Grocery Stokvel

I recently listened to a podcast on food inflation in South Africa; it was an interview by the Pietermaritzburg Agency for Community Social Action (Pacsa) talking about its food barometer for January 2017. Year-on-year – in January 2017, the Pacsa food basket increased by 16.47% as compared to January 2016. I further read an article on BusinessTech providing additional data on the Pacsa’s findings.

Below is a listing of the top ten major increases  in the Pacsa barometer are as follows:

  1. Chicken neck – 77%
  2. Sugar Beans – 40%
  3. Chicken feet – 39%
  4. Maize Meal – 36%
  5. Chicken pieces – 34%
  6. White Sugar – 32%
  7. Samp – 28%
  8. Curry Powder – 27%
  9. Rooibos tea bag – 22%
  10. Coffee, Salt – 15%

The increases are astonishing as thirty (30) out of thirty-six (36) measured foods increased in January 2017 Barometer. Six (6) of the top ten increases are none perishables, and most being a necessity in all household.

It is no wonder when taking the above into account; that I was excited when my wife indicated that with four of her friends, they have decided to form a Grocery Stokvel (in 2017). The plan is that each member will contribute R300 a month with the ultimate aim of buying none perishable goods at the end of the year and distribute amongst themselves. Some quick numbers: R300 x 5 x 11 = R16,500.00

As the saying goes, there is nothing new under the sun, the same applies to the Grocery Stokvel; this is not a new phenomenon, research published in 2012 indicated that there are five major types of Stokvel, amongst the top three are Saving Stokvel which accounts to 43%, Burial Stokvel a further 22% and Grocery Stokvel taking the third spot with a 16% market share. This shows the important of the Grocery Stokvel market. The same research further indicates that three categories of groceries bought are staples (83%), cooking products (79%) and washing powders 78%).

Having identified six (6) of the ten (10) items on the Pacsa increases are none perishable goods, it is no wonder the grocery stokvel becomes a winning formula – for me (and many other individuals). In 1990 the then Governor, Mr. Tito Mboweni mentioned that the growth of stokvels post the stock fair era has been associated with the need for survival strategies and to mobilize financial resources in a bid to cope with economic oppression.

The statement by the then Governor is even true today with the current economic climate South Africa is facing.  This might be one of many strategies consumers have to introduce to stay above the water. The Presidency in 1999 further acknowledged the safety net provided by stokvels and how they serve as a critical component for a cohesive society based on their ability  to provide for both financial and social capital.

Nonetheless, I know many grocery chain stores that will be happy to welcome these ladies to their stores and share the December bargains with them (take their money – to be bluntly) – for instance Massmart who are the owners of Jumbo and Makro acknowledges the need to look after the stokvel segment by stating that its wholesale chains will “continue paying special attention” to stokvels by providing concessions such as bulk discounts, pro active collection of orders and arranging affordable transport to the stokvel community.

A luta continua, vitória é certa

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Shocking South African Debt Statistics

This is definitely no April’s fool.

Before I go into these statistics, I am reminded of the days when payday meant nothing much except money coming into my account to only reflect a positive balance for a day (at most two), at times – it remained negative on overdraft for additional months. This is an example of how some South Africans and many others are living their lives. According to a report by South African Human Rights Commission (SAHRC) widely published in 2015, more than 11 million of South Africa’s credit active consumers were described as over-indebted; this is over half of South Africa’s credit active consumers.

Statistics compiled by debt management firm, Debt Rescue indicates the following in summary:

  • consumers owe as much as 75% of their monthly income,
  • 23% of South Africans have some money left over at the end of the month,
  • 77% of South Africans are flat broke,
  • 57% of South Africa consumers are struggling to pay their home loans,
  • 57% of South Africa consumers are struggling to pay off their credit card debt,

The 10th edition of Nedbank’s Savings and Investment Monitor further highlights that 63% of South Africans who are in debt have at least one store card whilst 29% have at least one credit card. All these confirms the World Bank’s report released in 2016 that found South Africans are the world’s biggest borrowers, with 86% of South Africans having acquired debt. I am reminded of an ancient proverb which states that the wealthy rule over the poor, and anyone who borrows is a slave to the lender.

Looking at these statistics, there is definitely more teaching about financial liberation required as we are clearly in bondage and enslaved – there is no way we can even begin to build wealth under these circumstances. Here is the last important statistic from Debt Rescue to share; the top three areas where outstanding debt is most prevalent among South Africans:

  • Personal loans (94%),
  • Credit cards (84%), and
  • Store cards (76%)

Debt is still a concern and a challenge even for me, but I can testify that it is getting the highest level of attention; with intentional fury – I am reducing this beast as I want to liberate myself from this bondage. As a sign of progress and not a right to brag – I have moved from the initial 77% of South Africans who are flat broke, to 23% of South African who have some money left over at the end of the month; this is progress.

These are indeed shocking statistics, however if we are committed to continuous financial literacy, we will be able to liberate ourselves of importance, the generations to come.

A luta continua, vitória é certa                                                                                                      The struggle continues, but victory is certain.

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An Impossible Goal

My first blog in 2017, phew finally – it took a bit of time.

I am thinking with the awareness that the first month of 2017 has ended; and the understanding that like many others, the year will soon come to an end. This always forces me to think about my goals, if this year I will do better as compared to the previous year. (By the way, each year a person is not getting any younger, although one like to believe they are forever young – at least forever young at heart.)

The question for each time I looks at the universal clock, is whether am I moving closer to reaching to my ultimate goal(s)?

I have been on a journey to learn, I am on a journey to empower myself as part of  an effort to reach my ultimate goal(s), not only that, but what happens once I have reached the goal(s). I read that many people work their entire lives and ensure that they have adequate resources at retirement – once they reach retirement, they are puzzled and “frustrated” as they have no plan – post retirement. I have learned therefore that it is not only important to reach your goal(s), but also to know what will happen once you have reached your goal(s).

I am not addressing the post-retirement planning and goal(s) setting today but want to focus on a familiar subject known as “Building Blocks”, wildly known as “New Year Resolutions”. For me, resolutions are building blocks that should guide and lead one towards achieving their ultimate goal(s), I do not think resolution should be divorced and made to be isolated yearly declaration – but there should be an underlying link towards the achievement of the long term ultimate goal(s).

There are a number of studies done, which in summary states that 66% of resolutions do not last a month, 80% do not last beyond March; irrespective of the failure rates, one needs to strive towards achieving their personal goals. This is the reason I keep writing my goals and regularly review them.

According to the data pulled from Google by iQuanti, these are the top five (5) most popular New Year’s resolutions for 2017:

  1. Get Healthy: 62,776,640 searches,
  2. Get Organized: 33,230,420 searches,
  3. Live Life to the Fullest: 18,970,210 searches,
  4. Learn New Hobbies: 17,438,670 searches,
  5. Spend Less/Save More: 15,905,290 searches,

Apparently a survey conducted online by CareerBuilder revealed the top five New Year’s resolutions among workers this year (2017) are:

  1. Save more money (49%),
  2. Be less stressed (38%),
  3. Get a raise or promotion (30%),
  4. Eat healthier at work (28%),
  5. Learn something new (26%),

These are some of the resolutions one can adopt while building theirs.

I attended a training recently where the speaker shared a touching real life story of a young lady who made a difficult and impossible goal, which she eventually attained in three years. After the story telling, a challenge was set for the attendees – make your own difficult and somewhat impossible goal.

It might take long to achieve, nonetheless make it and work towards achieving it. I am personally working on setting this goal (and hope by end of February 2017, this will be set).

Hopefully, I will revisit this in future and give an update!!

A luta continua, vitória é certa                                                                                                                                                    The struggle continues, but victory is certain.
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MY TEN FINANCIAL PILLARS

I have never climbed a mountain, but it is elementary knowledge that to reach the summit you need to do it one climb at a time. When I started working I was already a thousand climbs behind in reaching my financial summit. Like many other young South Africans, one was already faced with debt comprising of student loans, fortunately not credit card nor bank overdraft debt at that stage.

This is the reason why without gasp I have been climbing in anticipation of reaching my financial summit, and in December 2014 I started developing the “10 Commandments” as the building blocks towards reaching my financial summit; the process eventually ended a year later having identified pillars that form part of my 10 Commandments.

These are my Ten Financial Pillars, in no particular order:

  1. Spend less than I earn,
  2. Eliminate debt with fury,
  3. Invest wisely for both short-term and long-term,
  4. Save money wisely (and build an emergency fund),
  5. Have an insurance portfolio for home, vehicle, business and personal,
  6. Develop a side income,
  7. Give generously,
  8. Pay God first,
  9. Develop a budget and monitoring tools,
  10. Enjoy the labour of your fruits (money),

One can write an essay about each one of these pillars, but for today – the lesson ends here. I have read numerous books and/or articles in developing these, and as caution, these Pillars have been designed with my personal goal in mind, however if these resonate with you, there is no restriction in adopting them.

While I have not mastered all of them, good news for me is that I have been consistent with some; and it is this consistency that I hope will multiply to all of them. In the meantime, like a mountain climber, I am taking each Pillar one pace at a time.

At times I wish what I know now, I could have known and practised some years ago. But I am grateful that I have the opportunity now, to learn and implement – few years down the line – definitely I will be saying something different.

A luta continua, vitória é certa
The struggle continues, but victory is certain.

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SOURCES OF INCOME (WHERE TO START?)

Like many South Africans of our generation, one keep asking, how can I increase my sources of income so that one does not have the dependancy on the “slave wage” (discussion for another day). It is without doubt that the lifestyle and cost of living has extremely changed, and very much expensive as compared to the years gone by.

With the current economic climate, many companies are evaluating how they can increase their bottom line (profits) on the back of declining revenues or revenue increasing at a declining rate in comparison to prior years; to address this phenomenon companies are exploring and introducing cost control initiatives as means to increase the bottom line.

While we are patiently searching for opportunities to increase our sources of income, this is a good place to start as individuals without a doubt. On my recent analysis of my expenses (costs), I was shocked (and this is a regular shock) of how much of my monthly costs goes towards repayment of debt, at present over forty percent (40%) of my monthly costs is directed towards financing debt – and this is the reason I am passionate about living a life without debt – this discussion is not for today.

The process of analysing my costs started a couple of years ago, making it easy today to save an amount equivalent to three percent (3%) of my monthly costs. The three percent (3%) comprises of the following,

  • cancelled three cellphone contracts at expiry (non-renewal),
  • cancelled my other device’s contract at expiry (non-renewal),
  • negotiated a review (reduction) on my insurance policy,
  • replaced canteen lunch with my own home made lunch box.

On further analysis, there is an option which will be applied only for a month, and it can increase the saving to an amount equivalent to seven percent (7%) of my monthly costs; the additional costs comprises of:

  • cancelling the DSTV subscription for a month,
  • minimising through saving fifty percent (50%) of my “ad hoc costs”.

For now, I have not decided on the month, but i am looking forward to this experiment.

I have increased my income by an extra three percent (3%) through this exercise, although this is not much – it is three percent (3%) of funds which is now being diverted towards assisting me to achieve my investment goals; and also taking into account that in the near future and (for one month) this will be seven percent (7%) – a company with millions (or billions) worth of expenses, this would be regarded as a good achievement; to say it mildly, a couple of people’s salaries right there, I would have contributed to saving at least one person’s job.

I am proud that I have been implementing this lesson consistently for a period of time.

A luta continua, vitória é certa

The struggle continues, but victory is certain.

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ILL-GOTTEN GAINS

Life’s lessons at times comes packaged in a form of bad news, this week’s lesson comes from two stories published in some of South Africa’s most prominent newspapers.

After many years, it seems Aurora directors will be held personally liable for R1.5-billion debt owed to employees, a decision denying them leave to appeal a high court judgement that they be held personally liable for damages of R1.5-billion was dismissed in the Supreme Court of Appeal (SCA) in Bloemfontein. According to newspaper reports, should they fail to pay their liability, they would be sequestrated, and criminal investigations into corruption and gross mismanagement and possible prosecution will follow straight after.

The other expose is that of Auction Alliance, a damning forensic report found bank officials as well as law firms and attorneys, and prominent financial advisers, all of whom appear to have operated in a questionable and unethical manner apparently on the take of hefty commissions from Auction Alliance. Due to the magnitude of this expose by Business Day, the story will have a further follow-up in the coming weeks, thats massive.

There is no doubt in my mind that my hustling will results in some riches at the near future, but these two stories (and many others) remind me that in my search one should remain principled and ethical at all costs.  As I build what is known as generational wealth, one should also develop moral rules that will help him to distinguish between right and wrong.

I have often wondered what makes people act unethically, and in a slide show titled “Causes of unethical behaviour” the following are identified as common reasons for unethical behaviour (edited version):

  1. pressure and competition can drive people to do things they wouldn’t normally do,
  2. ignorance about the difference between what is ethical and what is unethical,
  3. self-interest for personal gain, ambition and downward greed,
  4. those who refuse to learn or do no care about ethical behaviour,

Heard or read somewhere, that we are leaving in a society that has become less patient, prone to quick results and immediate gratification. May I have longevity filled with patience and persistence in pursuit of my riches.

A luta continua, vitória é certa

The struggle continues, but victory is certain.

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Debt, Debt and Debt

I am reminded of a saying, “a cat has nine lives”, this comes as I think of my wife who was retrenched twice, and I on the other hand having survived two retrenchment, the first one in 2013 followed by the second in 2016. This phenomenon apparently is believed to have been coined as it relates to cats’ ability to always land on their feet in situations that would surely have severely injured other animals.

These retrenchment incidents continues to foster the realisation that one needs to get his financial affairs in order, just like any aspects of his life. Having come to this point, my primary goal is to clear all current debts as quickly as possible; I am one of those fortunate or unfortunate – deepening, who has a house and vehicle financed by a bank.

According to me debt is one of the most burdensome financial instruments to have ever been introduced, especially in our society where there is a huge imbalance between the debtor and creditor.  As it stand, only 21% of South African household income is available to household expenses and others things (after paying off debt); imagine that. All this means that 79% of our disposable income as South Africans is allocated towards debt repayment, this is quiet a burden.

For the past few months I have been able to pay an extra amount towards reducing my capital amount on the outstanding vehicle debt, all going according to plan, this debt will be cancelled within the next twenty two (22) months.  If I continue with my current additional monthly payments, there is a high possibility that more months will be saved, reducing the outstanding period of twenty two (22) months even further. I have to admit, I am looking forward to the day of the last payment.

Some people however prefer to change vehicles every three years to five years through financial assistance by banks, and most car dealership offers special financial packages through these financial institutions. I decided that this type of credit facilitation is not my modus operandi (not that it was); unless I have the cash, I will not chain myself on this form of credit / debt. The recent European debt crisis is a good example that prolonged borrowing (debt) has catastrophic consequences, a good lesson from the University of Life.

All going according to plan, I will own my current vehicle for the next few years and making sure that it is properly maintained.  The excess cash as a result from paying off Mr. Bank will cater for the following; 1. creating a maintenance reserve account (to cater for all future maintenance needs), 2. additional payment towards the bond (starting the same strategy of reducing the outstanding capital and period on the bond debt), and 3. the balance will go towards continuos efforts of creating generational wealth (savings and investments) where one is extremely behind.

I understand that our priorities are different, for me – this is important – a life that is free from debt.

A luta continua, vitória é certa

The struggle continues, but victory is certain.

Empowered to Prosper

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