Investments :
The choices we make ...
By Hugo Malherbe , Executive : Product Development at PPS Investments
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Life presents many choices , the choices we make determine our future .
If ever there was a quote relevant to one ’ s financial wellbeing , then this one by the author Catherine Pulsifer is probably it .
We make financial choices daily – some more significant than others . For example , when you bought your regular morning coffee , have you considered the impact of choosing to do so on your immediate and long-term financial well-being ?
It is only a cup of coffee , you might argue . How will this impact my long-term financial well-being ? If , for argument ’ s sake , a cup of coffee costs R40 and you buy one a day every working day of the week , it means you are spending R200 a week on coffee . During a 21-day work month , you would have spent R840 on your morning cuppa . Over an average year of 260 workdays , your morning “ pleasure ” amounts to R10 400 . Now multiply it by 43 … the duration of your working career if you started working aged 22 and retired when you turned 65 . Believe it or not , at presentday coffee prices , this amounts to R447 200 . That is a noticeable nest egg . Imagine if you earned interest on that amount for 43 years . Now we are talking a sizeable amount .
In essence , if one were to translate this fictional scenario to investment terms , it means that the investment portfolio you chose – in this case coffee – had , over the long term , no returns ( bar that warm feeling early in the morning ) for you . On the contrary , you “ lost ” this money as this “ portfolio ” is not an investment but just an expense .
Now imagine that every time you bought your coffee , the café where you bought it from invested the profit it made from your purchase into an investment portfolio and saved the money on your behalf . On your last working day before you retire , the barista hands you not only your coffee , but also proof of this investment – including the interest it earned on your behalf – for you to spend or continue to invest as you please .
Members of PPS holding qualifying products will know that this is exactly how PPS operates . Because we operate under the ethos of mutuality , we share operating profits and losses with our members through allocations to the Profit-Share Account . As is the case with any investment , market movements and short-term
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