Johan van der Merwe, CEO of Sanlam Investments.
Week three of the One Rand Man experiment and the 32-year-old architectural consultant has started paying attention to the detail behind his spending – for the first time ever, he is taking note of the price of items in the supermarket. But now that all major expenses are paid, he’s shocked that there is so little left to live off for the rest of the month. Normally he’d carry on spending liberally and slip into overdraft on his credit card - but this month looks very different as he only has his own hard cash to live off…
A trip to the supermarket gave some deep insight into the One Rand Man’s previous attitude towards money and spending. He used to ‘round everything down, so R8.99 was R8 and R24.99 was R20’. “I didn’t really take note of the price of things. So now that I am taking more care, I really can’t compare prices because I just don’t know them. I’m basically starting from scratch here.”
Johan van der Merwe, CEO of Sanlam Investments and a person whose own journey with building wealth began many years ago and led to a successful career in investments, says it is very encouraging to see the One Rand Man’s thinking on money beginning to change. “His shift from plastic to coins has brought home the message that every single thing we do costs money. My money philosophy – which was passed down to me by my mother – is to only spend what you have. With the exception of using credit to work for you – for instance when buying a property or another appreciating asset – it is never a good idea to get into debt.”
The One Rand Man is a social experiment by Sanlam where an ordinary South African lives entirely on R1 coins for the month of July. The aim is to discover how far removed we have grown from our hard cash. The project is linked to National Savings Month, an annual event on the South African calendar designed to highlight the importance of savings for the long-term financial health of the nation and its individuals.
Van der Merwe said that instant gratification is the main driver behind the culture of debt in South Africa today. “With some careful planning, investing and saving, it is very possible to achieve your goals. But just with a little bit more patience.”
He said there were many examples of people from humble beginnings who had succeeded financially due to hard work and a solid financial philosophy. The wealthsmith who had most inspired Van der Merwe was Anton Rupert, the South African billionaire, philanthropist and conservationist. “Anton came from very humble beginnings, but he built his global empire on hard work, integrity and honesty and he always made sure to give back to society and to the environment. I think there are lessons we can all learn from his story and other similar ones.”
Going forward, Van der Merwe said the most important ‘money move’ the One Rand Man should make is to start investing. “There is no single ‘right’ way to go about investing – direct or through a qualified financial professional who work with him on his complete financial picture to decide the best investment plan – but it is critical that he starts investing, and starts now. Hopefully he will realise that his money can work much harder for him.”
The fourth documentary episode of his experience will be available on Sanlam's YouTube channel tomorrow (25 July 2014), including commentary and insights from van der Merwe. Follow the One Rand Man’s story at here http://onerandman.sanlam.com, here https://twitter.com/onerandman, or here http://instagram.com/OneRandMan.
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