Q1 Update: Stuttering forward

This first quarter of the year has come and gone and it is time again to review how it went. Overall, it has been a rather challenging year so far and I have struggled to maintain balance. The time commitment of my job has been more than I had imagined and it has spilled into other areas of my life.

Goal by goal commentary:

* Pay off $7,000 in Debt

My debt balance has actually increased over the last 3 months to around $7,640. Credit card balances are down, however. I had to borrow some cash for day-to-day expenses as these are more than my income at the moment. As I gain more product accreditations I should be able to pick up on the revenue side and work at the debt balances more aggressively.

Stuttering Forward

* Buy an apartment (mostly) cash

Income from employment has not been up expectations. I will be able to increase my income in the second half of the year to fund this goal.

* Pass CFA Level 3 exam

This is THE most important goal for this time period. The exam is the first weekend in June. Passing the exam will broaden my career options significantly.

* Complete the work experience portfolio to earn the “Certified Financial Planner” designation

I have gained some clients, so expect to be able to use some of the financial plans I am working on as Case Studies for the Portfolio. The first submissions are due at the end of June. Watch this space!

* 10,000 visits per month on MzansiFinance.com

Abandoned for the moment. Employment time commitments are draining my spare time.

* Make the Top 10 of First-year Academy Advisers in Gauteng

Hope to make aggressive strides in this area after June. I did make an appearance in the top 10 countrywide for the number of cases in a week, which I was quite proud of.

* Study Mandarin Chinese up to the Intermediate Level

Abandoned this quarter because of lack of funds and time.

* 3 days of physical activity per week

Down to one day per week at the moment. My fitness has improved dramatically, however. The cricket season has now finished. I fell short of getting a five-for, which I was hoping to complete by the end of the season. Running around on the hockey field again for the winter – a different kind of fitness, but still great for body and soul.

I would definitely not rate this as one of the better quarters I have reported back on here at mzansifinance.com . I expect more balanced progress in my overall yearly goals once I have completed the CFA exam.

How has the first quarter of the year been for you? Have you progressed in your goals for the year? Comments are always welcome.

Kevin Mzansi

2013: Made to Soar!

I hope that everyone had a magnificent Festive Season. The time has again come to let the world know what I am planning to achieve this year. As some of you may know, I publish my Goals every year to hold myself publicly accountable for the Goals I set.Goal To Archive

The theme for this year:
“Why consent to crawl when you have the urge to Soar!” ~ Helen Keller


Pay off $7,000 in Debt I really thought that I would have this one crossed off my list by now. I will make a concerted effort to take this weight off my shoulders by the end of the 1st half of 2013.

Buy an apartment (mostly) cash I have been eyeing this goal for many years now. There is just something comforting about having a place that you can call your own. It would also provide a place for my father to stay when he comes to visit. He is retired now, so there is no reason that he shouldn’t be able to show up whenever he wants.


Pass the CFA Level 3 exam This is the biggy. I have been in the Chartered Financial Analyst program for quite a few years now. Passing this exam would be the culmination of many years of self-study. I have been mulling over my career options lately and getting through the CFA program would broaden my career options significantly.

Complete my work experience portfolio to earn the “Certified Financial Planner” (CFP) designation. Helping people with their finances is a passion of mine. Completing the work experience component would allow me to market myself as a “Certified Financial Planner” – the Rolls Royce qualification for the Wealth Management/Financial Planning Industry.

10,000 visits per month on MzansiFinance.com This is my real stretch goal for the year – the one goal I do not know how to pull off, yet. It would be quite an achievement if I manage to complete this challenge!

Make the Top 10 of First-year Academy Advisers in Gauteng My financial goals hinge on hitting this mark. I am naturally competitive, so am quite excited by setting such an aggressive work goal .


Study Mandarin Chinese up to the Intermediate Level I love learning new languages. This one is pure indulgence.

3 days of physical activity every week There is nothing quite as enjoyable as running around in the fresh air with friends or teammates.

I hope 2013 will be a year of great achievements for you as well.

Which big goals are you setting for yourself this year?

Kevin Mzansi

Reflecting back on 2012

Reflecting backEvery year, between Christmas and New Year, I take some time to reflect on the past year, think about what went well and what did not and set a course for things to come.

For me, 2012 was the Year of “Building for the Future”

My goals from the beginning of the year changed somewhat as I re-focused during the year. I have incorporated both the 1 January 2012 and changed Goals in my analysis:

Financial Goals:
* 6-figure Net worth
* 4-figure Internet Income by December
* $6,000 in debt paid off

Score: 0/3

2012 was a really rough year for me, financially. The Investment returns in my retirement accounts were around 17% for the year, but my leveraged Investment accounts halved in value. This was due partly to some bad calls and partly to having to liquidate positions to keep up with debt payments. I also had a severe cash flow drought the first 9 months of the year, coupled with increased expenditure because of a property fire. I near-abandoned my Internet properties due to work commitments, so Internet income was non-existent.

Professional Goals:
* Complete the academic programs I started
* Continue to “learn my trade” as a Financial Analyst and Financial Planner
* Write and publish 54 articles and 6 guest posts

Score: 2/3

I received a Distinction for the one academic program, but did not pass the other one. This will be a continuing goal in 2013. Time management was a real issue this year. I continued progress in gaining work experience, but I need to be more specific in an outcome in “learning my trade”. On the blogging front, I have exceeded my goal of number of articles, but could have done better, considering 80% of the goal was completed in the first half of the year already.

Personal Goals:
* Find a Ms. Mzansi
* Join a hockey Club and play
* Achieve an “Intermediate” Level in Mandarin Chinese
* Try out Yoga once
* Take 20 wickets in the first half of the cricket season

Score: 1/5

This goal area was a real disaster this year, because of cash flow issues and also bad time management. I did join a hockey club, though, which I enjoyed immensely. I also greatly improved my cricket skill-level and fitness level, although I did not quite reach the 20 wickets I was looking to get. I think the “Yoga” goal was a bit silly to put on a yearly goal list. In 2013 I will put together a monthly list of things to try, to keep life interesting.

All-in-all, a challenging year, but also satisfying in the goals that I did reach. What was I most proud of? I think getting a distinction in the Graduate Diploma in Financial Planning was the highlight, although playing hockey again would also rank up there in satisfaction.

How was 2012 for you?

Kevin Mzansi

My “why” of blogging – rethinking Mzansi Finance

BloggingIt is often said that if the “why” is big enough, the “how” will follow. I have had a really tough time keeping up with my commitments here at Mzansifinance.com over the last couple of months. I set myself quite aggressive goals this year and have fallen short significantly, mostly because of time management challenges.

Why did I create MzansiFinance.com ?
My aims for the blog have been two-fold: To provide a platform for South Africans to talk about financial issues and personally, to learn Internet Marketing and gain some exposure in the Personal Finance community. My aims are still the same, although I’m forced to re-think the “how” of Mzansi Finance.

Competing priorities

The more I think about it, the more I realize that success at growing Mzansi Finance will depend on the amount of time I will be able to allocate to the blog. My Internet goal for this coming year is rather bold: 10,000 visits per month. This would involve a significant time commitment.

My most overarching goal for the first half of the year, however, is not this goal, but rather a time-consuming academic one: passing my June exam. After much thought, I decided that I will aim to spend around 15 hours per week on Mzansi Finance. My aim for the 1st half of the year will therefore be steady, but rather unspectacular growth, consistent with the amount of time I will be able to allocate to the blog.

Do the right things!

I have also realized that I will have to get the most leverage from the little time that I am able do spend on the blog. My first-half year strategy will have three components:

* Interact on Social Media
The only way to grow a community is to interact and connect with people. My daily practice will involve gathering thoughts and comments on topical issues.

* Hootsuite
I have always prided myself on providing useful content to my audience. I will continue gathering great articles from around the web to deliver to followers and subscribers.

* Two quality posts per week
The cornerstone of success at blogging is providing quality content. Up to now I have been very reticent about allowing guest bloggers on Mzansi Finance, mostly because I am worried that the content provided will not be applicable to my audience. I have relented, however and will provide opportunities to guest bloggers, provided the content delivered will be useful to a South African audience.

I will revisit my strategy after June and make the necessary adjustment to attack my 10,000 visits per month goal.

Fellow bloggers: What have been your challenges in publishing a blog?

Kevin Mzansi

Great Expectations! (Q3 update)

Great ExpectationsLife has taken an exciting turn over the last couple of days. Yesterday, I played my first game for the Premier League team at my new cricket club and today I had my first day as a Financial Adviser at my new employer. Exciting times!

Here is a refresher of my goals and my progress up to this point:

* 4-figure internet income by December
* $6,000 debt paid off

My academic pursuits have overtaken my other goals for the last couple of months, so I have not made as much progress as I had hoped for. Another 3 months to make it happen!

* Pass the CFP Case Study exam
* Gain 6 months of experience as a Financial Adviser
* Write and publish 54 articles and blog posts
* Write and publish 6 guest posts

I will know by early November whether I have passed the Case Study exam, so, fingers crossed until then! Since I started work today, I will only be able to get 3 months of work experience by the end of the year. Still, I’m quite grateful for the start. I have published 25 blog posts so far this half-year, so another 35 in 3 months. A little bit behind, but still on track.

* Find a Ms. Mzansi
* Complete Mango Languages Mandarin Chinese course
* Try out yoga once
* Take 20 wickets in the first half of the cricket season

Epic fail on this section so far. I have put in some work on cricket, however. Winter training has gone well and my bowling action is much smoother than before. I hope the work pays off. I took my first wicket yesterday, so 19 more to go.

Who can believe that 3/4 of the year is already gone?! Time for a last push to make 2012 an extraordinary year!

How are your goals for the year progressing? As always, comments are most welcome!

Kevin Mzansi

Where is the money you “saved” on Tuesday?

MoneyWe as South Africans are fond of going out of our way to do things in the spirit of “saving” on expenses. On  Tuesday evening, the petrol price went up by 93c per liter – apparently the single biggest price jump ever. True to form, the petrol stations were packed with eager customers waiting to fill up their vehicles. This got me thinking: when is the saving worth the effort?

Meet Mark:
Mark hears the petrol price will jump by 93c per liter, so he decides to fill up at the petrol station. After waiting in the petrol queue for around 15 minutes, it is his turn to fill up. The petrol attendant fills his car with around 40 liters of petrol. Mark is chuffed – he has saved R40. Waiting in the petrol queue is thirsty work, so he goes into the shop and buys a two liter Coke and a packet of chips. R40 ….

This is exactly what we all do. In the behavioural finance world it is called “mental accounting” – we group separate expenses into separate “mental accounts” without thinking about the big picture.

What can we learn from this?

One impulse buy can undo all the work you have done in saving on items.

It is one thing to watch your expenses and save on purchases whenever you can. It is quite another to have the self-discipline not to spend the money you saved. That 10 rand you saved on one purchase is exactly the same 10 rand you are spending on something stupid.

If you “save” money on a purchase you should go to a bank and deposit the money in a savings account.

Work at turning your “savings” into actual savings. It is no use saving all this money on purchases, but never seeing the results in your bank accounts. “Saving” by purchasing has a better chance of leaving you broke than financially free.

It is more effective to negotiate the big items, than to nickel-and-dime the small ones.

If you purchase a R200,000 car instead of a R220,000 car (or negotiate down to that price) you have just received the equivalent of 2 years worth of petrol for free! Think of how much price comparison you have to do on groceries, for instance, to get to that amount of saving. Fight like hell for a 10% discount on a big-ticket item – it will make a huge difference to your budget.

Saving and frugal living are important components of an overall plan to reach Financial Freedom. Be sure to go at it the right way.

Kevin Mzansi

Time to hit them Goals!

I have decided to take a brief 3-week pause from Mzansi Finance to work on one of my most important goals this year – to pass the Certified Financial Planner (CFP) Case study exam. My exam is on Monday the 17th of September and I will return to my regular Monday, Wednesday and Friday posting schedule at that time. I will still be posting intermittent updates to mzansifinance.com, the Mzansi Finance Facebook page and my Twitter stream (@mzansifinance), so please check in when you have some time.Goal Success

Thank you for all your support and I look forward to returning with the same useful personal finance articles in three weeks time.

Kevin Mzansi

Beware of your own overconfidence when investing

Investing has become a very popular passtime. Stockbrokers have made it ridiculously easy for someone to sign up for a brokerage account and start trading immediately. More often than not, everybody has had the experience of doing their research, picking a stock and have it instantaneously starts rising. The problem is that we immediately start inferring that we must have some skill in our stock picking. What makes us jump at this conclusion so easily?Investing

You very rarely hear a “weekend warrior” investor say “my stock is only going up because the economy is doing well”. More often you will hear: “I just knew it was a good stock!”. If things go badly, you hear: “it is going down because the economy is bad”, rather than: “I was wrong”. This phenomenon is called “self-attribution bias” – taking personal credit for wins, but attributing losses to factors outside of our control. The stock markets are unpredictable. Self-attributing successes is a natural step to gain confidence in our investing abilities.

We are also susceptible to “Hindsight bias”. This means, if the stock does well, we say: “I knew it all along!”. This makes us even more confident in our abilities.

The terminal step is “the illusion of control”. “Illusion of control” is the tendency to think we can control the uncontrollable. We think: “The stock has gone up, therefore our information and logic are correct!” More confidence! Unfortunately, no matter how good we are, there are always situations in the business environment that cannot be forecast. No matter how much information you gather and complexity you add to your forecasting model, you can still be wrong.

Combine these three factors and we are ready to give Warren Buffett a run for his money. We start taking increasing risks and essentially gamble with our hard-earned money.

How do we control these biases?

The first step is to write down why you made any investment decision and all the ways you could be right or wrong in your reasoning. This will give you the ability to look at the investment process logically and make you aware of any reasoning before the fact, rather than in hindsight. In time you will be reminded by Mr.Market that there are many things outside your control and sometimes you are just plain wrong.

Investing is one of the most difficult disciplines to master. The trick in improving as an investor is to look at investment decisions logically and remove as much emotion as possible out of your decision-making.

Kevin Mzansi

What is buy-and-sell insurance?

A buy-and-sell insurance arrangement protects the partners, members or shareholders of a business from threats to the continuity of the operation when one of them dies, becomes disabled or retires. The agreement is that, when one of the members die, their stake in the business is sold to the remaining members. Buy-and-sell insurance is the manner with which this arrangement is normally funded.Buy And Sell

What often happens when a partner dies is that their stake in the business has to be liquidated to satisfy cash needs in the deceased Estate. This means the business may have to be sold to satisfy these cash needs. The remaining partners could also be stuck with an heir or new business partner who does not share their work ethic or vision of where the business should go.

A buy-and-sell arrangement, funded by insurance, is a great solution to the problem because:
* cash is available immediately when it is needed
* the heirs know exactly what their share of the business is worth
* the surviving partners immediately own the whole business
* there is no need to borrow
* the business’ capital resources are not drained

The arrangement is normally set up by each partner figuring out how much their stake in the business is worth. The other partners then take out insurance for that amount, according to their partnership percentages.

One drawback is that premiums paid are generally not tax deductible. Setting up the arrangement may be complicated, because provision has to be made for possible Estate Duty and other taxes that have to be paid. It is best to seek professional advice from a licensed Financial Advisor to ensure that the arrangement is concluded correctly.

A buy-and-sell arrangement is an excellent way for partners to ensure the continuity of their business and provide certainty to their family members if they were to pass away or become disabled. Any small business will do well to think of setting up this arrangement.

Kevin Mzansi

What are the different aspects of a Personal Financial Plan?

Everyone needs a Financial Plan, but what does a Personal Financial Plan actually involve? A comprehensive Personal Financial Plan has five main  aspects: Financial Management, Investment Planning, Risk Management, Tax Planning, Retirement Planning and Estate Planning. Let me explain what each of these are, in turn:

Financial Management:
Financial Management deals with Assets and Liabilities, Income and Expenses and cash flow. The Financial Planner will look at your budget and see if your income exceeds expenses or if you are making up the spending gap through use of debt. She will look though Credit reports, bank account details and statements and check for important detail. If you were over-indebted, for instance, a plan would be drawn up to get you out of debt and into a more financially secure position.

Financial Planning

Investment Planning:
The financial adviser will look at your goals, needs and priorities and draw up a plan to meet these goals. Examples could be saving for kids’ education, covering a shortfall in your future retirement needs or buying a holiday house. The financial adviser will check whether your assets are diversified and whether your ability and willingness to take risk actually match. It is not a good idea, for instance, to have your money in Options or other risky investments when a loss in these instruments would leave you bankrupt.

Risk Management:
The Financial Adviser will check existing insurance coverage, Medical Scheme coverage and Health Insurance. They will look at different risks and advise on improvements in areas where risks are inadequately covered. Such areas could be Income Protection, Buy-and-sell insurance for business interests, Disability Insurance and other products.

Tax Planning:
Taxes are a major expense for all of us. Just check your paystub if you have any doubts. By having a professional look at your tax position you can harvest significant tax savings and gain greater insight into the taxable nature of assets, liabilities and income.

Retirement Planning:
Most of us will get to a time when we are not able or willing to work. We all hope that some day we will have the funds to be able to retire comfortably. A Financial Planner will look at your current situation, project forward to when you plan to retire and check whether you have a shortfall in funds. If there is a shortfall, the financial advisor will create a plan with steps you can take today to fund the shortfall in the future. This can be done either through insurance, savings or investment products.

Estate Planning:
A Financial Advisor will help you to make provision for your wishes to be honoured regarding the distribution of your Estate. The last thing you want is your least-favorite relative assigning themselves as the Executor of your Estate and bagging the bulk of your riches. Estate Planning is accomplished through wills, prenuptial agreements, medical power of attorney agreements and possibly through setting up companies and trusts. You estate plan will also make provision for the payment of Estate Duty and provide liquidity in your Estate, in case your assets need to be sold off unnecessarily to meet debts of the Estate. The last thing you want is for a family heirloom to be sold to pay off the bond on your house, for instance.

Everyone needs a comprehensive financial plan to reach financial security. Find a competent Financial Adviser today to put you on the right financial course.

Kevin Mzansi