BUILDING WEALTH

I actually enjoy responding to emails and comments. It feels like I am having a two way conversation. Anonymous just posted a follow up comment on dealing with debt, buying a home and investing in property. Here goes:

I think that (making solid relationships) is a skill that has stood you in good stead.

Ok, so I'm a 29 year old married man with 2 kids and a little knowledge on personal finance. I feel like I'm too far in debt that even buying home for my family is but a dream. Any advice as to how I can go about making this a reality as my wife earns R13000 and I earn on commission which is normally between R17000 and R25000. I am very curious about the property industry and would one day like to look at buying, fixing and selling. Would you say that I would need to first pay off my bond before treading into that sphere of property investment and so forth?

I'm sorry, I know I'm asking so many questions now, but all this is coming to mind. Could you perhaps suggest any books or material that I could use to expand my knowledge on?

Thanks for your email Anon. let me briefly unpack your data:
Age 29; Married; 2 kids; renting (assumption); lots of debt; Income is R30,000-R38000 per month
Assuming that your wife is the same age as yourself, you are very young. All you need is to start where you are and start building up. You have to take tough decisions to build your wealth and the legacy to leave for your children. Where it starts is dealing with your debt. It doesnt matter how big it is, you can do it. You will need to be on the same page as your wife to fight this together. I will suggest a few posts for you to look at.

1. Starting Out
This post might discourage you a bit because it states what I think you should have done to start with. If you havent read it already, do so. Knowing what you missed helps make you more cautious as you move forward. The post is a letter I recently wrote to my sister who is starting out.
Building Wealth- the beginning...

2. Getting Out of Debt
Most people think this is too difficult. It is not as difficult as most imagine it to be. Read this and create your own strategy on how you will kill your own debt. R30,000 in income is not small money. It can go very far. Whatever strategy you use, stick to it. A number of people who dont get to the top give up too early. Consistency is what matters.
Dealing with Debt...

3. Building your Savings
You will always have to start with paying yourself. You are more important than any of the retailers you are enriching when you buy stuff. Your debt has to take priority. Paying your debt is paying yourself because that is buying your freedom. Refuse to be a slave to those you owe. Paying debt is the first step in building wealth.
Buying your Freedom...

4. If you buy a House
Buying a house is not necessary, but when you do, fight to pay it up so that you own 100 percent of your home. Rather buy a smaller house in a nice area with good schools. If you have a car, work on paying it up too. Not even a bank deserves to be owed by you. This will take years to finalise but you have the time. Remember to keep saving a little whilst you are paying off your assets.
Paying your Home Quicker...

5. Investing in Property
Be ready and prepared when you start investing in property or any other investment vehicle. I would remove small debt like personal loans, credit card debt and store account debt before I embark on investing. Savings in the money market account and probably an ETF may suffice until you are debt free. The debt you can live with is a homeloan. Nothing else is worth owing on. Keep your car as long as you can.
Property Investment...

6. Mistakes to Avoid
It would be wise to avoid some of the mistakes that others make when investing in property.
Common Mistakes by Property Investors...

7. Books I have Read
I have read a lot of books on investing and building wealth. I will make a list of all the books that pointed me to the right direction and make a seperate post. This post is already too long. I will take them out in my study and make notes on each of them. That may require a bit of time.

I enjoyed giving my two cents piece of layman advice. All the best going forward.
SISA

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NETWORKING FOR SUCCESS

I cannot be the only one who stalks amazing people I find in random places and online. I manage to get the most intimate of details from people about how they make their money. I think its mostly because I am an inquisitive soul. I ask a lot of questions that even my doctors allocate more time to me than to an average patient. Its like an illness but I love me. A lot of people tell me stuff without planning to. I remember a girl in one work meeting saying "I don't know why I'm telling you all this". I just smiled trying hard not to interrupt.

only yesterday, Anonymous left a comment on the post "STICK WITH THE WINNERS", which was essentially about friends of mine who are making their money work for them. I have a long list of such friends. Hubby thinks I should start having a channel with video interviews. People around me are just too brilliant and awesome. I am considering having written interviews of ordinary people here. Back to the question asked by Anonymous:  

"Being in the midst of winners is one thing however, getting there from the periphery of obscurity is a whole new ball game.
How did you find friends like the ones you have mentioned?"

Without thinking this through, I responded:

"I never even thought of where I got these friends until now Anonymous. My debt free house builder friend was with me at work. We clicked immediately.

The one who rents her home had her son as my son's best friend. We met at school events and then birthday parties. I chat to a lot of people. It helps.

The property developer claims to have been inspired by me and this blog. We met via blogs but we are now very close.

I am that girl with a glass of red wine that is untouched in business functions, interviewing everyone without them knowing it. Its a friend of mine who taught me about stock investing. He calls me for advise on that now.

Networking is never overrated."

NETWORKING FOR GROWTH Whilst networking is absolutely essential, remember that not everyone you meet can help move your personal finance agenda forward. You will have to identify people who are like minded and focused. Some people will be brilliant but not your preferred kind of associates. Some will think the same of you.

Treat your personal finance goals like a business. A business network is a "give and take". So many people want to take, take and take without giving anything. To get information, you will need to give same. Self centred people never grow far. The moment you give out what you have, you get a lot more from others. Be out there to help others with information and experience you gathered.

When you spot opportunities, do follow up to get more information. This needs not be a formal conversation. I find coffee dates amazing. I meet up with people to share what I know all the time.

A lot of people are introverts. We have to push ourselves to release our voices. Its always difficult but that is the case only at the beginning. Once a connection is made, it is made.

Some of the high quality connections you may make are in forums of like minded people. Blogs, online forums and social networking platforms are amazing to connect like minded people. You only benefit from these by giving your own input.Sharing is indeed loving.

Feel free to ask me anything by leaving a comment below or clicking here...

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FRUGALITY VERSUS EARNING MORE

A lot of personal finance fans choose between the two paths to financial independence viz. frugality versus earning more income. Those who have been following this blog for some time will remember that I wrote about reaching financial independence and how I am doing it here...  The two methods can be used together.

One of my rental properties: on Frugality versus Earning More

Frugality
Frugality is about using resources sparingly and economically. Frugal people may for instance buy used goods, grow their own food  to save money and generally live at a far lower cost than the income they earn. R500 in the hands of a frugal individual may last a month whilst two days may be too long in the hands of a lavish person.

The frugal hate any kind of waste and usually reuse resources. they embrace low cost and cost-free options like cycling instead of driving, jogging instead of the gym, searching for discounts, etc. This group focuses on cutting costs and expenditure. Many frugal people live on a small fraction of their income.

You will be surprised to know that I am not a frugal person. Just the past week I guzzled on restaurant cafe latte almost daily and ordered lunch from different restaurants everyday. I did this because I was just too busy and preoccupied the whole week. I would never do this everyday but if I have to choose between writing emails to my property manager and preparing the next day's lunch in the evenings, I am inclined to choosing the emails. This is because that email to my property manager is probably going to grow my income or guard against me losing money whilst the lunch may cost me R50 for that day. Before you judge me for being too lavish, we really try to live on a fraction of our income with 50% being the norm.

Earning More
"Passive Income is earnings an individual derives from a rental property, limited partnership or other enterprise in which he or she is not actively involved." that is according to the IRS.

Passive income is usually regular (daily or monthly) once it has been built. Main sources of passive income are rental activity, stock trading and business partnerships. When it comes to making a choice between the two (frugality versus earning more income), I definitely go with higher income. Reasons being that when money is made and invested, it goes on making babies and grandbabies for the rest of one's life. That's where I put 100 percent of my focus. If I have to buy lunch everyday because I am writing for income, so be it. 

Just a few years ago, we fought for our property income to replace one of our salaries and we managed to do that. I doubt if frugality alone would have helped us achieve that. We have tried to grow our dividends to give us a small stream of passive income, which proves to be very tough in South Africa. Our money market account gives us a few cents which, given the inflation rate, is technically a negative growth. But this is still better than an ordinary bank account. My writing earns me more than enough to cover my son's school fees and all school related costs. The excess from that is for me to do whatever I wish like the shopping spree I went on in my recent trip to the UK. The beauty with this is that I love writing and I can do it for the rest of my life. Everyone has their own passion they can practice on a part time basis. I would not have achieved much without extra income.

Frugality has a good role to play, but growing your income is the most effective strategy. However, even that only adds value when the income earned is invested. The aim is to have your money grow to earn you income every day of your life.

Which one would you choose for yourself: frugality versus earning more income?
Remember to ask me any question by clicking here...

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THREE MORTGAGES IN ONE YEAR

When I was quiet, its been crazy in this household. We actually applied and got three mortgages in one year after paying off all our homeloans. This scares many people but I guess its just our life. We go through some sort of preparation before we apply for a loan because we just can't stomach rejection. We are cowards like that! We also use our rental income in a spreadsheet with bank statements as proof of extra income. Now on to the story of us accessing three big mortgages in one year. A truck below being testament to our latest move from house to house.

Three Mortgages in One Year - Moving House

Every once in a while I itch to go through a renovation project. It seems to be a very strange feeling to many, but I on the other hand have accepted the fact that I am not normal. I definitely don't want to be normal, thank you very much. As this "renovation itch" time approaches, I started searching for a good fixer upper in the area of my dreams. I saw a gorgeous traditional style 1960s Victorian property listed online, with all 5 bedrooms, 3.5 bathrooms, a study, 2 kitchens and outside rooms. It was everything I ever wanted to work on beautifying. The only problem was that we were away as a family and would go back home in a week's time. I lost the listing and never bumped into it ever again in that week. 

The Viewing
Back home we started calling real estate agents to show us the properties in that same area. We love gated communities for obvious reasons. One agent took us out to a 3 bedroom house with a lot of ground to extend the house. As we were driving to the show house right behind our agent's car, we drove past the Victorian property I saw online. I froze inside the car but I didn't want to disrespect the agent by asking her to stop. This was such a painful discovery. I knew that I want that old house but without an idea how I will make that happen.

We viewed the 3 bedroom property and asked the agent to email us an "offer to purchase" form as we take the decision. We were too excited by the possibility of extending the current structure or rezoning the place into a two duet property. We could sell or rent out the one house and live in the new house. The house wa nicely placed in the front portion of the stand with massive land behind it. The stand measured about 1300+ square metres (14,000+ square feet). The agent lead us the other direction, to get out through the other gate of the estate. Meaning that, I couldn't see the Victorian house as we drive out.

The Search Re-Launched
We waved goodbye to the agent as we were trying to get back into the estate to see the house we wanted one more time. The Mr had not seen it as we drove fast past it the first time. Unfortunately, going back in there was impossible. Back home in my laptop, the search began. The house reappeared on my screen. I wanted to jump up and down. It was listed by only two agents (dual mandate). We called the first one but she seemed not interested to take us to see the place. We called the agent in the second advert. She was available immediately. The house was absolutely crazy dim and ugly inside. Just think OUTDATED everything.

We made our mind there and then. We'll sign in the dotted line. Almost 1600 square metres (17,000 square feet) of land and a lot of space to play around with remodel ideas. Solid structure without a single crack in sight. I looked at it and thought to myself, "I am absolutely home". Finally, a house with a veranda (porch) as large as a playground. We were pleased and arranged to go view it in a few days just to be sure. The house was on the market for only a week plus at the time.

After the second viewing we went to sign the offer to purchase. One couple had beaten us to it. We signed the offer anyway and offered the lowest we think the sellers would accept. A saving of more than R200,000. We were convinced that the place was listed below the market rate to start with. In just a few hours our agent called and told us that our offer was accepted. We were beyond thrilled. We were told that the lady from the other bidding couple cried. I understood her as I probably would have cried in her position too.

Mortgage 1 and 2
We financed this property with two mortgages. I will never have enough space to unpack that process in this article. But to cut the long story short, the interest rates we were charged were too high on a new mortgage. We decided to get a re-advance on two of our fully paid mortgages. Those were two super cheap homeloans.

We moved into the new home. It has been a hectic year trying to clean the place up. Removing carpets, splashing paint, etc. Our home was now light and getting there quick when we spotted another house for sale within the walking distance of our new home. We called our agent to investigate the owner and negotiate an offer. The price was non negotiable.

Mortgage 3
We were back at the bank door asking for a homeloan with our 20 percent deposit (down payment) in hand. This one house was in an office street. We wanted to rezone it into a commercial property. We go crazy when we see an opportunity to try something we have never done before. We immediately searched for town planners, architects and quantity surveyors. Finally, we have a commercial property. The process has been a money drain but we are still happy we dived right into the deep end. Our residential rental properties are hard at work financing this project. This is a life changer.

That my friend, is how we moved from having no homeloan to having three mortgages in one year. We are still working on this commercial project. Our calculation shows a return on investment of 17%. That is more than we can ask for.

Our Plan
Renovations on our current home are very slow. This is an asset that is underutilised. We are planning to complete the renovations on it and the commercial project and rent both out. Meaning that in a few years we will definitely be homeless again. We live in a construction site all the time. Super crazy, I know. We have a few ideas to try with existing investment properties, in order to raise their productivity and rental rates.

We had a hectic year. What a ride! Building wealth has never been this exciting. Its tough at times but overall exciting. Just remember this: It is POSSIBLE to do this for anyone. I may come back on the process of applying for a re-advance and a reasoning behind taking that path to finance our property.

To ask any questions from me click here...

Many blessings,
SISA

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DEBT TO INVESTOR

I am very proud of my baby sister. You may be gettin a tad bit confused because I have a lot of siblings. Lets name this one Pres. She is an amazing soul who has always kept her focus on saving. The only problem is that she was going at it the wrong way. A lot of people are going on about wealth building the exact same way.

Pres had a few store cards, which she only used to buy sale items. All of her kids clothes were bought at discounted prices. She really loved sales and got thousands of rands in discount every year. It bothered me that my sweet sister would know when and where the latest sale is throughout the year. She is still a sale star but with a changed mindset. This is the chat we had with her the day she stopped searching for discounted prices:

Me: Your kids have very nice quality clothing items.
Pres: You wont believe how cheap they are. I only buy at discounted prices. My favourite is 70% off or further discount on a discount. I save a lot of money that way.
Me: But you do realise that your focus is on spending and not saving, RIGHT?
Pres: What do you mean? I saved R70 by buying this for R30 instead of R100. I am saving.
Me: You are not saving R70, you are spending R30. Your R30 is not at the savings tool, it is at Woolworths. If you were saving it, it would be in your Money Market account or somewhere else making money for you. You lost R30. If anyone is saving here, its possibly Woolworths.
Pres' jaw dropped.

This is the mistake that a lot of people make. They chase the big red "SALE" signs on the windows of the shops. They get inside to buy stuff they don't need, because its discounted. Its one of women's biggest personal finance mistakes of all time. Off course, in the store catalogues they write "SAVE 50%". The truth is that you may be spending that 50% on something that you don't need. It gets different only if you actually needed that particular item that very moment. This "saving by spending" idea is such a bad habit, even if you think you will need the item in a year's time. How many times do we change our style and preferences. Besides, if you paid that R30 into your debt, you would have really saved yourself from drowning in debt.

Fast forward to just a few years later, Pres has paid up all her store cards. She carried a balance in quite a few cards before then. She never thought that being debt free is possible. She then calls me one day whilst I was at home minding my own business. Our call goes:

Pres: Hey sis I have a confession to make.
Me: What?
Press: Remember I have no store cards? Today I saw something I really wanted in one of the shops in the mall. it was heavily discounted and I didn't have cash.
Me: And...
Pres: I took a card application form. Immediately I had it in my hand I felt so much unease like something was constantly starring at me. I stopped immediately and told the shop assistant that I'll bring it back the following day. I felt so much guilt that I dropped it at a trash bin just outside the store and walked away. I felt so much relief.
Me: What did you want to buy?
Pres: A pair of shoes. They were really cheap.
Me: (with disbelief because this woman has no space to put her shoes anymore) Well done. I'm so proud of you.

My sister has no store cards since she paid them up, but her being debt free is just a tip of the iceberg. She struggled to get a job she is qualified for and settled for a job that pays way less. She used to complain about this and mentioned several times that they cannot buy investment property because of this constraint. My sister is still in her old job and now owns 3 properties. She moved to the smallest of them in one of the convenient suburbs. The other two are rented out to her tenants. My sister is glowing with confidence as she should. I am super proud of her. The most amazing part is that, this took only a few years for he to move from debt to investor.

I just want to encourage you to start getting out of debt. Its really not worth it. Stores are filled to the brim by credit card shoppers for Christmas festivities at the moment. What a sad state of affairs. Are we not much better than that? Don't our children and the next generation deserve better? Don't we deserve a comfortable retirement? Don't we just owe it to ourselves to sleep like babies?
 
I have a lot of similar stories from ordinary people like you and me. Join the winning team for a brighter future.

Many Blessings,
SISA

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STICK WITH THE WINNERS

Just the other day I wrote a letter to my sister at her request. I emphasised the part where she should surround herself with great people. I really should have written that in caps lock, bold and highlighted in red. It doesn't really matter how strong you think you are, bad company does spoil good character.

Stick with the WINNERS

If I ever give my son only one advise, this is it. In everything you do stick with the winners. That is in relationships, in finances, in your Spiritual walk, in your career, in life in general… Life is hard work as it is, you don’t have to add toxicity to it.

Let me get too personal a bit.
Cash is King
One of my best friends is a big part of the reasons I never fell into the debt trap really. We spent so much time together and fled from people whose lives were about the next pair of shoes. This friend of mine paid her first property within two and half years. That’s 2.5 years. We were both in an entry level job at the time. And NO, she got no help from her parents. She delayed buying a car and paid everything she could into the property homeloan. She went on to build a house of her dreams CASH within a residential estate years later (she is still in her 30s). That’s what I’m talking about when I say stick with the winners. She is a true winner. She now drives a brand new big and expensive car and dresses up really well. Not forgetting how she continues to build on her savings and investments. And her now fully paid rental apartment in a high rental demand area is her source of extra income.

Living on your Assets
I also have a friend who managed to upgrade her home into executive levels and just decided to rent it out to corporates at way more than her business made at the time. After renovating her house, she realised that it has become too big for her family. She rented the house to a business and went ahead to rent for about 15% of the gross rental she collects. Read more about how this diva lives on her assets.

An Investor's Lifestyle
My other girlfriend left her cushy corporate job for property development. She is not doing badly for a new developer. It gets tough at the beginning, as expected. Accessing capital is not easy but this diva started with rezoning her own home into a commune. They moved to their granny flat as they start. She is now completing her first block of flats. I'll try to get her to guest blog here. I will plead with her. Lesson for you and me: It is completely doable. These are people I know and love. We all have it in us to do it.

Taking a Break
I wont count all my friends here but this one is worth mentioning. She just came back from a luxurious holiday. She is a single mother of two. She went away to think about what she will do next. Having a few properties that now cover ALL her expenses. She quit her job and is now throwing herself into entrepreneurship. Having made all those sacrifices, she can take the risk I think. She prepared herself well before quitting her job.

It is a long list of winners I surround myself with. I only listed women here, on purpose. I also remember family members and almost everyone else, as I was blindly starting out in life, stating that "you cannot live without debt". What a bunch of hogwash. Off course anyone can. It will be tough initially, but it gets better and then way better. You can retire early and live comfortably doing exactly what you want to be doing. The main important factor in anyone's life is time. They are not manufacturing any of it if you haven't noticed. You lose time to do the right thing, and that time is gone forever.

Whatever your plan, implement it. Most people will say "it wont work", just keep moving. I make an effort to surround myself with winners. Winners are people who set goals for themselves and follow with implementation. It may be a guy selling tomatoes in the street corner or a teacher that lives on the fraction of her income. A winner is the girl who owns all her stuff... no consumer debt. Stick with the winners. Stick with someone who knows they do not need to fit in. Someone who is their own person. Peer pressure is for the weak. All lifestyles are contagious.

I may be boring, but one thing for sure, I sleep like a baby, when a lot of my peers are thinking of where they can get a Daisy to rob in order to pay Jane. Juggling credit cards to pay loans and store accounts. You deserve way better. Choose the winning team for yourself.. That is where we all belong.

Very well said! take that first step.

 Ask me any question. I actually love those.

Many Blessings,
SISA

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NOVEMBER 2014 GOALS

Since I went back to work I failed to document any of my quarterly goals. I am back to that. Recording things keeps me motivated. I know 2014 is already gone but I just cant keep this until January 2015.

PERSONAL FINANCE GOALS

NET WORTH: I will have to check the values of all the investments and real estate debt, add them up and re-calculate our net worth. More like the beginning.

EMERGENCY FUND: We did empty our EF whilst acquiring a property beginning of this year. I have to update you guys on that later. We are now slowly building this up again. Meanwhile, the new acquisition is still vacant bringing in no income as we are still working on it. We will keep the EF at 6 months worth of our household expenses. We are now at 14%. We will take it to 21% of the target. Growing it by a third (33%).

GIVING: We will maintain giving of more than 10% of income.

REAL ESTATE: Nothing major here. We will be working on extra security in our residence. December approaches and sadly with higher occurrences of burglaries.

STOCKS AND DIVIDENDS: Nothing planned here except for the normal ETFs.

EXTRA INCOME: Trying to take online income up by at least 25% by end of November.

Other Goals:
Enroll for a short course related to my work. I never thought I would have this goal especially at such a busy time at work. I really warmed up to work nicely. I like it.

Lets see End November if these actually fly. I also want to throw a no spend week challenge with interested readers from January.

Many Blessings,
SISA

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EXCHANGE TRADED FUND

I have been getting a lot of emails about the exchange traded fund (ETF) lately. I'll try and unpack it a bit here. I am a fan of ETFs, please pardon my positive look at them. But Really they are just the best money growing tool for new investors. Being low capital intensive and so on and so on... Lets look at our latest email below:

"You really inspired me, I would like to know more about Exchange Traded Fund”
Patricia

An ETF can be your foot in the door of the JSE or any stock exchange. One fund typically combines or has a collective of  stocks, commodities, currencies and/or bonds, which offers the needed asset diversification for an investor. Two people in my family invest in the ETFs because of their passive nature, low costs, tax efficiency, and liquidity. This is my experience on the subject from the two family members (hubby and son):

Low Cost
I once compared the ETFs to Unit Trusts. ETFs are very cheap because they are mostly commission-free. In their statements I see an admin fee. It’s negligible too. They are generally tax efficient too. That’s a really big plus. Always bear in mind that whatever cents you are saving in trading translates to more in your portfolio. It may be a few rands which add up to hundreds of rands in the long run.

Liquidity
Most investors want to know that they can get their money whenever they need it by selling their assets. In that case, an Exchange Traded Fund could be one of your options. You may actively trade your units using any of the available platforms, if you are the hands on type of a person. This means that you may buy and sell your units as you please.

Diversified Portfolio
All of us personal finance divas love a diversified portfolio. I hope we do. Exchange Traded Funds can be a good way to diversify one’s portfolio. Each ETF is typically a good basket of stocks, currencies, bonds or commodities. These may be from the same sector or various industries like finance, minerals, technology, top performing stocks, etc. Some are from same country and some international. Some are a group of high dividend stocks which are great for dividend investors. Now that we are on this topic, I have to write about my experience on international ETFs soon. 

Compounding
With my 11 year old son’s ETF, we both agreed to automate the re-investing of dividends. That small income buys more units of the fund and so the ball rolls. Apart from the capital growth he earns, he also gets his dividends automatically invested. That's the power of compounding. Some people may choose to take out their dividends out. I wouldn’t, unless I would invest them elsewhere.

Risk
Like any other investment, there are risks associated with trading. From the periodic trends, exchange traded funds generally look very good. Remember to do your research to identify your industry of choice and ETF type.

I did write about the Exchange Traded Fund before. Click on that link to open it.
Let me also commit to trying to get an expert to write a more comprehensive article on this subject. I'll beg them to go easy on the technical language.


You too may ask me a question by clicking on this link. You may also leave a comment below. And off course tell us about your own experiences or guest post here. We welcome any views. We also love other people's financial freedom journeys. Whether you just started paying your debt up, acquiring assets or taking your well deserved early retirement.

All the best in your investment choices,
SISA

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WHAT YOU OWN IN A SECTIONAL TITLE SCHEME

If you invest in a sectional title unit (like a flat, townhouse, etc), just educate yourself on what you own and what you can and cannot do. I got a letter on one of my rental townhouses with an invoice attached. It annoyed me so much to think that the administration company for the Home Owners Association (HOA) doesn't even know what they are doing.

Dear Sir / Madam

RE: INVOICE OWNERS RESPONSIBILITY – x BODY CORPORATE – UNIT x

We address this letter to you on instruction of the Trustees of the aforementioned Body Corporate.

Please find attached the invoice from Plumb xxx for the recent unblocking of a drain at your unit.

Kindly note the account from Plumb xxx is the owner’s responsibility.

Please take note that your levy account will be debited in the amount of R1152.68. Further note if monthly levy payments are made by debit order, this amount will be deducted in full unless instructed otherwise in writing.

Trust you find the above in order.

Yours Faithfully

Off course I didn't find the above in order. I responded immediately by email and followed up within seconds with a phone call. That's how furious I was. Bear in mind, I never even authorised this expenditure. I was never consulted prior to the appointment of the plumber.

Good Day xxx

I don't know anything about this blocked drain invoice. Was this done inside my unit or in the outside of it? Was it my unit's fault. No one informed me of this blocked drain. Receiving this bill is the first time I hear of this problem. Even my tenant was never contacted.

I would have expected to be informed to make my own arrangements if the problem was inside my unit. (Please refer to the Sectional Title Act)

The drain outside my unit, which services the whole block can get blocked for various reasons that are not necessarily my fault. This problem is not my unit's nor mine. This is the problem for the whole sectional title complex.

Regards,

Like I said, I called the lady and she said they will talk to the complex trustees. They really got back to me the following morning with:

Good day

The trustees have confirmed that they will cover the cost.
The cost will thus be reversed from your account.

Regards

What you own in a sectional title scheme

What you buy and own in a complex or sectional title scheme is:

• the mid-point of outer or dividing walls. Where bricks are double, you only own the internal brick. You don’t own the garden, the garage and parking space but you get a right to use it.
• the inside part of the ceiling and nothing above the ceiling. I heard that the amendments include the geyser or allow owners to own or partly own the geyser. Meaning the HOA can decide on this and have you liable for repairs and maintenance of the geyser.
• upper part of the floor, and not the foundation.

The driveway, garden, swimming pool, corridors, parking bay, any external structures and plumbing that is outside your unit is the HOA’s property. These are referred to as the common property. You just have to be clear on that one. If they see a plant they don’t like in your garden, they have a say.

Even if you have a property manager, its your responsibility to know what you own in the sectional title scheme and what your responsibility is. Ignorance is fatal!

All the best with your Financial Freedom search,

SISA

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WHAT WORKS FOR ME

Let us get something straight guys... I am as bad as the next person with discipline and loving nice stuff. I know you don’t believe me but I really am. I love shopping and dressing up among other things. But I have a way to keep my focus on the financial freedom ball. The only way I do that is by committing every single cent I make to some cause. I am amazing at setting priorities, if I say so myself… nudge!

What Works for Me is thinking with caffeine

Even when I am out and about shopping and indulging (which I actually do), I ensure that my priorities are taken care of first.What works for me  is keeping mental notes of what matters in my life.

Financial Independence
I am very clear on what I want. I don’t want to owe anyone, and I don’t want to be anyone’s slave. For the past ten plus years, I worked my butt off to build a cushion that ensures my peace of mind. It’s not always easy but very doable. My first priority was financial independence which I define as being able to live solely on investments. Keeping a job because I love it; it builds on my intelligence; it’s not standing in the way of my happiness, and all the nice phrases that come with job satisfaction. One of the nastiest things I had to witness in the workplace is people fighting for promotions and bonuses. It’s amazing what 10 years or less of hard work can buy. I would rather work on my investments than being desperate to fight for a job.

Time is Money
Starting your wealth building journey early is better than investing bigger lump sums of money later. R500 per month now earns way better returns in the long run than R2000 in five years’ time. Start already. After taking the decision to start, keep at it. Remember your key term “compound”.

What is Really Important?
I’d say for me building and maintaining my emergency fund is right on top of my list of money priorities. I hate feeling helpless when things don’t go as planned. We depleted our EF at some point and are still working on building it. It’s not helping that your expenses grow with yourself and inflation. If I had consumer debt, I would have that as the very first item to tick off my priority bucket list. Then there is retirement. Everyone has to save for a comfortable retirement. As we age, we get to be extremely expensive. Higher security and care needs. And off course in my case, there are parents and parents in law. We try to help ensure that they are comfortable.

Together we can Do More for Real
The only way to do this is involving your partner. On the background is a TV program with a troubled couple as I type this post. The wife has to hide all her credit cards and cheque books from her husband. They have been married for a whooping 16 years. The financial coach told the woman to actually get a divorce because he will never change. I doubt if he is working on changing either. He is adamant that he can change, whilst he got into the marriage with a huge debt he never declared and continued to spend every cent he earns and some more on big boys toys. I had my hands on my head because this situation is never going to change until he loses this woman. And the truth is that she also kept trying to sort him out for far too long without serving him with tough love. As for you and me, we are never going to achieve much without involving the spouse and kids.

Sacrifice for Extras
Whether it’s a holiday, a smartphone, a piece of furniture or a new car that you want, save more for it. Create a saving pocket and pour whatever extra you have on that account. Nothing drives me more than a goal. I am a typical goal driven person. I commit my money in order not to use it. If it’s already in my investments or money market account, I lack guts to withdraw it for unnecessary expenses.
I'm aware that what works for me may never work for you.

All the best,
SISA

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