The Old Diocesan Issue 13 - Magazine - Page 47
CAPITAL IDEAS
far more value in showing rather
than telling. The easiest way
to build interest is to set up
an investment in his name,
which brings an abstract idea
to life. A great option is a tax-free
investment. Currently, a maximum
of R46,000 may be invested per
tax year. All future growth and
withdrawals are tax-free, so this
is an efficient way to build longterm compounding returns.
Parents and grandparents should
invest into the account whenever
they can, so the R500,000 lifetime
contribution cap is reached as
early as possible. Untaxed future
capital growth can then be
maximised in your boy’s own
hands throughout his life.
Don’t forget: the youngsters will
be the ones making the important
family decisions in time!
ILLUSTRATION GENERATED BY CHATGPT
JOHAN VAN ZYL
(1995G), once CEO
of Stonehage Fleming
SA, is now a partner
at Principal Partners,
which provides HNW individuals and
institutions with access to highquality global private equity funds
and co-investment opportunities.
Don’t Lose the Family Wealth
You don’t need a vast fortune
to pass down the principles of
protecting and growing wealth.
For me, it started with my father
reminding my sister and me
not to waste electricity, water or
money. Just as a young Warren
Buffett used to view even the
price of a haircut through the
lens of lost future compounding,
teaching your children to respect
small expenses instils lifelong
mindfulness and gratitude.
But saving alone won’t preserve
wealth over time. Inflation quietly
erodes purchasing power – at
a 5.5% average rate of inflation,
R1-million today shrinks to less
than R345,000 in real terms 20
years from now. I believe it’s vital
to teach our kids about rising
prices – including everyday items
like shoes and cooldrinks – so they
understand why we must invest in
assets that outperform inflation.
Finally, never underestimate the
power of expert guidance. Before
my father passed away, he urged
me never to shy away from paying
for top-tier advice when needed.
If you and your children aren’t
finance experts, teach them how to
choose the right advisors and ask
the right questions. Good advice
pays dividends over the long term.
EIKE FELTZ (1993B)
is the CEO of
Currency Partners,
a foreign-exchange
specialist based in
Cape Town. Currency Partners is one
of the largest independent specialist
forex intermediaries in South Africa.
Think Beyond Borders
At Currency Partners, we work
with families managing wealth
across borders. In my experience,
one lesson stands out for teaching
children about money: it doesn’t
stop at a border, and neither
should their thinking about it.
South Africans learn this
the hard way through rand
volatility. A teenager who watches
the exchange rate move, and who
understands why pocket money
buys less in dollars some months
than others, is learning real
economics. But I’d rather show
them this than explain it in theory.
A practical starting point is a
small offshore investment account
in your children’s names. Regular
contributions, even if they’re
modest, will let them watch
their money grow in a foreign
currency and see, in real time,
how exchange rates affect its value.
It also opens a conversation about
diversification – why it makes
sense to hold wealth in more
than one currency and country.
I’d also want them to understand
the mechanics of moving money
internationally – the spreads, the
fees, the timing – because those
costs compound over a lifetime
just as returns do. The world is
far more globalised than when we
were at school. If you work, travel,
study or live across borders, as
many Bishops families do, knowing
how to move money is as valuable
as knowing how to invest it.
MANFRED OELZ
(1976O) is the father
of Jake (2024O) and
the ODU Committee
Treasurer. He is a CA
with extensive business experience.
Know What Money Is For
The technical stuff is critical, of
course, but first I’d want my sons
to understand what money is for.
It can provide security, opportunity
and choice – but it can also distort
your sense of what matters. It isn’t
a measure of a man, and a quick
route to unhappiness is spending
money you haven’t earned to
impress people who aren’t
important. Using credit to keep up
with the Joneses is the classic trap.
Equally, kids at Bishops need to
grasp how fortunate they already
are. Every boy leaving the school
walks out with one of the best
educations in the world. That’s
a head start, not an achievement.
Learning to use money well
includes understanding what it
can do for others. So talk about
giving to charity openly at home.
Decide together which causes the
family supports, and get your boys
involved. And, for goodness’ sake,
no Porsche when they turn 18!
THE OLD DIOCESAN | 43
