{"id":734353,"date":"2023-12-03T13:00:00","date_gmt":"2023-12-03T11:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=734353"},"modified":"2023-12-01T14:12:42","modified_gmt":"2023-12-01T12:12:42","slug":"being-rich-in-south-africa-doesnt-make-you-good-with-money","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/734353\/being-rich-in-south-africa-doesnt-make-you-good-with-money\/","title":{"rendered":"Being rich in South Africa doesn’t make you good with money"},"content":{"rendered":"\n

A large income and a high level of education don’t necessarily make someone good at managing their finances. <\/p>\n\n\n\n

“In my years in financial services companies, I\u2019ve realised that many people believe they will be okay if they earn a decent salary with their privileged education. But I know doctors and scientists, very smart people, who often make the wrong money decisions,” Stanley Gabriel, CEO of Momentum Investo, said. <\/p>\n\n\n\n

“I\u2019ve made some myself. I\u2019m afraid that financial advisers will tell you that even entrepreneurs who earn the healthy fruits of their labour are not always clever about money.”<\/p>\n\n\n\n

Momentum and Unisa’s latest Financial Wellness Index for 2023 measured the financial literacy of people by looking at their knowledge of financial calculations and reasoning, such as their ability to calculate interest, whether they know what inflation is and if they know how to reduce risk when investing. <\/p>\n\n\n\n

According to the report, South African households tend to overestimate their knowledge of personal finance. <\/p>\n\n\n\n

Although 45.7% of households think that they are financially literate, only 15% actually are. <\/p>\n\n\n

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Despite being poor across both categories, households tested more financially literate for financial reasoning (31.5%) than on financial calculations (9.4%)<\/p>\n\n\n\n

“What is also scary, is that 87% of people seem to rely on their own knowledge, online resources or family and friends when making financial decisions. A mere 10% consult professionals with the necessary knowledge,” Gabriel said. <\/p>\n\n\n\n

Looking at education, slightly more than 20% of graduates and post-graduates are financially literate, with the Financial Sector Conduct Authority determining that 50% of graduates don\u2019t enjoy dealing with financial matters.<\/p>\n\n\n

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Notably, the report shows that only slightly more than 10% of “the wealthy” – those who earn more than R840 000 per year (or R70 000 per month) – are financially literate. <\/strong><\/p>\n\n\n\n

The report shows that many of these high earners are more indebted, bad at managing their finances and the most guilty of instant gratification, as they think they can afford to splurge. <\/p>\n\n\n\n

The most financially literate people earn up to R60,000 per year – the lowest income group in the study. <\/p>\n\n\n\n

Although the percentage of financially literate households in an income group increases as income increases, the opposite applies to the highest-income group. <\/p>\n\n\n\n

“However, given South Africa\u2019s high-income inequality level, the financial \u201cmistakes\u201d of the high-income households are very damaging to society as many are expected to support other households, while they also pay the majority of income taxes,” the report said. <\/p>\n\n\n

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“I can only agree with the findings pointing to how dangerous it is for individual families and society at large if we aren\u2019t stewards of our income,” Gabriel said. <\/p>\n\n\n\n

“That said, I am also a firm believer in treating yourself when you have earned it and can afford it. But if you earn a decent salary and have an education, financial wellness should be within your reach.”<\/p>\n\n\n\n

“It seems a small price to pay to brush up on your school maths and spend 10 minutes every day on improving your financial knowledge. Switch on the radio or browse online. You\u2019ll thank yourself for the results, and so will your family.”<\/p>\n\n\n\n

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Read<\/strong>: Bad news for flight prices in South Africa<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Wealthy South Africans are not necessarily good at managing their finances – and this has a ripple effect across other income brackets. <\/p>\n","protected":false},"author":95,"featured_media":716390,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[26,6652,9250],"class_list":["post-734353","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-headline","tag-momentum","tag-unisa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/734353","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=734353"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/734353\/revisions"}],"predecessor-version":[{"id":734397,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/734353\/revisions\/734397"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/716390"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=734353"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=734353"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=734353"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}