We are currently right in the middle of the Spring season in South Africa. Spring is always said to be a great time to start new beginnings and look to the future. One of the most famous quotes in this regard was from Warren Buffet, which could almost be the Financial Advisor’s mantra – when he said, “Someone’s sitting in the shade today because someone planted a tree a long time ago.”

Well, this is true but also suggests that it is only with age that wealth can be created. Of course, time is probably the most significant factor in the planning and building of wealth, but there is however also an ancient Chinese proverb that says, ‘’The best time to plant a tree was 20 years ago, the second-best time is today!”
This begs the question ‘’Is wealth creation only about age and time?’’ The short answer is no – and here’s why…

The compound interest conundrum

Compound interest is a wonderful thing for many but for some it seems like a curse. On the one hand, for the young person, it is the Financial Advisor’s ‘go-to’’ reason for why wealth creation should be started as soon as possible – and that is unquestionably true.

From the day you make your first Rand, you are potentially on the path to creating wealth, providing you make saving and investing a part of your budget from that day on and by remaining invested you can harness this amazing power of compound interest very successfully.

On the flip side of the coin, because compound interest is so much cited as the key to building wealth, many people when they start reaching their middle age (and ridiculously many consider this to be in their 40’s when in fact most people only reach their earnings peak much later in life than that) already think they have missed the boat.

Well, nothing could be further from the truth. It may sound like a stuck record, but how can we ever forget that Colonel Saunders, the founder of the KFC empire did so when he was already in his sixties!

Altering mindset with age

At a young age, without a doubt, you want to be the person who planted your tree the day you started working, but you don’t go for planting just one tree and hope to be resting in its shade alone. As you grow you will want to plant a whole orchard. You will also want to plant in some different areas as you never know if the first tree you planted may simply have become eroded and died. This is why astute financial advice should be sought and revisited constantly throughout your life.

In middle age, you can still be planting and growing in many areas, looking at investments with shorter-term growth, or even use that powerful weapon you now have at your disposal, experience, to start a new business.

Financial Advisors often say to their clients, figure out how many paydays you still potentially have before retirement, and their clients are often surprised to see that they still have a lot of potential for investment growth.

In later years, even on the threshold of retirement, many people like the Colonel have used their knowledge to create something or used their wisdom and experience to create courses to teach others and gain residual income.

If they have taken the initiative to consult with a Financial Advisor they have found that a lot of the capital growth they have made in the past can be re-assigned, reinvested and utilised in a new wealth profile that may give them far more retirement income than they had expected.

A lifetime of astute advice

Hereford Group has for over 25 years been advising young and old alike to find better ways to make their money work for them and ensure that once they have stopped working their wealth will still be doing so. So, wealth creation is not only about age and time, it is about having the right mindset and receiving the best advice and guidance that you can get – at any time in life.

Talk to us, we are there for you as we have been for many clients with whom we have walked the road to a better future, regardless of their age. Wherever you may be in your life right now, stay safe, stay positive and stay invested in the future!