Siboniso Nxumalo 0:06 Hi, I'm Siboniso Nxumalo, a Portfolio Manager
at the Old Mutual Investment Group.
Over the last couple of weeks, we've received some of your stories and your questions on
topics of savings, investing, money, big topic of crypto.
Over the next couple of weeks, we will engage with those topics.
So, let's talk money.
Let's talk investing.
Let's talk how to build wealth.
Let's talk financial freedom.
Buchule Sibaca 0:29 My name is Buchule Sibaca, I'm 30 years old.
I'm a CEO of a digital tax and accounting firm based here in Cape Town.
Buchule Sibaca 0:42 So, what do I expect to make from the sale
of my assets?
I think my biggest asset that I have is my company.
And it's the biggest risk that I took.
And ultimately, you know, when you look at a company's sort of financial income, you
look at monies from the salary I make from it, you look at money that I make from dividends
from it, and maybe for hopefully one day, money I'll make from the sale of it.
I think, ultimately, what we're trying to do is for the next couple of years, 10/20
years, is to grow that company to be a sizable portion that may be listed on the JSE.
Buchule Sibaca 1:22 So, in terms of my current portfolio, I think,
for me, it was...
I had a tunnel vision before, you know, only looking at my one big asset, trying to, you
know, putting everything I had in growing that.
And I think, you know, Covid was a real wake-up call for me.
Because I think you, you start realising that actually you don't, you're not immune, you're
not Superman, you know, you're not going to live forever.
I think - well, things can happen to you, or unexpected things can happen to the business.
And that could make the business fail, you know.
And so, one of the most important lessons I've learned in Covid, aside from obviously,
all the health benefits, and all the health things that you wanting to learn, is really
the power of not putting all your eggs in one basket.
And that's what I've really sort of done over the past couple of, you know, months or so,
or year, actually, is expanding my asset portfolio, putting money away in other vehicles, you
know, like some savings accounts, unit trust accounts, you know, obviously, increasing
my life cover.
You know, all those kinds of things that say, okay, well, if something were to happen to
me, or the business, you know, would I still be secure?
And I think that was a really big question that me and my partners in the business have
been asking ourselves around how do we best diversify our current operations, and the
business of course.
Buchule Sibaca 2:52 Financial freedom.
What it means to me, it means the ability to do the things I want to do, when I want
to do them without being limited because of the financial decisions I've made.
I think it's okay, if I don't have a billion rand to buy a aircraft, I don't think that's
what financial freedom means to me, i.e. being able to buy a jet.
I think for me, it's about being comfortable.
It's about being happy, being in a state where if I want to go out for dinner to make myself
happy, to do that.
And not have the external pressures, or what I call month-end crunches, you know, where
you have too much month at the end of your money.
Having considerable reserves that says, even if I don't earn a cent for the next three
months, or four months, six months, I'll still be okay.
The longer that timeframe is that you're okay, let's call it, your "okay period".
In business, we call it rope or runway, then the better it is for you.
I think that the more freedom you get.
So, it's maybe freedom in absolute terms like, am I free or not free?
I think it's a moving target.
And you always want more freedom, I guess.
So, ja.
So, financial freedom for me really means those two things: comfort and happiness.
Siboniso Nxumalo 4:16 Hi Buchule, I really loved your story.
I think the first thing I loved about your story, is the idea of you building a business.
Wow, I'm inspired.
You've taken risks.
You're out there.
You're doing something.
And I think, ja, South Africa is in good hands if guys like you are out there doing something.
Now, there's some things that I really want to touch on that you spoke about, that I think
you have a phenomenal grasp of.
The first one is time periods.
You were referring to 10 years, 20 years.
I thought wow, he gets it.
He gets the importance of time and the power of time, especially when linked to your financial
goals.
Hold on to that, Buchule, hold on to that.
That is probably the greatest asset that any young person has.
They have time, because time in the market is the biggest asset that you actually have.
And you've got to catch it when you're young.
And you got to ride it out.
And you spoke about it.
And I thought, wow, he's got it.
Siboniso Nxumalo 5:25 The second one, you talked about diversification,
you talked about what Covid taught you about having all your eggs in one basket.
And you talked about different risk parameters.
I thought, wow, Buchule here can teach a lot of people about the principles on building
great wealth.
So, let's touch on some of those.
Let's talk about diversification.
Especially linked to the fact that you're an entrepreneur.
Like you said, you took risk when you were young, you went out on a venture, congratulations.
That's what we did.
These are the things we need, we need to be cheering guys like you on.
And in taking that risk, you view then your biggest asset or your biggest investment as
your business.
And it is.
You've invested your time, you've invested your money, you invested your heart and your
passion in it, and I can see it.
But Buchule, also, you've got to apply your mind to the sense that you've got every egg
in this particular basket, which is your business.
And so therefore, how do you deal with that?
And the future.
And I think one of the things we always advise, especially to entrepreneurs, in this particular
instance, guys like you who are chasing a dream, is that at your age, you should be
thinking about retirement already.
You should be thinking, hey, how do I invest in a retirement annuity?
Retirement annuity linked to some unit trust, that's got the right risk parameter for a
guy like you, that's going to be doing the work for you in the background, while you're
busy building your particular business.
And you ignore it, you leave it alone, you keep contributing, month in, month out, and
you let that grow over time.
By the time you get to your 60s when you're supposed to retire, actually, that would have
worked out wonderfully for you.
I think one of the things about being focused as an entrepreneur is that sometimes the entrepreneurs
neglect the fact that, hey, I've got time, and I can invest long term, I can invest in
a retirement annuity.
That is one thing I think we're probably - it'd be good to start thinking through.
Siboniso Nxumalo 7:36 The other side of it is actually what are
your financial goals?
Now, you're a guy who does have goals, and you spoke about them.
You said, what, you're 30 now, and you talked about how you - when you are 40 or so, your
kids must be out of the house.
So, first of all, I'm alarmed.
I'm like, what?
how old are these kids?
Why are these kids going to leave home at 40?
This man is building a business, these kids are going nowhere.
That business is successful.
They're staying right there.
So, therefore, what do you need for these kids?
Well, actually, you need to think.
Actually, his kids need to go to university.
Okay, so what are you doing with that?
How are you investing and saving and helping your kids go to university?
What assets can you be buying for that?
And again, as a guy who works at an investment firm, again, we think unit trust, Go and have
a look at unit trust, because your kids are relatively young, you've got a long period
of time to invest.
Unit trust, the right unit trust from the right reputable institution, investing in
the right assets, could actually set up your kids for success without you doing too much.
You set a contribution, and you just watch the contribution grow over time.
And then also it changes the risk parameters, because that, now, no longer has to come out
of your business.
You've already decided for that.
And you're allowing the role of time to help you along the way.
But, Buchule, I really don't have too much more to say to a guy like you.
I'm inspired by you.
And I think you've got the right principles.
I think probably the one thing you must be thinking about is, like I said, think about
retirement, because entrepreneurs generally don't think too much about that.
And then think about where your kids are going to be.
The ones that you are hoping will be out of the house at 40.
And I'm sorry to disappoint you, but that's unlikely to happen.
I'm 40 now, my kids are firmly at home.
They don't want to pay for anything.
But that's okay.
Or, at least I pretend it's okay.
Thank you, my man.
I'm inspired by you.
Cheers.