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South Africa
Monday, August 17, 2015 - 16:07
The poor can copy

The number of new millionaires in Africa is steadily growing, with more than 160 000 individuals holding around US$660 billion in personal wealth at the end of 2014, according to the New World Wealth Africa Wealth Report for 2015. The report points to Africa having the fastest growing high net worth (HNW) individual market in the world: the number of African individuals classified as HNW has increased by 145% over the past 14 years, compared to worldwide growth of 73% over the same period.

South Africa has the highest number of wealthy individuals on the continent and, despite a steadily weakening local currency, it is not excluded from these individual wealth growth figures, with the number of dollar millionaires in this country rising by 9% since 2007.
So, what is fuelling the wealth of so many South African individuals and can this ‘formula’, if there is one, be replicated to raise the living standards of all members of society?
According to Luke Martins, a Financial Planner at Old Mutual Private Wealth Management, the continued growth in numbers of high net worth individuals can be attributed to a combination of factors: the country’s continued position as a business and investment gateway into Africa; its appeal as a global investment destination; and, its robust physical and financial infrastructure.
“While these factors alone obviously don’t automatically translate into wealthy individuals,” Martins explains, “they do mean that South Africans with the will, and means, to grow their personal wealth have enjoyed, and will continue to enjoy, significant opportunities to do so.”
Lesego Monareng, also of Old Mutual Private Wealth Management, agrees with Martins, but believes that the success of South Africa’s BEE policies over the past 20 years has also added fuel to the wealth growth fire in this country. “In South Africa, the political will to drive economic empowerment of previously disadvantaged persons has been a major contributor to wealth creation for many,” Monareng says. “It has both built the middle market as a feeder into individual wealth achievement and allowed many individuals to position themselves to take advantage of the resulting opportunities.”
However, they both agree that there is much more to the continued increase in the number of HNW South Africans. They point to education opportunities, entrepreneurial spirit, and a willingness to take calculated risks.
Martins and Monareng believe this combination of factors can be replicated by a broader cross-section of South African society to enable more people achieve significant personal wealth or, at least, a greater measure of financial security and independence.
“While every individual’s path to personal wealth will differ according to their circumstances, opportunities and objectives,” Martins says, “there are enough similarities in the success stories of the country’s currently wealthy to justify considering these as being something of a blueprint for wealth accumulation.”
Monareng says there is still a dire a need for a strong network of financial and business experts. “Nobody is an expert in every aspect of business and finance,” she explains, “and more often than not, it’s the person who admits this early on, and outsources key functions to professional consultants, who achieves financial success the soonest.”
Irrespective of how individuals set about growing their personal wealth, both Monareng and Martins emphasise that protecting that wealth is equally important. Based on their extensive experience advising HNW South Africans, they agree that the main thing is stick to your investment plan, and avoid being swayed by emotions; and, most importantly, keep on diversifying.

Copyright © Insurance Times and Investments® Vol:28.7 1st July, 2015
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