In a country where the youth constitute a significant portion of the population, the financial future of South Africa hinges on the economic behaviour of its younger generation. However, an alarming statistic by the National Treasury of South Africa reveals that only 20% of South African youth are actively investing their money.
Non-essential youth-spending behaviour is the number one barrier to financial security. A report by the South African Savings Institute (SASI) claims over 70% of South African youth are spending their disposable income on non-essential items, including entertainment, fashion, and dining out. Only a small fraction is allocated towards savings and investments, which paints a concerning picture. This trend not only hinders personal financial growth but also impacts the broader economic landscape by reducing the potential for future financial stability and wealth generation.
“It appears the national savings rate in South Africa is one of the lowest globally, with a substantial portion of the population living month-to-month,” says Co-founder of SV Capital, Ayanda Majola. “By default, we’re thereby cultivating a paycheque-to-paycheque generation – and this is how we get it wrong,” says Majola.
With this intel in hand, there is a critical call-out for youth to wake up to the importance of early investment, and for governing bodies and mentors alike to educate South African youth earlier on in the savings lifecycle.
The need for financial literacy around early investment is more crucial than ever before and private sector companies and educational institutions would do well to collaborate on the guidance of financial habits via school curriculums and public awareness campaigns, empowering our youth to control their finances, for a winning future.
Financial education programs, investment workshops, and mentorship initiatives play a pivotal role in equipping young people with the knowledge and skills they need to make informed investment decisions. Initiatives like these seek to demystify the process of investing for youth, making it accessible and appealing to younger citizens.
Time is not on the side of our youth, and the importance of investing early cannot be overstated and with the right guidance and opportunities, the youth have the power to secure their financial futures and build wealth over time.
Don’t wait for tomorrow
Timing is everything, and a powerful ally when it comes to investing. The earlier you start investing, the more time your money has, to grow through the power of compound interest. Planting investment seeds today will grow into trees tomorrow; investing early allows you to plant the seeds of financial success. For South African youth, starting to invest now can lead to significant wealth accumulation over the long term, while delaying investment can result in missed opportunities and financial insecurity in later years.
Do not invest in anything you do not understand
Empower yourself with the know-how, and don’t be afraid to ask questions. Your investments need to make rands … and sense. Consistent self-education is a great way to keep ahead. Seek out financial education resources, online courses, and workshops online, or in person. Sign up for finance mentorship or financial forums, chat groups, and talks – all of which will keep your pocket on the pulse and in the know.
Start small
Begin with whatever amount you can afford; even small investments can grow over time.
Leverage technology
Leveraging digital platforms and mobile technology can significantly enhance the accessibility of investment opportunities. With the majority of South African youth owning smartphones, mobile-based investment applications can provide a user-friendly and convenient way to start investing.
Look for the alternative
Swap out traditional investments for a more exciting, relatable portfolio. For example, delivery bike investments by SV Capital provide an accessible entry point for youth to own a fleet of bikes and participate in the growing delivery economy.
By prioritising early investment and investment education, South African youth can build a prosperous future. Investing young is not just about financial gain, it’s about empowering the next generation to take control of their futures and build a strong financial foundation that will serve them for a lifetime.
While South Africa’s youth have the potential to transform their financial futures, the onus remains on financial institutions to mentor and encourage young minds with the right guidance. SV Capital, in particular, offers a range of investment opportunities and advice, tailored to the unique needs of South African youth.
To get started with investing, connect with the team at SV Capital on tel: 011 568 3490 or email: enquiry@svcapital.co.za. For more information on alternative investments visit www.svcapital.co.za.
