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The Fat Wallet Show from Just One Lap

The Fat Wallet Show is a show about questions. It’s about admitting that we don’t know everything, but that we’re willing to learn. Most of all, it’s about understanding as much as we can to make us all better investors. Phrases like, “I’m not sure” or, “Let me look that up and get back to you” or, “I don’t know” don’t exist in the financial services industry. If you ever had a financial question you were too embarrassed to ask, you know what we’re talking about. In this business, appearances matter, and nobody wants to seem like they don’t know how things work or what the outlook is for the buchu industry. It’s easy to excuse that little vanity, except that people in the investment industry are meant to service investors - people like you and me who need to figure out what to do with our money. There’s no such thing as a stupid question in this show. If you have unanswered financial questions, this is your opportunity to have them answered in a way that even I can understand. Pop them to us at ask@justonelap.com. Hosted by Kristia van Heerden and Simon Brown
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Now displaying: October, 2016
Oct 30, 2016

You thought we were just a podcast, but we also time travel. With Simon on holiday, we pre-recorded this episode two weeks ago, when #twentiestaughtmethat was trending on Twitter.

I learned my biggest financial lessons in my twenties. Reading through the tweets, I realised that that’s true for many people. I also realised how lucky I was to learn those lessons in my twenties. Of course it would have been better not to fall down a debt hole like a dystopian Alice in Wonderland, but at least I managed to claw my way out while I still had time left to correct my mistakes... We hope (she thinks grimly).

Three tweets in particular stood out for me, but I embedded the search below. Read through it. It’s quite amusing.

#TwentiesTaughtMeThat it takes more than a degree to own a Range rover.

#TwentiesTaughtMeThat it's easy for habits to become a lifestyle

#TwentiesTaughtMeThat: money matters even R1.00

Simon and I kick some ideas around about the best way to spend and invest a windfall. My deep-seated Calvinism has me shunning moderation in favour of austere financial measures. Thankfully I have my much more hedonistic friend around to pull me back to centre.

We received so much feedback after last week’s retirement episode. We’ll get to all of that next week. I still can’t get over the fact that people actually write us. Know that you’re making me very happy.

Remember to send your questions and comments to ask@justonelap.com. If you have a moment and would like to do something nice for us, please rate us on iTunes.

Kris

Oct 23, 2016

I recently realised, to my horror, that pension fund and retirement annuity providers are winning at consumer education. With my first job came an onslaught of pension fund providers vying to communicate with my broke ass. I didn’t know how to budget, how to manage my debt, how to navigate myself out of a brown paper bag, but did I know who to call about retirement.

Unfortunately, in the process of educating consumers to sell retirement annuities, providers fail to connect retirement savings with other aspects of financial life. The tax implications can be especially worrisome. Understanding taxes in relation to retirement savings is an important piece of the asset allocation puzzle in a broader portfolio.

This week we received two excellent questions about retirement savings and taxes. Organisations like Gradidge-Mahura Investments are devoted to helping people figure out how to navigate this tricky terrain as part of a larger wealth management strategy. We asked co-founder Craig Gradidge to answer two questions.

Firstly, what is the most tax efficient way to treat your retirement savings when you change jobs? Secondly, what does it mean to get a 27.5% tax rebate on retirement savings? Craig drops knowledge bombs all over this episode.

Thanks to Petrus Booysens and Tim Milner for your excellent questions. Remember, The Fat Wallet Show is about learning. If you have a question about money or investments, no matter how simple, send it to us at ask@justonelap.com.

Finally, at the beginning of the episode I allow myself a little indulgence by talking about one of my favourite Johannesburg hangouts, The Orbit. You can find out more about that here.

Kris

Oct 16, 2016

Erik Thiart sent a question that I’ve subconsciously been avoiding on this podcast. He wanted to know what the deal is with my debt story. I talk about paying back my debt often, but I’ve never really gone into how I got into debt in the first place. If I’m perfectly honest, it’s because it serves as a reminder of what a total moron I can be. It makes me look bad and I don’t want people to know about it.

This week I come clean. I explain how I got to owing R100 000 on a R10 500 salary in the blink of an eye. After unburdening myself, we discuss possible scenarios where debt could be helpful. We discuss how store accounts are trying to lure you in, how credit cards allow you to arbitrage the bank, buying a car and (oh goodness, why?) home loans.

I mention Jason Pieterse’s fantastic email in this episode. I published that mail here.

If you love us, please go tell iTunes here. It helps other people find us.

If you have questions or comments, feel free to send them to ask@justonelap.com.

Kris

Oct 9, 2016

When I finally paid off my debt three years ago, I was in the perfect position to start building wealth. It took two stark years to get out of a very dark place of my own making. No salon visits, no new clothes and a helluva lot of peanut butter later had me looking a little furry, but I felt good about myself.

Paying back all that debt made saving easier. I was already used to running a tight ship and sending my money to financial instruments. Six months after paying back the last of my debt I had saved enough for an emergency fund and my first lump sum investment.

I understood why I had to invest. I understood compounding, wealth creation, setting goals and the 4% rule. What I didn’t anticipate, however, was that my investments would flatline for two-and-a-half years. The drama with Deutsche Bank over the past three weeks gave me pause. Many Just One Lap users have been asking us what to do about their x-trackers. Since my entire tax-free allocation for the past two years has gone into DBXWD, this hits very close to home.

My investment portfolio has never really done much, and that never really bothered me much. However, this week I also got my monthly Capitec interest SMS. Over a one-year period, my emergency fund has earned me nearly R5 000 in interest, while my investment portfolio is actually worth less. Over a two-year period, I would have been better off sitting on a hunk of cash.

top40-chart
How not to time the market. What the JSE Top 40 has done since I started investing.

In this episode of The Fat Wallet Show I turn to Simon for a much-needed pep talk. Yes, I understand the principles of investing. Yes, I know historically speaking the market always recovers. However, the market hasn’t really been kind to me. I want it to show me the money, not take the money.

I’m not planning on doing anything differently for the moment, but I’m ready to see some upside. Pronto, please.

Kris

Oct 2, 2016

I’m a big believer in having an emergency fund that will cover my expenses for at least three months. I don’t want too much cash sitting around doing nothing, but I also want to avoid cashing out investments to cover emergencies.

My emergency fund creates an interesting dynamic in my personal finances. Because I have cash available, I think differently about warranties and insurance products. My 2008 Huyndai Atos, for example, is currently insured for R25 000. I have that amount available in cash. At what point does it become uneconomical to pay insurance? If something happens to my car, having access to the additional R25 000 probably wouldn’t hurt. Would it be better and would I be able to save that much before I need it?

Quinton Hoffman is facing a similar problem. He sent us this question:

Should I bother with extended warranties and service plans or should I use a emergency savings account? Which method gives me better value?

In this episode of The Fat Wallet Show, Simon and I talk about how to work out when a financial protection product becomes unviable.

Home calculator

The calculator I mention in the podcast can be found on rollingalpha.com. It’s a great toy!

I’ve been memed! Our friend Stealthy Wealth was on point with this one.

Prepaid and contract

Ourmoney.co.za wrote a great article about finding the most economical airtime solution. Check it out here.

Shoes!

My irresponsible behaviour inspired The Disruptors to write an article about shoes. I’m flattered and honoured. Speaking of disruptors: I get so many emails from guys, but I hardly ever hear from women. Where my girls at? Drop me your questions at ask@justonelap.com.

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