Five common myths that hold you back from investing

4 Dec 2017
“Investing is only a rich man’s game” or “I’m not smart enough” are just some of the reasons used by South Africans to explain why they don’t invest. These misconceptions can  stop you from reaching your financial goals, and need to be debunked, says Shirley Smith, Old Mutual Finance Chief Operating Officer.

In a nutshell, the five myths sound something like this:

1. “I can’t invest while living my best life”

Many people believe they won’t be able to maintain their current lifestyle while also investing. This fear of having to surrender the fun things in life is particularly strong when there are expensive events coming up, such as a wedding or a dream holiday.

The truth is that you don’t need to compromise the quality of life to become an investor. It’s possible to invest as you spend. Smith explains: “Our Money Account gives account holders the option to invest whenever they swipe. It is a transactional account that enables you to direct an amount between 5% and 15% of your purchase into an interest-bearing unit trust account in your name. Instant investing!”

2. “I don’t know how to invest”

Financial language can be confusing, and many South Africans assume you need a lot of financial knowledge and expertise to start investing. “But an account like the Money Account makes investing simple,” says Smith. “It’s been designed to take the hassle out of becoming an investor.”

3. “I don’t have the discipline to invest”

Putting money into a monthly investment usually takes discipline. But the good news is that some investments require no discipline. Smith says: “Every time you swipe your card you automatically invest your set percentage in a unit trust, which works really well for anyone who battles with the discipline of saving. Another great feature of this account is that with the click of a button you can change the percentage – between 5% and 15% - and control how much you are investing.”

There is also the additional benefit of FOCUS save which allows you to set an amount every month, for a specific date, so you can automatically save. The easy-to-use banking app lets you manage everything in one place.

4. “I can’t afford to invest”

Investing can set you up for life, so the sooner you start, the stronger your financial future. “Everyone can afford to invest with the Money Account,” says Smith. “It’s the first transactional bank account in South Africa that allows you to invest in a unit trust from only R4,50 per month. With it you can grow your investment up to 7,8% per annum.”

5. “I don’t have 32 days to wait to access my investment”

With some investments you can’t access your money at short notice, but the Money Account gives you full and immediate access to your funds, as and when you need them. Smith adds: “This transactional bank account is flexible and allows you to access your investment at the touch of a button.”

The annual Old Mutual Savings & Investment Monitor revealed that South Africans are saving much less than five years ago. In 2012 about 21% of income was directed into savings; in 2017 this dropped dramatically to 15%. “To stimulate savings and investments, we urge all South Africans to take the first step towards improving your financial future.” Smith says. “We believe the Money Account is a great vehicle to do so.”

Thapelo tells it like it is

Old Mutual presents the investment challenger - South African actor and producer, Thapelo Mokoena - who will be embarking on his very first investment journey through Old Mutual’s transactional banking account, Money Account.

Thapelo will make use of this innovative savings vehicle to do his festive season shopping, while tracking his savings through the simple application that allows you to control how much money you are investing and spending with a click of a button.

Follow Thapelo’s financial journey on Twitter: @ThapeloMokoena and Instagram: @mokoenalive.