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We all Need Financial Planners

ONCE upon a time in ancient Egypt, Pharaoh had a strange dream. He dreamt that he was standing by the Nile River when seven fat cows came out of it. Shortly afterwards seven other cows, ugly and thin, also came out of the river. The latter group consumed the healthy cows.

The seven fat cows represented seven years of abundance whereas the thin cows stood for the seven years of famine which were to follow according to Joseph who interpreted the dream for Pharaoh. So severe was the famine going to be that all the abundance of the good years would be quickly forgotten.


Joseph went on to advise Pharaoh to appoint officers who would oversee the storage of food during years of plenty in preparation for the time of shortages.

Besides the obvious religious interpretations of the story, it also has some practical significance for investing.

In times of plenty prepare for the future which is unknown. Income does not always keep coming throughout a person’s life.

At the onset of a person’s career, income is relatively low while he is spending much in trying to settle down or addressing various commitments.

As he progresses in life, income streams increase usually reaching their peak at mid age before falling at retirement. Thus investing during active years almost always helps to guarantees a comfortable retirement.

Many people who would have amassed wealth at the peak of their careers often die paupers because of poor financial planning.

Celebrities such as Hollywood stars, musicians, and professional athletes usually fall victims to this folly. They make the mistake of believing that money will keep pouring in forever, thereby forgetting that one day fame and fortune may vanish.

Mike Tyson, at one time the youngest world boxing champion, earned more than US$300 million during his illustrious career but spent it on trivialities. He squandered it on legal fees, parties and he lived a lavish lifestyle. Tyson owned pet tigers costing more than US$ 8 000 each before he filed for bankruptcy in 2003.

Another celebrity who got into financial trouble was the late “King of Pop” Michael Jackson. At his peak, his fortune was estimated at US$1 billion. He spent all that in extravagance. His 2 800 acre Neverland ranch home was put up for public auction after he failed to settle a US$25 million loan on the property. The house was costing the late star US$200 000 a month to maintain.

There are also local examples of people who fell from grace due to poor financial planning. They squandered money on parties, booze, women and fast cars just like their counterparts in the West.

Not long ago, a soccer star who at his best captained the mighty Dynamos and the national team, the Warriors, before winding up his career in the lucrative South African Premiership, died a pauper despite having earned lots of money during his career.

It took the contributions of well wishers for his body to be repatriated to Zimbabwe for burial.

Some of these rags to riches superstars bask in the misconception that fast cars and houses constitute real wealth. Many often brag about their large fleet of cars that are generally costly to maintain. These “assets” hardly earn any income but instead incur huge expenses that can be unbearable when the owners are no longer getting regular income.

When disputing claims that he was refusing to pay maintenance because he was broke, a local soccer star based in South Africa said in response, “Would I be driving a Range Rover Sport if I was broke?” To him and many others of his kind, a posh car was the surest sign of wealth.

The misconception is made worse by some gullible journos who do not understand the meaning of net worth. To them the richest people in the country are those with a garage full of the latest cars. They consistently miss the actual ultra-rich who own big businesses and those who hold huge investments in listed shares.   

Interestingly, many of the superstars have personal professional managers, lawyers, doctors and even public relations officers yet they do not have people to advise them on financial matters. Unbeknown to many people is the fact that wealth management is a specialised area best left to experts just as legal matters are for lawyers and baby health is for pediatricians.

A few who have seen the light have roped in private banks and financial planners to manage their wealth. This allows them to do what they know best whilst their assets are looked after by professionals whose judgment can be trusted.

In conclusion not all of us will be as lucky as the Egyptian Pharaoh who was forewarned about the impending hard times in a dream. As the old adage goes; it pays to make hay while the sun shines for that is not possible when it rains.

Ranga Makwata

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