Finance

The one mistake that could cost each South African R650,000

Malcolm Libera

 ·27 Jun 2026

Investment professionals have warned that delaying the decision to start saving may be one of the most expensive financial mistakes a person can make.

According to Lungile Macuacua, Portfolio Analyst at 1nvest, the biggest obstacle to building wealth is often not a lack of money but a lack of time.

“The scarcest resource in building wealth is not capital, it is time. Unlike money, time cannot be earned back later. The earlier you start investing, the more opportunity your money has to benefit from compounding and long-term market growth,” Macuacua said.

Compounding allows investment returns to generate additional returns over time, meaning that money invested earlier has more time to grow. This makes even modest monthly contributions potentially valuable over the long term.

The impact of delaying investment can be substantial. Consider two investors who each contribute R1,000 a month to a diversified portfolio earning a real annual return of roughly 4.8%. 

One starts at age 25 and continues until retiring at 65, while the other waits until age 35 before beginning.

By retirement, the first investor would have accumulated around R1.45 million in today’s money, compared with approximately R800,000 for the second investor.

Waiting 10 years to start could reduce retirement savings by about R650,000, while postponing by five years could cost roughly R360,000.

Many people believe they need a higher salary, better investment knowledge or ideal market conditions before they can begin investing. Macuacua argued that this mindset often does more harm than good.

“Many investors spend years waiting for the perfect moment to enter the market,” she said. 

“Historically, time in the market has proven to be far more valuable than trying to time the market. The sooner you begin, the greater the potential benefit of compounding over the long term.”

She added that waiting until someone can afford to invest R5,000 a month several years from now may be less effective than investing R500 a month today and allowing those funds to grow over a longer period.

Building wealth is about consistency

Macuacua also challenged the perception that investing is reserved for wealthy individuals or market experts.

Instead, she said diversified exchange-traded funds (ETFs) provide exposure to a broad range of companies and sectors through a single investment, enabling investors to focus on consistency rather than trying to predict market movements.

“For young investors, the most powerful strategy is often to invest consistently in diversified portfolios and allow compounding to work over time,” she said.

Glenn Grimley, Head of Stash at Liberty Group, echoed the view that accessibility has made investing easier than ever before.

“One of the biggest misconceptions is that you need a large lump sum before you can start investing,” Grimley said. 

“In reality, building wealth is often about consistency rather than size. Small amounts invested regularly can become meaningful over time because of the impact of compounding.”

He encouraged investors to contribute an amount they can comfortably afford every month and automate those contributions to build lasting habits.

“Start with an amount you can comfortably afford every month. Automate your contributions and choose investments that align with your goals and risk appetite,” Grimley said.

“The objective is not to find the perfect investment. It is to build consistency and allow time to work in your favour.”

Grimley also noted that young adults should also think about protecting their future earnings through appropriate insurance, such as life, disability and income protection cover. Unexpected events can undermine years of financial progress if adequate safeguards are not in place.