PPS HAS A GOOD STORY TO TELL | FIRST GENERATION WEALTH | HOW PPS MADE R6 BILLION | MAX MOJAPELO PPS

Added: 2026-06-01

[00:00:00]There's a good story to tell from your your office PPS. True. An incredibly good story in a rather unexpected time.

[00:00:09]We think the world is in absolute chaos.

[00:00:12]>> Yeah. And yet you report 6 billion rands in profit share.

[00:00:16]>> In profits, yeah. How in the world is that even possible? A couple of things, eh.

[00:00:22]One of the most successful long-standing business model in the world is insurance. 100%. Because that pooling it works magically. For some of our members, neh?

[00:00:34]Um and [music] definitely for last year if you were to look at it, we returned 93% 93% of premiums received Wow. in profit share. Yeah. If if I never get to retire as a way Yeah. Your your profit share will then be uh allocated to your beneficiaries to the estate.

[00:00:54]You know, the the thing about first generational wealth is that there's a lot that you're learning.

[00:01:00]So there will be mistakes. There will be mistakes.

[00:01:03]>> Yeah. Right?

[00:01:03]>> There's a time when money [music] is a lot more important than you the person. Yes, you did say. I did say.

[00:01:11]Hey, Mona Lisa. Don't tell us about the will anymore. Now we we waiting for Nkululeko Khasi. No. No, no, no. Doesn't work like that.

[00:01:18]>> We waiting for someone to die. No. In the township and then you're waiting >> [laughter] >> And then it's going to be a fight. King King David Studio podcast. We managed to get hold of uh Max Mojapelo who's a PPS executive investment solutions. Max Mojapelo shares a name with a very popular radio personality.

[00:01:41]>> [laughter] >> I'm one now.

[00:01:43]It's true. That's true. And I'm sure you know this well.

[00:01:46]>> I know. Yeah, you you carry a name and surname. You had a big big name in radio.

[00:01:52]>> In radio, yeah. No, like I said, I think you know, in the Mojapelo family obviously we keep the names in the family.

[00:01:59]>> Yes. So you can always trace it somewhere. Correct.

[00:02:03]>> Yeah, there's a connection.

[00:02:05]>> There's a connection somewhere.

[00:02:08]And then that's how you got you got this cool cool name.

[00:02:10]>> Yeah, then you get the cool name.

[00:02:12]>> [laughter] >> Yes, do you use it? I use it most times, but then I think Maxwell just, you know.

[00:02:22]It's easier.

[00:02:23]>> It rolls better on the tongue. And it's easier for business. It's easier for business. Imagine I give up my name cause burning that. Makhesha. I don't know, it would be a disaster, absolute disaster. But you know it's it's all good as long as you know we still flying the Mjiyakhe flag high. That's all that matters. That's all that matters man.

[00:02:40]There's a good story to tell from your your office, PPS. True. An incredibly good story in a rather unexpected time.

[00:02:49]>> Yes. We think the world is in absolute chaos.

[00:02:53]>> Yeah. And yet you report 6 billion rands in profit share.

[00:02:57]>> yeah. How in the world is that even possible? A couple of things here.

[00:03:03]I guess maybe you know we will talk about the structure of the business, but good good management. You know, like sometimes when you look at a company we always say you have to understand who are the managers. Other people who are actually making the decisions, the strategic decisions and I think there's there's been good strategic decisions by the group Exco.

[00:03:23]Which you know yielded good profits, operational profits to the tune of about 1.3 billion or so.

[00:03:30]But then also the markets are the markets are good last year.

[00:03:34]Strangely, from from from a layman's perspective >> Yeah. we it didn't look like it. No, yeah. And listen Because remember we look at the entire chaotic the the world >> the world It feels it feels chaotic.

[00:03:47]>> Exactly. Contextually when we got into the year, if you remember the GNU there were question marks. Mhm. Going to like is it going to be stable? Is it going to be you know, will the DA want to leave the GNU or whatever the case might be? So, there there were questions around that. And and and we are still dealing with um uh electricity issues.

[00:04:09]>> Electricity issues. We're we're dealing with a couple of issues, right? Um so, it wasn't as you were getting into the year, it wasn't an easy We weren't expecting a good year. Like we were like it might be We were on the fence, actually.

[00:04:20]It might be a good year, it might be a bad year. Yeah. Um I don't know if you remember, come April, uh Yeah. President Trump, Oh, yes. he gets on on stage, and then he starts putting tariffs. Oh, yes, of course. When when he had the the board >> He hit the board. Yes. And he was hitting people >> Lesotho, countries that didn't exist.

[00:04:39]>> People that he didn't know. He didn't [laughter] recognize, but when it came to the tariffs, he was recognizing the countries. Yes. Um and that that created turmoil in the market.

[00:04:47]>> Yeah. You see? Um but then it was also an opportunity. Mhm. Because the what suddenly happened was that there were always there was always this thing, you have to remember, could there ever be some dislocation from, you know, from from the stability or from political uncertainty in the US market? And then all of a sudden, people are saying, "Yeah, well, maybe the US is not necessarily the safest place." Then you start seeing the dollar coming down.

[00:05:14]Like Mhm. uh the dollar weakening. So, it's not necessarily the rand strengthening. It's the dollar. Yeah, the dollar weakening, because it weakened across a lot of currencies, trading partners, and what have you.

[00:05:25]Yeah. It's still weaker than it was.

[00:05:27]>> It's still weaker than it was. So, this this this move away from the dollar and what have you. Um but where do you then take money? Where is safety? Mhm. Safety is in gold. Ooh.

[00:05:38]Guess who makes gold? We do. We do. Hey.

[00:05:41]We do. So, then what happened was South Africa was then carried for for 2025 in in in any case. That's like the markets then.

[00:05:50]However, now things are different.

[00:05:52]Things are different.

[00:05:53]>> to acknowledge that >> Yes, we have to. things have flipped almost entirely. On but for a different reason. For a different reason. So I mean supply constraints, everybody's feeling it in the in the pocket. The diesel price is not friendly to anyone.

[00:06:07]>> Nope. Um I have a diesel. I I understand. Now it feels like it was a bad decision. You should have gone for a petrol. Or it's about time you go for that hybrid. Or that EV.

[00:06:17]Listen, we're in the same boat.

[00:06:19]>> Yeah. Um but yeah, so each and every year comes with its own challenges.

[00:06:23]>> Yeah.

[00:06:24]But I I must say that the world is resilient, to be honest.

[00:06:29]During times like this when you've got level-headed portfolio managers >> Yeah. looking after your money and what have you. They tend to make the right decisions, to be honest. And and I think the team back at the shop, they they did what was right. They held to their guns.

[00:06:43]They bought into some of those opportunities in terms of the managers that we that we select.

[00:06:48]>> Mhm. Um and that paid off quite well. So so that 1.3 plus the investment returns then added to the 6.8 billion that we talk about. It's a it's a it's another record, isn't it? Another record, yeah.

[00:07:01]Yeah. Last year was a was a record year.

[00:07:03]So we've been we've been pushing those boundaries year in year after. Year in year after. And again, you have to look at it from the the group needs to make good strategic moves.

[00:07:15]>> Yeah. Because when you when you make an investment, if you're a business person, when you make an investment, it needs to return something.

[00:07:21]>> 100%.

[00:07:22]>> So when those investments are starting to make good returns for the members who are the owners of the business, then it's a positive. And then if the portfolio in terms of some of those retained earnings, because the retained earnings they're actually managed by an investment team.

[00:07:39]If they do good, Everybody then it just it just creates magic, man. Creates magic for the members who are the professionals of South Africa.

[00:07:48]Let's talk about about how PPS always speaks of a collective.

[00:07:53]>> Yes. It it almost never speaks of me alone.

[00:07:57]>> No. It speaks of your your dollar will contribute to the bigger pool and that bigger pool will benefit everyone.

[00:08:05]>> Everybody else.

[00:08:05]>> That model seems quite familiar. Yes. If you speak of of We were raised in the townships with with people putting money together so they can go marry someone and putting money together so they can bury someone.

[00:08:18]>> Yes.

[00:08:18]>> And that model seems familiar. But then how different is it from that model that we are familiar with to PPS or are there similarities that are very obvious?

[00:08:27]Listen, they they are very similar. They are not they are not different.

[00:08:31]Key key society. Key society. Key society. Like it's in the name. Yes, absolutely. Actually, it is in Professional Provident Society. Key society. Um so where is the difference?

[00:08:42]Okay. Um if you think about it, yeah.

[00:08:44]The stockvelds are on a the societies are on a Yeah. They are a lot more consumption-based.

[00:08:51]Okay. Right. Okay.

[00:08:52]So >> [snorts] >> we put money together by David. You and I and a couple of other people. Yeah. Um maybe key societies are key societies are key to your or something like that.

[00:09:02]>> It's all below guys or something like that. Which Which is very familiar.

[00:09:05]Yeah, it's all below and what not. Um in most instances we are not necessarily paying a lot.

[00:09:12]It's it's just enough. Mhm. You know, we don't want to when they ask you or it's your time to pay society. It's probably 50 rands.

[00:09:19]>> 50 rands. Or something like that and what not. And and and sometimes um the collective, the pool that we are having in that society Yeah. roughly the same age. Mhm. Not not necessarily the best thing for insurance, by the way.

[00:09:32]Really? No.

[00:09:32]>> Oh yeah, yeah. It's cuz they might just die on the You didn't you didn't have cross-pooling. Yes. Okay. When I leave must contribute and yet live. then Yes.

[00:09:41]There must be some that are enjoying the benefits. There must be some that are contributing.

[00:09:44]>> 100%. Yeah. I think that's what's happening to electricity in South Africa.

[00:09:48]>> [laughter] >> Different subject. Let's carry on. Don't worry.

[00:09:52]There are some that are enjoying the benefits, some that are paying. Listen, there's there's a there's a few things.

[00:09:56]It's not electricity is one, water is another one. There's a lot of things where things are just We're not just We're not paying for things. We're not paying for services.

[00:10:06]That's That's a massive problem.

[00:10:07]Absolutely.

[00:10:08]>> Um and and and we'll get back to the point now, but I I I saw a a chart once uh showcasing the municipalities where water is not being paid.

[00:10:16]>> Mhm. At all. And they they used the color red. Uh I was pretty much the whole of The whole thing was red. The whole of South Africa. So, I mean, let's pay let's pay water. Let's Let's Let's do right.

[00:10:26]>> Mhm. As citizens of Imagine if it was a society and we were pulling together and and then it was all red.

[00:10:31]>> It's all red. People are not paying.

[00:10:33]It's going to be problematic. But back to the society now. So, so there we are. We get together and then we're paying towards a common goal of sorts.

[00:10:42]>> [clears throat] >> Okay?

[00:10:43]It then implies what if if somebody was to pass on, whatever the case might be, we're then able to take whatever we've accumulated to then give them a dignified Mhm. burial and what have you.

[00:10:55]Okay? Comfort the family and so on and so forth and take care of things.

[00:10:58]Um it's it's pretty much the same model.

[00:11:01]Okay? Um so, what is different? Okay?

[00:11:05]The difference here is the the pool can create differences in terms of the longevity and the success and the profitability or the excess money that is never used. Okay. We We don't just leave it.

[00:11:21]>> We don't just No. No. No. We We because the pool is so good. Mhm. Because the pool is so good and the pool contributes so much. Yes.

[00:11:31]You've got a lot more consistency in terms of people about that.

[00:11:36]But I was I was skipped. Mhm. I want to read.

[00:11:43]But I'm Mr. Mr. Machiavelli.

[00:11:45]Machiavelli, you haven't paid for the for 3 months. You see, they they we don't have such we've got like good consistency in terms of premiums paid.

[00:11:53]That's number one. Mhm. Number two, professionals, neh?

[00:11:58]Think of a professional that you know.

[00:11:59]Someone with a 4-year degree, what is usually you know, for you to get a 4-year degree, it's not the easiest of things.

[00:12:05]You have to be determined, disciplined, what have you, all those nice things.

[00:12:10]That's not something that you just do go varsity. Yes. No, you probably do it continually even after varsity. You're saying the character of discipline The character the character of the pool itself is one that is going to be a little bit more healthy, a little bit more cautious. How about driver?

[00:12:29]You know, they're more the guys who are going to be hooting.

[00:12:31]>> Got you. You know, driving the >> Yes. the famous VW. Yeah.

[00:12:36]Nothing wrong with it. You know, laid-back, sound up they're not going to do that. They're going to be very much behaving and what have you. So so the pool itself, one, you've got money coming in all the time. Consistent and people not understanding the importance of this thing that we're trying to do.

[00:12:55]Yes. And then at the same time, they they don't necessarily claim as much or what have you. Even if they claim, it's still good. But it's not a bad thing. Because the first thing that we we're supposed to do is to be there for our members. So we I mean, we paid about 4 billion worth of claims last year.

[00:13:12]>> Yes. Yeah. Like it's a it's a lot of money.

[00:13:15]>> So so so so you you you still need to be able to cover the the professionals and cover the members and and and and what have you.

[00:13:23]>> [snorts] >> Um but then be that as it may, it's still a good pool of people. So, typically, again, if you were to take it to the society, if you've got the society a lot of people dying all the time, and then you've got enough balance, you know, they go back to the Lord versus valuing, they join the pool, they are kind of like balanced. They should be a surplus. They should be extra money. 100% >> Right? We should have sufficient to offer people those decent burials. But then there's still money. We don't need to contribute to fill the holes that were left. Which speak to how different a typical society is. All it's doing it's burying. It's It It You know what I mean.

[00:14:06]>> Yeah, it's burying and and there's little left and all of that. And then now you're playing catch up. As As a group, you're playing catch up. All the time.

[00:14:14]>> You see. And then we create a trip to Kaikai. What Yeah. But But that That's even a different one. You see, because now it speaks to some of the consumption-focused societies.

[00:14:25]>> Societies, yeah. We just stop. Like, they are consumption-focused. Which means what?

[00:14:29]Start of the year we are starting. But we are looking at December moment.

[00:14:32]December comes, then we are spending.

[00:14:34]You see.

[00:14:35]>> And we start again. No, but But if you if you are in a society where for instance, let's talk about something that rarely happens, because I mean nobody likes to talk about death.

[00:14:46]Let's talk about car insurance for instance for instance.

[00:14:49]Um when was the last time you hit somebody?

[00:14:52]Yeah. Do you know something? Yeah.

[00:14:55]I have been reviewing mine >> [laughter] >> for the same reason. You see that question you asked? I asked myself about a week ago. Mhm. It's like, but do I need this thing? Cuz now you're looking at your budget. I get petrol has gone up. So, you're trying to manage things. The answer I spoke about this. I know the answer to it. I knew this thing. Cuz the answer is simple.

[00:15:14]And then you cancel it. The following day you are involved in an accident.

[00:15:18]That's generally what happens. But But I'm telling you, if we were to get like a thousand people, and this is the the reason why one of the most successful long-standing business model in the world is insurance.

[00:15:31]>> 100% Because that pooling, it works magic. Yeah. Right? If you were to take a thousand people, I'm telling you, maybe two, three, maybe four had an accident.

[00:15:40]>> Mhm. Right?

[00:15:41]>> Out of a thousand?

[00:15:42]>> Out of a thousand. So, can you see all If you've got that stock fell society for car insurance, you see, [clears throat] what we're doing is that we're contributing into this.

[00:15:52]If somebody has a problem, we will cover them. Yes.

[00:15:55]>> Right? Okay. Because it doesn't happen so often.

[00:15:59]This is we are saving for December. Mhm.

[00:16:02]This We know we're going to use all of the surplus money. Yeah, yeah. You see?

[00:16:07]And then once you've got surplus money, so now we started the car insurance. So, then we we we look around. We say, "Okay, you know what? Mr. Mashabela, you seem to know something about something."

[00:16:16]>> Yes. We want you to lead the society to then start buying up businesses or creating other different parts so that we don't have to go and buy from somebody else. Okay, so then now we say, "Okay, what else do we need? Medical aid." Okay, so let's let's start a medical aid business.

[00:16:33]>> Mhm.

[00:16:33]>> [clears throat] >> We need investments. Let's start an investment business.

[00:16:36]>> Yeah. We need this. Let's start this business. And that's that's actually PPS. Mhm.

[00:16:41]>> But it's because foundationally there's persistency in terms of money coming in. Yes. The pool is actually a very good pool, neh? Because it's diligent people, disciplined people, so on and so on and so forth.

[00:16:56]>> All of that. So, then the surplus then allows us because that's why I keep on going back to we've got a good management team to then start investing in something else. We're buying this. We're going to Australia. We're going to New Zealand.

[00:17:10]We just got We just opened up Glu.

[00:17:12]>> [clears throat] >> Yes. To take Mutuality back to the whole of South Africa, not just professionals, but all of these things strategically they are creating long-term value creation for all of the members of Do you know the a common statement that speaks to what we celebrating, which is successful year, is investment return?

[00:17:33]Yes. What does that word mean? Uh cuz it's easy for for us because we hear it so much in the news when we were listening to a 702, we think we know what it means. What does it mean in in layman's Yeah. In layman's terms? Yeah.

[00:17:47]Um I You remember You will remember from our previous conversation, okay?

[00:17:52]Something either goes up or down. Mhm.

[00:17:55]>> [clears throat] >> Okay?

[00:17:57]And that's it. Any asset, anything it either goes up or down. Mhm. Right?

[00:18:02]If it doesn't go up or down, there's something wrong with it. It must go up or down in terms of the price Yeah. At some point it when you look at it, it must be making a particular movement.

[00:18:12]>> It's It It must be changing.

[00:18:13]>> Yes. Yeah. Right? It must be changing.

[00:18:15]It must be going up or down. That's number one. Number two, there might be some cash flow that you get from it. Yeah. Income. So, rental income, dividend, coupon payment, yada yada yada. Like there must be some form of income that it's doing. Yeah. Okay?

[00:18:34]That's the basic of an asset. That's basic basic. I always say to people, you are an asset. Okay? Your value goes up, I can demand a higher salary. I can demand [clears throat] better benefits and so on and so forth.

[00:18:47]Where does the cash flow come in? It's that salary that comes in each and every month, whatever the case might be, okay?

[00:18:53]So, the same thing happens with anything at all. So, when we when we talk about investments, we are investing.

[00:19:00]Simply put, we're going to buy something, we believe the price will go up next year, or we believe it's going to give us some income of some sort. Mhm.

[00:19:10]And when you add it over time, when you add all of those things together, it will be greater than what we paid for it. That that that belief Yeah. sounds very biblical.

[00:19:21]>> [laughter] >> I can't help but acknowledge that it feels like a toss of a coin. It feels like I'm going to hold that so we are No, no, no, no.

[00:19:32]Tell me it's not.

[00:19:33]>> No, it's not. No, no, no, no, no, it's not. It's not. Um um this this is an agonizing activity of dotting all the I's, crossing all the T's.

[00:19:45]Hours and hours and and and and I mean there are books of guys who in particular, I mean I will reference like the local market where guys were saying this and this sometimes the job felt like I was just by myself or whatever the case might be. So this is not we don't take it lightly. No, we never take it lightly.

[00:20:03]>> Yeah. Um so this is after rigorous research.

[00:20:09]And there's layers >> Let me give you due diligence.

[00:20:11]>> Due diligence. Like like you don't just No, like if you're going to be buying, remember. So you're the custodian of assets. Mhm. So now there's a provident fund, there's a pension fund, there's some assets.

[00:20:25]There's No, they they worked hard and now they said [clears throat] we're going to give you this money.

[00:20:30]Before you invest or whatever the case might be, you know, um you've deployed an analyst to go spend time with the management of some mining company.

[00:20:38]>> Yeah. They go there. Mhm. They go underground. Go and have a look.

[00:20:42]>> But they they get to touch and feel.

[00:20:46]>> No, you have to understand. It's not just about paper. Yes, you know, you know, all these people talk about AI can give you this. No, no, no. Go down there. Go see those because at some point we have to look at cuz everything is all about opportunity cost. Yeah. Should I be putting money here or should I put be putting money in there? Cuz I I always not put money anywhere and just put it in the bank.

[00:21:08]Yeah, I almost said in your couch, but that's a different story. No, no, no.

[00:21:12]>> [laughter] >> I remember in in the couch Yes. the problem is the value of money goes down over time.

[00:21:17]>> 100% Cuz cuz inflation is Yeah. Right?

[00:21:21]So, that means the 100 rands that you left there Yeah, it's still a 100 rand note, but it buys less things. Mhm. So, so that's waste. Yeah. You can't put it there. It has It has to be It has to be somewhere where you are at least preserving the value. Mhm. The va- the and value is important, hey? Um I I think we we did speak about it previously.

[00:21:42]>> quite a bit, yeah. But, you have to preserve value over time. Yeah. Time Time can be your friend or time can be your enemy. In this instance, if you're not putting if you're not at least getting the preservation of value over time Mhm.

[00:21:56]time is your enemy. Let Let's explain these returns in a form of a member. Yes.

[00:22:03]PPS is celebrating with hearing aids. We seeing billboards and it's saying we did well, another record. Yes.

[00:22:10]>> What does it mean for me as a as a ordinary member? Okay. All right. So, membership PPS. So, you four years for your degree, you've got a risk product. So, we call it a qualifying product and whatever it is. You've got a risk product and you might have other products.

[00:22:26]When you've got a product, effectively you own you you are entitled to participate in the profits of that business.

[00:22:36]Okay?

[00:22:37]>> [clears throat] >> And that could be the long-term insurance business. Life solutions or whatever you. If you come to my side, that's investments. So, you buy an RA, you buy an investment fund cuz you so mix ch- ch- ch- to Brad David and whatever you.

[00:22:51]You You You are entitled to participate in the profits of that business. That's That's That's the It's automatic.

[00:22:57]>> Yeah. Yeah. The minute you've got a product, you can participate in the profits of that business.

[00:23:00]>> Yeah. That's why we always say that you are like an owner. You are the owner of the business.

[00:23:06]All right. So, once you get that money, we don't give it to you.

[00:23:09]Okay. No. Remember, we're always long-term focused.

[00:23:12]>> Mhm. Mhm. And I've told you there's a time Mhm. when money is a lot more important than you the person. Yes, you did say. I did say.

[00:23:22]And that's where Remind us again in one sentence.

[00:23:24]>> That's retirement.

[00:23:25]>> Absolutely. That's retirement, sir. Yes.

[00:23:27]When is No. Yeah, you needed more. You needed more. And you don't have the ability to end to end You can't. Yes.

[00:23:34]You've got arthritis. Hey. Remember, for me, the the PPS member, typically, you're looking at a doctor, Yes. a civil engineer, an attorney.

[00:23:46]So, what's going to happen when now when you're you're forgetting case law? Hey, man.

[00:23:51]I will say we two medics are excel. No, you you can't use excel. Yes. How How can we How can we trust you with structural designs and whatever? We can't.

[00:24:00]>> Yes. You see, we can't call you Dr. Mzapi anymore.

[00:24:03]>> No, yes. You are on paper. No, no, sir.

[00:24:05]You're not practicing. You must continue practicing, or else you can't You know, you can't be saying that I'm a doctor. No. Mhm. You're not earning. 100%. So, that's the retirement side. So, all of those profits that you are participating in Yeah. by virtue of holding that product, we then make it available to you at that time. All of those profits.

[00:24:27]>> I can't claim it now.

[00:24:29]Well, it's certain instances, but you can't you cannot on a discretionary No.

[00:24:33]Hey, man. I'm not on a discretionary basis. Yes. Yes. You pass on, then you know, we can make sure that we can give it to the beneficiaries and so on and so forth.

[00:24:40]>> All of that, yes. So, we hold it for that time. Mhm. For that time. Okay. So, what do we do with it in the meantime?

[00:24:47]So, each and every year you're getting profits. I can run it you you've got a product you've got a product. So, what happens? We then take it and we give it to the investment team. And you say, "Investment team. Can you please find investment opportunities that will preserve the value of money over time so that's inflation and then grow it by 5% over the value of money over time. So we we then try to grow it over and above the value of money. So all of that then becomes the Oh, we did 5.3 billion worth of investment returns for our members.

[00:25:23]Yeah. That that's actually what So so so basically their their pot is now bigger.

[00:25:29]>> It's bigger. The the the profits that can then be allocated to the members is bigger. It's not just the operational profits from the business that you that you're entitled or you you can participate in the profits in, it's also the profits that you've accumulated previously now have grown. Yes.

[00:25:47]What what's a typical scenario Yeah. of a member who joined you for 40 years?

[00:25:53]Yes. And these are I'm I'm I'm asking you to to do number crunching but very basic.

[00:25:58]>> Yeah. Who joined you for 40 years? Uh basic products, you know, life cover.

[00:26:03]Yeah. Uh you know, the regular stuff, you know. Uh what is the typical scenario of this man who retires or woman who retires now at 65 and he or she have Or she have. Yeah. Does he end up money on a regular basis every month?

[00:26:16]What is it? Or I want my lump sum and go buy my Lamborghini or go increase my house. Yeah. So so so uh firstly um maybe just to share something with [clears throat] everyone. We've got about just under 15,000 millionaires.

[00:26:32]Wow.

[00:26:33]15,000. Yes. Okay.

[00:26:35]Last year about 15 of our members got a million rand.

[00:26:40]What? Yeah. Yeah. Okay, explain.

[00:26:44]So so you remember that 6.8 billion? It went [clears throat] to somebody.

[00:26:47]No, of course.

[00:26:50]What? It went to somebody. Yeah. Out of that pool of people that it went to, okay? 15 of them got 1 million.

[00:26:57]At least 1 million.

[00:26:58]>> Yes. Okay. Yeah. Explain how they get to that. No, no, remember that accumulation. Over time.

[00:27:04]>> Over time and what have you. And the fact that cuz I mean it grows with time and what have you, right? Um so so if I started like years and years and years and back, like years and years. I mean the other thing about professionals is that they live long. Mhm. They really do live long. So for that person who when they graduated, they started with PPS. Actually, some even get to recruit at the university.

[00:27:28]>> At university.

[00:27:28]>> Yes. Right? So so then what what tends to happen is that they accumulate such a big profit share account Mhm. over time.

[00:27:36]That then and also because of the contributions that they're making for their life cover, for this and they've got multiple products with us, with the boosters that we've got and all those things.

[00:27:48]They get entitled to participate in a higher portion Mhm. of that profit share accounts. That's how they actually get to that.

[00:27:54]>> Mhm. To those numbers. So a typical scenario for someone who's 40 years or who's been with us for 40 years or whatever the case might be. I mean we did an example where we looked at somebody who's 23 and at that from the age of 23, you know, you start by doing what is responsible. You get life cover. Right?

[00:28:14]Something was to happen. I don't want to repeat But but but but we don't always think about it. No, no, we don't. When we that young. No, we don't.

[00:28:22]>> Yeah. We think we're going to live forever and we think we'll never age.

[00:28:25]>> 100%. 100%. But but remember that thing that I told you, you don't get to that four-year degree without being diligent, without being disciplined, without having an open like an ear that hears. Mhm. So typically that's what we that's what we find in this pool of members that we've got.

[00:28:42]That's what we find. People who listen.

[00:28:45]All right. So and and and again, I'm I'm I'm hoping that I always say it, these types of conversations wake somebody up >> Yeah. to say, "Listen, I need to do this. This is not a Mhm. It's not a maybe.

[00:28:58]>> Yeah. I actually need As a responsible No, as a responsible adult, I need to do this, man.

[00:29:03]>> Yeah. For your For your kids, if anything. For your kids.

[00:29:06]>> Yes. For family members that depend on you. Yeah.

[00:29:11]You know we are the sandwich generation.

[00:29:13]So, it's not just I might not have kids, but I might have parents who depend on me. Mhm. [clears throat] Dependency Yeah. in short, like creates necessity for you to take care of those who are dependent on you if you're not there. That's simple. Like I I like simple. Mhm. We need to sort that one out.

[00:29:30]>> Yeah. Uh but in any case, so so we we we we did a case 20 to 23.

[00:29:35]Um you start off with about 500,000 life cover. I mean, you don't have a lot at that point. Not a lot of dependency, so that's a reasonable amount. So, your premium is not terrible.

[00:29:45]>> It's not It's not terribly high. Right?

[00:29:47]Um you get to a point where say you get married. All right? Once you get married, Mhm. dependency goes up. 100%.

[00:29:55]Right? You married somebody.

[00:29:57]Right? There's some form of dependency of some sort. They might You're planning something. You're doing things together.

[00:30:03]All of a sudden, you were in a one-bedroom apartment. One Now you can get a three-bedroom because we're planning for a family. You see?

[00:30:10]Like dependency [clears throat] then goes up. That means that life cover must go up. Yeah.

[00:30:17]Anyways, in this in this example, you get to about 35. Now you have kids.

[00:30:22]Dependency still goes up.

[00:30:24]>> Yes. You see, brother Dave? I'm hoping you No, no, no, it's good. You also should be high enough. shut up.

[00:30:29]So, it will shut up.

[00:30:30]shut up, please. Okay, I'm comfortable.

[00:30:31]>> I was smart. All right. I started long ago.

[00:30:34]>> [laughter] >> I even questioned why I'm paying these things. I remember once I got a call about a No, we were checking your life cover.

[00:30:41]I'm not planning to die anytime soon.

[00:30:43]>> [laughter] >> Please don't call me. It's all this stuff. It's a It's a Yeah, you know, people don't want to talk to you know, you don't want to think about it, but you know, it's one of those things.

[00:30:51]>> Absolutely. So so that for as long as that dependency is going up, then one has to increase that. So so that's the scenario that we had. And then we took we we further said, "Listen, this person has understands that they need to save for retirement." So you're saving about 15% now. Let's say it's a it's a it's like a magic number. It's a good number.

[00:31:06]>> Yeah. 15% of their gross income and what have you for retirement. Um and they've got um um medical aid as well. Mhm. All right? You don't want to be sick.

[00:31:15]>> And now it'll get again that age.

[00:31:17]>> Yeah. You tend to think medical aid for what? Well, My body is good. My body is strong.

[00:31:22]>> I can Cuz you're 23. Cuz you're 23, you're Iron Man.

[00:31:25]Nobody can take you on, right?

[00:31:28]But you need it. But you need it because private private hospitals if you were to um if you were to look at the basket, the inflation basket right?

[00:31:39]Um cuz sometimes [clears throat] we look at the inflation number.

[00:31:42]Say it's 5% or 4% or whatever the whatever the number is.

[00:31:46]We're thinking, "Oh, yeah, but that's But inflation doesn't feel like that to you." Like the prices that you feel in your pocket doesn't Mhm. They hit harder. They hit harder, don't they?

[00:31:53]Yeah. Okay, that's typically headline inflation and what have you. Do you know what is the one thing that goes up higher than anything else? Health care.

[00:32:00]Mhm. All forms of health care. We know.

[00:32:02]Okay. Make sure you've got medical aid.

[00:32:05]Yeah. Like that you must just just do it because if ever you get hospitalized for any whatever reason and you go to the those private hospitals because the infrastructure in our country is not necessarily the at the best. Mhm. One one cannot afford sometimes to be in in public situations. Yeah. If if you've been graced enough to be able to afford the other side, you go there. But if you don't have medical aid during that time you'll remember this conversation.

[00:32:32]>> Mhm. Okay? But in that situation, so you've got those three products and what have you, being diligent and what have you. And you know, we made our assumptions in terms of increasing them with inflation and what have you and what have you. That person could end up with about 4 million rands. Mhm. Taking [clears throat] into account not just so it's about a million in operational profits, but then it's about an additional like 3 million from the compounding of all of those profits from each and every year.

[00:32:58]>> every every profit compounds adds.

[00:33:02]Now Keo, you've got your 20 rands, it compounds.

[00:33:06]>> because it's invested.

[00:33:07]>> Yes.

[00:33:08]>> Liberty Blue Bulls makes Uh-huh.

[00:33:09]>> So now that 20 rands next year, you're looking for another 20 rands from all the strategic investments that have been made by the group and the operational businesses and what have you. That all needs to give you a profit because you're a business owner. But at the same time, that 20 rands, you didn't you didn't eat it. You didn't chow it. Mhm.

[00:33:27]No, you put it into the market and it's in a very a somewhat aggressive, I'd even say [clears throat] moderately aggressive portfolio that if each and every year or over the long term, we deliver on what we say we want to deliver on, which is inflation plus 5%.

[00:33:44]Man, that profit that profit that profit share number becomes bigger. It it's not a it's not a joke.

[00:33:50]>> Not at all.

[00:33:51]>> No. Is there any common misconception that people have about this terminology of record returns that is used so often now by whatever and downs?

[00:34:02]>> Yeah. You're always winning.

[00:34:04]>> [laughter] >> Is there is there any misconception about it that people might have including your members? Yeah. No, no, no. So I mean, listen, sometimes it does feel like everything is going up all the time.

[00:34:17]Yes, one would say, you know, you're in an inflationary country. So, you know, things will things will be going up. So you know, we expect you to to up as well. But if you look at the um it's not just about how much the profit the profit share has grown by from 4.3 to about 5.3 to about 6.88 billion. Those are big numbers. Those are not small numbers.

[00:34:42]>> Yes. If you look at it in terms of how much we gave back versus the premiums we received. Mhm. [clears throat] All right. You you were just talking about you know thinking why am I paying these premiums? So for some of our members now and definitely for last >> Yeah, if we were to look at it we retained 93% 93% of premiums received.

[00:35:06]Wow. in profit share. Yeah.

[00:35:08]So again, think about it. Go look at that statement of yours. Go look at the premiums that you're paying. Mhm. Now some people they get back not when they switch not when Mhm. God knows when.

[00:35:23]They don't just get lollipops whatever it is that that is being offered on the streets.

[00:35:29]Right.

[00:35:30]Flights what not.

[00:35:32]Yeah, man. Some people Yeah. get almost an equivalent amount of the premiums that they put in >> Wow. as profit share. But remember we don't give it to you. We wait for you to need it.

[00:35:44]>> No. We wait for you to need it. Why?

[00:35:46]Because you are supposed to be that diligent part of South Africa. That's simple as that. If if I never get to retire I pass away. Yeah. My profit share is still [clears throat] safe.

[00:35:57]Your profit share will then be allocated to your beneficiaries to the estate.

[00:36:03]>> Yes. Um that's where now we are hoping that you have a will.

[00:36:07]I know. Hey. Yeah, yeah, yeah. Don't worry. I I'm good. You see You see you see the thing about wills is yesterday you had you know stuff for side to plate. Yeah. It was in your will.

[00:36:19]>> Yeah. And now you managed to get four plate. Yeah.

[00:36:22]>> You have to go and adjust the will. No, no, no. But but remember brother if Uh-huh. you're not doing this by yourself.

[00:36:28]>> [clears throat] >> No, no, no. You've got a Yes. that personal trainer, the financial consultant, who's also your fine your project manager. Yeah. That person has to see you each and every year.

[00:36:40]At least once. At least. Correct. I hear you got a four-plate stove.

[00:36:45]>> There we go. Because I can tell you you're my consult You're my financial consultant.

[00:36:49]Right? If If you look at some of these shows on whatever for the celebrities and whatever, they all have consult Those people they they they they they are always around them, understanding them, what is happening, what where we going, we're going here, we're doing this. You know, you follow these reality shows and whatever. My wife makes me watch them.

[00:37:09]>> [laughter] >> But I wonder which one does she make you watch?

[00:37:12]Yeah, the guy who's married to many wives.

[00:37:15]>> [laughter] >> No, like I used to watch those other ones in the US with the with the sisters and I'm just saying like they With that I used to waste all my electricity at my bed. No, but I I Like I'm just saying like there's new ones, but you know, I'm just saying like there's a lot of >> with that guy with four wives. You will not [laughter] believe or five wives.

[00:37:33]I'm so up-to-date. Trust me, it's not my creation.

[00:37:36]>> [laughter] >> They they make us watch them, you know, it's fine, but it's it's quality time.

[00:37:40]When one watches those things, it's quality time, right? But But if you look at how those people live, they they always have like somebody who's managing this, who's doing that. That's what your financial consultant Yeah. has to be doing as well. They have They have to fuss around.

[00:37:56]Um and remember sometimes the onus is on you to also inform them. Hey, this just changed. Yeah. Oh, listen, I'm thinking about this. Because you don't want to be making decisions without consulting your financial consultant, especially when there's financial implications. True.

[00:38:13]Because you are on a plan. You're on a strategy.

[00:38:16]Remember, that's what would have happened. You were with the financial consultant who was your project manager for your finances. And you [clears throat] decided the best course of action, the best strategy for the finances of my life, for the finances of the family is XYZ.

[00:38:33]That's that plan is in motion. Right?

[00:38:36]>> [clears throat] >> If something happens, this changed. Okay, then we revisit. So, the fact that you've got a will that is not being looked at implies at least once a year. At least once a year.

[00:38:49]Implies that either consultant is sleeping on the job.

[00:38:53]>> Sleeping on the job or you're not doing what you're supposed to be doing. Yeah. And informing your consultant that this has changed. Does it have financial implications?

[00:39:04]Wow. Right? Hey, when I start, don't tell us about the will, man. We we waiting for the car, see. No. No, no, no. It doesn't work like that.

[00:39:12]>> We waiting for someone to die. No. In the township and then And then it's going to be a fight. Of course it will be.

[00:39:22]>> It's going to be a fight.

[00:39:22]>> The family will come.

[00:39:23]>> You see? It's going to be a fight. So, so again, be responsible. That is our investment. No. Be the responsible adult. We need to stop that.

[00:39:32]It that has to stop. You know, the the thing about first generational wealth is that there's a lot that you're learning.

[00:39:40]So, there will be mistakes. There will be mistakes. Right? But there's there's so much in the world at this point in time. Yes, and I know there's there's there's such high content and inflation in the world right now. Right? And it's even going to be it's going to be higher.

[00:39:54]Right? It was high in the early 2000s.

[00:39:57]>> Imagine now. 2010s it was even high. Now it's going to be even worse because everybody can now sound like they know what they're doing.

[00:40:06]>> All they had to do was put up a prompt.

[00:40:07]It's a prompt. Very nice prompt. They did like prompt engineering. Yeah, yeah, yeah. They've got a certificate now. All of a sudden they think they can do that.

[00:40:15]Yeah.

[00:40:16]Like but when it comes to things that are so important, like your finances and whatever, you okay? One, you've got the consultants. That's like that's number one. Just just do that. 600 rands a month. It's It's more money. It's not that much. And in the bigger picture, if you consider the potential loss. Like it's it's like a dinner. Yeah. Yeah.

[00:40:37]>> It's It's an outing. I'm telling you.

[00:40:39]Right? Um quality guys, quality people, quality women. By the way. Yeah. Big focus to get to to try and balance um gender equality within the financial services space. So, you have to do the responsible thing.

[00:40:53]You have to have wills in place. Tell people how to direct things. It's not about the value.

[00:40:59]Remember this this this this um this whole notion of value, where we we were saying um uh you know, it's like something could be seen to be worthless to somebody's eyes, but it carries value. Because of the history of the family.

[00:41:16]>> Sentimental values.

[00:41:17]>> Sentimental value. It means something.

[00:41:20]Right? So, for as long as it has value, it carries value.

[00:41:26]Put it in the will. It's willable. Yes.

[00:41:29]Tell people, what should we do with this thing that carries so much value?

[00:41:34]You You cannot leave it because there's they they are courts that will decide on your behalf.

[00:41:39]>> Hey, man. You want that. And they have a backlog. You don't want that. It will take Do you know what? And And it's painful when somebody hasn't thought about it, and it takes forever to unwind that estate. People are sitting there, they're suffering. You have Have you ever seen like you'll see a mother and children suffering while money's tied up. And And cuz the dad passed on without really doing much.

[00:42:03]Because you were irresponsible.

[00:42:04]>> Yeah.

[00:42:06]It's small things. Yeah. You cannot You cannot talk.

[00:42:12]I want to go back to investment for a question.

[00:42:14]A good year in the markets does it automatically translate to good outcome for for investors?

[00:42:22]Depends. Okay. It [clears throat] depends on who's managing the money. It depends on were they able to find opportunities.

[00:42:30]>> [clears throat] >> A good year in the market, yes, sometimes if there's momentum.

[00:42:35]>> [clears throat] >> Things are running.

[00:42:39]They like I can you can highlight various times, you know.

[00:42:43]They take they take boom.

[00:42:44]>> The tech boom. There's a generic general Like a general even if you're not the smartest in the world, you'll make money.

[00:42:50]>> [laughter] >> Anyway, let's do it. That that one that one nearly took you out. Took the Yeah.

[00:43:02][laughter] Anyway.

[00:43:02]>> Well, but anybody who had a a tender document got some got something. Yes, it's that kind of year.

[00:43:09]What what was the biggest problem that time? Is that the money was not spent in the South African economy? That's the problem. Yeah. You see, at least if it was being spent in the South African economy, it could have created one or two jobs.

[00:43:23]Let's stay here.

[00:43:24]>> Yeah. So, you're saying it's it's not automatic. Some people made made losses even on the best possible years. Some people didn't get to where they were supposed to get to. Yeah. Right? And and remember for for us, so we you have to understand what I I need to say, you've got the option of not paying for an active for a person to actually decide, right? So, I've got something that I refer to as a benchmark. That's my hurdle. That's my line. I need to get through this line for me to say I'm worth the time, right?

[00:43:58]There were some managers last year they didn't get to that line.

[00:44:01]Oh, yes, everybody can say it was a good year.

[00:44:04]It was a very very good year. Mhm. But there's some managers that were like, "Listen, my man. The market did 40 and you did like 25. What happened?" Yeah.

[00:44:13]Because the person had a view. Remember, um I think the previous time we talked about the squad and what have >> Mhm. Yeah.

[00:44:20]So so there are times when the coach, yeah? This is supposed to be an easy game.

[00:44:26]>> Hey, man. Don't take tell me. I'm a Sundowns fan, right? Don't hate me.

[00:44:31]Right. You know you know it. And it it it plays >> Like when you played against Chiefs.

[00:44:34]That's supposed to be an easy game. An easy game, but all of a sudden it's not an easy game because when you're putting somebody on the bench Yeah. Why is Mkhwanazi Oh, yes. Yes. Yes. Those type decisions. Decisions like See, so just because it's good in the market does not imply it's always going to be good. No, no, no. Somebody might just do the wrong thing.

[00:44:55]One other thing, oh yeah.

[00:44:57]Because we we never know. We never know if it's going to be a good year or not.

[00:45:01]>> That's true. We just think that for the level of research that we've done, that due diligence or whatever you the portfolio that we have can withstand all the winds that can come.

[00:45:12]>> Okay. Okay. Like everything that can come, we should be fine. Like like and [clears throat] and even if it's a but but we can also dissect the portfolio to the point where we can say, "If this was to happen, we should be like this."

[00:45:24]>> Okay. "If this was to happen, we should be like this." It's almost scenario planning. Almost scenario planning, right? Um so again, like you you have to be careful in terms of after you've got that consultant and what have you. What the plan? Who do you then choose to be the custodian, to look after that money, to take that money and say, "Okay, let's invest it. Let's try to get to this." Yeah. So so it was a good year, but it doesn't mean that it was a good year for everybody.

[00:45:50]>> Everybody. So we are grateful that and and and and for us we we we held on to our our our views, we held on to how we manage money, to our philosophy that long-term focus. Um having the right mix in the portfolio. You know, we we always talk about, you know, them they they need to be other things that lift the heavy loads. So, those are the equities and whatever. They have that like they lift the heavy the heavy weights.

[00:46:18]Uh the the the the the heaviness of the requirements that, you know, our members need from us. And but you can't have strong men only. Sometimes you must have, you know, um some that are, you know, that will protect us. That will, you know, make sure that, you know, if things don't go the way we think they will go. True. We we we don't fall to the ground. So, you know, you have a little bit of bonds You can absorb the the shock.

[00:46:40]>> The shocks that may come through. Um and and and obviously we've got some other um investments as well that where we do good.

[00:46:47]Um where we, you know, we we buy into schools. So, we're building schools, we're doing this, and they give us good returns, to be honest. Um like it's not it's we're not like for us we are investing in education because education the education system gives us Gives you members. Gives you members.

[00:47:05]>> It gives us members. It gives us owners.

[00:47:07]It gives us owners of those businesses.

[00:47:09]We we've made a strategic um decision that we will never demutualize.

[00:47:14]Some other mutuals, right? Right? Some other mutuals demutualized. Ah, they're probably just mutual by name. They're mutual by name, but they listed on a stock exchange, right? And the minute you do that, it means that ownership sits with a few people.

[00:47:31]>> [clears throat] >> It's no longer with your members.

[00:47:33]>> It's no longer with many many people.

[00:47:35]Yeah.

[00:47:37]100,000 interest 200,000 people, right?

[00:47:40]So, and and that's the key thing. We we are saying we believe in the ethos of mutuality. We believe in the fact that we need to remain a mutual.

[00:47:47]Um and and and we will continue being that.

[00:47:50]Right? That doesn't want to change anytime soon. Here's something that I keep thinking about, and you've probably touched on it. The psychology of graduate professionals when it comes to to investment.

[00:48:03]Because I I describe them differently and I think your your your your boss, the CEO, does the same. He says they are busy. Oh, they are. They are They are too busy to to stop and read every document.

[00:48:16]>> Yes.

[00:48:16]>> You would expect them to be able to and to understand and to but they may not have necessarily have the time. What is the psychology of a of a graduate professional when it comes to these type of things, investments and things like that? Yeah, so so we've got a um we've got a a heavily intermediated base of clients, if I can put it like that.

[00:48:36]So, our members, they do make use of financial consultants.

[00:48:39]And we appreciate it when they do that.

[00:48:41]We appreciate the fact that most of them um they they were learned enough to say, "Listen, I cannot do this."

[00:48:50]And that is >> Let me let you speak out. That is being smart. That's being smart. That's being very very smart, okay? Because once they walk that journey, then some of those um shortcomings that are very natural to a person through conversation, through walking a journey with somebody who can hold you accountable, they kind of like dissipate. So, there's certain behaviors that we see in the market that we don't see with our base.

[00:49:18]Um >> [laughter] >> when we spoke on the two-pot everyone was running for it, we didn't see much of it.

[00:49:24]>> Oh, yes, you did say. Right. You did say or during the two-pot era Yeah, the there was not a Not a lot Not a lot of frenzy activities. No, no, no, no. Be be Again, like so we it but it's not to say No, no, but be uh but Brambles is because they are clever, no.

[00:49:41]>> [laughter] >> They just did the right things. They sought help. They did ask. And help probably said, "No, you don't need it.

[00:49:47]You can realign." 100%. But then there's also quite a lot of things that we as a as a mutual have to do for our community.

[00:49:58]So, there's a lot of educational things that we provide. There's a lot of you know, we've we've got um there's things that we're working on that will even showcase that that goes beyond financial things.

[00:50:10]That goes to life events and what have you. So, so there's a lot of things that we end up doing to empower our members as much as we can. Give them information as as insights as much as we can. Um that Monday morning, that email needs to go out. This is what happened in the market. 808080, and so on and so forth.

[00:50:28]You can expect that from us to make sure that you are informed and so on and so.

[00:50:33]So, but yes, they are busy. Mhm, they don't have the time necessarily. They they they they might not even, you know, be opening those emails and what have you.

[00:50:41]But again, we are we are fortunate enough that, you know, they do make use of financial advisors and what have you.

[00:50:47]And those that are are direct with us and they don't use the services of an intermediary, you know, they they are astute enough to say, "Listen, let me actually look at this thing. Let me understand what's happening."

[00:50:58]Um and if you look at how we also report as well, we showcase what are you missing, you know, our profit share statement. We will showcase you're missing this, you're missing that, you're missing this. This is what how much you got from here. We're just highlighting subtly you need this. Um creating various ways for you to to to to say, "Listen, you need to as a professional, there's really no need for you to be anywhere else." Mhm. Really.

[00:51:23][clears throat] >> [laughter] >> Like honestly, like there there there is no reason why you should be at any other company. You should be here. Yes. Owning the business instead of ensuring that there's another family that's living a better life in Stellenbosch or wherever wherever they are.

[00:51:38]Right? Um rather you and your family live better by owning the business as well as well. So, then we we create ways and means of then um encouraging that you know, take up something else and then there's an additional booster of participation in profits and So, there's there's various means within the ecosystem itself that ensures that holistically our professionals should be in a better Yeah. space.

[00:52:03]Um, and and and and by virtue of, you know, what the leadership uh at Glue is doing as well.

[00:52:10]You should find that, you know, we are going to take majority back to the South Africans. As a whole? As a whole.

[00:52:17]>> Yeah. No need for Not just a foyer. No, you don't need a degree.

[00:52:21]>> No. Yes. No, like we we will take it back. We we we have taken it back. Um, uh the business is is gaining ground slowly but surely, you know, creating that financial togetherness. So, it's it's just a Listen, I can I cannot wait for people to actually see it. Um, it's one of those things once you are in it you get it. Absolutely.

[00:52:44]>> Yeah. I keep coming across a a phrase, behavioral gap or behavior.

[00:52:50]When I when I when I read up on on investments and things like that. What is that in in simple language?

[00:52:57]Yeah. In simple language, neh?

[00:52:59]Uh we don't always carry out what we intend to carry out. Our actions sometimes they deviate from um what we what we ought to be doing. Okay.

[00:53:11]Um, and it's very simple. It's a it's it's a very human thing. It's not a So, there's no like something uh special about it. Let's talk about, you know, your your alarm clock on your phone in the morning.

[00:53:22]Do you do you do you ever press that snooze?

[00:53:25]I had to be up on this past Saturday. I had to be somewhere very early and I set the alarm for 6:30. Yeah. Um and 6:30 would have given me enough time to get ready and then so forth and so forth.

[00:53:39]Cuz I had to be there at at 9:00, but it it was a fairly long drive. Yeah.

[00:53:44]It went off at 6:30. I had another one Yeah. deliberately. Yeah, cuz life happens. I had another one for 6:35.

[00:53:54]>> Yes.

[00:53:55]So, I switched off the first one.

[00:53:58]>> Yes. And then I waited for the next one cuz I knew it was coming. You knew it was coming. Yeah. Yeah. But and then it came.

[00:54:04]I snoozed that one. I didn't switch it off cuz I knew it was my last chance.

[00:54:10]And then it came it came again. I switched it off. I had a long night the night before. I switched it off. Mhm.

[00:54:16]And then with the intention of waking up immediately. Yes. I had to be there at 9:00. It was a 2-hour drive. I had to wake up on time. I had to take a shower.

[00:54:27]Yeah. I only opened my eyes at 5:08.

[00:54:31]>> [laughter] >> So, I was I was late. I was When I was like, "Ah, man." Okay. So, I gave myself two chances and I missed them. And you missed both. Yes. Nice. Behavioral economics.

[00:54:42]Right. But but then we can translate it to financial matters. Okay.

[00:54:47]So, within financial matters, what like the foundational one that you'll find when you say like investments for instance.

[00:54:55]You've got Mikes over here or the BBS Investments team.

[00:55:01]Right?

[00:55:02]They are investing in various opportunities.

[00:55:05]Okay? And they've got a view that if we were to invest in the way that we invest in construct the portfolio in the way that we're constructing it, put the things together in this way.

[00:55:15]We should be in 3 years or every 3 years time, we should be able to get to about 10% or call it like inflation plus this or whatever the case might be. Right? It It looks clear enough. Yeah. That That's That's what we like we should be getting to that. Okay. What we're buying, what we're selling, and so on and so forth.

[00:55:34]That's what the portfolio manager is doing or that's what the investment team is doing.

[00:55:38]Then now comes uh Mr. Mashaba. Mhm.

[00:55:41]>> [clears throat] >> Okay. Mr. Mashaba learning. I'm ordinary professor.

[00:55:45]>> Ordinary Ordinary professor.

[00:55:46]>> Yeah, I'm an engineer. I have other issues I'm worried about. There's a bridge I'm building in Limpopo. You know, you look at that statement from time to time. You look at the value from time to time. You've put some money there. Okay.

[00:55:57]So, today you look at the money, it went up. Tomorrow, it would have come came down.

[00:56:02]As it would. As it would.

[00:56:03]>> It's It's markets.

[00:56:06]And then it keeps on going up and down, up and down.

[00:56:08]>> Donald Trump made some weird announcement. You know, and and remember, I'm just Hey, what's happening here? Mhm. Right?

[00:56:15]I don't have all the context. Google search or whatever the case might be. I do something.

[00:56:20]Hey, it seems like I'm losing money.

[00:56:22]Mhm. What do I then do? I sell out.

[00:56:25]Uh-oh.

[00:56:26]Behavioral gap. Uh-oh. See?

[00:56:29]The portfolio manager told you, "Give me 3 years, please. I'll get you the same."

[00:56:34]When are you somewhere in between the one and the three? Mhm.

[00:56:37]And you're [clears throat] like, "No, no, no. This is not working."

[00:56:39]>> It's not looking good, this thing.

[00:56:40]>> This is not looking good, man.

[00:56:41]Or I'm going to move from this side, go somewhere else. So, I'm not actually liquidating. I'm not taking the money out to spend it. I'm taking it and I'm putting it somewhere else. Cuz cuz I heard what they were planning to do.

[00:56:55]But this side Bitcoin.

[00:56:57]Hey.

[00:56:58]It lets me not go.

[00:57:00]This side, guaranteed what what and this and this and that. You see? Behave. So, your behavior is taking you away from what your trajectory should be, what your experience should be because of some of the things that are just like These are humanly Mhm.

[00:57:21]>> [clears throat] >> human misconceptions. These are human behaviors. Unfortunately, we all have them.

[00:57:29]Right? And that's why again, you always need somebody to test ideas with and what have you. So, the minute you're moving around, you're doing this over and above what the the portfolio manager said, "I can deliver this to you."

[00:57:41]>> Mhm. When are you wanting to do something else? You're supposed to be a passenger in this car. No. You don't want to be the passenger. I want to be >> to be the driver.

[00:57:49]>> [laughter] >> I want to drive with you. But, that's a problem.

[00:57:51]>> You know those types who who are not steering who are not steering.

[00:57:54]>> Mhm. They they they >> I'll bring you along. I'll bring you along and then what have you. So, you say that that's problematic. It's problematic because now um in most instances, they they are things that our blind spots ne are far limited to your blind spots.

[00:58:12]>> Mhm. That's true.

[00:58:13]>> person. Yeah.

[00:58:14]>> Right. So, when I because you don't wake up thinking what is happening in the US economy, what's happening with the And that's what you guys do. That's what we do. Every day. Mhm. That's all you're thinking about. So, now when I you were thinking, "Ah, but I read this article and this article said this."

[00:58:29]>> [laughter] >> And it was a glance. It was I actually read the headline.

[00:58:33]>> I read the headline. I I skimmed through this thing.

[00:58:36]>> Yes. And they said that this is the one. And then you end up That's Those are behavioral gaps.

[00:58:43]Are there others that are cuz that sounds quite expensive? Cuz You can do that every year for 20 years. It can be.

[00:58:49]And never quite make anything out of out of your investments. Yes, like like it like those that one and you see it during tough times. Like it You see it during um dislocations in the market. You see it when there's a crisis. Mhm. You know, uh COVID comes.

[00:59:06]Uh how do you say like invasions are always like it that classic one like cuz nobody sees it coming. True. You know, um um Trump Who's who Nobody saw him coming. Nobody saw No Nobody saw him coming. Which there he was, but we didn't know what he was going to do. He took a president's like You know, what, it was genuine like we just said happy new year. Ooh, then there he was. We are still thinking, oh we are we are going back to the office.

[00:59:33]Oh, this man. No, we are not. We are used to slow take off, slow take off.

[00:59:37]This man is starting by taking a whole a whole president of a nation. But, come on, man.

[00:59:42]But, you you have to understand. So, during that time, when the market reacts the way that the market reacts, we know the market will over react.

[00:59:50]>> Mhm.

[00:59:50]Right? Oh, so the over reaction of the market is unpredicted, yeah. Well, it we can't be But, it's almost common.

[00:59:57]>> It's common. Yeah. Like somebody's going to run for the hills.

[01:00:00]I'm liquidating. No, no, but this I'm not sure how to value this and what have you. And then my dude sit still. Yeah. So, if you're part of that crowd that is running for the hills, why are you running for the hills?

[01:00:12]When you just see people running, you're running with them.

[01:00:15]>> [laughter] >> You're running with them.

[01:00:18]No. No. That's a we can take a thing that thing will be extinct. Like, relax.

[01:00:24]So, that's the one bit.

[01:00:26]The other bit [snorts] that you typically find name when we talk about behavioral gaps is it's that just a lack of awareness.

[01:00:34]Mhm.

[01:00:34]>> [clears throat] >> Um and I'll take you back for those who are in corporate and whatever. You started you know, on on that HR acceptance day or that HR day when you are filling the forms, it's a lot of forms. You're excited to start a job. Yes, of course.

[01:00:48]And you had to make a choice of where the contributions should go.

[01:00:54]And [clears throat] it wasn't eeny meeny miny moe. It was. Right? You didn't know.

[01:00:59]You see, like that that's a that that right there creates a gap. Because you are not like the money where you like where you putting your money is might not be necessarily aligned to where where you should be putting your money.

[01:01:13]>> Or where you going. Where you like that that that plan, that direction. When are you putting money in something that is in a bus. You need a Ferrari. You put money in a bus.

[01:01:23]>> [laughter] >> Do you see where where the problem is?

[01:01:25]But but you didn't know. So you're saying lack of knowledge is It's critical. It's It's critical.

[01:01:31]That's a gap.

[01:01:33]It's a gap because now you have to remove that to ensure that you're always always somewhere where your behavior and what the market is doing or what the investment is doing is kind of like the same.

[01:01:46]>> Mhm. You see, you can't be you know It's not always easy though.

[01:01:52]That that particular one at that age at 23 No no no. 24, first job I know.

[01:01:59]>> and you know you're just excited to have a job one hour to you I know valid degree as a medical doctor you've been home for >> But you're an adult. Yeah but No no no.

[01:02:09]>> [laughter] >> No we cannot excuse ignorance. You are an You have a responsibility.

[01:02:16]Hey rather ask questions.

[01:02:17]>> Ask the question. See, like that right there. Please let's sort that one Because because I'm thinking but he but he I >> [laughter] >> No it's fine and then somebody will say no this one is what the one I took. They made their decision.

[01:02:31]>> I took this one. They made their decision and you follow their decision.

[01:02:34]>> Is it aligned to where you are going?

[01:02:35]No.

[01:02:36]Hey. So that's a problem.

[01:02:38]The other one, okay?

[01:02:40]is timing the market versus time in the market. Two different things. Yo yo.

[01:02:47]You know what? Every time I see these people uh talking about hey this thing did this or what have you Let's let's put money. Bitcoin. Mhm.

[01:02:57]What?

[01:02:58]No it's now it's time.

[01:02:59]>> So those are timing. Timing. Timing.

[01:03:03]Mhm.

[01:03:04]But Dave, huh? You see me? I wake up every day. I go to work. Mhm.

[01:03:09]If I knew how to time the market, I would not Mhm. You'd be rich.

[01:03:13]>> I'd be home with a Bloomberg terminal.

[01:03:15]>> [laughter] >> And you wouldn't be living amongst us.

[01:03:18]>> No. Mhm. So the this world has many asset managers and investment managers and a whole financial services industry.

[01:03:27]>> Yeah.

[01:03:28]But but you >> [laughter] >> I mean I have chat GPT. You with your chat GPT. Yes.

[01:03:37]It said You know the answer.

[01:03:39]>> I do.

[01:03:41]>> [laughter] >> I have chat GPT.

[01:03:44]No, but where did it Where did chat GPT get that?

[01:03:48]Of course it had to From the same people who are saying, "Yeah, well, you know what? Mhm. We didn't expose everything to it. We didn't expose our proprietary information to it.

[01:03:57]>> That's true, of course. It's only the public information that we That's why we are spending money [clears throat] to ensure that we can we can use it internally with our own data, with our own research to protect our proprietary information. So when I now you go there skimping away.

[01:04:12]>> Yes. Yes. No, but but but it said it said with your financial future it said.

[01:04:19]Volatile markets tend to make us make bad decisions.

[01:04:24]Yes, but but We run. I I understand that. Like you lack of plans.

[01:04:33]Okay. Lack of planning is what actually makes you responsible.

[01:04:37]Not okay. Because the markets will be the markets. Yeah. All of a sudden, yeah, something is running this this this this. If you had a plan You wouldn't >> No, you wouldn't. Yeah. I have a plan.

[01:04:49]My plan is I'm trying to get from here to Pretoria.

[01:04:52]Why am I going to Box Park?

[01:04:55]>> [laughter] >> Do you Do you see what I'm saying?

[01:04:58]There's a party.

[01:04:59]Why am I going there? Yes. You see? So you So you have to stick to your lane.

[01:05:03]>> Stick to your Simple. I mean you know the concept There's someone who did a a whole PhD on on destruction.

[01:05:11]Yeah.

[01:05:14]>> [clears throat] >> All sportsmen and women have fallen because they were distracted by something for a minute. I think Lewis Hamilton now is distracted by this Kardashian.

[01:05:25]>> [laughter] >> You see, that's a perfect example. Yeah.

[01:05:28]And they're completely distracted and he may never win again ever in his life because of this lady.

[01:05:33]>> But it's a tough team. I mean for even before the lady, it's a tough team.

[01:05:37]True. Yeah, that team is not the easiest.

[01:05:39]To work [clears throat] for or work with. Yeah. It's for because they they mute a driver.

[01:05:45]You see, and depending on the on the type of driver that you are. Yeah. And people would say, you know, they they've got they've got a almost like an intuition of how is the car. Like, can I stop here? Can I not stop here? And it's a team it's a team approach. So, I don't know.

[01:06:03]>> [clears throat] >> Let's see. See, I'm thinking distraction. Yeah. You're thinking distraction.

[01:06:07]>> Box Bay. Yeah. I went to Box Bay. I was heading to Pretoria. Somebody said, "Hey, man, I drive to where you want to go." I don't know what I did. But but you see If if if if you put there on Google Maps or whatever whatever application that you're using >> and say Pretoria. and say Pretoria, it'll find you the most efficient way to get there.

[01:06:26]Most efficient.

[01:06:27]Tell you, okay, you you'll probably find this there's a bit of this. There's this traffic.

[01:06:31]>> It'll take you so long to get Do you see that? That there's a Yes, there might be traffic that pops up.

[01:06:38]Yes, there might be an opportunity to actually go quicker. Mhm. Yes, [clears throat] there might be but there's a plan. Mhm. You see?

[01:06:46]So, distractions uh volatility in the market, what just tell me it tells me one thing.

[01:06:55]There's a plan missing here. Mhm.

[01:06:56]Because if there was one it'd be okay. Okay? Um but but sorry brother, if I I was I was We were chatting about the timing of the market and time in. Yes, 100%. You see I got distracted. No, no we well it's it's it's good conversation nonetheless. And and iterating reiterating that key point of get a plan. Yeah. I don't care if you if you say listen I don't want to use somebody and whatever you want to do it myself. Okay.

[01:07:25]Just have a plan, please. Just tell me where you want to be next year, the year after that and whatever you. That's it. That's the most financially responsible thing to do.

[01:07:35]>> Mhm. [clears throat] Everybody clearly it's not easy. No, it's not. Cuz if it was, we would all do it.

[01:07:42]What are some of the clearly in our in our decision-making, there must be some of the decisions that we're struggling to make. And some have to do entirely with our financial reality. Because we are not all given the same starting point, the same stipend. Everybody I remember funnest.

[01:07:59]Yes. Go.

[01:08:00]You see that one Yes, I sympath- I I I sympathize and empathize with everybody who you know has found it hard.

[01:08:12]And and it's a reality. I know it's a reality. There's various things that we you know we even we are trying to do to ensure that you know we can invest in creating jobs, to to do this, to better the quality of education in the country. So we know it's a reality.

[01:08:26]But for you who is blessed enough to have a job you can't tell me that you can't hold on to 10 rands. If you can't hold on to 10 rands, man.

[01:08:36]That's a problem, man.

[01:08:37]It is it's this thing is a it's a it's a muscle that you It's not it there's nothing like that's why like if you see somebody saying you can double your money in 2 days or you can create like this type of return or this or whatever the case might be. It makes me cringe. Mhm.

[01:08:55]Because it it's like going to the gym.

[01:08:58]Everybody No, you you when are go to the gym today so so to you sign up today.

[01:09:02]So, so imagine that this is the typical advert that you find sometimes on the internet or what have you.

[01:09:09]Um sign up for gym today.

[01:09:12]>> [clears throat] >> By tomorrow you are ripped.

[01:09:15]>> [laughter] >> Your clothes will not fit.

[01:09:18]Start buying new clothes.

[01:09:20]Because you're just going to be ripped.

[01:09:21]Your six-pack will be out of this world.

[01:09:24]You know what? You're going to fit that dress that you haven't fitted in since high school. Your metric dance dress, ne? You're going to fit into that dress. There's a pill now, hey? No, but but what does what are There's someone There's ladies listening now, but there's a pill, man. Come on. That's thing.

[01:09:39]>> But what are the consequences?

[01:09:42]You see? So, so, why why why would you think that they there'll be something magical for financial stuff? So, you're saying if it if it sounds too good, something is wrong with it. Something is definitely wrong. I'm I can I can assure you of it.

[01:09:56]Something is wrong with it. Like there's no way that Again, if if there was one, I wouldn't be here.

[01:10:05]Me.

[01:10:06]I wouldn't be here.

[01:10:07]>> [clears throat] >> No. We're thinking you guys are taking long drive. No, no, no, no. We really are. We think they're taking a long route.

[01:10:14]>> If it was there, I wouldn't be here. I'd be gone.

[01:10:17]You know, I'd be in Monaco right now, man.

[01:10:19]>> [laughter] >> I'd be far like right now. I'd be far, far. So, those things they don't It's it it does not exist. That doesn't apply.

[01:10:27]You're saying I want a shortcut. No.

[01:10:29]There's no shortcut to this.

[01:10:31]In life there's But once again, brother, we spoke about the assets earlier on. You don't know. We think you're No, this asset will go up in price. This asset will generate income. So, we can take that same thing and say that asset is a company.

[01:10:45]Okay. When was the last time So, if somebody comes to you and says, "Well, this thing will give you 100% or it will double your money in in a month, okay?"

[01:10:52]When was the last time you went to the shop? You paid two rands for something and then by the end of the month you're paying four rands and you were like, I'll still continue buying the same >> Yeah, yeah, yeah. You'll look for alternatives, you'll do this. It's not sustainable. There's no There's no sustainability in a company that can up the prices because if you're doubling returns, you must be getting earnings from somewhere.

[01:11:17]>> You must be doubling your pricing.

[01:11:19]>> You must be doubling your pricing or you must be I don't know robbing someone.

[01:11:23]>> robbing someone, hiring children and not paying them or something. Like you You must ask yourself sometimes, well, like why would this Mhm.

[01:11:34]In what world have I ever seen in in my world Yeah. have I ever seen and was I ever comfortable to say I'll continue buying something that goes up by 100%. It doubles every month.

[01:11:47]>> And it's true.

[01:11:47]>> But I'm still happy.

[01:11:49]Yeah, right now diesel went up by I don't know how many rands and everybody's crying. Mhm.

[01:11:54]>> People don't want to come to to the office and >> No, no, no. And we have valid reasons now. Finally, we have a very good enough reason you see not to come and we hope managers and leaders like yourselves will understand our situation.

[01:12:07]Under consideration. Under consideration. But but do you understand what I'm saying? Like you will feel such increases very quickly and as a consumer when you go back to that thing of value value is not price. Mhm. Value is value.

[01:12:26]It might change depending on certain aspects of the asset.

[01:12:30]But I'm not going to just change my pricing if my value or my perceived value has not changed. That's true.

[01:12:38]>> Then I'll look for alternatives, then I'll do this. So, those things they don't exist. Please, don't don't don't even go there. Like just don't.

[01:12:44]>> But they are sold, eh? Well, they are they are sold. There's an entire free market of we'll solve your financial problems overnight.

[01:12:53]>> Yeah, but it just take it from here.

[01:12:57]Have a plan. Mhm.

[01:12:58]Have somebody who can hold you accountable.

[01:13:01]Stick to the plan.

[01:13:02]Change it when situations change.

[01:13:04]Right? And then after that you find you find providers cuz the plan needs to be provided for. We've got that We've got the the house plan, but now we need to find the bricks. We need to find those.

[01:13:15]We need to find the builder. We need to find the right people. King King David Studio Network.