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For my 21st birthday, my grandfather gave me 21,000 South African rand (about $1,500 USD).
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However, the gift came with the condition that I see a financial advisor and invest it.
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I am grateful for both the gift and what it has taught me.
A month before my 21st birthday, my grandfather told me he was going to give me 21,000 South African rand (about $1,500 USD based on the exchange rate at the time). However, there was a catch: I had to visit a financial advisor with him and invest the money in stocks.
At the time, I appreciated the freedom that money gave me, but I gave little consideration to investing. I was working a part-time bar job throughout university, took promotion gigs whenever possible, and was starting to get freelance writing gigs.
Most of the money I earned went to subsidize my university lifestyle (usually drunken nights out or greasy takeaways from the local pizza shop), or I saved money for a specific occasion, like a road trip with my roommates across the country. That said, I welcomed the 21st birthday gift, and knew it was something I would grow to appreciate.
In early 2019, six months after my 21st birthday, my grandfather made me an appointment to meet him with my new financial advisor.
We sat in a board room as my financial advisor explained stocks and the market, throwing out terms that went completely over my head, like “repo rate,” “Capital Gains Tax” and “volatility.” I liked it, hoping I seemed to understand more than I did. My grandfather would occasionally ask my advisor to explain important concepts, such as emphasizing the risks of withdrawing money too quickly, especially when the market was in a bad place.
After we set up the investment, I received quarterly updates via email. I rarely opened them, and almost forgot all about the investment portfolio. However, during a family Easter vacation two years after the portfolio was set up, the subject of investments came up. My brother asked me how big my portfolio had grown (my grandfather had set up something similar for him too). I opened my email to check: The balance was 28,138 ZAR. This was an increase of 34% in just two years.
By this time, I had graduated from university, and was starting to earn a decent amount of money in my PR business. I still wasn’t sure how taxes worked, so I was overestimating the amount of money I would put aside for them each month. However, in 2022, after hiring a tax advisor and filing my annual tax returns, I discovered that I had a lot of money left in savings.