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Welcome to the best bits of the Money Show are digestive some of the most important insights, thoughts, comments and questions I suppose that have been on the show this week. If you'd like to hear more, if you think maybe someone you know, someone in your life could benefit from hearing it, please go to your podcast app and search for The Money Show. It's always a good idea to
just send it on a little bit to start. Some of the news stories that we thought were important this week, the White House announcing it was imposing in another twenty five percent tariff on goods from India. That means the total tariff from on Indian goods into the US is now fifty percent. Business Leadership South Africa and Business Unity South Africa they've both urged esk HIM to stop its legal action against NURSER, the energy regulator, for awarding five
electricity trading licenses to five different companies. I mean, it's an issue that gets to the heart of our sort of energy transition, what's changing regarding electricity in our society. And the global ratings agency S and P they flagged a fiscal risk as the ANC rarely said that it was very angry with the idea that the Reserve Bank and the Reserve Bank Governor, I supposed Eajo had announced the Monetary Policy Committee decision to target the lower end
of the inflation band. Tonight, if we bring you a mixture of stories from the world of money from the week that has been this week our shape shifter July and Lauvell, the CEO of Tungala Resources, reflecting on his incredible story becoming one of our most successful coal mining executives.
He spoke about leadership and also what he expects to happen in the coal industry and that some of the sector's pressing challenges, while also outlining his vision for a responsible transition to cleaner energy.
Retarding is a good thing. I've finally met it to the NEF Center of Sevenotu Land. Thank you well. We're very grateful that you gave.
I think whenever I were you know, the time I spent on Google looking, looking and preparing for tonight, and I noticed you included it in your LinkedIn profile as well. Is that you grew up in Gocomere, a particular part of Zimbabwe. It's near mass Vingo. If you look at it on a map, you went to a Roman Catholic school. They're still up, They're still going. The Sillver website I saw today. What was that kind of community like at the time. I mean, Zimbabwe's changed a lot over the years.
You know.
I mean Zimbabwe has been blessed with lots of mission schools. So all my schooling life was through mission schools. I went to Pacame for primary. Actually, go Coomere was a small part of my high school. High school education. I went to Sain Mission, one of the oldest missions in in in Zimbabwe, which was an Anglican mission. Then I went to Gocomere and something quite significant up beened at Cocomera because I met my my wife together for that long.
Sure do you think so we talk about education all the time in South Africa? Was there something about the quality of that education that helped you along the path that maybe young people in many government schools here don't get anymore? You know.
I hold the view that the Rhodesian government did one thing right for the black population of of den Rhodesia and Zimbabwe. They never denied us college education. We continue to get Cambridge education all the way into into independence, and when Robert and Gabe came on, the two things that your prioritize, actually, if you think about it, was education and free health. And they build schools everywhere, but with very good college education. And I think that set
us up. And for people like me who education was a ticket to change your circumstance, I was really lucky to have been born where I was born.
I mean I noticed that you spent some time at Columbia, and I was fascinated by this. I mean, Columbia is in the States, it's a big place, it's well known, it's fighting with Donald Trump. Everybody is.
It's quite a.
Journey from Gokumere to Columbia. I mean, did you ever while you were there look back and think, gosh, it started a long way away.
You know that part of the jenny is an interesting one for a young person who grew up in the circums, is that I grew up because what tends to happen is never really sure how good you can be, Yeah, until you get to a place like Columbia, where you begin to mix with colleagues from all over the world. In fact, in my class there were forty of us from thirty four different countries, and all of a sudden you begin to understand what work class leadership looks like.
But secondly, you actually just realize I belong, I can be just as good as the next guy. And I think it just gives you so much confidence and just liberates you to be yourself, to go out there and seek to be the best version not of the next guy, not of Jack Welsh, but of yourself.
You get away from the idea, well, I can only be as good as this place, and in fact you become July and Lavel.
The best version of July and Love and there's only one of you.
I like the way you put that you studied metallurgy, you studied the science of metal. Was there something about money that you wanted to do? Already by that stage quite a.
Young person actually, interestingly, I mean I told my friends that I'm a filled medical student because I lasted one semester.
Than me.
And then what happened was somewhere along the way in that first semester I met a guy called Herr Kover. He was a scene exative taking a director of Anglo American Zimbabwe. Then, and you started talking about mining and the things that you can do in mining, the difference you can make for communities where they were actually mining, the role that metals in minerals actually play in the developmental story of humanity. I really just felt, these guys
are doing something really cool. It's different to actually spending time in a in a a in a theater. So I just switched immediate at fund my passion.
Sure and you you you enjoyed that immediately. I mean you were studying its one thing to decide to do something. Now you're actually doing it, you're working in mining. Did you find that actually that passion stayed with you?
You know? I was lucky to work for an organization as big as Anglo American because what it provided was such a varied experience. In fact, I've only worked for two organizations, Anglo American and tan Gela now, But in reality I worked in so many different places, so many different experiences. If you can, if you can imagine, I started in COLLT, I went to phero Chrome, from fero chrome to Nico to PGMs, which I enjoyed thoroughly, and
full circle back to call different organizations. Although you're in Anglo American, you're experiencing so many different things, so many different markets, so many different commodities, different challenges, and it just grows you as a human being.
So you spend a lot of time kind of in the science of mining, managing mining, and then at some point the kind of I don't know, did leadership tap you on the shoulder? Did someone tap you on the shoulder?
Was quite a.
Transition, going from kind of science of mining to sort of leadership.
I mean, when do.
You think you sort of first found yourself in a kind of leadership position.
Probably round about the middle nineties. I made leadership positions first, first line management, quite air in my career as a youngster, and at that point in time, obviously you you're full of yourself. You think you're the best, You know everything. In fact, you almost think the guys who promoted you don't know enough anyone to change everything. So I've been fortunate to be in leadership positions probably for the greater
part of my career. That transition, more often than not, is not something that you get prepared for because you train as an engineer mostly as an individual contributor. In fact, we engineers think we are the smartest thing in any industry. Go into and all of a sudden you're not being asked to get the best out of other people. And that's a transition. Just generally, both in mining and most manufacturing organizations, we don't prepare young people very well.
For what makes it a good leader. And I suppose you know, I could walk past any bookshop and any airport in the world and they would have a leadership section and often think, you know, maybe I've got it, drng. But there's just a lot of nonsense there. In your experience. I mean, you've been with some of the best leaders in the world, some of the best leadership teachings in the world.
What works?
I mean, I can think of certain things off the top of my head, setting an example as one as being decisive maybe another what for you is the kind of key to it actually getting the best out of people because lots of people try and lead in their.
Fail You know, you're so right. I mean, leadership is about followers. Sometimes we forget that to be a leader, you've got to have followers. But it also teaches you that in fact, to be a leader yourself, you have to be a good follower. So this idea of taking people along with you ill aspective of what it is and realizing that in fact people choose to follow you, there's not much you can do. It doesn't matter whether
it's in politics or in business. Actually, when you stand in front of people with an idea that you want people to buy into, always remember that people are making a choice. Is this an idea that we're willing to give our very best to realize or not. So that's the first thing about leadership that I learned over the last three decades and a bit. The other one, really about what makes good leaders is to realize what delivers difference, and it doesn't matter whether difference is in sport or
in business. Are delivering good results actually is about realizing that we're not shut of good ideas. In fact, you know what, you can hire a consulting organization could be McKinsey ben. They'll give you brilliant ideas, but there's one thing they will never give you is how to translate those ideas into results, which is executing. And therefore, how do you build good teams that are complimentary and willing to get together, to work together to deliver superior results
better than the next guy. Because in minding, if you think about it. Generally, we all endowed with good resources. What differentiates the winner from the non winner is how well we execute to deliver that value into the marketplace.
Is it about putting the right team together? Is it about you talk about a vision? Is it about something else? I mean, clearly, you've got to sell people on the idea, almost make them sort of you know, almost make them think it's not quite theirs, but give them ownership of it.
You know, the idea of selling this concept that we say, you've got to sell the idea is important, but the idea itself must be compelling. But actually that's not the biggest part of building winning teams. Building winning teams is about bringing together a group of people who can compliment each other in a way that together they are better
than some of the individual parts. And secondly, it's just about you as a leader realizing how do you surround yourself with people who are willing to go to war with you, who are willing to hold you on your shoulders that they can buy so much into whatever simple idea that you've got, that not only do they support it, but they can actually build it into a much better idea. Because ultimately, if you think about it. I mean, we all think the most transformational leaders are the ones who
are we've got these blinding insights and ideas. Yeah, you do find the old anomalies like elln Mask, but most of us are just ordinary human beings who are able to orchestrate thousands of people who are willing to take sometimes which ideas which are not well formed and just molded into a winning formula.
Is leadership in Southern Africa harder than in other places? We have very diverse groups of people. Sometimes we argue with each other until someone from outside Southern Africa comes and then we all fight together against that person. I sometimes think that is leadership harder in Southern Africa than in other places.
You know, since since I've not had the opportunity to have a business in Australia and we set up business in Dubai, I used to believe on this mantra that if you have worked in South Africa and Southern Africa, you probably have very the best training and because it's quite tough to operate here. But the reality is actually you find every jurisdiction, every culture is it's a challenges
and differences. It's not about whether it's hard to hear or not is whether we can, whether you're able to understand the lookal narrative and the live systems that make people work up day in day out wanting to give their best and your ability to harness that that latent energy to make people give that extra discussion effort and it doesn't meet a way.
It is July and love or your special shape shifter Tonight the year Tunkala resources. I do you'll be pleased to hear July have some questions about mining. There was a time about five years ago when people started to get very excited about how the world was changing and moving away from coal. There's quite a strong environmental lobby in South Africa. We know, for example, what happens around Escum's coal fired power stations. Did you ever think, I mean,
there are more and more ways to generate electricity. How long do you think we'll be using coal for?
Still? Do you want me to disappoint you or you want me to tell it first? I don't know. Yeah, yeah, well knows, but I will knows other than to say that I think most people who have written the obituary for coal would be disappointed because the reality is and
if you go back. I mean, I've been talking about CALL since since five years, which is the way we're talking about If you look at the imaging markets, Southeast Asia, Africa to some extent, where there's billions of people who still need to come out of energy poverty into the kind of modern energe services that the first world actually experience. What they need is access to a reliable, affordable source
of energy. This idea that they've got to have a choice, a binary choice of either FALSI feels CALL in particular or renewables for me is a false choice. I think these energe sources can coexist, and that certainly is what we're seeing. And China is a very good example. China is deploying renewables faster than anybody else combined on the
glob today, and yet they're building new past stations. Is that reality that if you want to continue to drive economic prosperity, particularly in the in the imaging markets, you can't wish away this energy source that most people would like, who would love to hate.
No, sure, I mean I get that. I do wonder if we're kind of at peak coal, very close to peak coal, and then use it will start to get down possibly quite quickly.
I think we probably are Pickcole, if you ask my opinion, the decline is going to depend on a number of things. And I think what has slowed down decline is in some instance the activists. They have been their one West enemies by exaggerating the extinction of humanity, if we continue
to call that's one. But secondly, this idea of anerge security has become a far more dominant issue in developing energy policy in a lot of countries, and you beginning to see countries saying we can't rely fastly on a concentration of energy from one region and or only important energy. And therefore countries that have got coal within their own boarders are beginning to develop that is a resource to
secure their own energy sources going forward. And I think that is what is going to slow the decline from what it ordinarily would have been.
That was July and Lovelle reflecting on as leadership principles that have guided them already through a shifting landscape of Southern Africa's coal industry.
The Best of the Money Show and.
You're Consumer Ninja Wendy Nola. She was fascinating actually about the cost of home deliveries, and we're talking about food that comes to your door, hot and ready to eat. It's wonderful, it's also expensive and she at harvest can actually undermine your financial stability. It costs you money, and it costs you a lot more money than you might think, Wendy know.
So I have to say it.
It was a bank's press release which prompted this discussion, which is quite unusual for me. But yeah, so as you say, those little motorbikes are not just foods that has been ordered from delivery apps such as Uber Eats and mister d but also your grocery delivery. So we're not talking about grocery deliveries. We're talking here about people who who want to eat and then they click going to the app, click and it you know, there comes.
The little motorbike with their food.
And what Standard Bank did during the course of last month, which is saving some months or non saving months for most South Africans.
As it turns out, they took a look at what kinds of.
Things their clients were teeny spending their money on in otherwids habits that if they tweaked them a bit, because nobody wants to go called turky and anything.
If they spent a little bit more.
Mindfully, they could actually create a new habit of redirecting that money in the two have to go hand in hand. You've got to just save, you've got to spend it mindfully, put it away into a fund. Didn't account for emergency spending because it's not happening. Too many South Africans are saying they want to save for any day because we know through experience that rainy day has happen, and they
happen quite often, but it's actually not happening. So here is how the bank's head of Money Management and Advisory direct us to put it.
So in the context of savings month at Standard Bank, we want to have the conversation around practical ways, you know, to free up cash flow and to actually get the money to save. So as part of this exercise, we looked at individuals spending across different income categories and you know, categorized what people are spending on. So one of the things we looked at is subscriptions. Another thing we looked at is things like spending on takeaways and especially food
a level, et cetera. So really to have a conversation around yes, we all know it's important to save, but how do I start practically doing it? And if we're saying times are tough and it's difficult, you know, to save, what are some of the ideas that we can start
sharing with individuals to say, maybe look at this. And it's not necessarily to say stop spending on a certain item or certain category, but it's more to say, if you just take a bit of that money and you start redirecting it towards a savings account, you know, what can the impact of that be and how can you actually use that to kick start your savings?
Okay, so that's what they wanted to do. What levels of sort of spending on food delivery apps do they actually find?
Was quite an eye open Stephen I have to say, first of all, more than forty five percent of their clients across the board have no accessible emergency savings at all. And then among private banking clients between between twenty five thousand and fifty eight thousand a month, more than a third of them have no emergency savings at all either. So used to says we know that growing one's income
isn't always easy because there are external factors. We can't control, but obviously we can control what we're spending on takeaways.
Right, You've got to control what you can control. Now, we can't make as much money as we want, but we only spend as much as we need to and want.
I suppose yeah, and you know those of us whose work or home address is very well known to the mister d's and that it eats drivers.
The starting point would be, actually, let's look at it. Let's be mindful what what are we actually spending on these apps?
And you don't have to do any maths. You just have to go into.
Your audit history on the app or apps and it will tell you all. Standard bank starter shows that customers spend on average seven hundred and seventy five Rand a month on takeout and food delivery from fourteen major food fast food or quick service restaurants as the industry calls them qs are franchises, and as I said, that's not including groceries and supermarket meals. So it's the customers in the late twenties and thirties who are most guilty and
adverted commers of this. They're hugely embracing it. This is the new this is the way to go, and higher the income that they're earning, the more they spend. Those earning more than sixty or around sixty thousand spent one thousand rand monthsly, going up to around one to three a month during holidays.
Lower to middle income earners, those.
Earning under twenty thousand spend four hundred and seventy two rand. At those earning twenty five thousand a month six hundred and fifteen random month.
That's a lot, Stevens.
So I mean it sort of edges up right. You don't kind of realize how much you're spending on this because you never sit down and work out what it's costing you a month.
Well, that's the thing I think that applies. And I mean Dirett used to mention subscriptions as well. We don't want to go into that here, but that's the other thing that every month coming if your credit cars. And I think part of it, Stephen, is it's you're not handing over money. You're not handing over catches, not this conscious okay here, sixty eight rand or whatever. It's it's all clicked done coming off your card, you know, And
it's I think that adds to it. And I just wanted to add something that that bank press release didn't mention, and I think a lot of people don't actually realize, is that the food's not costing you extra over and above what you would pay if you ordered and collected yourself or went and ate inside one of those QSR places.
It's not just the delivery fee of twenty rand or whatever, but all the restaurants actually according to a news twenty for report back in twenty twenty three, they investigated this quite in depth, and most national chains charged between twenty percent and thirty percent more for meals than what their menu prices are for you know, normally, so that they add on their app costs for being on those apps to their customers, and that is a lot.
Twenty to thirty percent.
Then you're paying delivery on top top of it, and that's going to erode your bank account quite nicely if you are regular.
Yeah, yeah, very quickly.
Okay, So I mean, do you just stop doing it automatically? Do you go cold turkey or do it's another way.
I don't think cold turkey is a good thing we're going to we're human beings resistant to that. So don't order as often or reduce the cost of the of your takeaways. So don't pay the delivery. If you don't pay the app, marke up price, go and collect yourself or sit in the restaurant. You know, it's it's this convenience click and there it comes on the scooter thing.
That's that's taking away money. That if we save the money, don't just save the money that you put it away and have a goal and or just you know, when your car breaks down and you've got to suddenly find eight thousand rand. I mean for most people that will set them back for months and they're borrowing. Yeah, and that's more interesting. It's a dramas you know, there's one of two or three fewer takeaway meals or not having
the scooter come to your door. You know, there's the trade off is that you've got piece of mind and it isn't this emotional trauma when suddenly you need to find extra money that you don't have.
Yeah, okay, And I mean in the end, basically the moral of the story is, and this is something you learn when you leave your late twenties and nearly thirties, is that convenience costs absolutely.
So it's other forms of food as well, I mean, if you go into a supermarket, there's so many products on the shelves that are screaming pick me because I'm quick and convenient, and we're all like, oh, well, I are so busy and luck let's do it the quickest, easiest way.
All that convenience costs.
So if you buy the instant oats instead of spending a whole two or three minutes cooking thoughts the traditional way on the stove, it's going to cost you a lot more over time. The pre cut and bagged veggies are great, so convenient rather than cutting your own button nut or whatever. All these purchase decisions might seem petty, the pre cooked.
Sources instead of just spending two minutes do you yourself?
They all add up, and all those habits collectively are what are some of the things that are stopping us or you know, from able to put a little bit away to help ourselves for when there's inevitable dramas happened to us.
That was Wendy Nola offering an important reminder think about our food delivery apps are very convenient, They're great, especially on Friday night. They can also have a big impact on your financial will Beings.
Seven, you will listen to the Money shows the best.
Bits our personal finance segment. Warren Ingram, co founder of Galileo Capital. He looked at the Reserve Bank's recent interest rate cut. He explained what this means to you, but also some advice on how to make some smart financial moves as the landscape changes. Essentially, how to better manage an interest rate cut.
It's it's almost one of the fundamental aspects of all of our lives. So it impacts the way we spend, it impacts the way we live, and for a lot of us, debt is a reality, and so interest rates become even more important, you know, the more debt we have, and as we know, our country is super indebted. Anything to do with interest rates has almost a multiplier effect on our lives.
So you're right.
I mean, I think quite a lot of people kind of get lost in the news of Okay, the Reserve Bank's done this and actually missing the point that it really it's bricks and mortar for us. It really has a day to day impact.
Okay, So there are lots of different things we can do to try and take advantage of this. When interest rates go down, what's the good news. What does get cheaper because it's not good for everybody.
It's not good for everybody. The thing that starts immediately is if I'm sitting with a huge amount of credit card debt or personal loans or overdrafts. If the banks are doing their job correctly, very soon after the Reserve Bank announces a drop in interest rates, it means my debt gets cheaper immediately thereafter. So you know, a day or a week later, they'll obviously hold out a little bit.
Of the banks, you know, they never want to miss an opportunity, But it means that my credit card repayments get a bit less. And when you're paying, you're interested. Let's say twenty five percent a year, any breathing space that you get, you know, a quarter of a percent doesn't sound like a number, but let's say it's you know, your credit card, your personal earned, your car, and your mortgage. It becomes hundreds, if not thousands, if not tens of
thousands of rands impact in South African's back pocket. That almost instantaneously, what gets less attractive.
I mean it's not there are other things that happen as well. It's not just one thing.
So what happens now is you get the people sitting with cash, especially retirees. You know, retirees will will often store bit too much money. They won't be listening to their financial planners and who say, don't you know, don't don't cold cash, and they'll start complaining because they're saying, well, you know, two years ago, I was, you know, earning ten thousand round a month of interest, and it was really great. Now two years later, interest rates to be
coming down, coming down. Now I'm earning eight thousand. So cash becomes an unattractive place increasingly as interest rates come down. If all the prognosticators are right and we don't get any more interest rate cuts, it's still reasonably attractive to earn interest. Now the interest rates are still quite high, actually, but it is less and less attractive. And remember you might be getting paid seven percent interest. You're giving our friends at SARS three percent of that for tax, so
actually then you're earning four percent. And you know, if your cost of living is going up at six or seven, then you're going backwards. So cash is the thing you don't really want to hold in a falling interest rate environment.
Are they particular types of investments that sort of lose their appeal. Are they particular things that actually, I mean, is there a particular category maybe that really suddenly don't start to make sense anymore?
Money markets, fixed deposits, even rs, retail servings bonds, which I really like. You know, they will now issue new bonds into the future at a lower rate, So that category, that class of investment will perform worse.
Those will also be conservative investments, right, that kind of thing.
Very cautious, very conservative. And why it's impactful is it's often the antidote to the very aggressive investment. So if you're retired and you need equities because you need to, you know, protect against inflation, you hold a lot of cash and that helps you and offsets all the volatility, and now all of a sudden, your cash is not a rewarding You're you're kind of forced to take a smaller nesting an emergency fund. So it does become a problem.
Actually, are there investments that become suddenly a lot more attractive? Are there some things that actually, now, really when interest rates are low, when are cut, you actually need to start investigating a little bit more seriously.
So government bonds or corporate bonds typically you'll find their price. The price of a bond goes up when interest rates go down, and then the other way around, so if interest rates go up, the price goes down. So now all of a sudden, you've got an investment which generally pays a rate of interest a bond. And now you're getting capital growth as well. So that's very nice. And you know that's impactful for you and me, for example, because we might have it in our ra or we'll
see it in a balanced unit trust. So now we're getting capital growth our in those funds as well. And then property companies that trade on the Stock exchange or even you know, normal properties. The property companies, their prices tend to rise a bit when interest rates go down because they all have debt. They'll call it gearing whatever, but they've borrowed money, they're buying properties, so the less they have to spend on funding interest the better for them.
I mean, there's a particular property company, a real estate company that before each Monetary Policy Committee decision the day before, sends me a press release with their CEO demanding that interest rates be cut. I mean, there's a pretty self interested argument, isn't it.
It is and and I think, I mean, we probably don't have time to get into why the reserve banks doing what they're doing, et cetera, why interest rates are high. But having said that, that is a self interest argument, because actually the thing that really wipes us out is the cost of living is inflation. So whatever we can do to keep inflation down and keep it under control, which actually is interest rates, I think is a good thing. And it's a known factor. So the property companies must
deal with it. It's it's known, it's a no known they can do their jobs despite the interest rate.
So good to hear your questions tonight for Warren Ingram, the co founder of Galileo Capital, a certified financial planner. He's actually with us in the studio double one, double A three seven two two one four four six o five six seven. I'm sure you have a thought or two about where we are with interest rates right now after that cut last week. Okay, so, Warren, so interest rates get cut. It's the it's a Friday morning sort of wake up. And I'm reminded in the EWN News bulletin,
Oh yes, made this announcement yesterday. So now they're down. What are some of the things that I should do almost immediately.
One of the things to check is when interest rates come down, if you've got debt, the way that banks will help you is they'll either charge you a little bit less interest, and that means that that that first new repayment will will drop a bit. So if you were paying five thousand round a month on your debt payment, are they dropping it from five thousand to four nine
hundred Do they do that automatically? My sense is if that is the case and they do drop it automatically, you can actually elect to maintain the original amount, so you then pay actually a little bit more. So if you said to them, don't do that, I'm happy to pay the five thousand. No one likes to pay a debt, but I can cope with the five thousand. I'm used to it now, Please don't drop it. If you can live with that, what it means is you're paying your debt down faster, and I think a lot of people
don't take advantage of that opportunity. So what they do is they then spend a bit more. They've got a bit more breathing and they've got a bit more cash in the end of the month, So I think check your debt and try and keep your repayments the same,
because you'll get that debt paid much faster. If you can't do that, have a look at the interest that you're paying on all of the investors, all of the debts that you've got, and the one that's costing you the most, at least continue repaying that one, so at least you pay down the most expensive debt, the high interest rate first. That would be the very first thing I do on the first day that those interest rates are going to come down.
So it's likely that you're paying, say a higher interest rate on a car, but it is a smaller and of shorter duration debt than your bond. Yeah, but if you put more money into your bond more earlier, doesn't that mean over a longer term you'll get more value for that.
You're right, except that for me, the interest rate you're being charged is actually the expensive thing. So I would rather take a little bit longer to pay off the mortgage at the start, to take a bit of time there, because if you get the car paid off quickly or more quickly, that means you can take the entire car payment chuck that into the mortgage as well, and then you make a really big impact. So I think there is no investment in the world that grows as fast
as your credit card debt for example. Yeah, so actually paid on the credit card debt, then paid on the car, then pad on the mortgage in that order. The trick is not to then go new car just as you've paid off the old car. That's the thing where we all get caught out.
Indeed, yes, it's thirteen minutes now to eight. You with the money, show your questions for Warren Ingram. Okay, what do you do with your investments? Rate suddenly go down? Is there are there any changes or anything you need to do with actually your investments? How do you how do you sort of approach that because you're thinking slightly longer term here?
Oh and I think so we've spoken about your checking your debt and restructure the debt. Next question is do you do you does the mix I'm not allowed to say the D wordymore because you always rip you off diversification. So you've got a diversified portfolio. Is it still correctly diversified? So do you still have what you should what the correct allocation to shares to bonds to property. Remember, interest rates have gone down, so now the price of bonds
has gone up. That does that skew your whole portfolio, because if it does, what you might want to do is just check the balance. The other one we didn't really speak about much and is falling interest rates are great for the stock market, So you might find that your bonds have gone up and the stock market part of your portfolio has gone up. So check the balance, make sure it's correct, and then reposition because interest rates don't change a lot, so to reposition your portfolio because
of that is good news. It's a good thing to do.
It's also a good moment to check your emergency fund if you're getting it, if you're saving just a touch more, maybe you can put some more money into that.
Either top up your emergency fund, or if you've done well and your emergency fund is a bit overfunded, it's not so rewarding anymore to have extra cash, so maybe you drop it down. So for most of us it's actually top up the emergency fund, but for some of us it could be Okay, let me take some art and actually put it into equities or shares or bonds or something.
Like that or in JJ's question, I want to know if there is an easy way to work out how much money I need to retire. And I suppose if someone were to say, how much money do you need to retire? All of it.
And some more, yes, I think too. I want to kind of start with just the psychology lesson quickly, because when people do the number and I'll answer the question, they might get a little depressed. And maybe the thing to understand is when you do the calculation and you still got some time to go to your retirement, the trick is can you narrow that gap from one year to the next to the next. So if the gap is wide between what you have and what you should have,
are you making that gap shrink? And if you are, that's progress. So don't lose hope when I give you the way of calculating, and I think you can do a fairly simple rule of thumb, which is you take all of your expenses in a typical year. Now if your kids are if you've got kids in there at school or varsity, whatever the deal is, remember they're not going to be there, hopefully hopefully by the time you've retired.
You've done that job. So you take your expenses as there are today, and you just take out the expenses that you know will disappear. Then, if you buy a car every ten years or every five years, take one fifth. If it's every five years, one fifth of the car expense. Add that to your annual expense. So you get to number. Let's just say you end up spending one hundred thousand a year of normal expenses every year. Take that and multiply it by twenty five. That gives you your retirement number.
It's not perfect. It's a rule of thumb, but gee, it pretty it is pretty good. I've done that rule of thumb, and then I check it with very sophisticated calculators and modeling tools and stuff that I don't really understand, and the two end up talking a fairly similar story. So that's the answer for JJ. And as I say, a year after ear if that gap between what you have and what you need is narrowing, you're doing your job.
M okay. So there is actually a way to go and do it. I mean in the way that most people can understand.
I think so, and I mean I think we can. We should all know what we spend. If you don't know to JJ if you don't know what you're spending, and you don't and you want to retire, come on, you've got to do some work, which is at least understand what you spend and then to be able to multiply that to get to that number. It's not that difficult. We don't like doing it because it's a bit scary. We don't want to see what we can.
Yeah, okay, So there's a lot happening around residential property and and lower interest rates, and property prices obviously are going to be affected by interest rates, and generally speaking they go up. Hence my weekly email from the real estate agent.
Yeah, and I think we're actually seeing a bit of anecdotal evidence that the property market in Joeberg, for example, is picking up again. You know, it's been a one way story right now, but you know, just the Western Cape all the time and Cape dance pumping, and now we're seeing more and more news about property prices in joe Buck picking up. And I think part of the story is around interest rates. So as interest rates come down, mortgages become more affordable, and so that becomes a positive
pressure to push prices up. If you were marginal about where your rent versus your mortgage. This might just put it in the situation where your mortgage now becomes affordable. The thing about property prices is they don't move like the stock exchange. They don't go instantaneously. So if you were thinking about buying and you were on the fence, don't sit for too long. You can now use this as an opportunity to get in.
We're speaking to Warren Ingram to Night of Waste note coming through on seven two, seven oh two one, seven oh.
Two evening's diving into even that's a quick one man.
So how much more president must you pay on the bond to rechuse it from I mean on a mounta basis to digit from twenty yeahs to fifty years for instance.
So how much more as you put.
In on top of the normal bond to regit it by fashion over the period I listened under anything you could do?
Thanks Tiker. It's a great question, and I don't know if it's possible to actually work it out. If you've got a twenty year bond and you want to now reduce it to fifteen, you want to pay it back in fifteen years, how much more as a percentage each month would you need to pay I suppose it might depend on all sorts of things.
Yeah, you know, and those maths problems to we were given at school with a story sums. It sounds like one of those and I was notoriously bad at though. So I don't have a good answer. I mean, I think you can probably do a calculation.
Just go online.
There's lots of these bond calculators and it'll tell you so. So a short answer to say, I don't know, but I do think you know, this kind of a drop, a quarter percent drop is not going to give you five years shorter on your bond. So if you continue to maintain your payments, it's going to take I don't know, six or nine months off, but it's not going to be five years.
Yeah, TK, it's still worth doing. I've got to tell you. I think in the longer run it is still worth doing. Okay, So when interest rates go down, we start to see more people coming into the market, But do you also need to sort of factor that into your longer term plan. You can't just rush out and buy property now.
Please don't do that. So you don't buy based on an interstrate cut Number one, interest rates could go up again. You know, if these tariffs just have a dramatic impact on our country and inflation goes through the roof, it might force the Reserve Bank to push rates up. I mean it's you know, we don't know what we don't know, so you don't buy based on that. The people that would look at this as an opportunity would be people that are renting and are seriously considering buying anyway, and
this becomes the tipping point. But equally maybe that people who are in the property market now, who own a property and we're wondering what would push prices up. This is a piece of good news for you because this is going to push prices up across all sectors right across the country, not just in one area. So it is a very positive trend. But it's not the only one. We've had a few cuts already, so there is a point where it picks up that snowball.
I mean, I suppose what people really want to try and do is to make the most out of any cup that they get, and it can actually be quite hard to know where to start. It might also help to know before there's a decision what you're actually planning to do to have a sort of a strategy.
Yeah, I mean, please have a game plan for your money. And I think if you're sitting with a debt issue, doing that homework to say what costs me the most, that would be step one. Or if you're not in that position and you're looking at property, you know, do the calculation to say, can I afford the property today? Can I cover months and months of bondary payments? You know what happens if the geezer bursts, and what happens
if I need to pint. If you can deal with all of those things, then this might just be the last thing that helps you just get on the line. But we don't make huge news. We shouldn't a bit because of a quarter percent inter straight cut. It's just another piece of good news.
That was Warren Ingram bringing down the implications, breaking down the implications, I should say of the Reserve Bank's interest rate cut.
Seven The Best of the Money Show from this week.
This week our business book review Ian Man, the managing director of Gateways Business Consultants. He discussed conquering crisis. My Admiral William H mcgraven's a wonderful name. Mcgraven has extensive military experience, ian impact, some powerful leadership lessons on resilience, strategic thinking, and navigating disruption.
One of the things about it is he's come up with a set of principles about, well, how did how to conquer a crisis situation. It's not as much to prevent it as how you deal with it once it's happening. Yeah, And the book says this is book you should read before you need to Yes. And I cannot emphasize that enough. Just to put in mc in context, he was a
retired four star general. He led the US Navy Seals and that's the toughest people in the group, and was involved in in special operations literally for America around the world. He was the fellow who went after Bin Laden. He is the one's who's not personally but organized the taking out to Saddam Mussein. He also land up afterwards being the chancellor of the University of Texas. So he has both.
Expressed something very appropriate appropriate there.
But the key about him is that he's given he's got a set of ten principles that you've gotten that you really should be aware of whenever you're faced with the crisis. Now, the crisis can be on a level. They can obviously be a political crisis, but they can be a family crisis or a business crisis. And a couple of the couple of rules that he has now, I'll share just a couple with you. The first thing is he says that the first reports are always wrong.
Yeah, what a great way to start, actually, because that's so often the case.
And what it tends to happen is that when you start and say first reports are almost always going to be wrong, be skeptical, skeptical about what's really happening with the timing of the fact, what's really going on there, And you really need to be cautious about making any declarative statements before you've had a chance to say, I need to investigate what this is so you don't put your foot into it and cause a lot of trouble. And people don't do that, and I think that that
gets things to spin out of control unnecessarily. Another issue he talks about is having a council of colonels. The Council of Colonels obviously military to their talk colonels, but I would imagine they have a council of people that
you can trust in your organization. So whenever something comes up, it's very important that it's not only your opinion, but you actually have your counsel of people that you really trust, not necessarily at your level, above your level, below your level, that you can call into a room, actually a real face to face conversation. The other point there, I love I raise it very very nicely.
He says.
Bad news doesn't get better with time, and it's there's a strong tendency to to feel that you should cover up bad news for as long as you possibly can. And one he everything he talks about he has all
based on experiences he's personally had in the military. There was a time when when they were they were a man came out of it, out of a he's in Afghanistan, trying to protect the people there, take out the bad guys, and and a man comes out of the area that they were worried about with the with the with a weapon and he's aiming at everybody, and they take him out.
Turns out that he's the cousin of the president. Unlucky, and this is he said, this is the catastrophe he found up Betreus, who was running it at the time. Petressal quite friendly with the president, trying to develop a relationship with them.
He says he was.
He was very but this is this wasn't just a man being killed. This is the this is the president's nephew. And and because of that, he instead of trying to dull it down, he found him at half boss three in the morning, took him out of going him out of bed and told him what was happening. He got yelled at. They eventually solved the problem together, but he said he worked brilliantly through Petress after because petre said, I know I can trust you because you'll never lie
to me and you'll never withhold any information. And I think that that's absolutely critical. Another thing that another instant they had in Afghanistan was they were tracking groups of people and they had you're tracking them with all sorts of really fancy stuff, but you lose you lose contact because the mountains. Because they got these guys and they really looked like a bunch of terrorists. Once they were absolutely pretty sure that they were terrorists, they did take
them out. Now, the problem with them, whether they were terrorists or farmers is what they had to track, and they tracked them for hours. They've got incredible surveillance abilities. And the newspapers came out and said they that they bombed and killed a group of all they were were farmer and the reporters who were most vicious. The very next day, he invited them to come to the Jersey where they do the work and the analysis. He showed
them exactly what they do. He showed them how they work, how they come to decisions, how they analyze, how long they track and before they make a decision. He said, by inviting them in to see what was actually happening, and he weaponized the truth. And by weaponizing the truth, he said the article in the newspaper, one of them stopped, stop vilifying without and the other one moved himself quite a lot.
Just before we go any further, in the States, there's this idea where people who work in the military and military high ranking military offices must always be right. We don't have that here. A very different view. Does that sort of come across. He's used to clearly being obeyed and used to being seen as always right.
That I think that could happen. But I think that what probably has happened. There's so many people that that there's of all people, you need to come across the one that you think is right just. And I think that when when he looks like a man of good values, but he also seems a man who's quite used to being one. One last thing and I'll show this you. He says that there's always time for more, for a
morale check. He was at the University of Texas. He bought a huge piece of land on behalf of the University of Texas to do a development and went south. It was a complete mess and was waste of money and waste of time. And he's the press. He has to go before the he's the chancellors and everybody else in the chress press really takes him out. And he's sitting in his office and a man comes to his secretary and says, I'd like to speak to mccraven and I don't think now that's the right time. And he
just shouts out. He shouts at moral check, and and he he said he knew what moral check.
Moral check was.
He said, in the army, when something gets beat up, always villified wherever it is, you go to them and you do a moral check. Moral check is to see that he's going that's okay. And so this man came in there said, you know, boy, you've you've caused so much trouble enough against and I always wonder how come
you always get these top positions. Here go I missed the beginning, and they laughed together, and after by the time it was all over the discussions he was he said he was really glad that this man had told him and come there to support him. I think it's terribly important, and people are in those situations with it's your staff for other people, you know, seated that you have a moral check.
That was Ian Man A compelling look into the book Conquering Crisis and the leadership wisdom of Admiral William H mcgraven.
Seven.
You all listening to The Money Shows. The best bits.
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