But isn't the
[20:08] Speaker 2: other lesson that you have to be engaged in in
[20:10] Speaker 2: your personal finance. You can't just put it somewhere certain
[20:14] Speaker 2: and leave it. You have to be actively involved.
[20:17] Speaker 3: Yeah, you know, do a review every six months or
[20:19] Speaker 3: at the worst, you know, every year, and then be patient.
[20:23] Speaker 3: When things have gone down for a short period of time.
[20:25] Speaker 3: That's not the time to now become an investment expert.
[20:27] Speaker 3: That's the time to kind of zoom out and have
[20:30] Speaker 3: a look at what everything has done for a period
[20:32] Speaker 3: of time and make sure that you're okay.
[20:34] Speaker 2: Warren Ingram, thanks so much, really appreciate it. The co
[20:37] Speaker 2: founder at Galileo Capital and of course the cidvied financial
[20:40] Speaker 2: advisor and as always the person you go to for
[20:43] Speaker 2: all of your questions about personal finance on The Money Show.

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