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For my 21st birthday, my grandfather gave me 21,000 South African Rand (about $1,500 USD).
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However, the gift came on the condition that I see a financial advisor and invest.
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I am grateful both for the gift and for what it has taught me.
A month before my 21st birthday, my grandfather said he would gift me 21,000 South African Rand (about $1,500 USD based on the exchange rate at the time). However, there was a catch: I had to meet a financial advisor with him and invest the money in stocks.
At the time, I appreciated the freedom money gave me, but I paid little attention to investing. I was working part-time bar work throughout university, I started promoting gigs whenever possible, and I just started getting freelance writing gigs.
Most of the money I earned went to subsidize my lifestyle at university (usually booze from a pizza shop or cold takeaway from the local pizza shop) or I saved money, like a road trip across the country with my roommate. That said, I welcomed the 21st birthday present, and I knew it was something I wanted to appreciate.
In early 2019, six months after my 21st birthday, my grandfather set up an appointment for me to meet with my new financial advisor.
We sat in the boardroom while my financial advisor explained stocks and the market, tossing around terms that went completely over my head like “repo rate,” “capital gains tax,” and “volatility.” I nodded, seeming to understand more than I did. My grandfather would sometimes ask my advisor to explain important concepts, such as highlighting the risks of withdrawing money early, especially when the market was in a bad place.
After we set up the investment, I received quarterly updates via email. I rarely opened them, and I forgot all about the investment portfolio. However, two years after establishing the portfolio, the topic of investment came up during a family Easter holiday. My brother asked me how much my portfolio has grown (my grandfather had set something similar for him). I opened my email to check: the balance was 28,138 ZAR. This was a 34% increase in just two years.
By this time, I had graduated from university, and I was making good money in my PR business. I was still unsure of how taxes worked, so I was increasing the amount of money I set aside for them each month. However, in 2022, after hiring a tax advisor and filing my annual tax return, I discovered that I had a good chunk of money left in savings.
