A month before my 21st birthday, my grandfather told me that he would give me 21,000 South African rand (approximately $1,500 US at the exchange rate at the time). However, there was one catch: I had to go with him to a financial advisor and invest money in shares.
At the time, I appreciated the freedom that money gave me, but thought little about investing. I was working working part-time at a bar Throughout university I promoted gigs whenever possible, and I was just starting to get freelance writing gigs.
Most of the money I earned went towards subsidizing my university lifestyle (usually drunken parties or greasy takeaways from the local pizzeria) or I saved money for a specific occasion, e.g. journey with my roommate across the country. However, I welcomed the 21st birthday gift and knew it was something I would treasure.
I knew investing was responsible, but I also believed it was a future priority.
In early 2019, six months after my 21st birthday, my grandfather made an appointment for me to meet my new financial consultant with him.
We sat in the boardroom and my financial advisor explained stocks and the market using terms that were completely incomprehensible to me, such as “repo rate,” “capital gains tax,” and “volatility.” I nodded, hoping it looked like I understood more than I did. My grandfather would occasionally ask my advisor to explain important concepts, such as highlighting risks I'm withdrawing money too earlyespecially when the market was in a bad position.
After we arranged the investment, I received quarterly updates via email. I rarely opened them and almost forgot about the investment portfolio. However, during the family Easter holidays, two years after creating the portfolio, the topic of investing came up. My brother asked me how much my portfolio had grown (my grandfather also organized something similar for him). I opened the email to check and the balance was ZAR 28,138. In just two years, this increase was 34%.
By this time, I had already graduated from university and started making decent money in my PR business. I was still unsure of how taxes worked, so I overestimated the amount of money I needed to set aside for them each month. However, in 2022, after hiring a tax advisor and filing annual tax returnsI found that I had a decent amount of money left in savings.
The author learned a lot about finance from her grandfather. Courtesy of Alice Draper
Three years after I started investing, I added to my portfolio myself
I remembered the investments my grandfather had helped me set up and emailed my financial advisor asking if I could add another ZAR80,000 to the portfolio. We arranged this and I also inquired about retirement by arranging a monthly debit order to go into my tax free account. pension fund.
My grandfather didn't just give me capital; he gave me financial literacy. He knew that the best way to understand the value of investing was to see my own money grow. I'm lucky to still have him as a mentor and often ask him for financial (and business) advice. His approach is never prescriptive; In fact, even at 21, he never told me that I should keep my money with a financial advisor.
Instead, my grandfather always believed that empowering people through knowledge, tools, or resources creates a different kind of security. Learning to invest at 21 gave me exactly that: the ability to make smart choices about my money as my life and income changed.
