Khosi Mvulane: Teach yourself about wealth

Khosi Mvulane is the Managing Director of GAD Consulting Services Inc., referred to as GAD. She is a chartered accountant and registered auditor with the South African Institute for Chartered Accountants (SAICA) and Independent Registered Board for Auditors (IRBA).

Precious has over 15 years of finance experience in both the public and private sectors. This includes 9 years in senior management roles such as Chief Financial Officer.  We caught up with her to find out more about her money habits. 

How did your childhood influence your attitude towards money? 

It was not so good. It created a belief system in me that money is for certain people and if you have shelter, a car and food that is enough. However over the last few years I have really worked hard to correct those believes in me. 

Are you good with money or irresponsible? 

I am generally responsible but sometime I do indulge. 

How do you define financial independence?

Financial independence is about a person being able to generate money without having to wake up i.e. passive income. Basically, you don’t have to rely on anyone to make and have money.

Do you and your husband share equal responsibility when it comes to your household finances? 

Yes, we share financial responsibilities. 

As a mom do you worry about school/college expenses and how do you plan for it? 

Yes, but I have been spoiled by my husband, he is very proactive on school fees. But long term, I really worry because our children are still very young. 

If you have the choice between buying a home or investing in shares, which would you choose and why?

Definitely a home because of these reasons: 
1. The value of property has tripled over the last 4 decade and in other areas it has really increased.
2. I can use borrow from the bank to buy it as long I can show I can afford it and use it.
On the other hand when you invest, there are too many variables like: 
3. The share value which cannot be guaranteed. Today it could be XY and the following day it will be another thing. And small actions like the the CEO resigning, regulator fines, foreign exchange, etc etc. may cost you as an investor. 

Being your own boss, have you ever been in serious financial trouble?  

Yes. Cash flow clients not paying on time is the worst thing for small business. You practically hold your breath towards month end. I just hate that. The last 6 months I was really in trouble. But now I have worked out a strong credit control and collection procedures including handing over of debts. 

What's been your best and your worst decision about money? 

My best decision has been to invest on my personal development – not just qualification but knowledge about money and wealth. I practically have spent over R150 000 in the past 24 months. The worst decision was not using my knowledge to structure assets for tax efficiency i.e doing tax planning for the family.

What do you do to make sure that you are financially secure? 

Save every month for rainy days, diversify your investments and create passive income. 

How do you encourage yourself to think about your financial future without feeling overwhelmed ? 

I have a belief that it is all in my control to make it work. Everyday I make sure that I work on the things which will earn me passive income and  I diversify my investments. 

What’s your biggest personal indulgence? 

Shopping for clothes and bags 

Do you have rules for lending money to friends or family?

No, I made a rule that when I have the money I will give to them. And sometimes even if I don’t it but I feel that they need it more than I do, I will give it to them. But should they not return the money then they should never come back to me to ask for it. 

What are the most useful financial lessons you’ve learned?

1. It is not the amount of money you have but it's how you use it that counts. 
2. Healthy money management habits are daily lessons.
3. If you live your life with no limits, your spending habits can get out of hand especially with the credit cards. Therefore, have a budget, create a grocery list and set a limit for you and your family. 
4. Watch out for financial services products. Sometimes they don't offer the value as promised or they are not worth it as long term investments. 
5. Appoint an accountant to help you with your tax planning and get your banker to help you with your will. 
6. Teach yourself about wealth. Read books and attend seminars.

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