Q & A Afika Soyamba

Afika Soyamba is the founding member of the Power FM ETF Club. He is one of the people I follow on Twitter whom I feel inspired by their focus on improving the state of their  finances. He has started his own blog, where I am hoping that he will write about the Stokvel that was for getting rid of debt. Please check his blog out first-hand:

https://ufudolobutyebi.wordpress.com/

Who is your ultimate wealth super hero role model that inspires you?

• My superheroes really have been my mother, my late Grandmother and they are not anywhere close to being wealthy, let alone being rich. These two women taught me a lot but they never sat me down to tell me how to handle money when I start having my own. I learnt from observing how they handled money. My grandmother was known to be a stingy person and she spends her money wisely. Only getting a government grant a once in a while one of her children would send her money. But she managed to make sure we had something to everyday and we were eating nice.lol. She only had a ‘Sales House’ account that she rarely used and no other debt, except maybe at church(Wisile)
• Then there is my mother – when I started staying with her, I then began to know her finances and realized that she always have like 2 to 3 times her salary in her bank account. Me on the other hand I was running out of money before the month ends. Worst part I was earning 2 times more that her and that didn’t sit well with me. I told myself that I want to be like that. I remember when she was suspended at work for three months without pay and she never had to borrow money or me having to help out, life continued as normal for her.

When did your journey towards wealth creation begin?

• My wealth building started when I decided that I wanted to pay off my student loan (NSFAS) debt in 24 months and that was in 2009 when I started working. Attacked that debt like crazy and open a savings account with FNB which I later transferred the monies to a newly opened savings account with Standard Bank. I wanted that money not to be readily accessible as I was using FNB as my main bank. I think 4 months later went to check the balance standard bank and I was told that I have never opened a savings account with them. I was transferring money every month. I never got my money back. So from then I think I always wanted to save again, but I only know about the banks. I think I was until there were talks of MTN Zakhele where I started knowing about the stock market in 2010. It never stopped and I am still struggling to build wealth. I now know so much and the journey continues until until.

Where do you envision your “net worth” in a year’s time?

• My short term goal is to see my net worth being at Zero. There is a high possibility that I might just get to that magic number or very close to it in about 18 months.

How can you easily break down this concept of “net worth” in layman’s terms?

• Net worth is a guide for your financial progress, and it’smore important than your income. Net worth is simply your assets like, savings and investments and minus your debts.

Why is direct ownership (JSE) by the Black community at only 3%? Are there any remedies that you can suggest?

• Black community was not allowed to take part in the real economy (markets) and over the years they probably just forgot about JSE and focused more on just getting freedom or it was the least of their worries. We got the freedom and all we were thinking about was racial integration not integration of the money. It puzzles me when people write about the gap between the poor and the rich is widening but when it comes to black and white they would say the gap is getting narrower because of the opportunities that blacks have now ‘over’ their white counterparts. Net worth is built over time and we all know what compound interest does when given time. Black communities where never allowed that opportunity it’s going to stay like that for some time.
• The current generation is the first to actually have money to invest but it’s hard to just look after yourself and not your parents and siblings. Most black professionals belong to the generation known as the sandwich generation because they need to take of their aging parents and their own families.
• Even though we have high income earners, they still do not know the financial tools to build wealth and those who know they are not too confident and they are afraid of them I remember when I was attending some ETF investment seminar at the JSE. I spoke to some guy and he was saying he wants to start to invest but he is afraid. He asked why all of a sudden are ‘they’ opening up the stock markets to the black community and what are they not telling us. I told him it was up to him to decide and I walk away from him.

Remedies

• Education, education, education. We need to educate the general public about investments, debts. Financial literacy needs to be something that is taught at the school, varsities, workplaces, stadium events, churches.
• A generic platform is needed where it can come to the people, instead of people going to it to learn. I believe those people that go to seminars they already know something and looking for more info. What about those who know nothing about these things? Companies do try to educate people but I feel they do it only to lock those people with their products. I would like to see more investment companies to take charge of investment education not the insurance companies.
• Create a second stock exchange for small business, where they can raise funding to expand their businesses and not always looking for from the government.

What advice can you give to others who aim to be debt free?

• Stop acquiring debt today
• Know and understand how and where your money is going(budget)
• Pay your debt from the smallest to the largest(consumer debt)
• Make some changes in your life, some call them sacrifices. Please don’t use words like that.
• Lose or sell unwanted and underutilised stuff.
• Build an emergency fund, people, yhoo this has been my downfall.
• Payoff your car and keep it
• Start to attack your home loan and student debt if you have any.

Then you can party all night, just one night though.