View from the Chair - Proficio 2022 Issue 1

By taking the time to recalibrate and re-examine the purpose behind the things we do, we can better focus on those things that truly add value

Mike Estment CFP®

Mike Estment CFP®

Executive Chairman: JHB and Private Wealth Manager

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View from the Chair - Proficio 2022 Issue 1

Recalibrate! The one clear positive to come from the pandemic, in my opinion, is the opportunity to rethink what you do, with whom you do it, where it takes place, and most importantly, why you do it.

I have commented in the past about a wonderful Japanese term, Ikigai. It translates to "purpose" in English.

I think the younger folk are way more tuned in to who, what and critically, why, older people (like me) are, as a generation, still inclined to toe the line and follow old, established rules and "ways" of doing things.

It doesn't matter where you are age-wise, career-wise, or how you've done with that bucket list. What does matter is getting the time to think, prioritise, pull triggers and, in doing so, make stuff happen.

One reads of folk with high-profile jobs having resigned and moved closer to the family, having experienced what they were missing, chasing their tails, careers and promotion. Take that special holiday with an eighty-year-old parent or grandparent. The last three years have shown us not to take too much for granted!

We are nowhere close to fully understanding what Covid really is, other than a bug that has turned NORMAL upside down. Whether for the good of all or ulterior motives, our leaders around the globe have shut down societies, economies and life as we knew it, which we took largely for granted.

The latest trend is people going walk-about. A massive increase in trekking during sabbaticals is in vogue. Certain professions such as accounting and banking have, over time, adopted this approach. Taking a much longer break from work, really letting go, recharging, and recognising that you aren't indispensable is good for the soul. This has become popular with a much broader community, where individuals are breaking away midstream and "walking the Camino".

Back to Ikigai for a second. The difference between doing what you love to do, or simply using work as a means to an end, is massive. Think about a great teacher, traffic warden, or gardener. They will never earn a fortune, but they get up every day looking forward to making a difference. Think about retiring at 60 or 65 and doing, with the one or ones you love, those bucket list things or staying on for another decade given the risk of not having enough. They say that only a small percentage of the population can retire without a worry.

The other truth is that we generally live longer, and this trend has accelerated during our lifetimes. It is real, needs thought, and is also happening when global inflation is trending lower.

I'd like to believe that I've worked quite hard. At 63, I have no intention of hanging up my gloves. However, I intend to take a little more time off to travel, climb, ski or do stuff we have on our bucket lists. I'm sure this will also include an Italian cooking course and hike in the Camino de Santiago if Lisa has her way! The point is that we can do the cooking bit for the next 20 years; the others have a sell-by date. If your experience is like mine, time accelerates, and before you know it, time has caught up with us, making that ski slope or mountain pass a stretch!

One of the biggest lessons to learn when calibrating investments, risk versus return, Rands and Dollars, I believe, is about time and cash flow. My greatest concern as a seasoned advisor is the risk of folk being too conservative given an inherent fear of "loss". Markets and funds don't go to zero as a rule. By no means are they steady and predictable, but when making smart, well-diversified investments, time is your greatest friend, with the compounding of returns an almost inevitable consequence. Taking advantage of local and foreign investments, sheltering these from tax whenever possible, and understanding and making provisions in cautious investments for your income requirements allows you to invest the balance of your portfolio in more volatile but unquestionably better-performing assets. This concept works like a dream. The vital ingredients are time, patience, good planning and communication. One can be lucky with timing, but this is more akin to gambling. Staying invested in good quality assets will give your portfolio the best probability of delivering sustainable returns, which futureproof us from likely longevity.

As always, I look forward to chatting with interested readers and meeting some of you on the Camino. I will be the guy in the NFB T-shirt trying to keep up with Lisa!

Finally, I would like to congratulate NFB Asset Management for the remarkable results achieved over the last five, and particularly ten, years. We have built a fabulous, top-performing team and set of solutions for our clients. When a business like NFB offers its clients an NFB-branded fund, it needs to deliver the goodies. The funds have delivered, and continue to do so, under Paul Marais' stewardship. Well done indeed!



This article features in the 2022 issue 1 edition of the Proficio, NFB's bi-monthly financial update newsletter. Download the complete newsletter here.




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