Month: June 2018

We teach what we learn – unintentionally

We have a wonderful opportunity to teach our children responsible and healthy money lessons.

Imagine the possibilities for your children if they grow up with a healthy relationship with money – one where they don’t measure their self-worth by how much money they have … or don’t have. Over the years, many clients have expressed to me their various regrets and happiness around unhealthy and healthy money lessons they had learnt from their parents, and in turn, taught their children.

Some are proud of, and others regret the money messages shared.

As parents, it is our duty to teach our children right from wrong, but at the same time, be aware of not teaching them to be just like us. I am sure many parents have deliberated on messages and behaviours they would like to pass on to their children. And I guarantee you that no parent wants consciously to teach their children bad behaviour and unhealthy habits. or to pass on low self-esteem.

If you had to ask most parents what their number one wish for their children is, the answer will most probably be “happiness.” So how do we teach our children and perhaps grandchildren about money to inspire happy lives?

You can teach your children unintentionally or intentionally. Most communication to our children is probably unintentional. Children learn from what they hear, see and experience while growing up, and if your relationship with money is based on fear, loss and anxiety, then this is the message that you are unintentionally passing on. And in all probability, these were the messages passed on to you by your parents.

Would it surprise you to hear that recent research tells us that children’s money habits are formed by age seven? And that, as adults, we operate on a subconscious level 95% of the time? This means that our conscious mind is really only working 5% of the time while our subconscious mind runs the show most of the time!

Intentional teaching is sharing thoughtful money messages. We as parents can only teach thoughtful messages if we are aware of our own money story, understand our relationship with money and have the wisdom to change the behaviours that don’t serve us, and keep the ones that enable our lives in a positive way.

Real-life examples

I recently participated in a Life Planning meeting with a father and son. The father reflected on the The first step in teaching your kids how to handle money is to be a good example.money messages he heard while growing up. His father taught him to work hard for his money, and with hard work, comes reward. You may consider this to be a positive money message, but reflect for a moment if the message would have been more powerful if it had been about “earning money by adding value”? This father, now 70 years old, is still working hard for his money. He fears that if he is not working hard, he is not adding value and therefore not deserving of earning.

The father unintentionally passed this same message on to his son. He also works incredibly hard but expresses the wish to be able work “cleverly,” so that he can shape a more balanced life for himself. Father and son wholeheartedly agreed that this is a cycle they would like to break. They don’t mind working hard, but recognise the need for balance: more time to laugh, relax and just living the life they were meant to live. I am sure that the constraining message will not be passed on to future generations in this family.

Ingrid is a client who reflects on a very positive and empowering money story passed on to her by her father. Her father empowered his girls to be independent; he supported and sponsored their tertiary education at a time when most women were not encouraged to study. He instilled a belief in them that anything is possible. This belief Ingrid’s father had in her capability and ability to succeed served her well. Because of this, Ingrid has had the courage and determination to follow her true purpose in life – and make a success of it!

It astonishes me how powerful father and son relationships can be. In honour of Father’s Day this month, I would like to share one more father and son story that has inspired me as a mother of two boys. The son shared with me that his father always asked, “How much pocket money do you feel you deserve for the time it took to do your chores?” This money message has had a wonderful positive impact on the son’s life.

Today, he sees earning money as an exchange for time. His most precious commodity in life is “time”. He will therefore always compare the value of his time versus the money that he is earning for his time. He is now planning to retire early from his formal career and re-invent his work so that he and his wife have more time to explore some of their unfulfilled dreams.

My parting thought on learning and teaching is a money message about saving and investing – the value of compound interest. This could be a fun activity to do with your grandchildren. My advice is not to just establish a savings or investment account for them, but rather to involve them in the process, engage with them on how it works – in this way you are helping them to take ownership from a young age.

Wishing you many happy – and intentional – courageous currency conversations in your family!

When the markets cause concern, consider context

When the markets cause concern, consider context

What is your burning question? If you were seated, face-to-face with your financial planner right now, what would be that top-of-mind concern that you would raise?

I got a sense of the answer at the most recent Retiremeant™ workshop, our third in Johannesburg, when I asked the audience, comprising clients and their guests, “What would you most like me to share with in the time we have together?” The unanimous response was: the flat market conditions.

It is the same question that has been emerging in our client review meetings, where the reporting cycle preceding it has reflected flat returns.

I thought, in light of this understandable sense of disquiet, that I might share some points to lend perspective.

The relevant reporting period
The reporting period is the period over which you measure your returns. For most people, it is the day on which you invest your money until the end of the most recent month.

I found the following stats quite interesting:

* If we go back three years from December 2017, we see that the JSE yielded an 18.5% return

* Three years from 31 march 2018, and the JSE only gave you a 6% return (this is why the last quarterlies statements looked so poor)

* Go back three years from the 31 May 2018, and we have a return of 10%.

So as you can see there is quite a difference in returns across these three periods which are within six months of each other.

The same applies to the currency, US$ to the rand. Looking at the three periods in rands, you either gained 7%, lost 2% or gained 4.3%. This variance can be quite significant. This is why the recommended term for investing in equities is seven years plus: over the short to medium term, returns are highly volatile. We are gratified by the fact that we have had no negative years since 2008, the longest period in history without any negative years. If we look at the five-year and seven-year performance, we are comfortable. It’s through these inconsistent returns that we must sit tight.

A local and global trend

Blaming the asset manager might be a valid response, were the markets going up and your investments were not. In reality, it’s the investment markets as a whole that have really struggled this year, both locally and globally, so it’s not fair to blame the asset manager.

Our JSE is down 6% this year and most of the global indicies are in the same space. Both PMX and OM Multi managers are doing the best they can, ensuring you have a well-balanced portfolio spread across various asset classes, and also across a number of world-leading asset managers.

We will share updates with you in your review meeting: information relating to market performance; we aim to give you a greater understanding of the current investment climate. It’s useful to remind ourselves that last year was probably the toughest year for South Africa in the post apartheid era: sentiment was at an all-time low, yet our JSE still delivered a 21% return.

Change in Chartered’s reporting to clients

At Chartered, we have been working on creating a reporting communique that is comprehensive and easy-to-read. We are happy to announce that, from the beginning of July, you, our clients, will no longer receive the communique entitled Interest. Rather, you will receive Navigating the Tides which is your new weekly economic market update. If you have unsubscribed before, you will find we have re-subscribed you, giving you the option to consider this new format. If you don’t receive it, please check your junk mail or spam folder – your server may be filtering it out.

As always, Chartered Wealth Solutions is hard at work to continue improving on the service we offer our clients, and to keep our relationship based on trust and reliability. I appreciate discussions with our clients, be it face-to-face at events or via email, so feel free to continue to communicate with me.

Warm regards

The cure lies in the cause

Wellness is not a point in time, but a continuous cycle. It is a continuum of cause and effect.

Stress, anxiety and trauma are the most common reasons why people are unwell today.

It’s not the actual trauma or stress that causes your un-wellness, but how you respond or react to these events, the emotions that flow from your experiences, that impact on your well-being.

These are the health lessons presented by Dr Riaz Motara at a recent Lifestyle event for our Retiremeant™ clients.  To say I was inspired by Dr. Motara’s views on wellness is an understatement. I was so enthused that I immediately set up a follow-up appointment: I wanted to learn more!

Dr. Motara’s view on the correlation between health and our thoughts substantiates our Retire Successful philosophy that a healthy mind supports a healthy life. It’s about keeping your body fit, your mind challenged and your heart engaged.

Don’t discount the impact of your emotions
Dr Motara joins many other experts in the field of holistic health when he says that “fear” is the most significant emotion that underpins everything that happens to us as humans. It affects how we approach life, the decisions and choices we make, how we act or react – in fact, fear subconsciously steers almost everything we do.The difficult part is that our emotions are not really a conscious choice to make. We feel, because we react to something in a certain way.

While fear is the core emotion, how we negatively react or feel, based on trauma, are derivatives of fear: hate, anger, disappointment, discontentment, abandonment, loss, insignificance – and the list goes on.

It all sounds so complex, doesn’t it? To explain, I shared with Dr. Motara that the therapist I was seeing after my third high-jacking told me that I brought all this onto myself. That made me angry! No – fuming! Then Dr. Motara explanation made sense: my negative emotions became my self-talk and all my efforts to heal after the trauma were based on overcoming my fear. I was so fixated with fear that I ended up attracting fear into my life. The stress and anxiety actually caused me to become unwell in body and mind.

It’s a matter of the heart
The same applies to your health. Being a cardiologist, Dr. Motara dedicates much thought and research to issues of the heart. He has actually found a strong correlation between depression and heart disease. He says that by treating patients holistically, and by delving into past experiences, he is able to determine when the heart disease started. For example, a client with heart disease also tested for low levels of serotonin. Motara discovered that the feeling of “un-wellness” and heart disease started hand-in hand, shortly after a traumatic life experience.

Motara believes that 50% of the cure of any illness is having insight into what caused it. Ask yourself:

  • When did it start? When can I last remember feeling great?
  • What did I get exposed to?
  • Does this correlate with how I am feeling now?

The answers are inside of us. Unfortunately, it is not always easy to access traumatic memories, but if you delve deep enough, and try to make sense of your behavioural patterns, you could probably pinpoint your health to a specific cause and reaction.

The cornerstone of complete wellness remains a holistic approach. It is essential to consult a medical practitioner to treat your symptoms, but it is also important to work on managing your emotions and dealing with all the challenges that life holds, which most commonly includes stress and anxiety.

 

So, this winter, while it’s cold and gloomy and early morning walks are not as appealing as in summer, why not spend some time exercising your mind towards wellness. I’ll join you in that!

Keep warm and well.

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