In a country where the youth constitute a significant portion of the population, the financial future of South Africa hinges on the economic behaviour of its younger generation.
However, an alarming statistic by the National Treasury of South Africa reveals that only 20% of South African youth are actively investing their money.
Non-essential youth spending behaviour is the number one barrier to financial security.
A South African Savings Institute (SASI) report claims that over 70% of South African youth are spending their disposable income on non-essential items, with only a small fraction allocated towards savings and investments.
With this information in hand, there is a critical call for youth to understand the importance of early investment.
Kagiso Tloubatla, co-founder of SV Capital said: “The need for financial literacy around early investment is more crucial than ever before.”
“Time is not on the side of our youth, and the importance of investing early cannot be overstated. With the right guidance and opportunities, the youth have the power to secure their financial futures and build wealth over time,” says Ayanda Majola, co-founder, SV Capital.
In celebration of Youth Month, SV Capital offers five investments hacks for young investors.
Don’t wait for tomorrow
Timing is everything, and a powerful ally when it comes to investing. Therefore, the earlier you start investing, the more time your money has to grow through the power of compound interest.
According to SV Capital, if South African youth start investing now, it can lead to significant wealth accumulation over the long term. However, delaying investment can result in missed opportunities and financial insecurity later in life.
Do not invest in anything you do not understand
It is essential that the youth empower themselves with the know-how, and they should not be afraid to ask questions.
SV Capital said that consistent self-education is a great way to keep ahead.
Young people can seek out financial education resources, online courses, and workshops online, or in person. They can also sign up for finance mentorship or financial forums, chat groups, and talks.
Start small
Young people need to keep in mind that they should only start investing with whatever amount you can afford. SV Capital said that even small investments can grow over time.
Leverage technology
Leveraging digital platforms and mobile technology can greatly improve the accessibility of investment opportunities, according to SV Capital.
With the majority of SA youth owning smartphones, mobile-based investment applications can provide a user-friendly and convenient way to start investing.
Look for the alternatives
SV Capital said that young should look for alternatives to traditional investments like non-traditional investments.
Three reasons young people should consider non-traditional investment products:
– Diversification: This helps spread risk and increase returns on investments
– Innovation: It will allow young investors to have access to high-growth opportunities.
– Relatability: It makes investing more exciting and interesting for young investors.
IOL Business