Money & Me: 'Money should not be a burden but a resource to help you achieve financial freedom.’
The Finance Story ‘Money & Me series’ features finance professionals who share their journey with Money. This is an initiative to learn from each other.
- Ronel Jooste is a chartered accountant and entrepreneur from South Africa.
- In 2015 her entrepreneurial aspiration coupled with the fact that she was on the brink of burnout made her realise that she had to prioritize her health and happiness.
- So, after a decade in the corporate world, she quit her position as Head of Group Financial Reporting and took the entrepreneurial leap. She co-founded a Guesthouse & Wellness center specializing in physical, emotional, and financial wellness with her sister.
- She also started the FinanciallyFiT Group specializing in financial consulting and training for entrepreneurs and individuals.
- Here is her take on Money and how she manages her money.
How did your upbringing shape your attitude towards money?
Both my parents have always applied good financial management principles and they believed ‘cash is king’. So most of the time, we had to wait until we could buy something!
Also since my mom was a stay-at-home mom, unlike my other friends who mostly had both parents working we had to live within our means.
For a young child not having the latest toy or dress was tough but today I am incredibly grateful for this important lesson.
Apart from the fact that my parents reap the rewards of their money mindset now being in retirement; I also apply those principles.
What does Money mean to you?
I believe money is a vital component of our overall well-being. Money is not only essential to provide for our basic needs i.e. food, housing, transport, etc. but it is also required to make the majority of our dreams come true.
Our physical, emotional, and financial well-being all need to be in balance to achieve ultimate wellbeing. If one aspect is lacking it impacts negatively on the other aspects.
How old were you when you started properly investing/saving?
Growing up my sister and I have not received pocket money.
A friend convinced me to apply for vacation work at Edgars when we were in grade 11 (standard 9). We earned very little money (something like R10 an hour and R20 on Sundays i.e. R50 for a Saturday and R100 for a Sunday). That was where my journey with money started.
After the holiday they appointed us as temporary staff to also work over weekends. I saved most of the money.
I was fascinated by how quickly that small amount of money has grown. I started doing research and exploring different savings accounts and investment types that offered better returns.
When I started university, I got myself two more temporary jobs that I could do on the days that I did not attend class.
When I started my second year of articles, I bought a brand-new Opel Corsa 1.6 Sport in 100% cash (R123k) with the money.
That is proof that starting out saving small amounts of money can quickly turn into something more significant.
I also used my savings to help pay for my studies.
What was your saving strategy when started your career?
After qualifying as a CA, instead of rushing to buy a house and living by myself, I lived with my parents for a few years.
During this time, I started saving money to buy a house and put the money that I would have paid on a bond into unit trusts.
By the time I bought my house, I could pay cash for a deposit, all the transfer costs and furnishing the house....saving me a lot of interest on my bond!
When I bought my first house, the idea of having debt was terrifying. I put in a lot of effort to repay my bond in 6 years and became debt-free in my early thirties. Living debt-free is wonderful as you can spend all your focus on investing and creating wealth.
I built up an emergency fund early on and that really helped to cover any unforeseen expenses.
At the same time, I also saved money to travel and buy the items that made me tick.
At the end of the day, money should not be a burden but a resource to help you achieve financial freedom and live the life of your dreams.
Do you indulge in fancy living?
As a nine-year-old kid, I always dreamt of driving a BMW, and two years after becoming a CA I could buy a brand-new BMW 320i...again 100% cash. Proving that money can help us realizing our dreams.
How did I buy a BMW in cash? I put away the monthly installments as if I had car financing and when I had enough I could afford to buy my car in 100% cash. I had saved up R282k to buy it!
So in general I do not splash out (buying a BMW was a dream for which I saved money very wisely over the years).
I, however, do spend a lot of money on things that are important to me and that I enjoy doing i.e. traveling (I have travelled to more than 30 countries), eating out, going to the theatre, going on holiday, going to the spa, etc. Then I cut back on other things that are less important to me.
How did you save enough money to quit your job and start your own?
I did not really save specifically for starting my own business. I left the corporate world much younger than I initially anticipated.
When I left, I was already debt-free for a few years and had a good investment portfolio built up, which I could use to fund my ventures.
The biggest mistake you made when it came to money?
I would say one of my biggest mistakes was underestimating how much time it takes to build a solid business.
Before my sister and I started the guesthouse venture, we looked at the business model and the income potential. I realized that it could replace my corporate salary...the mistake I made though was to think it will happen immediately.
Starting a business from scratch takes a lot of time, effort, and dedication to get to a point where it is profitable, sustainable, and can operate independently. Once you reach that stage though it is exceptionally rewarding and fulfilling.
Since you are an entrepreneur, what is your saving investing pattern?
During the start-up phase of my businesses, I continued to contribute to my retirement annuities, but I stopped some of my monthly contributions to unit trusts, etc.
I rather invested that money into the business to prevent having to use debt. My priority with our guesthouse was to build up an emergency fund as soon as possible which was our saving grace during the worldwide pandemic.
For all the businesses I started since leaving the corporate world, I watched the cash flow and budget like a hawk.
Once the businesses started to become profitable and could sustain themselves, we used the profits to do renovations and to grow our investment portfolio.
The beauty of having multiple businesses is that you can use one business to pay for your daily living expenses and use the other businesses’ profits to start more businesses or to invest.
How has the pandemic impacted you?
Our guesthouse business was severely impacted. We had to use our emergency fund to pay the staff and monthly expenses.
We are extremely thankful that the capital saved up assisted us to survive during this period.
But the bigger impact is that we lost out on a year’s income from the guesthouse. I guess these things do happen and the better you are prepared, the less financial stress you would experience.
If you had to go back in time and plan your finances, what would you do differently?
I would have started investing in the property immediately when I started working.
Although I had limited time to start business ventures myself during my corporate career, I would have invested in businesses while I was still in the corporate world. Businesses are one of the few investment types that can provide significant returns on your investment.
Living a fancy lifestyle does not necessarily equal being wealthy. I often coach people who drive fancy cars, live in the biggest houses, only wear branded clothing and on face value appear to be living the life, but then they are deeply in debt and experience severe financial stress.
To me, it is more important to have a solid and diversified investment portfolio; sufficient retirement savings, multiple income streams, and that my businesses can provide sufficient passive income to provide me with the time and money freedom to do what I love and live my life to the fullest.
Ronel is the founder of FinanciallyFiT Group specializing in financial consulting and training for entrepreneurs and individuals.
Now It's Your Turn...
What is Money to you? How old were you when you started saving and investing?
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