Sharon Moller, Financial Planning Coach at Old Mutual Wealth

As South Africa commemorates Youth Month, the recently released high youth unemployment and low GDP figures provide a poignant backdrop for the future of our youth. It is a reminder to the youth about the significance of acquiring not only education but also the essential skills for financial success and independence. Developing smart money management skills is crucial, as it lays the groundwork for long-term investing and building wealth.

Financial Planning Coach at Old Mutual Wealth, Sharon Moller, shares valuable insights and effective tips to guide the youth along the path to financial success, empowering them to make informed decisions and lay a solid foundation for a secure future.

1. Developing smart financial management habits early

Developing smart financial management habits early, such as budgeting for expenses and making informed purchasing decisions, is important because it lays the foundation for responsible money management. By understanding your income, expenses, and financial goals, you can prioritise your spending, avoid unnecessary debt, and cultivate a healthy relationship with money.

2. Get into the habit of regular investing

Investing a portion of income or allowances regularly is crucial as it not only helps the youth establish an investing routine but also instils a long-term investment habit. There is so much you can achieve without even noticing the effort if you make this a part of your lifestyle. You can build an emergency fund, and you can be able to buy new tyres with ease after damaging your current ones, no thanks to our country’s massive potholes. Investing also develops the habit of delayed gratification a key to building wealth as the investor gets takes advantage of compounding over time.

3. Taking advantage of digital financial tools such as trading apps

Taking advantage of digital financial tools such as investment and trading apps is important as they provide practical and interactive platforms for youth to learn about investing and trading. These tools can help you get used to market movements and, in some apps, you will have access to research and market analysis by leading investment analysts.

4. If it’s too good to be true – it probably is. Be careful of get-rich-over-night scams

There is no scarcity of these. You see them all the time on your socials, and bling branded cars shouting ridiculous investment returns and getting rich overnight. But you must be absolutely cautious of these fly-by-night scams to protect against the risk of losing all your money in one go. If you buy into any investment and trading apps, make sure that they are properly registered or linked to a reputable brand. Remember it is never a good idea to invest all your money in one share, as the saying goes, don’t keep all your eggs in one basket. Stay carefully informed, practice scepticism, and always verify the legitimacy of offers or investment opportunities that you come across to safeguard your finances and avoid falling victim to these fraudulent schemes.

5. Immerse yourself in the world of investing and understand concepts such as stocks, bonds, and diversification

This is an exciting and ever-evolving world. No two days are ever the same. Immersing yourself in the world of investing and understanding concepts like stocks, bonds, and diversification is important because it opens up opportunities for wealth creation. It also allows you to be an active participant in the economy, because your investments in South African stocks (companies) are a show of confidence for our future. Learn about different investment options and remember, there is a world of investing out there and you are not only limited to what is available on the South African market, you can invest offshore for as little as R500 a month.

Building wealth may not always be easy, but with the right knowledge, discipline, and perseverance, you can build a solid foundation for a secure and prosperous future. This is one way for the youth of 2023 to honour the youth of 1976, by contributing to building our country’s economy through investment.

Financial advisers also play a crucial role in empowering their clients, especially the youth, to build a strong financial foundation. Advisers can provide effective guidance in understanding investment options, risk management, and long-term financial planning.

ENDS