Nerina Visser is an independent ETF Strategist and Advisor, offering consulting services to the investment industry, financial advisors and private individuals with a focus on exchange-traded products and benchmark indices. Nerina is a director of the etfSA Portfolio Management Company.
NASTASSIA ARENDSE: Now we move on to Stocks for Frocks with Nerina Visser, who is an ETF strategist at etfSA. As you know, the Money Expo 2017 will be taking place at the Sandton Convention Centre on July 28 & 29. It’s in its third year, where all sorts of industry experts on finance, investing and entrepreneurship will convene under one roof.
Nerina Visser is one of those industry experts and she’ll be painting a scene as to what you can expect for Stocks for Frocks. We do expect to see you there in July, Nerina. Thank you so much for your time.
NERINA VISSER: It’s my pleasure. Thank you.
NASTASSIA ARENDSE: I like the name “Stocks for Frocks”. What inspired putting on a workshop like this?
NERINA VISSER: Nastassia, I think the Stocks for Frocks concept was born four years ago. It’s the brainchild of Ann Wilson, The Wealth Chef. Mike Brown from etfSA and I got together and focused on making the stock market and stock-market investing more accessible for ordinary people.
The idea of the “frocks” is a bit of tongue-in-cheek. Focusing on women certainly is an aspect, but we are very quick to say that jocks are also welcome.
It really talks to trying to demystify something which for many people is quite intimidating. So whether you are talking finance, whether you are talking investments, whether you are talking stock markets – many people find that quite intimidating. It really is about breaking down the mystery, breaking down the jargon and just getting down to basics in terms of what this thing called money is, how we make it work for us, rather than the other way round. Yes, that’s really the key basis behind Stocks for Frocks.
NASTASSIA ARENDSE: I generally read a lot of articles where they talk about how women are more important in boards and incorporating the whole inclusive growth story that we kind of push out. But on the financing and investment side, are you finding that women are starting to become a little more confident in their finances, wanting to invest, wanting to take on more risk?
NERINA VISSER: Absolutely. I think it’s a very exciting trend to observe. You are quite right, certainly from a corporate perspective. There is a lot more focus on the incredible value of diversity in the boardroom – and that’s not just gender diversity but diversity across the board.
But when anything comes to the investment actions being taken, there is still a lot of resistance from women who feel that this should be something that the man does, or something that the man somehow apparently just magically must know how to do. When you think about it, none of us are born financial geniuses. This is all stuff that we learn. So, whether you are a man or woman, you’ve got the ability to learn about money, about investments.
And when you look at some of the demographic statistics around longevity, around how much longer women live than men, how many people, including women, will live alone at some point during their lives, how often it is a case that the woman is more often than not responsible for taking the money decisions in the home.
Then you realise how incredibly important it is that women feel empowered through their financial knowledge and decisions. This is the gap, really, that we are trying to bridge with the Stocks for Frocks brand and with the event, just showing women and men who are interested in joining us that investing can be a lot of fun – and it’s a great way to empower yourself.
NASTASSIA ARENDSE: What about the products? Time and time again, when I turn on my television, I see all kinds of ads targeted at insurance for women or whatever the case may be. But do we get a lot of the wealth managers coming out with designed ads, with products targeted at women – and do women know all about them?
NERINA VISSER: It’s a great question because I think the answer is no, actually not. You’ve got to ask yourself why not. This is more than 50% of the potential market out there and, in terms of the market that is untapped, probably even more so. So it’s surprising to see that you don’t see more of this.
But I think what we are really talking about here is that Stocks for Frocks is not an investment product. This is about an experience of really opening up the opportunity set to women as well. This is not a get-rich-quick scheme. This is not how to become an overnight millionaire with a forex-trading programme – definitely not. This is all about some of the basic principles that you need to get in place in your life and become comfortable with in understanding what’s going on in your money matters. And it’s about overcoming that fear of inaction because so often people see investing, especially investing in the stock market, as risky, whereas the biggest risk is probably not getting involved and inaction – not doing anything.
NASTASSIA ARENDSE: Nerina, you’ve got your first question. It’s from Tsidi in Bloem. It says: “I’m 28 years old and I’m looking to get into the stock market. Where do I even start?”
NERINA VISSER: I’m so pleased to hear that, and especially that Tsidi is contacting us from Bloem. There are two things that I want to mention. The one is that although The Money Expo events will be held in Sandton, the Stocks for Frocks session that we’ll be running on the Saturday morning, in particular, will be available via a live broadcast. So people who are not in Johannesburg on the day, like Tsidi from Bloemfontein, certainly can get involved by buying her session ticket for the Stocks for Frocks event on The Money Expo Events page, and participate in that actual event.
The power of technology is so amazing. There is a lot information available online also, and maybe I can direct Tsidi, and anyone else who is asking where to start, to the website passiveinvestmentmastery.com/investing. There is a lovely free webinar where you can go and learn more about: What is this thing all about, what are investments, why do I need to do this, and how do I actually get started on this journey?
NASTASSIA ARENDSE: Before we get to Sindi’s question in Soweto, I’m curious. You’ve been in the finance business for a long time, I can imagine. What are probably the top two most common questions that women come to you asking, or some of the issues that they struggle with?
NERINA VISSER: I think one of the first things is that women tend to focus a lot more on the short-term needs of not just themselves, but in particular their families, their communities and so on. So their focus is a lot more on making the budget balance, and focusing on their immediate spending needs, and then the longer-term investing requirements that they might have.
For me probably one of the biggest dangers for women is that they tend to focus too much on everyone else and not enough on themselves. I love using the analogy of the oxygen mask on an aeroplane, where they say: “Put on your oxygen mask first, before you can help someone else.”
The second thing for me is to acknowledge that investment for women often means so much more than just traditional forms of investment. Women are great in terms of investing in helping other people before helping themselves. So “woman” for me often is the personification of this thing – that you can’t be island of prosperity in a sea of poverty; women tend to be able to bridge and overcome that gap so much better than men can.
That’s why we need more women involved in the longer-term investment game so that they can really turn the economic growth around for us in the country.
NASTASSIA ARENDSE: This question comes in from Sindele, and perhaps I can help answer this question. Her question is: “Is entry to The Money Expo free?” It is. You can come in on the 28th and the 29th of July at the Sandton Convention Centre. Your session, Nerina, for Stocks for Frocks, is on which day?
NASTASSIA ARENDSE: It’s on the Saturday morning that we will be there. There isn’t a paid entry for it. To be honest, this is all up to Moneyweb. It depends on how they are going to be pricing it. But there isn’t a fee specifically for the Stocks for Frocks event. It is a special hour-and-a-half-long session on the Saturday morning. People who are attending The Money Expo can specifically come through and attend the Stocks for Frocks event.
NASTASSIA ARENDSE: We’ve got another question that’s come in. “How do I take advantage of some of the tax-efficient investment vehicles that I hear so much about on the show?”
NERINA VISSER: Another wonderful question. When we talk tax-efficient vehicles, there are two immediate things that come to mind. One is the tax-free savings and investment accounts. The benefit of those really is that any money that is invested in such an account attracts no form of tax. So there is no tax on dividends, there is no capital gains tax, there is no interest tax that is payable. That does not give you an up-front tax benefit, but it gives you very good ongoing and long-term tax benefits.
The other one is any contribution that you make into retirement savings. Whether that is into your company pension fund or whether it is into a retirement annuity fund, for example, one is allowed to contribute up to 27.5% of your taxable income every year to retirement savings and not pay tax on that. So that gives you a tax benefit up front so you can basically save on your tax immediately, right now. You are then taxed on that only right at the end of your retirement journey, when you are in retirement and you earn your pension. That’s when you will be taxed.
NASTASSIA ARENDSE: Let’s put this question. It targets women of different ages. If you are aged 20 to 35, what should you be thinking about and focusing on?
NERINA VISSER: I think the first thing to think about is that you should try and spend less than you earn. The first rule about investment – and I think Warren Buffett puts it really nicely is: You should not save what is left after spending; you should spend what is left after saving. When you do that from your very first pay check, or from the first money that you earn, you set yourself up for lifelong success because you are never going to be getting involved in debt, which is one of the most wealth-destroying things that can happen. At the outset, when you start out, try to avoid going into debt, and never spend more than you earn.
NASTASSIA ARENDSE: If you are 35 to 50?
NERINA VISSER: I think at this phase it’s very important to make sure that you balance the demands on your money from all the different parties involved in your life. People often refer to the “Sandwich generation”, the generation that to some extent has to assist parents with making ends meet – parents who might find that they are now entering retirement and don’t have enough saved for themselves – and at the same time help younger children. So really the balancing act is crucial between 35 and 50. That’s where the oxygen mask becomes so important, to say you’ve got to take care of yourself first before you take care of those around you.
NASTASSIA ARENDSE: And then 50-plus?
NERINA VISSER: Then 50-plus I think is about focusing on how to make my money last. The idea that one should be lower risk in terms of your investments in your later years I think really has passed its sell-by-date. The idea that moving into cash, for example, as a low-risk strategy has really been blown out of the water because, after you take inflation into consideration, I often refer to cash or savings in the bank as a return-free risk. You will not be getting richer in real terms.
So it is about making sure that you still continue to invest your money in such a way that your capital can grow, so that it can sustain what are nowadays much longer retirement years and longevity.
NASTASSIA ARENDSE: Here’s a quick funny one from Themba in Centurion, asking: “Is R300 enough to get started – I’m asking for my wife.”
NERINA VISSER: Absolutely – R300 is definitely enough. I think that’s one of the beauties of products such as ETFs and index-tracker funds. One can with a relatively modest amount get started, get some skin in the game and start this wealth journey. So absolutely, R300 is enough to start.
NASTASSIA ARENDSE: We’ll have to leave it there. That’s Nerina Visser. Remember she is on Twitter, so if want to engage with her a little further, it’s Nerina_Visser. Correct?
NERINA VISSER: Absolutely. That’s it.
NASTASSIA ARENDSE: That’s it from the Moneyweb team. Good night.