Tag Archives: Financial literacy

The budget Speech

Pravin Gordhan

Cape Town – Financial literacy education is very dear to me to an extent that I lead a team of volunteers at University that solely focuses on teaching high scholars about money and debt management and saving. The minister of finance, Pravin Gordhan announced in his 2012 budget speech that those who save will get a form of a tax break.

At this stage I am not at liberty of analyzing his speech, but he said many things that are heart warming, and not so heart-warming to smokers, drinkers and gamblers.Personally, I welcome his speech.

What I found profound is the following statement:

To encourage voluntary savings, consideration is being given to the introduction of tax-exempt short and medium-term savings products. The proposal is that individuals should be permitted to save up to R30 000 a year, with a lifetime limit of R500 000, in registered savings or investment products that would be free of tax on interest, dividends or capital gains.

In retrospect the minister is encouraging wealth creation and saving amongst South Africa citizens.

Be financially savvy!


Posted by on February 22, 2012 in Economics


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What can we learn from the Buffet family?

As people around the world were watching the royal wedding, I mean the wedding of Prince William of Wales and his fiancee Ms Catherine Middleton, investors  of Berkshire Hathaway were preparing for the company’s AGM (annual General Meeting).

On the 30 April 2011, Charlie Munger and Warren Buffet of Berkshire Hathaway hosted their annual general meeting. Warren Buffet, now 81 year old remain my all time favourite person.  Not only does he inspire me with his intelligent way of investing, but also with his dedication to philanthropy.

In practice, just before the annual general meeting, listed companies send what is called “Notice of AGM” to their shareholders. Notice of AGM (annual general meeting) is the letter that notifies shareholders of  the upcoming companys’ general meeting. Berkshire Hathaway is not an exception to this practice. Earlier this year, when Berkshire Hathaway send the letters to its shareholders, I also managed to put my fingers on the copy. I am not saying that I am a shareholder of Berkshire, I will need to work for donkeys years to afford one unit of stock in Berkshire, but I checked that letter out of curiosity.

Financial illiteracy is a problem in Africa. We need a mechanism in with which the problem of financial illiteracy can be addressed. According to the Saving institute of South Africa, about 2% of South Africa’s working population are saving.

Financial literacy can be defined as follows:

Financial literacy is the combination of consumers/investors understanding of financial facts and concept, and their ability to appreciate financial risks and opportunities to make informed choices, to know where to go for help and to take other effective actions to improve their financial well-being.(OECD)

When I was paging through the said letter, I stumbled upon a very good letter that teaches about how to save and keep excess money in reserve. With this letter one can learn the power of saving  and financial independence. This was the letter written to Uncle Sam Buffet  from dad on how to save for stormy days. Uncle Sam is Warren’s dear uncle.

I believe that this letter contains a lesson or two that can lead one to financial independence. Click the link below to read the letter.

letter to uncle Sam

On an unrelated chain of events, how true is that  Osama Bin Laden has been killed?

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Posted by on May 2, 2011 in Business, Economics


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