The right in­gre­di­ents for wealth

Finweek English Edition - - INSIDE - BY KRISTIA VAN HEER­DEN

Ann Wilson is a mul­ti­mil­lion­aire and the au­thor of The Wealth Chef, a book that helps or­di­nary peo­ple achieve fi­nan­cial free­dom. She presents money man­age­ment and in­vest­ment work­shops all over the world, but like most South Africans, she wasn’t born with an in­nate un­der­stand­ing of money.

Find­ing her­self in debt by her late twen­ties, de­spite her com­fort­able en­gi­neer­ing salary, she re­alised that her life­style was keep­ing her from be­com­ing truly wealthy. She man­aged to dig her­self out of debt and get her spend­ing un­der con­trol, but her money woes were not yet over.

“I had gone from bing­ing on money I didn’t have to think­ing if I held on to it re­ally tightly, I wouldn’t feel vul­ner­a­ble.” She got mar­ried, but money re­mained a con­tentious is­sue through­out the re­la­tion­ship, which even­tu­ally ended in di­vorce when Wilson was in her early thir­ties. “I ended up watch­ing both my money and the mar­riage walk out the door! At this point I felt like a com­plete fail­ure. After all th­ese years of work­ing hard, I was back to zero fi­nan­cially.”

She re­alised that she didn’t un­der­stand the dif­fer­ence be­tween sav­ing and in­vest­ing and had no idea how much was enough. “There was al­ways this fog­gi­ness around my fi­nan­cial plan. I started look­ing at stock mar­ket in­vest­ing and read­ing up on all the great value in­vestors of the time. In the process, I fell for a few of those get-rich-quick schemes be­cause there was still a part of me that tried to find that one, key in­vest­ment that I could tick off the wealth box.”

By this point she started to re­alise that in­come was the least im­por­tant in­gre­di­ent in cre­at­ing wealth. “It’s not what we earn, but what we do with it that cre­ates the wealth. It took me eight years, from that day of feel­ing like a com­plete fail­ure and start­ing all over again to achieve my own fi­nan­cial free­dom.”

WHAT IS THE MOST IM­POR­TANT THING PEO­PLE HAVE TO KEEP IN MIND WHEN TRY­ING TO GET OUT OF DEBT?

Even when peo­ple are tak­ing care of debt, they have to fo­cus beyond just get­ting debt free or be­ing f inan­cially free. Part of that is learn­ing skills on how to get money work­ing for them. While tak­ing care of debt I rec­om­mend start­ing a very ba­sic stock mar­ket eq­uity in­vest­ment to get con­fi­dent and to get into the habit of pay­ing them­selves first. In South Africa you can start with R300 per month.

WHAT IS THE SIN­GLE BIG­GEST LES­SON YOU LEARNT IN BE­COM­ING FI­NAN­CIALLY FREE?

Cre­at­ing wealth is a process, not an event. We cel­e­brate the lot­tery win or the business that was sold for mil­lions, but when we let go of be­liev­ing that wealth is this one, big event, we start to re­alise that ev­ery cent is a seed. So many peo­ple keep wait­ing for that big bonus to start, but to­mor­row never comes. You cre­ate wealth through repet­i­tive, wealthy habits of re­duc­ing our debt, of get­ting as­sets, of com­pound­ing.

WHAT IS THE BIG­GEST LIE PEO­PLE TELL THEM­SELVES ABOUT MONEY?

It’s that there isn’t enough. When we start say­ing, “How can I get what I want with what’s avail­able to me?” we un­leash the great­est as­set that we have, which is our own po­ten­tial and our own mind. When you re­ally start un­der­stand­ing how to pay your­self f irst, you can de­cide how to cover the rest of your ex­penses with what’s left. Then we start get­ting cre­ative! If you wait and see if there’s any­thing left at the end of the month, you’re ac­tu­ally telling your­self that the DStv con­tract is more im­por­tant than your dreams. Money is a dis­as­trous master but a fan­tas­tic ser­vant!

WHAT IS THE ONE QUES­TION ABOUT MONEY THAT YOU GET ASKED WHER­EVER YOU GO?

“How can I earn more?” That is the wrong ques­tion. We ask our­selves poor money ques­tions and that is part of the prob­lem. The ques­tion you should be ask­ing is, “How do I live the great­est life right now with the money I have avail­able to me?”

Of­ten, when we start talk­ing about eq­uity in­vest­ing, peo­ple will ask, “How can I f ind a safe in­vest­ment?” Again, the qual­ity of the ques­tion is poor. The great­est risk is never learn­ing about money. Risk is purely a mat­ter of f inan­cial lit­er­acy. Most of us don’t un­der­stand that no one popped out of the womb a fi­nan­cial ge­nius.

WHAT’S THE WORST FI­NAN­CIAL AD­VICE YOU’VE EVER RE­CEIVED?

“Trust me, I’m a fi­nan­cial plan­ner! This is re­ally com­pli­cated. Just trust me and sign here on the dot­ted line and buy this prod­uct.” I be­lieved that this is scary and com­pli­cated, and through naiveté and fear bought into some re­ally dis­as­trous f inan­cial prod­ucts. My mis­sion is just to get peo­ple more f inan­cially lit­er­ate and more con­fi­dent so they can ask the ques­tions and be a great cus­to­dian of their money to work for them and not for any­body else. Wilson will be of­fer­ing ad­vice on how to set up an in­vest­ment plan at the popular etf SA.co.za Stocks for Frocks events, which will take place in Jo­han­nes­burg, Dur­ban and Cape Town in Novem­ber.

Ann Wilson

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