Tito’s Maiden….BORING.zzzz

Tito Mboweni

Yesterday, Finance Minister Tito Titus Mboweni delivered his maiden medium term budget speech. WOW. Some of the head lines I have read include the following:                “Mid Term Budget Speech: 13 most important quotes from Tito Mboweni”,  “Mboweni’s budget speech underwhelming: Shivambu”, “South Africa’s Rand Slumps after Mboweni’s Budget disappoints.”

Why are we so enthralled with this? We knew the date was coming, whether Mboweni or Nene delivered the speech, the facts are the facts and nothing was going to change. He has only been in office since the 9th October, did we really think he was going to say something that we didn’t know? Could he have sprinkled some miracle potion on the fiscus in the 15 days he has been in office?

Before I get into the point of my blog, I just want to highlight a few facts, South Africa has been on a slippery slope for quite some time now, since the beginning of the Jacob Zuma Era (read terror). He came in and played a game with the South African fiscus, he moved people around like pawns on a chess board, he had his own agenda (to ensure he never goes to jail again and never lives in poverty again), which he fulfilled during his reign (read terror). Since that time, SA has been spending more than it has been earning, spending more than it can collect, just spending. It was the answer to everything, low economic activity, spend, financial crisis, spend, budget deficit, borrow more money to spend. The problem is the money was being spent on quick fixes to make us feel better, much a like a shop-a-holic, when feeling down we bought things, when happy we bought things, when bored we built things (2010 world cup). What we never did was INVEST in things. But we as South Africans know this, we are aware of what’s been happening, we have been talking about it round our braais for years, so it is no shock. Yet, we still have such a reaction to “Mboweni’s, maiden budget speech”.

Back to my point, the Financial Press in South Africa have had a field day for the last 10 years, our politicians have fed them so much content to sensationalize and drip feed us the South African Public that we have become akin to a phene, craving more and more bad news, looking to every event to give us our hit and when we get it, we act all surprised, as if it’s our first rodeo, but it gives us something to talk about, something to worry about, something to have to do something about. It’s not our fault, this is an industry addicted itself, it has built empires around delivering bad news to the people, sensationalising everything, to sell more of the content, to make more money. Unfortunately, they have become responsible for the way so many of us feel, think and act on a day-to-day basis. We allow ourselves to be controlled by the reported intraday movements of the ZAR, the JSE, ALBI .Why? What effect does that have on us today? If the ZAR goes from R14 at 8am to R14,20 at 1pm and then R14.05 by the time you drive home, why should it change the way we behave during the day?

From a lifestyle Financial planning perspective, I absolutely despise the Financial Press, or as a friend of mine refers to it as “Financial Porn”. Yes, we may want to know the facts, but they aren’t going to change anything in your life right now, so stop worrying about it. I am not saying we need to bury our heads in the sand regarding what is going on politically and economically. What I am saying is let’s not let it control how we live our lives on a day-to-day basis. In our interactions with clients and telling them the truth about their money, you can rest assured that we have factored in the effects of our political uncertainty and the effect it will have on their lifetime cash flow model. We have accounted for the volatility in our currency, we will have shown you the effects a market crash will have and we will have the conversation about we need to do in such a scenario. So, if it has been accounted for, then surely you don’t need to react to it like our lives depend on it.

I guess the problem is that most people haven’t actually had these types of conversations, they don’t know what happens to their life plan if the JSE drops by 20% in a year. If the ZAR smashes through R20/$, what does it all mean? Do I need to stop eating, cancel my family holiday? Take my kids out of private school? I would also hang on every word fed to me through the press, if I had no idea how it was going to impact my life. These are all scenarios we take our clients through, we want them to know the good and the bad, so they know how to deal with these events if and when they happen. If you want to go through a process which puts you at the centre of the equation and not your money, one which prioritises your earnings over that of the broker, then you need to meet with a Lifestyle Financial Planner, preferably this one.


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