Not what you make but what you keep

“It’s not about how much you make – it’s about how much you keep!”

Robert Kiyosaki (Rich Dad, Poor Dad)

As South Africa endured the end of our 6th month of lockdown (albeit with a move to Level 1) the grinding effect of closing the economy, limiting citizens’ freedoms, and restricting business activity was evident for all to see this week with the release of the 2nd quarter’s jobs figures – 2.2m jobs lost between April and June, when the lockdown was at its hardest!

The 3rd quarter of 2020 ended with the Highveld experiencing signs of the first possible thunderstorm of Summer – a bell-weather perhaps that the natural cycle of things remains intact? But as the months of Covid-19 pass, it is becoming increasingly evident that the way we live our lives is massively different to what we knew before the existence of this virus.

September was a tough month for markets as the heady-highs of the previous months were put to the test as ‘second waves’ of infections across Europe reminded us that the Covid-19 virus is anything but done. Without a vaccine, countries have to find ways of striking a delicate balance between saving lives and saving their economies.

The markets in September reminded me of the fundamental adage to which I constantly refer in consultation with my investors – it isn’t about how much you make, but rather how much of that you keep. Whether referring to income and expenses; how much growth you forego to taxation; what percentage of investment gains are given back in a correction; or even how many new daily infections of Covid-19 we see after the peak, it is the constant focus on keeping as much of what we make that is the fundamental difference.

As the proverbial ‘long tail’ of the new daily infections drags on, it is clearer now than earlier in this pandemic to see the impact of the virus on our costs of living. Beyond the obvious increases in our consumption of water and electricity, working from home means consuming more of other things too – I’ve noticed the amount of coffee we purchase, how many packs of dishwasher tablets we go through in a month, and even how frequently we are re-stocking toilet paper all catch me by surprise! Managing the expense-line of our household income statements is clearly of increasingly greater importance!

So as we enjoy the warmer days of summer, and forge our new ways of balancing our commitments of work, family time, and still taking precautions against infection, each of us have our part to play in achieving the goal of striving to keep as much of the gains for which we have all worked so hard! Wishing you and your families only the best of health, happiness, and success!

Steve Crouse
Chief Investment Officer