5 Things Madiba Can Teach Us About Financial Independence

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By Mark Cliff

It was not possible to be on planet Earth this weekend without being touched by news of Madiba’s 90th birthday. Looking back at the great man’s life and some of the lessons we can learn from him, I wondered what it was that we could learn from his life about achieving and maintaining financial independence.

You’re probably going to live longer than you think

It is hard to believe that Madiba, who obviously spent a large part of his life in very difficult living conditions, is 90, but then we need to start appreciating once and for all that we’re probably going to live quite a bit longer than we thought. There once was a time when one needed to plan for only about 20 years of retirement (65 to 85).

Many of the people born since the 1940s have grown up in a society where they have been much better educated on health and lifestyle issues and have taken the time and effort to look after themselves. 95 is the new 85 and anyone who used to think they only had to plan for 20 years of income during retirement now need to consider at least 30 years – that’s no less than 50% longer!

Appreciating that many of us are probably going to live to over 90 years means that we need to put in place a financial plan and behavioural discipline to provide for these years.

Everyone needs advice from time to time

Madiba needed help and guidance at times during his life. We all do. Walter Sisulu was one of his greatest friends and confidants and on the occasion of his 90th birthday Madiba said of Sisulu, “There are so many examples I can quote of the wisdom and leadership qualities of Walter. In all of those instances he demonstrated the ability to see the broader picture and to project himself way beyond the immediate considerations that others found ourselves focusing on.” When it comes to creating a plan towards achieving financial independence it is also useful to have a friend, and partnering with a competent financial planner can make the difference between success and failure.

Determine your values and stay true to them

Anyone who has taken the time to read the famous speech Madiba delivered at the Rivonia Treason Trial in 1964 will appreciate that he is a man with strong values that have guided him for most of his life. When it comes to working towards and maintaining financial independence, we too need to determine our financial planning values and stay true to them.

So what kind of values are we talking about?

Here are a few worth considering:

• Get sound financial advice from a trustworthy resource

• Live within your means

• Begin saving at an early age – or as soon as possible

• Avoid debt – particularly high-interest debt

• Educate yourself on investing wisely

Education & Discipline

Madiba made the effort at a very difficult time in our country’s history to educate himself and in 1948 qualified as a lawyer. Even during his incarceration on Robben Island Madiba continued to educate himself and was one of a number of prisoners who graduated with degrees from UNISA. Like Madiba, we all need to educate ourselves on the importance of creating a financial plan to achieve financial independence, and the components which make up a good financial plan. Your financial advisor will assist you.

Along the road towards financial independence there are going to be trying times. Times where one is tempted to be greedy, times where one is afraid, times where one becomes despondent and times where one will be tempted to taking excessive and unwarranted risks. Having the discipline of someone like Madiba to stay true to your long-term plan and not be pushed or lured off it will be an important step towards achieving your ultimate goal.

It’s a Long Walk to (Financial) Freedom

Madiba’s autobiography “Long Walk To Freedom” tells of the struggle of not just one man against a reprehensible political system, but of a whole nation. It tells the tale of not a quick solution to the problems, but a long and arduous struggle. Similarly, the walk to Financial Freedom for most of us will not be a short one, but rather a long, arduous walk.

What we have been able to learn is that we need to plan for us to live for a long time. This will mean that we need to make plans for longer. In order to reach our ultimate destination of Financial Freedom, we will need to educate ourselves as much as possible regarding long-term investing, find a good financial planner to help map out our route and develop values and discipline to enable us to stay true to our course. The road to Financial Freedom is not a short one, but if we learn these lessons and start to put them into practice, we will reap our rewards in time.

Source: Mark Cliff, Alphen Asset Management, July 21, 2008.

 

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