Quarter 2 Review 2017

By Thiart van der Merwe

A captured state exposed by a trail of emails in the hundreds of thousands. The #GuptaLeaks made headlines almost every day in major newspapers throughout the quarter. Shocking revelations of kickbacks received to Gupta-linked companies and generous gifts and holidays paid for to secure more lucrative deals just highlighted the corrupt web the ANC finds itself in.

Source: Zapiro in Daily Maverick

After the 2007 ANC National Conference, a faction of the ANC broke away forming COPE showing their dis-ease with the president elect at the time. In 2013 an expelled youth league president started the EFF as a breakaway party from the ANC. With as much division, it is difficult to imagine a united ANC after their 54th National Conference this December.

We anticipate increased revolutionary rhetoric and policy uncertainty in the run up to December. No candidate can win this election with a ‘business as usual’ campaign.

In June, the Minister of Mineral Resources gazetted a revised mining charter that was widely criticized specifically citing a lack of consultation. The main concern was around BEE ownership of 30% at all times with a clause including naturalized families as BEE benefactors, which suggested a certain family being the major winners. Markets responded badly with resources dropping significantly. Within a week our newly appointed Public Protector sent the Rand into a frenzy when she overreached and called on a constitutional change to the Reserve Bank mandate. On both counts we saw sanity prevail with the Public Protector going as far as following through with her predecessor’s recommendations by opposing Zuma’s application for a review of the State Capture report’s recommendations. These stories will certainly develop leading up to the conference in December.


Globally we saw a victory for the Eurozone as Emanuel Macron became the youngest president of France. With that France remains in the Eurozone and avoided the right wing rhetoric that has become louder over the last couple of years. With Netherlands opting for the Euro earlier in the year – these are positive developments for economic stability in the region. From the European Central Bank comments it would seem as if economic recovery is on track. People are however worried about the possibility of tightening its policy that will lead to reduction in the quantitative easing currently at around 60 billion per month.

Theresa May’s attempt to strengthen the Conservative Party in a snap election, backfired badly. The Tories lost out at the polls and did not secure a majority of the votes; they had to broker a deal with the Democratic Unionist Party to maintain their majority. The Tories had to rethink their strategy on Brexit and plan for a more accommodating approach on their initial “hard Brexit” stance.


Local data reflected that South Africa is officially in recession with two quarters of negative GDP growth. We are the only country out of 41 major economies tracked by the OECD (Organisation for Economic Co-operation and Development) to be in recession. The IMF predicts modest growth of only 1% over the coming year signaling political uncertainty and weak confidence across the board as the main drivers. Weak economic demand also reflects in inflation slowing significantly to 5.1% in June (year-on-year) which led to a 0.25% interest rate cut after quarter end. This would ease the pressure off household budgets and potentially boost retails sales that are very subdued in the current environment.


South Africa Business Confidence


The graph above suggests that we are our own worst enemy. The RMB/BER Business Confidence Index slumped to the lowest level since 2009. Companies are reluctant to invest into the South African economy and would rather invest in Africa or the rest of the world. Lead economist at Stanlib, Kevin Lings often refers to this graph and mentions that fixing this graph could fix the economy.


Local markets faltered towards the end of the quarter with equities giving away most of the gains made in 2017. This was mainly sparked by the Federal Reserve’s decision to increase interest rates in the United States and a global sell off that ensued. Industrials were the only major index that showed positive returns in the second quarter. Globally, the S&P 500 continued to reach record highs throughout the quarter. The FTSE100 also showed signs of recovery – the index rose 10% in 2017 in dollar terms.



As we saw in the first quarter that the Price-to-Earnings ratio is normalising we see continued positive earnings growth reported by companies listed on the JSE. Earnings estimates were at record highs in May, mainly driven by resource counters. Analysts are suggesting that this has more to do with the increase in the price of minerals itself, and very little with South Africa. As the economic outlook improves throughout Europe and the United States there is potential for an uptick locally.

In a world where news has become so politicized, it is difficult to focus on economic drivers. If we filter out the noise there are signs of improvement in sentiment towards equity markets globally backed by firm fundamentals. Most of the world is growing steadily.

With turbulent times ahead for the ANC leading up to a potential secret ballot in August and tougher times in December we finish off with a quote by one of the greatest leaders of all time, Nelson Mandela: “After climbing a great hill, one only finds that there are many more hills to climb.”

The New Old – Challenges and joys of longevity

By Elke Zeki

This month we launched our Encore workshop, specifically aimed at people approaching retirement and the challenges the “New Old” face today.   There is a distinct phase of life (we argue between 55-70) where many of the old are still young. They are active, relatively healthy, want to work (although flexibly) and spend money. Yet society sees this group as a headache. As the world ages, especially in developed countries – growth, tax revenues and workforces will decline while spending on pensions and healthcare will increase. Or so we thought…

The Economist recently published a special report on this exact topic. They argue that healthier, longer lives can be an economic advantage and that the key to unlocking this “longevity-dividend” is to turn this group into more active economic participants. I summarise and comment on their findings below.

What can we call this phase between work and old age? These days, people don’t check into the retirement home the day they retire. Life no longer consists of only three stages – educate, work, retire. There is a new life phase and we need to capitalise on it, as those in it can add great economic value, both as workers and as consumers.

So why have businesses, employers and financial services not moved away from the old way of thinking?

It seems we need a radical approach to change behaviour. Those catching on quickly are reaping the rewards.

Why should the workplace change?

A bit of history first: The first formal pensions (in the 1880s) were payable from age 70 (later reduced to 65), yet life expectancy was 45. Today in the developed world 90% of the population live to 65, mostly in good health, yet it’s still seen as the starting point of old age and many companies still force staff members to retire at this age.

Baby boomers are famed for their work ethic and commitment to getting the job done. As many are hoping for a flexible transition to retirement, why not use their skills and ability? They are likely to be content with a flexible job that pays less and they are certainly not looking for career progression.

It’s interesting that the sort of changes older employees seek, such as flexibility and wellness, are exactly the things young millennials entering the workforce demand. Why not make it productive for everyone?

Where are the opportunities?

Businesses are not adopting quickly enough, therefore the emergence of entrepreneurs amongst this group has increased dramatically. According to The Economist survey, US 55 and 65 year olds are 65% more likely to start-up companies than those between 20 and 34. In the UK, 40% of new businesses are started by over 50’s.

Innovative businesses capitalising on this group includes Uber. Currently – a quarter of all Uber drivers are over 50. Airbnb also proclaims the over-60’s to be the fasted growing group of hosts on their home-sharing site and receive the highest ratings from customers.

Travel has become a booming business in the US, where more than 40% of adventure travellers are over 50. These travellers don’t want cruise ships; they want different and adventurous experiences such as Antarctica and Galapagos!

Another area identified is technology. It holds great promise to make life better for the elderly, especially when it comes to healthcare. The notion that baby boomers shy away from technology has been proven untrue by many researches.

It seems there are many gadgets and platforms built with young people in mind, that can be more useful for older people. Facebook for example offers a platform for people to stay in touch or connect with loved ones. Over 55 is the fastest growing age demographic on Facebook.

Finally, another emerging market is online dating. Divorce rates are soaring in the US and UK as new pensioners suddenly face the prospect of spending a lot more time with their partner. “Americans over 60 are now getting divorced at twice the rate as they were in 1990.” The Economist shows. Popular dating sites have seen the group between 53 and 72 grow faster than any other age group. Again, highlighting the need for connection and technology.

We need the financial services industry to innovate and change. Why?

You may be retired for longer than your entire working career. It’s likely that you will be healthy and energetic for most of those years. Women over 65 are also twice as likely as men to end up living alone. All these factors can be problematic if you don’t have enough savings. The financial services industry is in a unique position to make a difference, by innovating, guiding and educating people.

These are some of the important issues they should address:

  1. Longer lives mean people need larger pots of money and more flexibility in the way they use their money. Products therefore need to be designed with this in mind.
  2. We need to find ways of resolving the problem of under-saving pre-retirement and over-saving post-retirement. This is where we believe the importance of proper financial planning and guidance cannot be underestimated. Under-saving and underestimating how long someone will live can be a costly exercise.   So too should people with sufficient capital and wealth build the confidence to spend freely what they can afford.
  3. A more creative approach is needed to the range of assets that retirees can draw from. For example, many people’s biggest asset is their home, yet it cannot provide income into retirement. Is it possible to create a product where this asset can play a part in funding their longer life? Reverse mortgage for example allows you to exchange your home for a stream of income.

Another radical approach is to reduce tax on retirement income. By making retirement income tax-free you can extend your retirement capital by a decade!

Through medicine and healthy lifestyles, life expectancy has increased rapidly. Fields such as stem-cell research, regenerative medicine, biomedical technology and genomics can be even more disruptive and we need to start preparing for it now. Economies and social structures will be greatly affected, but with more time, comes more opportunities. How we use these opportunities?


Resources: Dawn of the pre-tiree. What to call the time of life between work and old age? The Economist (2017, July 8th edition)


Rethinking Retirement. Finweek Collective Insight (2017, July edition)

A week in Provence – a step closer to a dream

By Sunel Veldtman

Many years ago, I read the book ‘A Year in Provence’ by Peter Mayle. It kick-started my love affair with the ‘let’s go live somewhere else’ idea but it also watered a small seed within me. I guess that seed has been there all along: from my early childhood on a Karoo farm – the deep desire to live a simple life – rich in the abundance of community and all that the land offers.

I do not know when my love affair with lavender started though. I just know that I wanted to be a lavender farmer. I even did a course on lavender farming and investigated buying suitable land. It was at a point just before I turned 40 when I was rethinking my life (as one does!) and I was deeply dissatisfied with it. I now talk about lavender farming as my escape dream. Thankfully, for my financial wellbeing, I realised in time, that lavender farming was not the solution and that the kind of life I wanted could be attained right here in Johannesburg. I realised that it was a symbol for my desire to live more closely to what I value – connection, beauty and freedom.

However, the lavender dream lives on in a different format and so, for my 50th birthday, my husband and I went to see the Lavender in Provence – a kind of pilgrimage to the dream. Along the way, we stopped to stay with friends and just experience life in the French countryside. The way in which we travel has changed. We are less interested in seeing churches, museums, statues and historical points of interest and more and more interested in experiencing connection with the culture of the place. Our pace of travel has changed too – we give ourselves time to rest and reflect.

The hunt for lavender

From the outset, we planned our holiday this way. We skipped most of the cities and large towns, to spend time in the countryside away from the crowds. We skipped the famous markets and opted to cycle to the village market to buy bread. We (mostly) skipped fancy restaurants in favour of roadside picnics and we passed on the congested coast to head for the hills of the Vaucluse. And of course, we hunted for lavender.

Searching for lavender is somewhat like a safari experience – one needs to know where to look. If lavender is your aim, you need to do homework. Provence is vast, hilly and covered in indigenous forests, which in itself is something to behold. Traveling in the smallest rental car turned out to be a distinct advantage. The passes are magnificent and adrenalin inducing. Sheer cliffs of white rock plunge into ravines overgrown by mossy oaks. And then you turn a corner and in front of you are fields of purple.


There is something captivating about lavender. Perhaps it is the full sensory experience. Every sense is alerted. A lavender field is alive. The thin stems sway in the breeze. Bees buzz lost in the abundance and oblivious to human intruders. Large white butterflies gently rest on the purple sprigs and the summer heat releases the heavenly scent from the flowers. Perhaps the enchantment is in the orderly rows stretching, sometimes into the horizon. Perhaps it is the stark contrast between the stony soil and the delicate beauty it produces. Maybe it is the fleeting moment, a small window of weeks that this spectacle is available for those lucky enough to see. Or the vistas to white capped Mont Ventoux and distant dusty towns.


The fields are unfenced (mostly) and one is free to walk through the fields. So we did and almost embarrassingly, we just could not help ourselves. We wanted to keep enjoying the beauty and we tried but mostly failed to capture the moments and the loveliness. One afternoon, we found a spot under a tree next to a lavender field with a view to Mont Ventoux (my Tour de France following husband’s highlight) and just spend hours enjoying the produce bought at the local market with a nice chilled bottle of rosé.

Provence is the home of French rosé. This wine is perfect for hot summer afternoons. Everything about it is perfect, just light enough to lull you to sleep with a book beside the pool. The colour so translucent that you might mistake it for a white, reminiscent of the peaches of the season and perfectly right for goat’s cheese and a baguette.

The French way

The French have largely managed to keep their way of life because it is precisely what defines them. They have, unlike most other nations succeeded to guard their food production with a vigour that other nations guard their world dominance. Did they, unlike us, understand the importance of food or were they just fortunately too stubborn to change? In rural Provence, it is hard to find a supermarket and it is evident that most locals still buy their daily bread from the same boulangerie they have always bought it from, and perhaps their family has bought for generations.

Our friends buy their free-range eggs from their neighbours, their meat from the farmer up the road, their vegetables at the market in the nearest village. At these weekly markets, stall owners have long talks about exactly which melon will be right for lunch, they tempt you with tastings of sausages and cheese and are always keen to share a recipe with you.

As is probably evident by now, to Provence we went to see lavender and to eat. We ate well. At a guided market tour (our standard introduction to a region or city when we travel), we learned that the French eat seasonal, locally produced food. At the local market, you buy just enough to last until the next market. Strawberries and cherries are only enjoyed while they are in season, the appreciation enhanced by the wait. The beauty of these markets is breathtaking. You can stand and stare at the primary colour collections – yellow sunflowers next to purple lavender bunches and rich cherries, healthy herbs and deep aubergines.

We learned the art of eating Bouillabaisse in Marseilles, which we ventured to just for this one meal. We learned about aperitifs – raw fennel, olives or foie gras on fresh baguettes (Boulangeries bake bread at all hours of the day and you may nibble at the bread on the way home). We tried the creamy regional cheese as desert or before desert in the French way. And we tasted golden almond cakes dripping in orange blossom syrup and snowy puff pastries so feathery light they dissolve in your mouth leaving only the faintest sweet after taste.

Guidebooks warned about the unpleasantness of swarms of visitors to Provence in the high season. However, we found ourselves the only foreigners in a market or a lone car at the side of a spectacular lavender field. On our last morning, we strolled through a village so undisturbed that we could eavesdrop on women chattering while they were airing the house above the narrow alleyway.

The hilltop towns are at their best in the early morning in early market trading or at dusk when the magnificent sandstone lights to ochre and peach. At midday, everyone heads for lunch followed by a siesta, leaving these towns radiating heat and deserted. It forces the traveller to the same restful rhythm.

The French have a reputation for being rude and we were somewhat apprehensive especially since we do not speak the language. On the contrary, we found that, they are friendly and become very agreeable when you show an interest in their food or wine. In Lourmarin on market day, not only did we get to buy a cold bottle of wine, but the owner opened the bottle and found glasses under the counter so that we could enjoy our picnic under the chateau with wine. In the countryside, we found little haughtiness, fancy dressing or pretence. Perhaps our lenses were coloured by the glasses of holidaying or maybe there really is no need for all the baggage that we carry in the city.

I came back from Provence thinking that the French have nailed life. (Medical research underlines the wisdom of their way of life.) I am more convinced than ever, that for me, this kind of life beckons – the kind of life where it matters what you eat, that you share your table with friends and family and find your enjoyment in a simpler life.

I think that, with more effort, it is possible right here where we live. I am enthused to search for it and make it happen.


Words Worth Reading

This month, we feature an article by our friends Dave Park and Anne Livingstone. They are enthusiastic travelers who blog about their many adventures on ‘My Very Long Weekend, Every day is Saturday’. The title alone gives away the high value they put on travel, brought about by financial freedom. We include one of their latest blogs, Under the Midnight Sun. Read about their amazing encounters with polar bears in the Arctic. Read their blog here.

Carl Richards, also known as the Behaviour Gap Sketch guy, wrote a fantastic piece on The Magic of Certainty. We all want certainty. Our brains crave certainty. However, as he says in this column, ‘uncertainty equals reality’. Some good advice follows for dealing with these uncertain times.  Read the article here.

We also feature an article by Leadership Now – Humility is the NewSmart: Are You Ready? Read it here.


The randomness of returns

By Elke Zeki

Financial planning is not an exact science, nor is it about getting everything right. It is about creating a plan that accounts for uncertainty and allows you to adjust quickly and easily.

One such area of uncertainly, especially when planning for retirement, is expected returns. When doing a cash flow analysis, we always assume a return for each asset class in your portfolio. These expected returns are usually based on very long-term averages with model adjustments resulting in minor changes.








The problem with assuming average returns for equities of 14%, is that these returns do not come in a straight line. Returns from equities (and other asset classes) can be extremely volatile with some years producing much higher or much lower returns than the average assumed in our calculations.












Volatility is one issue, but another is the order in which you receive these returns.

Two people with the same amount of capital, invested in the same portfolio and same monthly drawdowns, can have significantly different long-term results due to different market conditions and timing of retirement. If one retires during a strong bear market and draws income during a prolonged period of low returns, it will significantly reduce his capital and the portfolio may take years to recover from it.

We can illustrate this below by looking at another example:

Celeste retires today

Investment summary

Living annuity R 5 000 000 5% annual drawdown (about R20 000 pm before tax)
Voluntary investment (Unit trust portfolio) R5 000 000 R20 000pm drawdown
  • She receives a total of R40 000pm (before tax)
  • Income adjusted for inflation over time
  • Portfolios invested to target a return of inflation + 6% based on long-term projections.
  • A basic cash flow analysis would show Celeste that she could comfortably draw R40 000pm (adjusted for inflation each year) from her investments for the rest of her lifetime. The capital would be enough.

It’s possible to do a more complex analysis by simulating returns (based on actual returns received in the past). It’s a technique called Monte Carlo simulation (For more reading on the topic:  http://www.investopedia.com/terms/m/montecarlosimulation.asp)

The system creates different scenarios by using historical data and randomly allocating returns to each year. Each scenario would allocate the returns in a different order thus giving us different results.


When looking at Celeste’s analysis the blue line in the graph above represents the average expected outcome into retirement. The graph also illustrates that given a certain order of returns Celeste may be worse off than planned (red line) or she could be much better off (top yellow or green lines).

Another way of illustating this is by showing all the possible outcomes as in the example below. The black dotted line representing the average and most likely outcome.

The dispersion between different scenarios can be huge and therefore can have a significant effect on your capital and ability to retire comfortably. This is something often neglected by retirees and advisors. Most people only plan for the blue line. However as illustrated, returns are random and can present themselves in different ways

Common mistakes made to counter this problem

Reduce risk of the investments (include less volatile assets such as cash and bonds) – the problem with this approach is that if you are too conservative, your income withdrawals cannot keep up with inflation and you would therefore reduce capital quickly over the long-term.

Increase the risk of the investments (include more high growth assets such equity and property) – because equities have a higher expected long-term return than other asset classes, it can make the outcomes look more attractive. The randomness of returns and higher volatility may however increase the probability of being worse off than planned.

Only live off the income from investments – this is not always possible to do, especially if yields are low. Many people need to live off income and capital. It’s just a case of planning properly to ensure that the capital lasts your lifetime.

How to protect yourself against the risk of being worse off than planned

In our view, there are only two ways to effectively reduce your risks of reducing capital significantly. These are:

Increase diversification – good asset allocation and diversification amongst various asset classes is critical. It’s important to construct a portfolio to target a specific return by taking the least amount of risk possible. Diversification reduces risk.

Your spending/withdrawals – this is the most important and effective way to protect capital, especially in low-return years. It’s important to be conservative with your drawdowns especially in good years. Returns in good years should be banked for bad years.

How can a financial planner help?

It’s important to remember that cash flow analysis is just a guideline to provide you with some idea of what is possible. It is however something that should be monitored carefully over time, so that you can react and adjust where necessary in times of low returns.

At Foundation Family Wealth, we plan regular reviews with our clients. In our regular reviews with our retirees, we discuss with them the progress of their portfolios relative to the initial plan. At every review, we perform a new cash flow analysis based on the current value of the portfolio.

We also review the most recent experience and discuss the necessary expectation adjustments or withdrawal adjustments. We work as a team to protect our clients’ portfolios in good and bad times. Research has shown that this approach of on-going monitoring and adjustment can prevent clients from experiencing the worse case scenarios.

Beyond The River: A model for socioeconomic transformation

-By Erol Zeki


Beyond The River is a beautiful, true-life South African film that opened in cinemas a few weeks ago. Inspired by the story of two men from vastly different backgrounds – Piers Cruikshanks and Siseko Ntondini – and their determination to win a gold medal at the one of the contintents toughest canoe races – The Dusi Canoe Marathon.

I had the privilege of attending an event where these two men spoke.

This is not a review of the movie (which is well worth a watch) and I promise there are no spoilers here either. Nor is it a book review of ‘Confluence: Beyond the River’, telling Piers’ and Siseko’s story which inspired the script.

Rather, this is a look at what is possible. It is a look at some of the amazing things going on in our country. People from all walks of life are coming together, overcoming seemingly insurmountable challenges and creating a better future for all South Africans. Just ordinary people doing extraordinary things.

The Soweto Canoe and Recreation Club (SCARC) – where Siseko Ntondini is a member, was founded almost a decade ago by a few passionate paddlers who wanted to give back to the community and introduce disadvantaged youth to watersports.

SCARC has since been adopted as the “Development Arm” of Dabulamzi Canoe Club (Emmarentia), the largest club in the country. Siseko is just one example of the great success of SCARC. Of the top 20 finishers at the 2017 Dusi, 13 were from the Soweto based club. The Dusi is tough event and these guys are placing this way on pure merit thanks to the grass roots development model. Canoeing in South Africa is truly and forever transformed. But that is just its sporting success – the development and life opportunities that the programme is creating for its members, are far greater.

I have long been a proponent that participation in sport has a powerful impact on the holistic development of a young person: You are part of something, you need to learn to win and lose, you need to learn how to work as a team. It takes dedication and commitment without the guarantee of success. The participation, the contest and the comradery is the reward and the life lessons are invaluable.

Canoeing in this case is just the anchor, the thing that unites everyone around a single passion. The volunteers at SCARC, together with the support of members of the parent club from Emmarentia have created an environment and a platform from which these youths can develop life skills, get educated, live better lives and have careers. Siseko is still a competitive paddler. He is also employed by Adreach (one of the major sponsors of the club) and is a 3rd year law student. An impressive and full plate by anyone’s standards.

South Africa cannot move forward economically, culturally, or emotionally if we do not tackle inequality and poverty head-on. And to do this we need to uplift, educate and empower people with the tools and opportunities to live quality and fulfilling lives and to break the cycle of poverty as they pass the baton on to the next generation.

Our challenges as a country are both numerous and complex, and a programme such as SCARC may be a drop in the ocean, but what a great blueprint for socio economic transformation.

Read here to learn more about the SCARC.

Read here To learn more about the movie and the book.

At Last: Its About Time

By Johann Coetzee

Wednesday arrived with the promise of late afternoon rains, a hint of early morning sunshine and some cumulous clouds already building up from the east. I lingered for a while in bed, contemplating the beauty of this day and the consistency of creation.

This also happened to be the last day of my official career.

On this day my diary was filled with appointments. I had to counsel some retrenched executives for trauma and hopelessness. A three-hour session followed with the CEO of an international company to define and structure incisive organisation renewal interventions. A late afternoon presentation to a property development co followed, and reflecting on work-life-balance based on my book ‘It’s About Time’.

Driving home, I realised that there was no corporate farewell planned, nor any celebratory send-offs. I possess no equity which I can vest, nor accumulated leave pay-out or pension or provident fund transfers. I have been self-employed for 35 years. I drove home, said farewell to my career, and was embraced by my wife and inspired by phone calls from my children. The following emotions and convictions overwhelmed me:

  • I am absolutely convinced that I do not want to die with my boots on. I elect to die with my boots off, bare feet, yes with those old rugby broeks on, and my preferred t-shirt which I wear to the beach and even sleep in.
  • I fully and unconditionally accept the fact that I am not elegant nor attractive forever, nor universally. There is a simmering obsolescence within all of us, and it is wise to step away timeously and disappear. After all, there are far smarter youngsters than yourself, waiting for your vacancy to open and to provide an even better service.
  • I have fully accepted the fact that I am not important; I am history and should switch off whatever ego may be left.
  • I fully accept that as I engage in new variety, options, discovery and commitment, my call should be to serve and service those people whom I missed, and now to invest time and kind into advancing their quality of life.
  • I am now abundantly excited about that mystical condition called Freedom, discretionary options and impulsive decision-making.
  • I even experienced a sense of pride in the fact that I fired myself, and now choose to be unemployed, and even unemployable.
  • I am very ready to engage in a joint venture with my wife, where the only equity is sharing and enjoying.

I am now an apprentice at the age of 68 in this exciting phase of new discoveries, engaging unfinished business and acquiring new insights and skills. It is a wonderful sensation to discover, and now know, that I do not have to prove anything, but improve much. Busyness dilutes quality and always reveals itself in a form of panic and hurriedness. Yes, it’s about time to TAKE time, linger in the contemplation of options, and reduce speed in the pursuit of new objectives.

I can never sleep late, but I will learn to sleep later.

I am not going to join the gym, appoint a personal trainer, join a club, nor purchase frivolous global tours. I just want to discover my home first and reconnect those who grew up in it. I have a need to revisit my dear friends on the shelves of my library, which I neglected over the years. I want to read more leisurely, study less prescriptively and record the narratives and messages which I believe others could benefit from. I want to move from behind my desk to in front of that workstation, sit in a wing-back chair with my feet up, and slowly page through magazines.

I have decided that I am not going to save myself into poverty and so deny myself the good life now. I shall spend myself into prosperity now and employ the fruits of my labour for enjoyment and even a little bit of extravagance where appropriate. I am not going to impoverish the sensation of today by excessively providing for tomorrow. I will not fear affordability and provision. I will banish any sense and act of stoic conservatism, and will commit to an expansive life and exploratory living. I am also excited about this next phase of non-prescriptive engagement, in diversity and unknown challenges, opportunities and variety which I am very willing and ready to discover.

As I approached the Ultra City on the N1 at Midrand, I decided to turn-in, treat myself to a celebratory breakfast, which I had never done in my life. I did reflect somewhat, and allowed a tinge of emotion as I closed a couple of files finally. A few fresh perspectives arose, inspired by two poached eggs and a croissant.

There, I wrote this farewell speech for myself: On My Own!

Encore! Workshop


If you’re thinking about slowing down, exiting corporate life or retiring, this workshop is for you! This is the new retirement and we’ve called these years – “The Encore Years” because they start long before you finally take your bow.

The traditional picture of retirement looked like golf days, beaches and books, and other idyllic ideas involving years of leisure. Well, that’s changed! These days, many of you continue to work because you need to, or because you really want to. You might even embark on a second career, whether its aimed at squeezing out earnings in the final years or finding meaning in giving back. Or, maybe you’re finally pursuing that big dream!

Whatever the case – a successful retirement requires just as much planning and work as a career, if not more.

Research also tells us that while you’re career changing late in life, you’re also healthier, smarter and more financially fit than any other generation. But because of the world we live in – you’ve got some pretty unique challenges too. So now what?


We’re proud to come alongside you and cheer you on as you keep moving! Encore! is our way of saying, you deserve a huge applause and we’re calling you out again and again because you’ve got a lot to give and a exciting life to live. We want to help you plan for this life. We want to help you make these transitions as smoothly as possible in every way.



Dr Riaz Motara – a leading cardiologist specialising in the prevention and holistic treatment of age related diseases. He will cover all aspects of preparation for healthy encore years – including mental and physical health.

CEO of Foundation Family Wealth, Sunel Veldtman will speak about modern retirement, developments , what is required for successful encore years, thinking about purpose in your encore years, thinking about happiness in the encore years – and how best to make the transition to encore years.

Foundation Family Wealth Director, Elke Zeki will bring insight into how much is enough? In order to answer the question – we need to know what your needs are. This depends largely on what you plan to do in your encore years. How do you fund that big dream, career change, slowing down or drawing income? How do you plan financially for that? How should your investments be structured to fund your encore years? We will cover tax, politics and the challenge of low growth.



Date:    Friday, 21 July 2017
Time:    08:00 to 12:00
Venue:  Ten Bompas Hotel, 10 Bompas Road, Dunkeld
RSVP:   carmen@foundationsa.com by 14 July 2017.


Scaling Down – The Road To Retirement

– By Mareo Bekker


Sunél asked me to jot down a few thoughts on how I understand and experience “semi-retirement”. Before I address the subject, I have to provide some background and context to my story.

After starting my working career, my wife Lizel and I were blessed with four sons. It changed the dynamics of our household. As they grew up and each had his own activities, I realised that my work had to be afforded its appropriate place, and that the activities of and with the children, had to provide the balance. My sport was substituted by the attendance of coaching sessions, matches and tournaments. Friendships forged on the side-lines with other parents led, in our case, to hiking ventures with the families. As a result of the demands on our lives by our sons and their activities, Lizel and I inevitably had less time for ourselves on our own.

I met prof Johann Coetzee about 15 years ago. He introduced me to the concept of “work/life balance”. It resonated with me as we had intuitively seemed to have practised something very similar over the years. The concept of a “sabbatical” was not yet in vogue in all professions at the time. We however took a sabbatical after I left the corporate world in 2003. Lizel and I walked the Camino Francés (800 kilometres in 35 days) with backpacks from St Jean Pied de Port in France to Santiago de Compostela in North Western Spain. Camino means “the way”. “The Way is an excellent metaphor of life – not just as a goal, but also for the joy of the journey in all its fascination and fullness.” (The Road to Santiago, Edilesa Guides, p3) The hike made me review life and assess which things were really important to us.

In 2006 we changed our religious community to one in another geographical area. It was a challenging, but ultimately hugely satisfying experience resulting in growth on another level. We made a host of new friends. We had to work hard to maintain old friendships.

As knees started buckling, our old friends gradually started acquiring 4×4 vehicles. At the time I thought a 4×4 was an unnecessary luxury item. Coincidentally our new friends were already 4×4 people. After being invited to accompany them to places that we would not have been able to reach by foot, I was convinced that certain wonderful places were only accessible by a 4×4. We initially rented such a vehicle. In 2008 we acquired a second-hand 4×4 and had it kitted out so that we could be self-sufficient in the bush for a few days.

We toured through Botswana and Namibia a number of times. In 2013 we joined a group to Dar es Salaam and Serengeti. We went to Damaraland, Kaokoland, Etosha and Chobe last year. We re-visited Kgalagadi recently. These were all unforgettable experiences. We agree with the saying that experiences are more valuable than things.

Why do we go on trips like these? Since I turned 60, I saw the traditional retirement age of 65 drawing inexorably closer. I gave “retirement” a lot of thought, and started reading books and articles on the subject. I was afraid that the dreaded day would arrive and that I would not be mentally ready for it – especially as I had no hobbies outside my career. I do however have a wide field of interest.

I got the distinct impression that many people in my age group prefer not to think about retirement. Some are too busy and do not see the sense in retiring. Others are probably not financially able to cease working in the traditional way and to “retire”. My wife and I therefore discussed the issue regularly and drafted a timeframe for my scaling down into semi-retirement – which obviously depends on our health from time to time, and grace from above.

I realise that 65 is only a number. It could just as well have been 70 or some other number. In 2015, when I turned 65, I felt that it was the appropriate time for me to make a few visible moves to indicate that I am in fact scaling down. The process to full scale retirement will probably be completed by 70 or a few years thereafter.

Why scale down now? I felt that it was time not to be the leader any more, but more of a mentor and even, at times, the follower. I have lots of knowledge and experience to impart. (I am the cleverest that I have ever been!) I also wanted to reduce my responsibilities, obligations and risks. My energy levels are decreasing. I wanted to place my health higher on my list of priorities. I commenced with Pilates classes three times a week. I realised that I will not be able to clamber onto my roof rack after 75 to sleep in the roof tent – chalets are just too comfortable by comparison! I therefore had less than 10 years left for more strenuous physical activities. Thereafter we would probably scale down or terminate such activities.

What happened to my work? I have very accommodating partners. I agreed with them that I would commence selling my interest in the firm to them over a period of three years. I changed to a 10 month work year. I still work daily from 7 to 15:30. In effect nothing has changed, save that I have much more leave time. I informed my colleagues of the new arrangement on 1 July 2015 and motivated it as follows:

“Why do I want to do this?

  • I want more time to do 4×4 tours to wilderness areas while I am still physically able to do so.
  • I want more time to be available for my grandchild and his parents.
  • I want to spend more time at our seaside cottage to read and reflect. Maybe the TED talk below will give you some insight into my thinking.



The arrangement is reviewed annually. If both parties are satisfied, we re-commit.

How has it worked out to date? What do I do with my increased “leisure” time?

  • I have more time to spend with my wife: she has her own programme filled with music, orchestra, church affairs, bible study, gardening, charitable projects and looking after our grandsons from time to time;
  • I have more time available for my grandchildren. Unfortunately they are moving to Cape Town soon. The extra time will now be diverted into plotting and planning how and where to spend more time in the Cape, in order to see them regularly; we would not want to miss out on their development;
  • My other sons have different careers and sometimes ask me for advice. It is a privilege to be asked, and to have the time to assist.
  • Family and friends sometimes also require assistance, and it is very satisfying to assist.
  • Organisations in which I was involved previously, sometimes ask me to assist with advice or small projects. The writer Paul Tournier saw the benefit of giving inputs without expecting or receiving anything in return. It is hugely satisfying.
  • I have more time for spiritual matters. Marsha Burns said: “This is a time when you can take whatever steps are necessary to leave the past behind in ways that are deliberate and decisive. You must do this before you can step into the next phase of progression. Be done with things that are no longer useful and not relevant to who you are and where you are going.”
  • We go on a 4×4 tour with different groups of friends once or twice a year. I hope to be able to take my grandsons along on some trips in future.
  • We spend more time than previously at our sea cottage, either on our own or with friends or family. We do not have a TV there. There I rediscovered the pleasure of reading novels and biographies and listening to music.
  • Back at home, we make a point of going to music concerts, especially at the Linder Auditorium and those of the Rand Symphony Orchestra.
  • My old friends and I meet regularly to watch some rugby games, this is inevitably followed by a hearty feast. We also manage to fit in a lunch on certain Fridays – during the course of which we solve the world’s problems.
  • And: We never miss an opportunity to celebrate!
  • I still have to find time for the cinema!

I was involved in the financial services sector for most of my working life. I however never had time to properly study the markets and individual companies. I always thought that, after retirement, I would spend my time reading about these matters and buying and selling shares. It is quite ironic that I have lost my appetite for it. Thanks to FFW’s regular reviews and the trust which I have developed in them over the years, I now leave these matters to them. I really do not want to be bothered about whether I should buy or sell Naspers! I am however still interested in macro trends and asset allocation, and am concerned about increasing costs, capital gains tax, income tax and the amended regulations in respect of trusts.

I hope that my story may be of use even if only to one person. May your scaling down be enjoyable!

Mareo Bekker


PS: Here is a list of books, reports and articles that I found useful over the years:

Bob Buford: Half Time: Changing your game plan from success to significance

Bob Buford: Finishing well

Bruce Cameron: Retire right

Johann Coetzee: It’s about time

Alan Maguire: Retirement and getting old are not the same. alan@theeldersjourney.com

Merrill Lynch: Leisure in Retirement: Beyond the Bucket List (2016). www.ml.com/retitrementstudy

Lynda Smith: 12 Powerful Questions to navigate your future; Coaching Program of Refirement Network www.refirementnetwork.com

Paul Tournier: Learning to grow old

Vaugh, Bataille, Sargent & Lee: Managing yourself: Next-Gen Retirement: Harvard Business Review: June 2016

Ernie J Zelinski: The joy of not working

Ernie J Zelinski: How to retire happy, wild, and free



Words Worth Reading

Retirees Are Too Pessimistic on Their Investments – And It’s Costing Them

… “Adults in retirement are less optimistic than younger groups about future economic growth, stock-market returns and long-term personal financial well-being, new research shows. This may lead them to shift out of stocks too soon and cut spending more than needed, shortchanging their lifestyle and dreams” …

This is such an important article. Dan Kadlec writes about the hope we can’t afford to lose – especially in light of our investments.


Seven Things You Should Save For Your Grandchildren

After Fifty Living’s Jo-Anne Lemu wrote:

“Money, toys and games come and go, but if you want to give your grandchildren a gift that will last, there are other items that can help kids learn more about your story, themselves, and their family. What children really value is your attention and they appreciate the grandparent who’s prepared to stand in, teach them and inspire them. These presents aren’ always the trendiest items on shelves, but they are more valuable and will help your grandkids for years to come.”

Let us know what you think about this one and send us a pic if you do manage to get this special box together for your grandkids.


The CFA Institute posted this article – “Politics Matters – Sometimes”.

“The narrative of global markets is shifting away from its focus on central banks and monetary policy toward geopolitics and fiscal policy…

Read the full article here.