Not usually what you would see from me, but who’s to stop a girl caring about her finances? I’m a working gal and need to be a grown-up and I thought some of you may care for some wisdom!

Without further ado, here’s a snippet from South African author Daniel Gozo’s Joseph & Noah: What Ancient Wisdom Can Teach Us About Thriving In Today’s World *insert grabby hands*

Title: Joseph & Noah
Subtitle: What Ancient Wisdom Can Teach Us About Thriving in Today’s World
Author: Daniel Gozo
Page count: 244
Date published: 1 April 2025
Genre: Non-fiction, Business

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Synopsis:

What can ancient wisdom teach us about thriving in today’s world? Why do some people achieve far more than others? Is it luck, or something deeper? What if you could combine the insight of Joseph and the foresight of Noah with a deep understanding of financial markets?

The book is structured into three insightful sections:
Part 1: Patterns, Catastrophes, and Financial Markets
Part 2: The Strength of Thought: Investing Simplified
Part 3: Mindsets: Breaking Boundaries, Overcoming Barriers, and Redefining Limits.

Joseph and Noah uncovers the truth behind success, debunking its often-romanticized portrayal and instead revealing a reality shaped by perseverance, resilience, and strategic decision-making.

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This is a paid promotional blog post. Thank you to the author for collaborating with me on this chapter reveal! All thoughts and opinions are my own.

INTRODUCTION

A deep recession gripped the country many years ago as a young man, fresh out of college with a four-year technical diploma, set out to find employment.

His goal was to become an electrical engineer, and he hoped to find an employer with strong training programmes and good career prospects. But after eight months of searching, he had not found a single opening or promise of work.

Desperation set in, and he began walking the streets, making cold calls on factories and industries. Some employers, tired of unsolicited jobseekers, had mounted signs at their entrances: ‘Geen werk/Awukho Umsebenzi ’ (‘No jobs’). In most places, doors were slammed shut in his face. Others, more polite, urged him to try elsewhere: ‘Wishing you all the best,’ they would say.

Then, one day, a middle-aged guard at the gate of a large tobacco factory called after him.

‘I’ve seen you walking down the street several times. The boss will be hiring for the grading season if you’re interested … come back next week.’

Grading tobacco was not what he had studied for, but he needed to start somewhere.

The following week, he returned to find a long queue of jobseekers. The same portly guard, on duty again, explained the procedure. Thirteen positions were available, and the minimum qualification was a matric certificate.

The guard needed someone to organise the group and prepare a list of those eligible. Scanning the anxious faces, he spotted the keen young man from the previous week and called him forward.

‘I’ll check everyone’s qualifications and send those who qualify to you. You will list only thirteen. I know you’re smart, the most qualified of this group. Please count to thirteen, no more. Here’s pen and paper.’

The process was quick, and soon the list was complete. The guard disappeared into the office complex, closing the large gate behind him. When he returned, it was to call in the shortlisted candidates for their

formal interviews. The candidates passed through the gate one by one – thirteen in total. The process, which was performed seasonally, had stood the test of time: the guard trusted that this final step was a mere formality. But the keen young man who had compiled the list was not among the thirteen. As the guard began to close the gate, the young man pushed forward to protest.

‘I explained myself clearly, son. The boss will only take thirteen today,’ the guard said. ‘You didn’t count yourself in. The next recruitment will be next season.’

The guard’s expression transformed into the firm, unyielding look of a security official whose word was final.

In his zeal, the young man had overlooked himself. As the large gate slammed shut, he slumped to the ground, weeping uncontrollably.

* * *

Reading comprehension and literature studies in high school are favoured teaching and learning methods, much like case studies in business schools. What better way to explore success than by examining the real-life journeys of those who have walked difficult paths and emerged victorious? When they reach a fork in the road, what gives them the confidence to choose the right path? Is the answer hidden in the details of their stories, like the fine print in an insurance contract?

In writing this book, I set out to investigate the lives of ordinary people who have achieved extraordinary success, fame or wealth – people who did things differently. From ancient biblical figures of millennia past to modern-day individuals in the twenty-first century, the pursuit of the secrets of success spans generations.

I found balance in the power of three, like a tripod, a bar stool, a potjie pot resting on its three cast-iron legs, and the Holy Trinity. The eight chapters in this book are therefore divided into three parts.

The first part, with two chapters, explores patterns, cycles and catastrophes. Beneath the surface of seemingly random events, there is hidden order. Large-scale catastrophes can trigger cycles that last long enough to demand our attention and provide frameworks for making informed decisions. Ancient biblical stories, such as those of Joseph and Noah, offer guidance when examined closely. For instance, how did a youthful Joseph succeed in interpreting Pharaoh’s dreams so accurately? And how did Noah have the foresight and resilience to build an ark and prepare for a flood while those around him remained indifferent?

The second part of the book spans three chapters, featuring tales of people – young and old, famous and unknown – who walked unique paths. Their lives provide not only entertainment but also valuable lessons. For example, how did a thirty-year-old woman navigate the global financial crisis of 2008 and emerge unscathed?

I believe that reading these stories is akin to experiencing the essence of someone’s life through a single chapter. The devil is in the details – self- awareness and the secrets of investing, particularly in managing human emotions around money. When markets crash and panic sets in, the Joseph and Noah models offer calm guidance through the storm.

The final section of the book comprises three chapters. Some of the individuals featured became famous, leaving legacies of improving humanity, building generational wealth, establishing global brands or creating landmark tourist destinations. Others are unique in their pursuit of happiness, redefining the very concept of success along the way. Many challenge stereotypes – whether related to ageing, perceived limitations from chronic illnesses or genetic conditions, or the barriers imposed by naysayers. All of them triumphed.

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The tale with which I began this Introduction was passed down from my grandpa, who had an endless reservoir of stories. Although fearing it might upset some of my classmates, I shared it during a life orientation lesson in high school. Instead, it quickly became known as the ‘count-yourself- in’ tale, spreading through the playground – proof that it resonated as a learning moment. It is one of the few stories that has stuck with me, replaying itself at various points in my life.

Throughout this book, as I have written about the lives of fascinating individuals who have found success, in whatever way they define it, I have remembered to count myself in too, drawing from my personal library of memories and experiences to supplement the stories.

I think my grandpa would be proud.

CHAPTER 1

THE JOSEPH EFFECT:

Harnessing patterns and cycles for greater success

‘He shared with the men of the Old Testament and with the Oracle of Delphi the heavy burden of instant vision.’ – Gian-Carlo Rota

 

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In a world where the constant flux of markets mirrors the unpredictable ebb and flow of life itself, we find ourselves at a crossroads of decision-making and interpretation. Financial markets often reflect each other, echoing the global trends and uncertainties that shape our economic landscape. Just as life is filled with unexpected turns and challenges, so too are the markets influenced by a myriad factors – geopolitical events, technological advance- ments and economic policies – that steer them in different directions.

Imagine standing at the edge of a vast ocean, watching the waves rise and fall. Each wave is unique, yet part of a larger, interconnected system influenced by the wind, tides and gravitational pull of the moon. Similarly, financial markets are part of a global system where actions and events in one part of the world can create ripples felt across continents. A policy change in the United States can impact on stock prices in Asia, for example, just as a technological breakthrough in Europe can influence market movements in Africa.

This interconnectedness means that markets often move in tandem, reflecting a shared search for direction amid a sea of information and events. Investors, much like sailors navigating the open ocean, must interpret these movements and make decisions based on their understanding of the patterns and trends. They seek to find meaning in the chaos, to predict the next wave and to position themselves advantageously for the future.

In this dynamic environment, where the only constant is change, we must remain vigilant and adaptable. By observing global trends and under- standing the factors that drive market movements, we can better navigate the uncertainties of the financial world, making informed decisions that align with our goals and aspirations.

And as we stand on the brink of unprecedented technological advance- ments, one question looms large: what unique capabilities will AI bring to the table that traditional computers cannot? Investors and markets alike are always on edge, keenly awaiting new data, such as US wage reports, while geopolitical tensions and rising oil prices add further complexity to the financial landscape.

In South Africa, we keep a close eye on the South African Reserve Bank’s decisions as well as inflation trends and market movements. The latest inflation figures occasionally surprise economists by coming in slightly lower than expected. The Reserve Bank Governor’s policy stance is scrutinised for its hawkish or dovish tendencies, shaping expectations about inflation, economic health and interest rates.

The world of cryptocurrency also presents intriguing dynamics, particularly with the periodic halving of Bitcoin rewards, which affects its price by reducing the rate at which new coins are minted. These events are keenly anticipated by investors and analysts, with each halving being followed by intense speculation and market adjustments.

In our information-saturated age, news comes at us from every direction, around the clock, via television, radio, social media and countless apps. The sheer volume of data, often laced with subjective opinions, poses a significant challenge: how do we sift through it all to find reliable insights? Should we mute notifications, unsubscribe from feeds or follow influencers who seem to have a knack for spotting trends?

Reflecting on these modern dilemmas, we can draw inspiration from ancient wisdom. Take a story that has withstood the test of time, for instance: the story of Joseph from the Bible. The tale is a narrative not just of dreams and interpretations, but of a young man’s journey from the depths of despair to the heights of power.

In the twenty-first century, many of us seek advice from consultants or experts. In Joseph’s time, millennia ago, there were wise men and magicians but no laptops or internet. Joseph was sold into slavery by his jealous brothers, only to rise to prominence in Egypt by interpreting Pharaoh’s dreams when no one else could. His tale is one of vision, courage, faith and a willingness to defy the consensus – qualities that are as essential today as they were thousands of years ago.

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Joseph lived with his family in the land of Canaan, a large, prosperous country located in the Levant region of present-day Lebanon, Syria, Jordan and Israel. According to the book of Genesis, the land of Canaan was designated as the ideal inheritance for the descendants of Jacob, who was also known as ‘Israel’. This promise was part of a divine covenant, marking Canaan as the destined homeland for Jacob’s family and future generations. This inheritance symbolised the fulfilment of God’s promise to Jacob and his ancestors, representing prosperity, stability and a lasting legacy for his descendents, the Israelites. In the context of Joseph’s story, this inheritance underscored the significance of his journey and the trials he and his family endured to ultimately secure their place in this promised land.

Joseph had eleven brothers. His father, Jacob, whose life was marked by trials and triumphs, was a significant figure in biblical history. Jacob’s story is intertwined with many pivotal moments that shaped the destiny of his descendants.

Jacob was a man who wrestled with both human and divine beings. This is why God renamed him ‘Israel’, which means ‘he who struggles with God’ (New King James Bible, 2004, Genesis 32:28). This struggle was emblematic of Jacob’s perseverance and faith, qualities that he passed down to his children.

The name change from Jacob to Israel symbolised a profound trans- formation and a new beginning, marking Jacob as the patriarch of a great nation. Understanding Jacob’s story and his transformation into Israel helps us grasp the deeper themes of perseverance, faith and redemption that run through Joseph’s life.

Joseph was the last son in the family; having been born in Jacob’s old age, he soon became his father’s favourite. It did not take long for Joseph’s brothers to realise that of all his children, their father loved Joseph the most. To make matters worse, as younger boys often do, Joseph regularly told on his brothers when they misbehaved, so relations between him and the brothers were strained. When Jacob had a special robe with many colours made for Joseph, the die was cast and the battle lines were drawn.

Thirteen chapters (Genesis 37–50) and 214 verses of Genesis, the Hebrews’ biblical book of creation, are devoted to the story of Joseph. It is also told in the Quran: Surat Yusuf in Sura 12 covers the story in 111 verses. In both accounts, the texts reflect the main events in a similar fashion and the consequences of the events are the same.

In a research journal article about Joseph, Abdel Haleem (2007) offers perspectives regarding the story as told in the Quran versus the Old Testament. The differences lie in the emphasis and tone with which each version is recounted, the time spans involved, and the characterisation, artistic forms and colour given in each of the two texts. This difference is reminiscent of the device used in Pete Travis’s 2008 action thriller film, Vantage Point, in which different witnesses offer differing points of view to unravel an assassination attempt made on a US president in the fictitious storyline.

The underlying themes of Joseph’s story are jealousy, deceit, callousness, fateful lust, courage and faith. All events in the story contrive towards the bigger purpose of divine intervention by a distant God to save the family of Israel. Stripped of religious zeal and opportunism, the story exposes human failings, hidden agendas and survival instincts familiar to humans living on earth today.

The story of Joseph in the book of Genesis was written by Moses, who lived many years after Joseph (circa 1400 BC). Even though the story was written millennia ago, it still has great significance for current generations of people, whether they are of Jewish or Gentile origin.

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One day, seventeen-year-old Joseph had a dream, which he related excitedly to his brothers: ‘Please hear this dream which I have dreamed: There we were, binding sheaves in the field. Then behold, my sheaf arose and also stood upright; and indeed, your sheaves stood all around and bowed down to my sheaf’ (New King James Bible, 2004, Genesis 37:6–7).

His eleven brothers reacted with shock and resentment: ‘Shall you indeed reign over us? Or shall you indeed have dominion over us?’ (New King James Bible, 2004, Genesis 37:8). The favouritism shown to Joseph by their father, Jacob, was already a source of tension, but Joseph’s vivid retelling of his dream only exacerbated the existing divide. The implications of the dream for the family’s inheritance could not be overlooked. Consequently, the brothers’ animosity towards Joseph escalated dramatically.

Joseph had another dream, which he again shared with his brothers: ‘Look, I have dreamed another dream. And this time, the sun, the moon, and the eleven stars bowed down to me’ (New King James Bible, 2004, Genesis 37:9). This may have been the straw that broke the camel’s back of Joseph’s relations with his brothers.

Joseph then related this latest dream to his father, who became very worried about its meaning and the potential consequences for his son. Jacob admonished Joseph, saying: ‘What is this dream that you have dreamed? Shall your mother and I and your brothers indeed come to bow down to the earth before you?’ (New King James Bible, 2004, Genesis 37:10).

In Sura 12, vv. 4 – 6 (Haleem, 2007), Jacob replied to his son as follows: ‘My son, relate nothing of this dream to your brothers lest they plot evil against you: Satan is the sworn enemy of man. So will your Lord choose you, teach you to interpret dreams, and perfect His blessing upon you and on the House of Jacob as He perfected it formerly on your fathers Abraham and Isaac; surely your Lord is all-knowing and wise.’ Jacob, the wise old- timer, had no intention of forgetting about this dream, and brooded quietly over it. As we shall see later, there is a connection between Joseph’s two dreams, which both project an outcome that has Joseph in a position of strategic status.

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In the context of the texts, Joseph’s dreams are considered to be a supernatural gift from a distant, divine God depicting a future reality. Is this view of a supernatural gift the only viable explanation for predictions? Or is there an alternative that derives from the observation of patterns in the natural environment? These questions are the subject of Judith Corey’s research article for the Journal for the Study of the Old Testament, aptly titled ‘Dreaming of Droughts …’. Dreaming of a future reality is a phenomenon located within the area of futures forecasting.

An historian at the University of California in Los Angeles, Corey examines the history of futures forecasting from Babylonian civilisation through Hermetic philosophers to modern meteorology, and from Greek philosophy to contemporary sciences (Corey, 2014).

Corey notes that a subtle introduction in the first verse of Genesis 37 – ‘Now Jacob lived in the land of journeys of his father in the land of Canaan’ – is a reminder of the instability of nomadic life for a sojourner or temporary dweller at the time during which Joseph’s dreams were recorded. Corey believes that this instability would have had an influence on Joseph, resulting in his dreams of landing in a position of status at a time of drought. As Corey points out, the dreaming mind is fed by emotional relationships that cultivate the psychic conscious.

Babylonian civilisation is credited with excellent record-keeping. Centuries of observations were recorded by scribes employed by kings and priests in a guild fashion, from father to son, and with this discipline, the Babylonians produced the first almanacs, predicting the times of events such as sunrises and sunsets, eclipses, solstices, equinoxes, high tides, rising river levels, frost, plentiful harvests and devastating droughts. The Babylonians came up with the concept of correspondence, a model where what occurs in the macrostructure influences the microstructure (in other words, creates a ripple effect). The natural environment produces information that in turn is received via the senses, with the mind receiving a copy of the image – these are referred to as ‘emanations’ in this model. Dreams are experienced in the quiet of the night during sleep. The Greek philosopher Aristotle surmised that the stillness of the night acts as a catalyst that enhances the emanations.

David Brown, who has made an extensive study of Mesopotamian planetary astronomy, concluded that Babylonian astrology spread to other cultures in neighbouring regions in a process that introduced a paradigm shift and a new science (Brown & Brown, 2000). It was during this period that Babylonian astronomical science found its way into Jewish culture, creating an impact that lasted for centuries, including at the time of the writing of the book of Genesis. These are the times in which the youthful Joseph grew up, and the prevailing beliefs and culture of these times shaped him as a human being. The instability of his life as a sojourner or temporary dweller and having to deal with the vagaries of the natural environment had a significant impact on him. The events in the natural environment, past and present, intersected with his belief in the divine and influenced his resultant dreams.

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The plot quickened when Jacob sent his beloved Joseph out to the pastures at Shechem to check in with his brothers and report back to confirm that all was well with the flocks. The brothers hated Joseph, and the two dreams in which Joseph had predicted that they would be subservient to him were fresh in their minds. They hastily plotted to kill Joseph when they saw him approaching from a distance. However, overcome by a sense of guilt, they decided instead to sell him as a slave to a caravan of Midianites travelling to sell their wares in Egypt. The brothers washed Joseph’s robe in goat blood in order to create the impression that he had been attacked and killed by a wild animal, and presented it to Jacob. Jacob went into mourning, beside himself with sorrow. Not only had Joseph been his son, but he had been Jacob’s favourite son.

Once in Egypt, Joseph was sold to Potiphar, captain of the guard. However, Joseph’s ordeal was not over. His new owners and employers found him to be a likeable young man; his curse was his good looks – he was described in Genesis as a handsome boy – which brought him trouble. Potiphar’s wife soon made lustful advances on Joseph, but he committed the cardinal error (in her eyes, at any rate) of remaining loyal to Potiphar, his master, and rejecting her advances. According to Genesis 39:12–18 (New King James Bible, 2004), ‘she caught him by his garment, saying, “lie with me”: he left his garment in her hand and fled’.

Using the robe as evidence, Potiphar’s wife turned the tables on Joseph; she reported him to her husband, accusing Joseph of having attempted a sexual attack on her.

The event is painted with much more colour when told from a different vantage point. In the version of the story that is related in the Quran, some women in the city mocked Potiphar’s wife, accusing her of soliciting her slave boy. This prompted the nobleman’s wife to invite the women for a meal during which she presented Joseph to them. The women were charmed and hypnotised; they were so enraptured by Joseph’s beauty that they found themselves cutting their fingers with their knives during the meal.

Joseph may have brought the ladies under his spell like Richard Gere in the 1980 film American Gigolo, but he was no gigolo. He found himself on the horns of a classic dilemma: condemned if he gave in to temptation, and equally condemned if he rejected the advances of Potiphar’s wife.

According to Sura 12 (Haleem, 2007), Joseph prayed, ‘Lord, prison is dearer to me than what they call me to. Shield me from their cunning or I shall yield to them and lapse into folly.’

Joseph was indeed thrown into prison, where he found himself in the company of other prisoners, including Pharaoh’s previously ranked and trusted (but now errant) officers: his cupbearer (butler) and his baker (Haleem, 2007; Aling, 2003). These two officials are of immense importance in Joseph’s story; this is the first time that Genesis records Joseph’s gift for interpreting the dreams of others.

Joseph’s faith was too strong for him to take the credit for this gift and he attributed this power to God, saying in Sura 12 that his Lord had taught him to do so (Haleem, 2007). In Genesis 40:8, Joseph says, ‘Do not interpretations belong to God? Tell me them.’ And so the baker and the cupbearer told him their dreams, which Joseph interpreted accurately: the cupbearer was recalled to Pharaoh’s service and promoted, but the baker was killed, impaled on a pole, just as Joseph predicted. As the cupbearer had promised and when the opportunity arose, he remembered his prison mate when his fortunes took a turn for the better.

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As Joseph had predicted, the cupbearer was duly released from prison and reappointed in Pharaoh’s palace, this time in the higher role of chief cupbearer. Two years later, Pharaoh had two dreams on the same night. He found these dreams so disturbing and worrying that he woke up between them, and later could not shake them off.

The degree of importance that Pharaoh attached to his dreams was typical during ancient times. As noted earlier, Jacob had brooded over the meaning of Joseph’s dreams, and Joseph had himself been so excited by them that he had felt compelled to share them with his family members, even though it was obvious that they would receive the dreams negatively. Respected Old Testament scholar Gerhard von Rad points out in his book that for the ancients, visions were so vital and imperative that the notion of keeping them private was inconceivable. In addition, dreams were taken so seriously that those who could interpret them were accorded high status in royal courts (Von Rad, 1973).

It should come as no surprise that early the following morning, Pharaoh summoned his magicians and wise men in order to consult with them. He wanted these capable men to interpret his dreams and needed this to be done quickly. It was a simple brief. But none of Pharaoh’s wise men could explain their meaning.

The chief cupbearer was in attendance. Witnessing the fiasco, he suddenly recalled the young Hebrew man he had met during his time in prison. To find favour with Pharaoh, the chief cupbearer explained that Joseph had interpreted both the baker’s dream and his own, and that everything had happened exactly as predicted. Pharaoh was excited to hear this, and without further ado, he ordered that Joseph be brought immediately to his chambers.

Joseph shaved before presenting himself to Pharaoh. Historians have debated the significance of this decision to shave off his beard. It appears that Joseph was a smart fellow. The Egyptians shaved routinely; in ancient paintings, they are always clean-shaven. This detail had not escaped Joseph, who decided not to present himself with a full beard, as was the practice of the Hebrews. This was Pharaoh, the most powerful man in Egypt, and first impressions mattered. There would not be many more opportunities for Joseph to negotiate his way out of the dungeon and into Pharaoh’s court, where he could begin to build a career for himself.

Joseph walked into the royal court and found Pharaoh ready for him. Pharaoh started by complaining that none of the wise men of Egypt had been able to interpret his dreams, and then recounted his dreams to Joseph:

In my dream, I was standing on the bank of the Nile River, and I saw seven fat, healthy cows come up out of the river and begin grazing in the marsh grass. But then I saw seven sick-looking cows, scrawny and thin, come up after them. I’ve never seen such sorry-looking animals in all the land of Egypt. These thin, scrawny cows ate the seven fat cows. But afterward you wouldn’t have known it, for they were still as thin and scrawny as before! Then I woke up.

In my dream I also saw seven heads of grain, full and beautiful, growing on a single stalk. Then seven more heads of grain appeared, but these were blighted, shrivelled, and withered by the east wind. And the shrivelled heads swallowed the seven healthy heads. I told these dreams to the magicians, but no one could tell me what they mean. (New King James Bible, 2004, Genesis 41:17–24)

Joseph responded as he had to the chief cupbearer and baker: the business of interpreting dreams, he told Pharaoh, belonged to God, and he was only the messenger. This is a testament to Joseph’s strong faith in the divine. But I also have a sense of the smart use of what we would now call a ‘disclaimer’, in case his interpretation and predictions proved inaccurate or misleading. Joseph knew that Pharaoh was a cruel man – he had only recently seen the baker being executed by being impaled on a pole – and he knew that he would be wise to use a caveat when called on to provide advice.

To understand the effect of witnessing another person being impaled, we should go back in history to Vlad III Drachul. During the fifteenth century, Vlad III rose to power while still in his twenties, ruling Transylvania and Walachia in the mountainous region of present-day Romania. He was a feared leader and warlord who had the singular aim of staying in power at all costs. His belief was that in order to be a great leader, he had to mete out morbid, sadistic and cruel punishment whenever a subject displayed even the slightest measure of dissent.

Vlad III, who inspired Bram Stoker’s horror novel Dracula, used several ways to punish ‘errant’ people, including decapitation and mutilation of their noses, but his favourite was impalement. For this reason, he earned the frightening nickname Tepes, which in English means ‘The Impaler’ (CE Noticias Financieras, 2020, 2021).

Impalement was a public spectacle, carried out in full view of the citizens. The unfortunate victim would have oil and grease poured into their rectum or vagina while warriors held them down. A sharpened pole was then driven through their body, lubricated by the oil and grease, causing severe internal damage as it progressed. The pole would eventually emerge near the person’s neck, shoulders or mouth.

This gruesome method ensured a prolonged and agonising death, sometimes lasting hours or even days. For added cruelty, a blunt pole might be used instead of a sharp one, prolonging the agony by preventing rapid internal damage.

Impalement was often meted out capriciously. For instance, a Franciscan friar who had reprimanded Vlad III for murdering a family of boyars was impaled by having a pole driven through his brain as punishment for his perceived insolence. In another instance, a man who had challenged Vlad about the smell of the bodies of those who had been impaled was himself impaled high enough to be able to breathe fresh air while he suffered and died – a grim mockery of his complaint.

Vlad III’s unpredictable and brutal behaviour contrasts sharply with the predictability typically expected of leaders, even in medieval times. His actions provide a stark context within which to understand Pharaoh’s decision to impale the baker and the peril Joseph faced when he stood before Pharaoh.

Joseph was a man of faith who displayed an incredible amount of courage on that day. First he made it clear to Pharaoh that he was only the messenger; the interpretation of dreams came from Joseph’s God. And then, in what is now seen as one of the most famous forecasts in the Old Testament, which had far-reaching consequences for everyone concerned, Joseph used divine guidance to outline the meaning of the dreams.

According to him, the seven healthy cows and the seven healthy heads of grain represented seven years of prosperity. The seven scrawny cows and the seven thin heads of grain ‘withered by the east wind’ represented seven years of famine. In Joseph’s words, this was a revelation from God – a warning – about what he was about to do. The famine was going to be so severe that any memories of past prosperity would be erased. The similarity of the two dreams was deliberate, intended to emphasise the fact that these events would happen fairly soon. Pharaoh had to take quick action; this was an emergency.

Joseph went on to advise Pharaoh that the predicted events required him to identify a wise person who would, with the support of competent supervisors, take charge of operations in the entire country. During the good years, the appointed governor and his officers should be tasked with collecting one-fifth (20%) of all grain produced in Egypt, which would be stored in Pharaoh’s warehouses and guarded. The advice was precise and persuasive; such was Joseph’s wisdom that the proposal was issued together with details, specifics and numbers. He assured Pharaoh that if he followed this process, he would succeed in feeding all his people through the difficult years of the famine.

Pharaoh believed everything Joseph said and was impressed by his God. Joseph’s interpretation of Pharaoh’s dreams showcased his wisdom, making him the perfect candidate to lead Egypt. Pharaoh made Joseph the second- most powerful man in Egypt, giving him a signet ring, fine linen clothes, a gold chain, a chariot and a new Egyptian name. Pharaoh declared that no one in Egypt could do anything without Joseph’s approval.

The dreams that Joseph had had at the age of seventeen came true when he was thirty. As he had predicted, Egypt experienced seven years of abundant harvests, during which time vast amounts of grain were stored in Pharaoh’s warehouses. This time of abundance was followed by seven years of severe famine. When the famine hit, the Egyptians cried out for help, and Joseph distributed the stored grain. He proved to be a capable and shrewd administrator, first selling food for money, then for livestock and eventually for land, until all the land in Egypt except that of the priests belonged to Pharaoh. Desperate, the people offered themselves as slaves in exchange for food, and Pharaoh accepted, making them his slaves.

Meanwhile, Joseph’s family in Canaan was facing starvation. When Jacob heard that there was grain in Egypt, he sent his sons to buy food. When they arrived, they did not recognise Joseph, who had transformed from a spoiled favourite child into a powerful, wise leader. Joseph’s mature appearance and regal attire disguised him from his brothers. Eventually Joseph revealed his identity and saved his entire family, bringing them to Egypt with Pharaoh’s blessing. He told his brothers, ‘You meant to harm me, but God used it for good, to save many people’ (New King James Bible, 2004, Genesis 50:20).

The interconnection of Joseph’s two dreams – his brothers’ bundles of grain bowing down to his bundle, and the sun, moon and eleven stars bowing low before him – and his new status of influence in a foreign land was now complete. According to the Old Testament, it was the conclusion of what had been God’s divine plan to save the family of Israel during a devastating drought. I wonder, though, how Joseph managed to achieve this with such success. The Old Testament and Sura 12 are both quite clear that this was a result of divine intervention made possible by the courage and faith of Joseph. It was a plan made by a distant God.

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Human beings have an unquenchable desire for certainty. People make forecasts, assumptions and predictions on a daily basis in pursuit of certainty. We rely on hundreds of these assumptions every day. For instance, you probably wake up in the morning assuming you will feel well, your car will start, the roads will be clear and your office will still be there when you arrive.

In a discussion of futuristics and futures forecasting, Roland Meinert stated that while we possess empirical data about the past, we lack such data about the future; however, although we cannot change the past, we can shape the future (Meinert, 1973).

Meinert identifies four systematic techniques for forecasting the future (1973):

• Extrapolation: Analysing past data to identify patterns and build future models.
• Delphi: Polling experts for their
• Simulation: Creating models to test scenarios, such as in space
• Scenario speculation: Imagining future lifestyles or consumer

These techniques are useful in various fields, including social planning.

The study of dreams and their potential to predict the future is part of the larger field of complex adaptive systems. John Henry Holland, a scientist at the University of Michigan, pioneered research in this area. He believed that predicting the future is essential for survival, and that complex systems, which may appear chaotic, generate order and patterns over time (Holland, 1995). Living beings, including humans, create internal models based on vast amounts of data and experiences in order to anticipate future events.

In today’s world, predictions about future natural events are made using data collected over centuries. The power of modern computers allows us to run complex mathematical models quickly. For example, scientists David Hodell, Mark Brenner, Jason Curtis and Thomas Guilderson (2001) studied lake sediment cores from the Yucatan Peninsula in Mexico to reconstruct the region’s history over the past 2 600 years. They found a recurring drought cycle every 208 years, most likely linked to solar activity and the gravitational influence of celestial bodies. While the exact causes of drought are not fully understood, a lack of magnetic sunspot activity seems to correlate with drought occurrences. Movements of the moon and the planets as well as the occurrence of solar storms are also connected to events on earth, suggesting that ancient methods of predicting weather, like those in Joseph’s time, were based on similar observations.

Will Alexander, a former chief of the Division of Hydrology in South Africa, also studied pattern recognition. He showed that annual river flows are linked to sunspot activity, demonstrating this with data from the Vaal Dam. He found that river flows followed a twenty-one-year cycle, alternating between drought and high inflows, synchronised with double sunspot cycles. This pattern recognition is a fundamental aspect of how our brains work, helping us make sense of the world around us (Alexander, 2009).

As highlighted earlier in this chapter, the influence of Babylonian astrology and civilization had spread to Joseph’s region and had a marked impact on people’s understanding of the world at that time. Surrounded by the natural environment, solar activities and agricultural life, Joseph developed the ability to find patterns in his dreams.

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Genesis 37–50 is a story about survival and adaptation.

As indicated earlier in this chapter, the first verse of Genesis 37 highlights the unstable life and nomadic existence that Jacob’s family led as sojourners: ‘Now Jacob lived in the land of journeys …’. The Hebrew verb gur used in the text means ‘temporary dweller’. This suggests to us that a strong survival instinct was etched in Joseph’s mind at an early age.

From childhood, Joseph’s continued existence was dependent on nature. In addition, the influences of the Babylonian civilisation on his region meant that he would have acquired knowledge about the correlation of the movements of the moon and the planets with sunspot cycles and the like.

The sleeping unconscious mind dreams and arrives at symbolic visions of the future. This view, which provides an alternative explanation of how Joseph got it so right when it came to interpreting his own dreams as well as those of others, is grounded in contemporary science.

Joseph’s predictions exemplify the concept of long memory, or long- term persistence, which has strategic implications in fields such as climate, hydrology and finance. Researchers from various disciplines have explored this concept, tracing its origins to the work of Harold Edwin Hurst, a hydrology engineer who studied the Nile’s water flow with the aim of controlling floods and sustaining development in Egypt (Graves et al., 2017).

Hurst found that natural events tend to have long stretches of high or low values, unlike random events. His findings, known as the ‘Hurst phenomenon’, showed discrepancies between theoretical models and real- world data. This led to the development of long-memory models.

Hurst’s ideas were developed further by mathematician Benoit Mandelbrot. While working at IBM, Mandelbrot pioneered the field of fractal geometry and challenged the conventional use of bell curves in statistics. He argued that outliers are inherent to systems and should not be ignored, as they were by traditional mathematical models, and demonstrated that real-world data is often more complex and interconnected than previously thought.

Mandelbrot’s ideas help explain how seemingly random events follow patterns. He applied his models to various fields, including stock market prices, revealing that price movements are not as random as previously thought. He coined a term – the Joseph Effect – for the predictable, continuous cycles he observed, such as the biblical seven years of plenty followed by seven years of famine (Tamplin, 2023; Graves et al., 2017).

Mandelbrot’s work emphasised the importance of understanding roughness and irregularity in natural and economic systems, which led to significant advancements in mathematical modelling, and had practical applications such as determining ideal dam sizes for water conservation, as we will see in the section that follows.

In essence, Joseph’s ability to foresee the future based on observed patterns aligns with these modern scientific concepts, demonstrating the enduring relevance of long memory in understanding and predicting complex systems.

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Why is the Joseph Effect important?

The answer is simple: the Joseph Effect suggests that patterns and cycles, rather than random events, drive financial markets and other systems. This means that periods of high prices are likely to be followed by more high prices, and periods of low prices by more low prices.

For decades, financial market theory assumed that markets were efficient, with prices reflecting all available information. The rise of social media made this idea even more appealing. However, the Joseph Effect challenges this notion by emphasising the importance of patterns and cycles over random fluctuations.

The Joseph Effect introduces predictability in market movements, which can help investors follow a disciplined investment strategy. Instead of reacting impulsively, investors can stay committed to their plans, benefitting from dollar-cost averaging and compounding, buying low and selling high when the market presents opportunities, and remaining invested during market fluctuations.

The concept also extends to technology. For instance, Tim Berners-Lee created the World Wide Web to help physicists share information. His idea evolved into the internet we use today, which has changed how the world operates. Reflecting on the thirtieth anniversary of the internet, Berners- Lee observed that the Web has evolved into a multifaceted platform, serving as a communal hub, educational institution, healthcare provider, retail space, creative workshop, professional environment, entertainment venue, financial centre, and more (World Wide Web Foundation, 2019).

Berners-Lee’s vision was driven by the idea of linking information easily, allowing users to find connections between seemingly unrelated things (Berners-Lee, 2000). This principle influenced Google’s approach, setting it apart from Yahoo, which relied on organising information in neat categories. Google’s success lies in embracing the full capabilities of the Web, as Berners-Lee envisioned (Hern, 2019). This approach allowed Google to dominate the search engine market and innovate with products such as Gmail. By offering one gigabyte of email storage, Google anticipated falling storage costs and an exponential rise in user numbers, ultimately outpacing competitors such as Yahoo and Hotmail (Press, 2016; Indah, 2023).

The Joseph Effect also provides lessons for personal finance. Just as Joseph saved Egypt by ensuring that Pharaoh stored up grain during years of plenty, individuals can secure their financial future by saving and investing during their productive years. This prepares them for leaner times when their income may be lower. Ultimately, the solution is straightforward: you should save and secure as much as possible, building your capital consistently – the more the better. More than one millennium before the birth of Christ, Joseph advised Pharaoh that one-fifth of all grain produced in Egypt should be stored in silos for use in times of need. This principle remains relevant and applicable today.

Just as hydrologist Will Alexander showed that annual river flows and sunspot activity follow long-term patterns, so financial planner William

1. Bengen proposed the 4% rule for safe retirement withdrawals, based on historical data and patterns in market returns (Bengen, 1992, 1994). This rule helps investors determine how much they can withdraw annually without depleting their savings.

Through his calculation of the safe withdrawal rate, Bengen offered a viable and useful method to address the issue of determining the necessary capital for retirement or for a future planned date, which is best illustrated through the analogy of a dam.

You will remember that Benoit Mandelbrot’s mathematical models were used to determine the ideal size of reservoirs. This offers a useful analogy: we can compare the characteristics of sound financial planning to the characteristics of the ideal dam.

These are the characteristics of the ideal dam:

• It has a uniform
• It ends the period as full as it
• It never
• It has the smallest capacity that meets these

This analogy helps us understand how to manage our finances. The dam represents our accumulated funds, with the water level symbolising our savings. The inflows are our income and investment returns, while the outflows are our expenses. Just as a dam needs a consistent water source, we need a steady income. The goal is to ensure that withdrawals (outflows) do not deplete our savings (the dam’s water level) so that our funds last as long as we live.

To build and maintain this ‘financial dam’, we need to do the following:

• Secure a reliable source of income, such as a job or
• Continuously invest and save, ensuring that our ‘dam’ remains
• Prepare for unexpected events that might affect our finances, just as a dam must account for evaporation or unexpected inflows.

Ultimately, the key is to save and build capital consistently. The more you save, the better prepared you are for the future, just like a well-maintained dam ensures a steady water supply.

The global financial services industry has adopted the 4% rule as a guideline for retirement planning, recommending it as a reliable method to ensure that capital endures (Jonathan, 2014). With an estimated safe withdrawal rate, determining the ideal amount of capital needed is straightforward. It is a matter of working backwards. For instance, if you need to withdraw R500 000 annually, you should aim to have a minimum of R12.5 million saved by the time you retire.

Ultimately, the Joseph Effect emphasises the importance of recognising patterns and cycles in various aspects of life, from financial markets to technology and personal finance. By understanding and applying these patterns, individuals and organisations can make more informed decisions and achieve better outcomes.

CHAPTER 2

THE NOAH EFFECT:

Decoding the impact of large-scale catastrophes

‘… I will cause it to rain upon the earth forty days and forty nights; and every living substance that I have made will I destroy from off the face of the earth.’

– New King James Bible, 2004, Genesis 7:4

 

1

It was Sukkot, the Jewish autumn holiday of thanksgiving. Things on the Israeli border with the Gaza Strip had been relatively quiet for some time. A complicated truce between Israel and Hamas had held for years, save for the occasional missile launched into Israel, which the reliable Iron Dome anti- missile system successfully repelled, preventing any damage to property or injury to citizens. The attention of the Israeli army (IDF) was focused on the country’s northern border, with little concern for the south, and many IDF soldiers were on leave.

But on 7 October 2023, Hamas shocked the Israelis and the world by launching a coordinated attack from Gaza, south of Israel (Britannica, 2024). On this day, the opponent did not play according to the rules. A barrage of over five thousand missiles was fired into Israel, and the Iron Dome system was overwhelmed. The attack led to devastating carnage, igniting a brutal war as Israel moved to eliminate its adversary.

Like the Second World War and Covid-19, which brought the world to a standstill in 2020, the events of 7 October 2023 can best be described as low probability, unpredictable, chaotic and hugely disruptive. They fall under the category of events that trigger ripple effects such as fear, supply chain shocks, inflation, commodity shortages, panic and outsize price shocks in financial markets.

Such events are unpredictable, yes, but what should we do when they happen? Should we prepare for defeat, or can we find better ways to face such challenges? Should we look for opportunities in the mayhem? In my opinion, there is no better way to find guidance on how to handle such a situation than to go back several thousand years, to when Noah was the only man to save his family from the deluge.

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When God reflected on his creation, the dramatic multiplication of his people and the resultant population increase, he realised that his people had grown corrupt, wicked, evil and violent. This is not what the Lord had intended; according to the Old Testament book of Genesis, the Hebrew book of creation, ‘it grieved him at his heart’ (New King James Bible, 2004, Genesis 6:6).

However, there was one man who had found favour in God’s eyes: Noah. He was different from other men of his generation. And so God confided in Noah, telling him of the impending destruction that he planned to unleash on the earth through a flood, the likes of which had never been witnessed before. All living things would be destroyed, except for those covered by the covenant that God later swore to Noah.

God instructed Noah to build an ark of gopher wood, providing detailed specifications for its construction: ‘The length of the ark shall be three hundred cubits, the breadth of it fifty cubits, and the height of it thirty cubits’ (New King James Bible, 2004, Genesis 6:15).

The measurements are given in cubits, and you may wonder what exactly a cubit is. It is an ancient unit of length based on the distance from a person’s elbow to the tip of their middle finger. Measuring in this way is like using your own body as a ruler. Typically, a cubit is about eighteen inches or forty-five centimetres, but it could vary slightly depending on the person measuring. Noah would have calibrated a rope based on this measure and used it much like a builder uses a tape measure today.

God then made a covenant with Noah: Noah would bring two (a male and a female) of every living creature on the earth onto the ark. Noah himself, along with his wife, his sons and their wives, would also be on board.

Noah was an obedient man, as God had known, and he did not disappoint. He built the ark according to the instructions he had been given. When it was ready, God told him to bring the living things on board as previously instructed (for every living thing, two of each of its kind), and warned him that all hell would break loose in seven days’ time.

Noah was six hundred years old when the waters of the flood broke on the earth. As the waters rose, the ark – with Noah and his family on board – was lifted and it floated. The rains poured down relentlessly for forty days and nights, eventually submerging the hills and mountains under fifteen cubits of water. The ark, crafted with divine precision, was tossed upon the waves but remained steadfast, safeguarding its precious cargo. Meanwhile, all life outside the ark had perished: ‘And every living substance was destroyed … and Noah only remained alive, and they that were with him in the ark’ (New King James Bible, 2004, Genesis 7:22–23).

The rains stopped after forty days and forty nights, but it took another 150 days for the floodwaters to abate.

In the seventh month, the ark rested on Mount Ararat, a destination known only to the Lord. Noah opened the window of the ark and sent out a dove to check if there was any land not covered by water, but the dove came back, having failed to land. Seven days later, Noah opened the window again and let the dove fly out; when it came back with an olive leaf in its beak, he concluded that the waters had abated. After a further seven days, he sent off the dove again, but this time it did not return; the dove was now free in the wild where it belonged, and it was time for Noah and his crew to disembark. As God had promised Noah, the floodwaters had destroyed all living things on earth except for those that had boarded the ark.

This is the story of Noah, the ark that he built and the Great Flood, as told in the Old Testament in the book of Genesis.

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The flood story, as recounted in both the Bible and the Quran, has captivated audiences worldwide for centuries. Its themes of survival, renewal and the power of nature resonate deeply across cultures, with both Muslim and Hebrew traditions centred around the hero, Noah (Old Testament) or Nuh (Quran). It is rightfully referred to as ‘the deluge’: an event so chaotic and catastrophic that it was impossible to predict.

Moses wrote Genesis close to two millennia before the birth of Christ. His account of the flood (told in Genesis 6 – 9) is notably brief and abrupt. The narrative also does not contain a single word of dialogue.

By contrast, Abraham and Moses often engaged in dialogue with their Lord when approached by God, and in some instances even made firm objections to his instructions, as a son would in conversation with his father. For instance, when Abraham was being tested for obedience, the conversation went as follows: ‘And it came to pass after these things, that God did tempt Abraham, and said unto him, Abraham: and he said, Behold, here I am’ (New King James Bible, 2004, Genesis 22:1).

On the other hand, Moses needed a great deal of convincing and a few miracles to persuade him to do what God wanted; he quickly assessed the complexity of the task God was asking him to perform and the dangers that lay ahead, and raised objections, as in this example: ‘And Moses said unto the Lord, O my Lord, I am not eloquent, neither heretofore, nor since thou hast spoken unto thy servant: but I am slow of speech, and of a slow tongue. And the Lord said unto him, Who hath made man’s mouth? or who maketh the dumb, or deaf, or the seeing, or the blind? have not I the Lord?’ (New King James Bible, 2004, Exodus 4:10–14). However, this was not the case in Noah’s story.

This noticeable absence of dialogue in the Genesis account of Noah’s Great Flood prompted scholars to search for other versions of the flood story.

Flood myths are deeply ingrained in Mesopotamian culture, where the Tigris and Euphrates rivers often flooded. As Assyriologists and archaeo- logists have uncovered, multiple versions of these flood stories exist, all sharing striking similarities. The Great Flood became a cultural touchstone, with events often described as having occurred before or after the deluge.

George Smith was an English Assyriologist who made a major contri- bution to the field. While working as a banknote engraver for a printing firm, his passion for the Assyrian culture led him to spend his lunch hours at the British Museum reading everything he could find on the subject. When his unusual ability to decipher cuneiform tablets was observed, he was invited to join the British Museum (Wikipedia, 2024).

In 1872, Smith began translating a clay tablet discovered in Nineveh that described a great flood caused by the gods of Babylon to punish humanity. The tablet was encrusted with lime deposits, which a conservator removed after a few days. Once it had been cleaned, Smith found details mirroring the biblical flood story, including information about one person being instructed to build an ark and to save one pair of each species, the ark coming to rest on a mountain and the release of a dove. Overwhelmed by his discovery, Smith famously began undressing in excitement.

The announcement of Smith’s discovery, made in the presence of the Archbishop of Canterbury and British Prime Minister William Gladstone, garnered significant attention due to its potential implications for the Church. The story made headlines, and a British newspaper, the Daily Telegraph, funded Smith’s expedition to find more tablets in Nineveh. In 1873, funded by the newspaper to the tune of £1 000, Smith discovered further tablets relating to the flood story (Wikipedia, 2024). Tragically, he died of dysentery in 1876 at the age of thirty-six while continuing his research in Mesopotamia.

More recent discoveries were made by Irving Finkel, a curator at the British Museum, who spends his time deciphering ancient Mesopotamian clay tablets. Many of these cuneiform tablets record the everyday activities of the Babylonians. However, a significant discovery came with the ‘Ark Tablet’, a clay tablet that revealed striking parallels to the biblical flood story, offering a glimpse into the shared cultural narratives of ancient Mesopotamia.

The discovery of the tablet came about when a young man, Douglas Simmons, brought an ancient clay tablet with him when he visited the British Museum one day in 1985. It had been a gift from Simmons’s father, Leonard, who had collected clay tablets and other souvenirs while serving in the Royal Air Force in the Middle East during the Second World War. Frustratingly, Finkel was not able to convince Simmons to leave the tablet, which seemed to reference a flood, with him. It was not until 2009, twenty- four years later, that Simmons returned with the tablet and agreed to lend it to Finkel.

Finkel was thrilled by the tablet’s content and called it the ‘Ark Tablet’. It is central to Finkel’s book, The Ark Before Noah: Decoding the Story of the Flood (2014). Roughly the size of an iPhone, it dates back to around 1750 BC and contains sixty lines of cuneiform. It begins with a dialogue between the god Ea and the Babylonian man Atrahasis (translated as ‘the exceedingly wise’), the equivalent of Noah (Finkel, 2014: 107):

‘Wall, wall! Reed wall, reed wall! Atrahasis, pay heed to my advice, That you may live forever!

Destroy your house, build a boat; Spurn property and save life!

Draw out the boat that you will make On a circular plan;

Let her length and breadth be equal …’

The tablet includes detailed instructions for building the boat, including the use of materials such as palm fibre rope and bitumen, and tells the story of Atrahasis being instructed to bring aboard pairs of every wild animal. The flood story closely resembles the biblical account, but the ark described is a round coracle with a base area of 3 600 m2 and a diameter of seventy metres, different from the oblong shape typically depicted in the Bible (Holland, 2014).

Finkel notes that references to the flood story appear as early as two millennia before the birth of Christ, long before written records. He identified three main flood stories, each with its own flood hero: the Sumerian Flood Story, the Atrahasis Epic and the Epic of Gilgamesh (Finkel, 2014). These stories share some similarities with the accounts in Genesis and the Quran.

Historical records show that the Hebrews were taken into captivity in Babylon around 600 BC (Soskice, 2014). However, by the time Genesis was written, Babylonian influences – ranging from their astronomical science and cultural practices to flood folklore – had already permeated Jewish culture.

Moses’s Old Testament account succeeded in transforming the story of the Great Flood into a narrative of profound global impact. Recognising its powerful potential, the Hebrews elevated this ancient tale, imbuing it with deep interest and significance that has resonated through the ages.

4

Deciphering ancient languages to reveal the secrets of the past is an extraordinary skill. To delve even deeper into the flood story, I turned to the scientific insights of William Ryan and Walter Pitman, marine geologists from Columbia University. In their 1998 book, Noah’s Flood: The New Scientific Discoveries About the Event that Changed History, they examined the biblical flood story through the lens of geology, offering a fascinating blend of ancient legend and modern science.

Around twenty thousand years ago, the last great glaciers began melting, causing sea levels to rise (Ryan & Pitman, 1998). In around 5600 BC, the retreating glaciers in Europe started redirecting water away from what is now the Black Sea, which was then a freshwater lake. As the Black Sea’s levels dropped hundreds of feet below the Mediterranean, the dry land between them, including the Bosphorus Strait, separated the two bodies of water. As global sea levels continued to rise, the Mediterranean eventually overflowed, breaking through the Bosphorus Strait and flooding into the Black Sea with a force two hundred times greater than the flow of the Niagara Falls. This deluge mixed saltwater with freshwater, transforming the Black Lake into the salty Black Sea. It is likely that the roaring waters caused immense noise and lasted for months, devastating the region.

Ryan and Pitman described what witnessing this flood might have been like (1998: 16):

A group of distant kinsmen, haggard and terrified, came in along the shore. They described how their valley had been inundated. The waters of the Great Salt Sea above were pouring into the lake below, turning their once peaceful valley into a wild torrent. Their villages were swept away. Days later, the rising water invaded the delta and fields. The frightened villagers fled to the hills, making sacrifices to their goddess in hopes of appeasing the gods. Petrified, they retreated from the chaos and told others of the doom they believed was unleashed by the gods.

To support their hypothesis, Ryan and Pitman analysed sediment cores from the Black Sea. They found freshwater molluscs below the sea and saltwater molluscs above it, indicating a dramatic change. Carbon dating showed that mud was deposited between 18 000 and 8 600 years ago. These findings, they believe, provide scientific evidence of the Great Flood mentioned in Genesis.

The flood story was passed down through generations, reaching Mesopo- tamia, where floods from the Tigris and Euphrates rivers were common. It is likely that this familiarity amplified the drama in these stories. The many versions of the flood story, from Genesis and Sura 71 to the tablets deciphered by George Smith and Irving Finkel, reflect this.

5

Noah, a man of great faith, prepared for the deluge by building an ark, thus saving his family and many other species. His story offers us useful lessons on the importance of foresight and preparation when it comes to dealing with catastrophic and unpredictable ‘black swan’ events, such as the Great Flood, the Second World War and the Covid-19 pandemic, which are sometimes also referred to as ‘Noah Effect’ phenomena.

In an attempt to understand this phenomenon, I delved into the pivotal events before and after the Second World War, uncovering how this catastrophic period reshaped the world in profound and unexpected ways. In his study of the origins of the war, historian Alan Bullock (1971) identifies various contributing factors, including Britain and France’s policy of appeasement and their failure to secure an agreement with Russia, Mussolini’s alliance with Hitler, the Nazi–Soviet pact, the naivety of the Polish for believing they could keep Germany and Russia at bay and the isolationism policy of the United States. However, he maintains that the true cause of the war remains Adolf Hitler’s character (especially his anti- Semitic, racist prejudices) and Germany’s aggressive foreign policy.

Between 1933 and 1939, events unfolded rapidly, catching Europe and America off guard, and leading them into a war for which they were unprepared. By 1939, Hitler’s expansionist policies had sparked the Second World War, the most ruinous conflict in human history.

The Second World War caused immense devastation globally, especially in Europe, resulting in millions of casualties. However, it had mixed implications for Los Angeles: when the federal government increased its defence budget, the small town almost five thousand kilometres away from America’s industrialised East was transformed into an industrial powerhouse, producing warships and planes for the Allies (Arthur, 1994). This led to the establishment of steel and aluminium industries such as the Kaiser Steel Plant and the Fontana Mill. The demand for labour opened up opportunities for women, blacks and Hispanics, revolutionising the workforce.

By 1943, Los Angeles had experienced significant growth, fuelled by an influx of new residents who, in turn, encouraged their families and friends to join them. This migration created a ripple effect, steadily increasing the population as more people were drawn to the opportunities and vibrant life the city offered.

There is no better example than Lockheed Aircraft Corporation (now Lockheed Martin), which played a crucial role in the war by producing fighter planes (Lockheed Martin, 2020). In 1938, its plant was based in Burbank, Los Angeles. The company received a large order from Britain’s Royal Air Force, which boosted its reputation. Following the attack on Pearl Harbor in 1941, the Burbank plant was classified as a strategic military site and camouflaged to look like a suburb. This opportunity allowed Lockheed to grow into the world’s largest arms producer (NBC News, 2012).

The financial success of Lockheed is evident in its stock market performance. In 1978, shares traded at $4 each; by 2023, they were trading at $435 (Macrotrends, 2023). An investment of a thousand shares in 1978 was worth $435 000 in 2023, plus dividends.

The Second World War, much like the Great Flood of Noah’s time, unleashed a wave of unpredictable and transformative changes. For Los Angeles, the war catalysed a metamorphosis that was beyond imagination.

San Francisco, today a wealthy industrial hub, was also shaped by the ‘black swan’ event of the Second World War. The city, over six hundred kilometres north of Los Angeles on the West Coast of the United States, grew immensely as a result of the war. More than thirty shipyards consolidated to form the world’s largest shipbuilding complex, crucial to winning the war. Between 1940 and 1945, the San Francisco Bay Area produced 1 400 ships, averaging one per day (National Park Service, 2024). This industrial boom led to a population surge, and the recent tech boom has added even more people, making San Francisco the second most densely populated city in the United States after New York, with 18 451 people per 2.58 square kilometres. This high population density has led to a severe housing crisis.

In the 1950s, local authorities aimed to preserve San Francisco’s character by restricting new housing developments and high-rise buildings. This decision, coupled with the Second World War’s impact, contributed to the city’s current housing affordability issues (Weinberger, 2016). According to Wolf Richter, a publisher of business and finance trends, house prices in San Francisco have increased by 531% (adjusted for inflation) since 1960, whereas household incomes have only risen by 91% over the same period (Richter, 2019).

6

Next I investigated the profound repercussions of Covid-19, discovering that this global crisis vividly exemplifies the Noah Effect in our contemporary world.

In December 2019, health authorities reported an outbreak of pneu- monia of unknown origin in Wuhan, Hubei, China. Shortly afterwards, the genome of a new coronavirus was released and made public to the scientific community (Ciotti et al., 2020). This virus, later named Covid-19, quickly spread worldwide, causing numerous deaths. Despite mandatory face mask policies, the virus continued to infect millions. When individuals died from Covid-19, their bodies were wrapped in special plastic, and funerals were limited to a small number of family members.

Covid-19 had a devastating impact on health systems and economies globally. Governments imposed lockdowns, restricting both domestic and international travel (Yi-Chi et al., 2020). Health systems were overwhelmed and the numbers of deceased people were so high that undertakers struggled to manage. The lockdowns used to restrict the spread of the virus severely damaged economies, leading to business closures, job losses and widespread financial hardship. Governments had to provide financial support to many people who could no longer afford necessities.

The World Health Organization reported that as of December 2023, 772 million people had been infected with Covid-19, and nearly seven million had died, with most deaths occurring by December 2021, before vaccines became widely available (World Health Organization, 2023). Nearly seven million people died in less than three years due to a single virus, despite significant technological and medical advancements.

Like the Second World War, Covid-19 was a ‘black swan’ event – an unforeseen happening with enormous consequences. As the pandemic unfolded, travel ceased, airlines went out of business and supply chains were severely disrupted (Hald & Coslugeanu, 2020). A shortage of computer chips from China affected the availability of electronic equipment as well as automotive production, leading to worldwide inflation (Xiling et al., 2021). Major economies struggled to control this inflation, prompting reserve banks to hike interest rates to levels not seen in decades.

The pandemic starkly revealed the world’s vulnerability to unpredictable events. As the virus spread with alarming speed, governments struggled to implement risk mitigation strategies in time. In 2020, humanity, ill- equipped to mount an effective defence, confronted an invisible and elusive enemy. The profound impact on society underscored just how unprepared and exposed we truly were.

7

Scientific investigations into the flood story, such as those by marine geologists Ryan and Pitman, and the mathematical models of Benoit Mandelbrot, provide modern interpretations of the ancient deluge. These studies explore the historical and hydrological significance of extreme events, known today as Noah Effect phenomena (Walter, 2014; Graves et al., 2017). When researchers try to create a scatter graph for chaotic events such as these, the many outliers make it impossible to fit the data onto a smooth curve, meaning that traditional mathematical methods cannot predict them. This highlights the importance of the Great Flood, which inspired the concept of the Noah Effect – a phenomenon where past chaos continues to influence present random events. These Noah events often lead to what is called the ‘Joseph Effect’, named after the biblical story of Joseph’s seven years of plenty followed by seven years of famine.

The Covid-19 pandemic was a prime example of a Noah Effect event, bringing winners and losers. Pre-pandemic, branded-goods companies and software firms were favoured stocks. During the initial lockdown phase, before the Pfizer vaccine was announced on 8 November 2020, people relied heavily on deliveries and software. Consequently, Amazon shares rose by 79% and Netflix shares by 59%, while the real estate and energy sectors suffered (The Economist, 2022). Office occupancy plummeted, and banks faced defaults and reduced margins due to lower interest rates. This level of disruption is characteristic of a Noah Effect.

Between 2020 and 2022, the tech sector experienced varied performance: Apple shares soared, while Facebook and Meta lost significant value (The Economist, 2022). Nvidia, a microchip designer, saw its stock spike by 166%, while Intel’s stock slumped. As vaccines were rolled out and governments regained control, supply chain disruptions from prolonged lockdowns led to global inflation. Major economies struggled with rising inflation, prompting aggressive interest rate hikes to control it. For example, South Africa’s prime interest rate, which had been lowered to 7% in 2021 to support economic recovery, was hiked to 11.75% by May 2023.

Lightstone Properties reports that the exceptionally low interest rates from mid-2020 to late 2021 allowed new buyers to enter the market but also led to overextension. By comparing the number of buyers in May 2021 to those selling by May 2023, Lightstone calculated an 80% level of distressed sales (Moneyweb, 2023). In the same article, First National Bank reported that 23% of sales driven by financial pressure remained elevated, surpassing the historical average of 18% since the fourth quarter of 2007.

During periods of low interest rates, people qualify for bigger loans and so tend to buy bigger homes, but high interest rates make mortgages unaffordable, leading to rental demand. Those who buy their homes when interest rates are low and do not have a financial buffer face foreclosure when interest rates increase. While this scenario represents a financial disaster for some, it creates opportunities for others to buy distressed properties at lower prices.

It is illustrative to look at the performance of the Cape Town property market following the Covid-19 pandemic. The Cape Town market has shown sustained growth, with house prices rising 141% between 2010 and 2022, the highest increase in South Africa (Statistics South Africa, 2023). The city’s limited supply of land for development keeps both demand and prices high. Recent statistics reveal that the Western Cape (including Cape Town) now leads the country in terms of the number of building plans that have been approved (Pam Golding Properties, 2023). However, estate agents lament the low housing stock compared to the burgeoning demand (Fourie, 2023). While the impact of high interest rates between 2022 and 2024 has been less dramatic in Cape Town than in other major cities, it has nonetheless disrupted the momentum of property prices.

It can be advantageous for investors to buy property at times when interest rates are high, as opportunities for bargains may arise. Investing wisely means acquiring properties at prices below their fundamental value. Although unpredictable, Noah Effect events create such opportunities.

The sustained rise in Cape Town’s property prices prompts a compelling question: are these soaring values grounded in solid economic fundamentals, or are they merely fuelled by market hype? Cape Town’s competitive fundamentals are backed by its inclusion in PWC Africa’s ‘Cities of Opportunity’ report, in which it is benchmarked against major global cities such as London, Berlin, New York, Singapore, Kuala Lumpur, Paris, Toronto, Mumbai, Sao Paulo, Hong Kong, San Fransisco, Los Angeles, Beijing, Moscow and Shanghai. The comparison is based on a set of key performance indicators that include the following criteria: the city’s role as a gateway; its health, safety and security status; sustainability and natural environment; demographics and quality of life; transportation and infrastructure; economic influence and the ease of conducting business. The report highlights Cape Town’s strengths, including its transport system, business-friendly environment and natural beauty. Despite inequality stemming from the country’s past, Cape Town is seen as having strong fundamentals and potential for future growth (Williams, 2017).

In summary, Cape Town’s property market has demonstrated remarkable resilience and growth post-Covid-19, driven by limited land supply and strong demand. As one of South Africa’s top-performing markets, it offers unique investment opportunities, particularly during periods of high interest rates. With competitive fundamentals recognised globally, Cape Town stands out as a vibrant, promising destination for future growth.

8

As we have journeyed through ancient flood stories, scientific discoveries and modern-day catastrophes, it has become clear that the Noah Effect is more than a tale of survival – it is a profound lesson in human resilience and adaptability. From Noah’s ark to the economic ripples of the Second World War and the global upheaval of Covid-19, these events remind us that while we cannot predict the future, we can prepare for it.

The Noah Effect teaches us that amid chaos, there is always an opportunity to rebuild, innovate and thrive. Just as Noah constructed an ark to weather the storm, we too must build our own arks – be it through foresight in investments, adaptability in crises or innovation in the face of uncertainty. The stories of the past and the data of the present both point to a timeless truth: those who are prepared, who anticipate the unpredictable and who remain resilient in the face of adversity will not just survive but emerge stronger.

As we look to the future, let the Noah Effect be a reminder that even in the darkest of times, there is a path forward. It is in our hands to find it, to steer our course and to emerge from the storm with renewed purpose and strength.

CHAPTER 3

SUCCESSFUL INVESTING:

The power of thought

‘Hast thou the soul of a free man or the soul of a slave?’

– George S. Clason

 

1

The terms ‘now’, ‘now-now’ and ‘just now’ typically signify an immediate action in all English dictionaries. Yet their usage in daily speech can significantly alter their meaning, often implying a future action. This notion counters the teachings of our school days, when delaying tasks was discouraged. Procrastination, a common human behaviour, can hinder success if not managed.

This chapter delves into personal tales that reveal insights into human nature and financial acumen, with a focus on the benefits that come with taking speedy action rather than procrastinating. It also warns investors of the dangers of changing their investment strategy in the face of challenging events and crises. Investors who resist the temptation to make panicked decisions when markets are volatile are rewarded for their level-headedness over the long term.

Among these narratives, I sought to highlight a distinctive story, one that stands in contrast to the rest. Julia epitomises this unique perspective. Her first appearance on Talk Radio 702’s Money Show when she was twenty- seven and her subsequent annual discussions about her financial journey every July for the following decade make her story a focal point of this chapter. At the time, I found her input so valuable that whenever I missed an episode, I would seek out the podcast to catch up on her insights. Julia’s journey is the centrepiece of this chapter, offering a rich exploration of individuality and investment behaviour.

2

James Coddington is a businessman based in Auckland, New Zealand. He is the founder of a technology business, Joy Business Academy, whose mission is to disrupt traditional training methods (Nadkarni, 2020). When conventional training methods are used, it takes a long time for young people to acquire the skills needed to be considered for employment. The aim of Coddington’s business is to train people in a fraction of the time it normally takes, and thus to plug the skills shortage in the industry. Technology is the basis of Joy Business Academy. The company provides experiential learning through simulations, virtual reality and game learning.

Coddington, who made his first million dollars in his late twenties, is a believer in the saying ‘You can’t save yourself to riches.’ But this saying is often misconstrued. He clarifies its meaning by explaining that a person must improve their earning potential before they can make meaningful savings. This entails continuous learning and upskilling. You cannot save what you do not have. His life experiences have taught him not to put too much faith in long-held financial myths. Coddington suggests that to get ahead, you need to value your money and invest it wisely. Start by investing in yourself, and when you have some extra funds, place them in a safe investment that you trust will grow. This could be property, blue-chip shares, art or gold.

Despite his successes over the years, Coddington concedes that he has made many poor financial decisions. One that still haunts him is a choice he made in his final year of university – passing up the opportunity to buy an acre of waterfront land on the newly formed Lake Dunstan in Cromwell (Central Otago) for $30,000. Instead, he chose to spend the money on an expensive, but highly enjoyable three-month skiing trip in Whistler, Canada. He prefers not to think about how much that piece of land is worth now (Nadkarni, 2020). However, he was young and probably felt that his future was too distant for him to need to worry about investing in land at the time. He procrastinated, and this decision proved to be a painful mistake.

Coddington’s experience is all too common, yet one might not expect such folly from someone who has been canonised. However, even saints are not immune to the pitfalls of procrastination: the famous Saint Augustine also suffered a bout of procrastination at some point during his early adult life (Andreou & White, 2010). Augustine acknowledged the internal conflict between his soul and body, recognising that they had been adversaries since the beginning of time. In his Confessions, Augustine recounted how, after years of indulging in sexual pleasures without love, he vowed to return to Christianity, praying for chastity and self-restraint, but adding, ‘only not yet’. Despite his deep disdain for his current lifestyle and his sincere desire to change, he kept postponing any real change until ‘tomorrow’ (Poliquin, 2018).

Procrastination is known as the thief of time. Some people procrastinate on occasion, while others do it more persistently. Does it help to know that you are not alone in suffering occasional lapses of procrastination? Or is that knowledge cold comfort?

3

Dietmar Gunther* called me on a Wednesday afternoon. He was guardedly excited. ‘I have been given the keys to a new house that I must sell. I have known the clients, a couple, for almost fifteen years, and I sold them the house myself about eight years ago. It needs work, but you must see it. Panther Street. Great location. You fix it how you normally do, and it will sell fast.’

Dietmar was my real estate agent. Now happily retired, he had decades of experience in real estate and was a specialist in the area. Dietmar was different from most estate agents. He sold properties on behalf of clients and picked up fixer-upper bargains when they became available. His renovation skills were beyond compare. When Dietmar bought a property in need of tender love and care, he would renovate it until it looked new, attending to all details with what I teasingly referred to as his ‘German efficiency’.

*Not his real name.

Dietmar was a German immigrant who had arrived in the country in his late twenties. His English was fluent, but his accent betrayed his German heritage. Nostalgia meant that he drove a German BMW SUV, bought meat from the German butcher close to Bedfordview, dined in German restaurants and served his clients complimentary German sweets on Sunday show days. He had made his fortune in real estate.

When Dietmar called, I always had to put everything down, listen to him and then immediately arrange to view the property on offer. This time he already held the keys, so I made an appointment to view the house after work the same day. The owners had emigrated to Australia and so it was vacant.

The house was in the unassuming tree-lined Johannesburg East suburb of Kensington, established at the beginning of the twentieth century by Max Langermann, who planned the layout of the streets and gave them British names such as King Edward, Nottingham, Derby and Leicester, with all the streets ordered alphabetically.

Katoomba Street was named after a warship that had played a significant role in English history. The British Royal Navy had dispatched a squadron of battleships led by the colonial cruiser HMS Katoomba to protect the coastlines of British colonies Australia and New Zealand, which arrived triumphantly at the port of Sydney in 1891 (Australian National Maritime Museum, 2023). Estate agents of English origin recited this history with an air of nostalgic pride, including such details in their profitable small talk during show days on Sundays, while subtly persuading clients to buy the property in question and settle in the suburb.

The layout of the streets was completed in 1903. The houses have typically English architecture – both Georgian and Victorian styles are common – and are popular with English-speaking folk. Bay windows, Oregon floors and Oregon doors are typical features. In most cases, the condition of the doors is very good; Oregon is durable. Decades ago, the preferred décor style in the suburb meant that most doors were painted with an oil-based paint, which served to preserve the underlying wood perfectly. The wooden floors lay safely under ageing carpets, which protected the wood from water damage and the elements.

Renovators usually sanded the old paint off the Oregon doors, removed the old carpets and sanded down the Oregon floors. Serious renovators hired seasoned wood and floor artisans who would give the Oregon wood the correct treatment, varnishing it to a high-gloss, gleaming finish. Once its facelift was finished, the house would exude an incredible marketing appeal.

Many of the houses were handed down from generation to generation. Built in the jacaranda-lined streets around the ridge of the Langermann kopjes, they were well constructed and remained structurally in great shape. However, most of them were in need of rejuvenation when the property boom of the late 1990s attracted immense interest in the suburb, and so many property owners and renovators embarked on the renewal of their houses.

The basic architectural design of the houses was largely left untouched to retain the heritage feel of the area, but the kitchens and bathrooms were usually upgraded. In addition, bathrooms were added, the houses were repainted according to the latest colour trends, and many other aesthetic changes were made to increase the curb appeal of the properties. Real estate enthusiasts termed the modernisation process the ‘Chelseafication of Kensington’ in a nostalgic reference to the affluent West London suburb of Chelsea. The formal English word for the process is ‘gentrification’.

By the time I met with Dietmar at the property, he was already excited about the prospects for this oldie. He had figured out the best layout and other possibilities for the renovation, and wasted no time advising me on what he thought was the best approach to revamp this character home. I always had my own ideas about how to tackle a renovation, but my approach was inevitably driven by my accounting background; I tended to drop anything that attracted higher costs, or find a less expensive way of doing it.

Dietmar knew the market very well, and so I listened patiently to him as he showed me the house. Once we had completed the tour, he warned, ‘I give you two days to come back to me. You must tell me in two days if you are interested. You are the first person I called to show the house. If you do not take the house, I am going to buy it myself and fix it.’ I was already familiar with this line, which Dietmar frequently used in our dealings.

This was a Wednesday. I went off to do my homework and assess the feasibility of the project. For some reason, I initially doubted Dietmar, silently questioning if he was right about the best way to refurbish the house because I feared it would result in exorbitant costs. Knocking down so many walls to create additional space always costs money; could I expect the selling price to compensate me for these costs? Always wary of overcapitalising, I called in a few of my usual team of artisans – the builder, the electrician and the plumber – to obtain urgent input for my cost estimations. I also checked property platforms for the latest property sales in the area, as I normally do.

This was in 2012, when the housing market was recovering from the slump caused by the 2008 global financial crisis; I had become much more cautious in my dealings and needed to do more calculations to convince myself before making a decision. I had a decent job that I valued, with a reputable employer. Renovating houses was a passionate side hustle that I was determined should never create conflict with my employment. I was doing well enough flipping homes to finance private school fees for my children and later to pay for them to study at overseas universities. However, this hobby – including whatever feasibility study was required for the project – was only to be done in my spare time. That week, my boss had given me an urgent work assignment that demanded many hours to complete. I had to work long hours late into the night. Soon I was out of time.

I dithered. I did not call Dietmar until Monday, missing my ultimatum by two days. I did not even consider calling him to ask for more time: there is a good reason why the Germans have a reputation for efficiency. When I called Dietmar at last, his first reaction was to chuckle mockingly. He had given me preferential treatment by allowing me to view the house before anyone else. I had not called by the agreed date, and so he had exercised his option. He had proceeded with the deal, signing an offer and concluding the purchase of the property for himself. Since the clients knew him and the house was vacant, they were only too happy to allow Dietmar to take immediate occupation and begin the renovations.

Whenever Dietmar was busy with a renovation, I always visited the property to check on his progress and learn a few things; he was a master in this trade. With the fervour of a true craftsman, Dietmar would assess the finished product, his eyes tracing every line and curve. ‘When it comes to quality, it’s the small details that matter,’ he’d declare with gusto, pointing out each subtle nuance that met his exacting standards. So a week later, I was back at the property, keen to see if he was indeed knocking down all those walls as he had advised me to do. And yes, I found out that he was doing exactly that. The home was now a construction site. Dietmar was no time waster; in just one week, several walls inside the house had disappeared, with only the supporting walls remaining, and on this blank canvas, it was possible to see clearly how his renovation plans would transform this old house. There was a new space for an ensuite bathroom and added space for the kitchen, and a lovely flow from the open-plan living areas to the kitchen and the patio.

Two months later, after the house had been renovated and was ready to go back on the market, Dietmar sold the property for more than double what he had paid for it. And it could have been me! I could have been the one making a tidy profit. I could have secured the opportunity without committing outright in case my calculations proved that the project was not worthy of my time. I should have insisted on a ‘conditional’ clause in the offer to purchase. But procrastination had taken over. I had blinked, and on this one, I had lost. Every fool must learn. Fortunately, other opportunities continued to come, and I never gave up.

4

In 2007, twenty-seven-year-old Julia* made her first appearance as a guest on Bruce Whitfield’s radio show, The Money Show, which was broadcast on Cape Talk and Radio 702 every weekday evening for more than twenty years (Primedia Broadcasting, 2024).

Whitfield was introduced to this remarkable young lady by another weekly guest on his show: Warren Ingram, co-founder of financial services firm Galileo Capital, who had been Julia’s financial advisor (Whitfield, 2021). His twenty-minute profile of Julia was so popular that he asked her to return to the show in July every year for the following ten years or so (Whitfield, 2018).

* Not her real name.

It was stories such as Julia’s that drew listeners to The Money Show. The concept of an ordinary person saving enough from their monthly income to attain financial freedom at a young age was both inspiring and eye-opening for those eager to discover what it truly takes to achieve independence. The audio recordings of all the shows were made available online as podcasts, allowing interested listeners to enjoy them at their convenience.

‘Counsel in the heart of man is like deep water; but a man of understanding will draw it out.’ (New King James Bible, 2004, Proverbs 20:5)

Julia had always been an inquisitive person who noticed the fine details, with nothing of importance escaping her attention. Just short of thirty years old, the young management consultant had noticed her aunt’s lifestyle, which she could not help envying.

Her aunt enjoyed the finer things in life: in addition to her stylish clothes and upmarket car, there was an aura of assuredness about her that indicated a level of financial security that contrasted markedly with the financial precariousness experienced by other members of the family.

A road trip from Durban to Johannesburg with her aunt just before the 2008 global financial crisis changed Julia’s life.

Julia’s financial discipline was meticulous, extending even to her choice of vehicle. She drove a used Opel Corsa Lite, a car she had owned for years – a decision that was far from arbitrary. This small hatchback, with its well-proven 1.4-litre fuel-injected petrol engine, was a masterstroke of practicality. Despite its modest size, the engine delivered more torque and horsepower than many sedans with larger 1.6-litre engines (Car Magazine, 2006). The Corsa Lite was designed for urban efficiency, making it an ideal companion for navigating city traffic. It boasted an impressive acceleration, reaching zero to a hundred kilometres per hour in just twelve seconds. But it wasn’t only about speed; the car’s stopping power was equally remarkable, with a stress-driven braking time of 3.2 seconds, ensuring a smooth and safe ride for both driver and passengers.

Where the Corsa Lite truly shone was in its fuel efficiency. Consuming just 6.7 litres per hundred kilometres – equivalent to about fifteen kilometres per litre – it was a wallet-friendly choice that aligned perfectly with Julia’s savvy approach to spending. For someone who valued every dollar, this car offered the perfect blend of performance, efficiency and reliability, proving that even the smallest details, such as vehicle choice, played a crucial role in her path to financial freedom.

In a further attempt to cut travelling costs, Julia lived in a rented apartment close to work. However, she always had the feeling that there had to be a better way to do things if she was to make real progress towards her goal. Nobody could advise her to cut costs because in that department, she was doing better than everyone else.

The road trip from Durban to Johannesburg is six hundred kilometres long. The route runs along one of the finest freeways in South Africa, connecting the economic heart of the country, Gauteng’s Johannesburg, with the popular tourist destination and commercial port of Durban, the capital city of KwaZulu-Natal. I have always had good driving experiences on that N3 freeway, which make for easy conversation in the car. I engage cruise mode, take my foot off the pedal and enjoy the journey while my automobile purrs quietly along. To spice it up, there are several fine stops along the N3 that are ideal for a break, to refuel or have a quick meal.

Julia wanted to ask her aunt a simple question: how did she afford nice clothes, a great car and dream holidays? The trip from Durban to Johannesburg provided a good opportunity for a productive discussion between aunt and niece, and Julia did not waste this chance.

Her aunt’s answer was equally simple: investing made everything possible for her. But Julia’s aunt had a question of her own: what was Julia’s goal for her life?

Julia wanted to be financially independent by the age of forty. Earning an annual salary of R350 000 – at the time (2007) quite a decent salary for her age – Julia had saved R60 000. During that drive, her aunt offered to introduce her niece to her financial advisor. Julia wasted no time and did not procrastinate. She had a goal that she intended to achieve.

She met with her new financial advisor and agreed to follow a plan. Her monthly income was to be divided into thirds. The first third would go towards income tax. (There is nothing certain in the life of human beings except for death and taxes; we are certain to die, and we will always be obliged to pay the taxman, whether we are alive or dead.) The second third would go into investments, and the last third would cover her living expenses. Each third was equally important. This was the basis of the plan. In over a decade of working, Julia’s income grew five times. However, she was not satisfied with her earnings as a young professional. Management consultancy involves the imparting of intellectual knowledge to clients. Consultancy firms traditionally run training workshops to keep staff abreast of the latest knowledge and competitive with rival firms. This was the environment in which Julia worked. She made it her business to keep honing her skills, displaying an eagerness to learn and do better. In time, she was rewarded with strong career growth. Every promotion was accompanied by a salary increase; in a single decade, her salary grew until it was five times greater than it had been. In addition to the investment advice from her aunt and her new financial advisor, Julia had conceived of another significant pillar of success: growing her earning potential by improving her skills and so achieving higher remuneration.

Julia’s model for investment reflected her character. She invested in a range of low-cost index-tracking funds every month without fail, regardless of how the markets were performing. She kept to her plan. By 2017, her portfolio was sitting at an admirable R4.7 million. When Whitfield hosted Julia again in 2021, her investments had been diversified in different index and exchange-traded funds (ETFs), and their value had grown to R6 million. During those years, she fell in love, got married and started a family, and so had been faced with all the normal challenges that confront young people in this position, including additional expenses. But with the exception of one withdrawal of R141 000 to pay for renovations to the family home so that it accommodated her growing family and the purchase of a more suitable car, she did not succumb to the temptation to dip into her accumulated investment kitty. That was the only withdrawal she made. When the investment markets were not performing well, and inflation and interest rates were high, Julia aggressively increased her monthly mortgage bond repayment, and the loan balance was on its way towards zero.

From her debut on The Money Show, Julia quickly captivated audiences, earning admiration for her unwavering financial discipline and laser- focused determination. Not content with simply increasing her income, she adhered relentlessly to her savings plan, a commitment that soon earned her the fitting moniker of ‘Supersaver Julia’.

The impact of compounding on Supersaver Julia’s investment journey is clear. She was twenty-seven when she started. She did not procrastinate. She started at an early age, and the power of compounding gave sustained momentum to her financial discipline and persistence. Assuming that the markets will deliver an average return of 10% every year, financial calculations indicate that without another cent being added to her capital, her funds should accumulate to R15 million by the time she turns fifty and to R39 million by the age of sixty. However, we know that curveballs happen and roadblocks are occasionally encountered along the road of life (for instance, Covid-19 caused turmoil in markets as recently as 2020). Joseph and Noah Effects can detract from or help with the accumulation of savings (see Chapter 1, ‘The Joseph Effect’, and Chapter 2, ‘The Noah Effect’ for a detailed explanation of these two phenomena). Life happens and there is no forecasting what individuals will encounter in their lives. The most important thing to learn from Julia is that it’s possible to accumulate capital when the right plan is crafted. It must be added, however, that strong financial discipline is essential, and that people who want to accumulate wealth must resist procrastinating and start early.

5

Between 2007, when Julia embarked on her ambitious savings marathon, and 2020, the world endured two seismic shocks: the 2008 global financial crisis, triggered by sub-prime mortgages, and the unprecedented Covid-19 pandemic. As the world reeled from these upheavals, investors everywhere fretted over the potential impact on their portfolios. While the pursuit of financial freedom is a common aspiration – a longing for respite from the relentless grind of daily life – Julia’s goal was far more specific: achieving financial independence by the age of forty. Given the tumultuous landscape, it is not far-fetched to imagine that Julia harboured anxieties about the stability of her hard-earned progress. So, how did she navigate the choppy waters of these crises and stay on course towards her goal?

‘Though the waters thereof roar and be troubled, though the mountains shake with the swelling thereof. Selah.’ (New King James Bible, 2004, Psalms 46:3)

The sub-prime mortgage crisis was caused by the reckless lending of banks to individuals with weak credit ratings and the fact that regulatory authorities in the United States allowed the practice to persist uncontrolled. This phenomenon continued over many years, especially in the decade leading up to the 2000s, when securitisation and trading of mortgage loans led to the creation of a financial product (the mortgage-backed security) that was traded by financial services companies. A rapid, unsustainable increase in house prices followed, causing a property price bubble.

Between 2004 and 2006, the US Federal Reserve Bank increased interest rates from 1.25% to 5.25%, a development that tipped the financial markets over the edge (Duignan, 2023). It was a disaster that had been a long time in the making. The bubble was destined to burst; when this happened in 2007, it caused a crisis of enormous proportions and a lending freeze by banks. House prices collapsed below the value of loans secured against the properties. Since the sub-prime loans had become securitised, the mortgage-backed securities traded in global markets caused the rest of the world to be engulfed by the crisis; as the saying goes, ‘When America coughs, the world catches a cold.’ The crisis hurt those who had become dependent on debt to acquire property: interest rates rose, and the poor and middle class were crushed by debt, leading to widespread foreclosures and dispossession. Recession followed, and millions lost their jobs. The financial crisis that followed was catastrophic.

The other shock to the economy was caused by a virus. The Covid-19 pandemic, which started in China, saw hundreds of millions of people being infected by the virus at a speed no one could have imagined or predicted. Millions of people perished across the world. The ensuing global lockdown caused havoc to global economies as economic activities around the world came to a standstill. Many businesses collapsed and never recovered after the pandemic, leading to job losses and immense suffering. In South Africa, businesses and retrenched staff applied for Covid-19 relief from the state.

The fall from grace of what was once a blue-chip JSE-listed company on the eve of the Covid-19 lockdown in 2020 was a sign of things to come (Mahlangu, 2020). Edcon, the ninety-one-year-old retailer that owned Jet and Edgars, had already been struggling under debt for years before the pandemic. The company did not have sufficient cash to survive the unforeseen lockdown announced by the President of South Africa on Sunday 15 March 2020 and implemented with immediate effect.

Edcon had spent several years grappling with financial challenges, striving to stay afloat (Smith, 2020). In 2019, the business, perceived as too big to fail, had received a R2.7-billion lifeline bailout from the Public Investment Corporation. The lockdown was the last straw. On the Thursday after the lockdown took effect, Edcon CEO Grant Pattison called a conference to address creditors who supplied the retail business (Hogg & Wessels, 2020). Choking with emotion, Pattison broke down and cried. Edcon could cover its salary bill, but there was insufficient cash to pay creditors.

I listened to the audio clip of Pattison’s announcement on talk radio. It was extremely depressing. Fortunately, the clip did not receive much more airplay. There was no sense in causing further anguish to audiences tuning in to the radio, desperate for positive news. By June 2020, 22 000 Edcon employees had been served with retrenchment notices.

Stock markets across the world tanked during both of these global shocks, causing despair and panic among investors and retirement funds. As a retirement fund trustee of what has now grown into a R5-billion stand- alone fund, I remember their devastating effects only too well. I was an employer representative trustee on a board of eight trustees (four employees elected and four appointed by the employer). The board of trustees had to report back annually to fund members during those years of dreadful returns with a minus in front of the percentages.

As a board, we met several times before the annual general meeting (AGM) in 2009 to put together a suitable communication strategy for members. It was important to prevent panic among members and to encourage them to remain focused on the long term. We needed to implore members to avoid distractions caused by temporary shocks.

This was easier said than done. The questions from members attending the mid-2009 AGM in the aftermath of the 2008 financial turbulence revealed investors’ concern and anxiety, especially in the case of those close to retirement age. The 2008 crisis brought the Johannesburg Stock Exchange All Share Index (JSE ALSI) to almost 50% of its high (it fell from 33 191 in May 2008 to 17 814 in November 2008, a period of six months [MarketWatch, 2008–]), and it took three years for the index to find its way back to levels prior to the financial crisis.

It was a difficult time for investors and a nervous time for the trustees sitting in front of fund members congregated in an auditorium for the fund AGM. On this occasion, attendance was understandably much better than in previous years. Members wanted to learn about the implications of the economic mayhem on the fund performance. Trustees, the principal officer of the retirement fund and investment consultants huddled next to each other in the front row, as if seeking safety in numbers as they waited for questions from the floor.

One such challenging question from the floor was the following: ‘May I urgently transfer my share of the fund to the capital protection portfolio, even though this request falls outside the almanac dates reserved for changes?’ Now, this course of action would result in transferring the member’s share of the fund at its lowest values and locking in the loss, while simultaneously parking the funds in a cash portfolio – resulting in lowered risk, but also yielding returns too low to beat inflation.

Fortunately, the board of trustees had prepared the principal officer well to handle challenging questions such as this one. He adhered to the principles of the AGM communication strategy as agreed upon by the board of trustees, responding in simple terms:

Imagine your pension fund as a carefully tended garden. Over the years, we’ve planted a diverse array of seeds – stocks, bonds and other investments – each chosen for its potential to grow and yield fruit. In a stable environment, this garden flourishes, providing us with a steady, predictable harvest.

However, just as a garden can face sudden storms and harsh conditions, so too can the market experience periods of volatility and downturns. Think of the recent crash as a severe storm that has swept through our garden. During such times, it might seem like the plants are wilting and the garden is struggling. But remember, these are temporary conditions, not the end of the story.

Our strategy is akin to the careful tending and pruning we do after a storm. We assess the damage, make adjustments, and focus on nurturing the resilient plants that can weather the storm and thrive in the long run. We have chosen a diverse range of investments precisely because it helps us withstand and recover from such market turbulence.

Just as experienced gardeners know that storms are part of the cycle and trust in the eventual recovery, so too do we remain confident in our long- term strategy. The fundamentals of our investments remain strong, and we continue to manage the fund with the same care and prudence that has guided us through past challenges.

In essence, while we acknowledge the current volatility and the recent downturn, our focus remains on the long-term growth and stability of your investments. The storm will pass, and our well-tended garden will continue to yield rewards over time.

The effectiveness of a message often hinges on the messenger delivering it. Our principal officer, impeccably dressed yet conservative enough to blend in, exemplified this truth. He spoke with a measured cadence, deliberately slowing down at key points, as if to ensure no one was left behind. As he paced across the podium, his eyes swept the audience, locking onto those engaged in the proceedings. The board could not have chosen a better person for the task. His presence, supported by the full board of trustees seated in the front row, seemed to instil a quiet confidence among the members, their expressions conveying what they were feeling: ‘We can trust these people with our money.’

6

Displaying nerves of steel, Julia was also not tempted to make rush decisions during the turbulence caused by the 2008 global financial crisis and the Covid-19 pandemic. She allowed the power of dollar-cost averaging to intervene, and kept her capital invested. (Dollar-cost averaging is an approach in which the investor regularly invests additional amounts without attempting to time the markets [in other words, not waiting for a time when markets are speculated to be favourable].) Stock markets fluctuate over time; market movements are often volatile. When stock prices are low, the same rand amount will purchase a larger number of additional mutual units in the index funds, creating a good opportunity that offsets the effect of buying when prices are elevated.

The table that follows illustrates how this strategy works and its benefits. The example assumes that an investor, Jacobie, puts away a fixed amount every quarter, investing into an ETF, a mutual in which she will be allocated units, or what is called a share of the fund. She invests R10 000 per quarter, which accumulates to R40 000 over the four quarters.

Table 1 Illustration of dollar-cost averaging

	Jacobie: Dollar-cost averaging				Rudolph: Lump-sum investing
Period	Market price	Amount invested	Units bought	Total units owned	Amount invested	Units bought	Total units owned
Quarter 1	20.00	R10 000	500	500	R40 000	2 000	2 000
Quarter 2	12.50	R10 000	800	1 300
Quarter 3	20.00	R10 000	500	1 800
Quarter 4	25.00	R10 000	400	2 200
TOTAL		R40 000	2 200	2 200	R40 000	2 000	2 000
Value of investment by Q4		R55 000 (2 200 × 25)			R50 000 (2 000 × 25)
Capital gain		R15 000			R10 000

As a comparison, it is assumed that another investor, Rudolph, invests a lump sum of R40 000 at the beginning of the period. The total amount of capital invested (that is, R40 000) is the same in both cases, but Jacobie has bought 2 200 units, while Rudolph bought 2 000 units. Jacobie is in a better position by the end of the fourth quarter, with 200 more units owned than Rudolph, translating to R5 000 more in value invested. Dollar-cost averaging benefits from the price movements and market volatility during the period.

Taking advantage of dollar-cost averaging, Julia stayed invested and persistently added a third of her monthly salary to her investments.

Supersaver Julia was selfless in sharing her experiences of growing her savings from almost nothing to R4.7 million over more than ten years and compounding to R6 million by 2021. Every one of those years, Julia shared what she had learnt on Bruce Whitfield’s radio show.

Julia opted to seek the knowledge of those who knew more about money than her. We must seek expert knowledge about bricks from a bricklayer; that is the correct approach. But not all advice is good; some advisors are driven by sales incentives and commissions, while others are armchair or dinner-table experts. For this reason, Julia should receive full credit for maintaining control over her investment approach.

Julia used debt to buy her family home. However, she respected debt enough to know that as much as it is an enabler, it must be paid off as quickly as is practically possible to reduce the amount of interest paid to the bank over the term of the loan. In many instances, the return from investments is less than that from savings achieved by paying off interest on debt. Julia owns her car outright, with no debt. Debt is useful for possessions that appreciate. It is preferable to own a home and avoid the payment of rentals to a landlord, as these payments do not result in any ownership of property.

It was a privilege to hear Julia’s insights during her annual appearances on the show. Her zest for life and vibrant energy came across strongly, although listeners might have been forgiven for thinking at first that she was a frugal person uninterested in the finer things in life. However, she endeared herself to listeners by sharing that she ate out regularly and loved travelling (she went on at least one international holiday every year). All that was built into her financial plan – the third of her monthly income earmarked for expenses. She was human after all, a young woman driven by an unwavering ambition to live life on her own terms, embracing the freedom she so deeply craved.

7

Much of this chapter has reflected on Julia’s discipline and single- mindedness. Another thing that remained constant throughout her radio appearances was her strong preference for index funds and ETFs, both of which have grown in popularity over the years, particularly in the early 2000s.

Mutual funds, also called ‘unit trusts’, are pooled investments to which individual investors contribute. Individuals own a portion of the pool, also referred to as ‘units’. The pool is invested in shares, bonds, money markets and the like. Investors receive a return on investments based on the performance of the mutual fund, less fees, of course.

There are two categories within mutual funds: actively managed funds and index funds.

• The goal of actively managed funds is to outperform the stock market They require intense decision-making by portfolio managers because investing in them involves constant stock-picking, selling and buying. The fees charged by active managers are quite high, as they must recover the costs associated with the active investment style.
• Index funds involve investments in portfolios that mirror a specific share index or a portion of a share index (for example, the JSE Top 40). Index funds are passively managed and aim to match the performance (investment returns) of the chosen stock market index. The fees for investments in index funds are much lower than those for active funds due to the different investment style.

Julia is not alone in her faith in index funds; many other people share similar views. Magda Wierzycka, the outspoken CEO of Sygnia Asset Management, believes that index-tracking funds are more cost-effective and perform better than actively managed funds. She notes that while individual active managers might sometimes outperform market indices, they rarely do so consistently, especially when their higher fees are taken into consideration.

Two key issues come to the forefront: investment returns and the costs associated with investing. Investors use the total expense ratio to compare the cost efficiency of different funds. This is calculated by dividing the cost of running a fund by the value of assets managed by the fund.

In 2015, Wierzycka published a review of expense ratios in which she analysed a sample of eight funds (Allan Gray, Investec IMS, Momentum, Glacier [Sanlam], Fairbairn Capital, ABSA AIMS, Sygnia and 10X) (Wierzycka, 2015). Of the eight, only 10X and Sygnia were passively managed; the rest were active funds. The two passive funds had the lowest expense ratio (10X at 1.03% and Sygnia at 0.45%), while the actively managed funds were tied at 1.79%. In the sample, the range was therefore 0.45% to 1.79%.

Passive funds are considerably more cost-efficient than actively managed funds, as proven by Wierzycka. There are good reasons for this. Investing with the aim of delivering returns that beat the market is a costly exercise (Ellis, 2012). In addition, beating the market is the exception rather than the norm, especially when we consider the riskiness of that approach. Here is the irony, however: people are quite cost-conscious when buying consumer products. For example, there is one thing that most people do when they dine out. On receiving the bill, presented in a leather-bound waiter’s billfold, together with complimentary peppermints, they begin the traditional audit of the bill. Some pull out a pen and spectacles and start ticking off each line, occasionally calling the waiter over to complain about an unfamiliar charge on the bill. Most often, there is nothing to raise an issue about, and they settle the bill with an air of satisfaction, having completed what they view as an important task.

The consensus is that one should always check in case the restaurant has made an error. The real aim of this scrutiny is to pay the correct cost of what has been consumed. I cannot argue with this principle; it is good to think like that. But a person who wishes to make more significant savings has two more effective options: the first is to stay home and cook up a storm, and the second is to dine out, but to select a restaurant that offers good food at reasonable prices.

Another common practice is shopping around and comparing prices online. Consumers are quick to brag about having found a bargain in a promotion, especially one that has escaped the attention of their colleagues. However, this cost-saving mindset is usually thrown out of the window when people are choosing where to invest their hard-earned money. This behaviour is an example of what is known as ‘loss-aversion bias’: the placing of a higher weighting (bordering on revulsion) on losses and a lower weighting on potential gains.

Most are familiar with the compounding effect when it is applied to investing and growing the nest egg. However, the destructive effect of compounding costs is seldom discussed. There is what appears to be a subtle tendency to encourage investors to ‘focus on performance and only performance’ on the assumption that higher investment returns more than offset investment fees paid (Crane, 2006).

Most investors see investment fees as inconsequential when selecting asset managers. The commonly held view is that the superior returns of active management offset its higher costs. This assumption is incorrect. This relegation of investment costs as a minor matter has been peddled successfully over the years by those providing financial advice (Crane, 2006; Haslem, 2004). Consequently, the mutual fund industry tends to avoid competing based on price. Frustratingly, asset management firms receive payment for their fees first, before anything is paid out to investors, even when a fund’s performance is weak or negative. That is the contract. At that point, it is too late to complain about the costs. Wise investors avoid such a state of affairs by comparing the total expense ratios of various fund managers before committing to an investment.

Economics Nobel prize-winner William F. Sharpe wrote an article titled ‘The Arithmetic of Investment Expenses’ for the Financial Analysts Journal. Using simple language, he explained the concept of the terminal wealth ratio. This ratio measures the impact of investment expenses on invested capital over a specific period. Sharpe noted that the higher the real rate of return on the underlying assets, the higher the terminal wealth ratio will be. This is because higher returns increase the final value of the earlier contributions more than the later ones (Sharpe, 2013). The calculation was based on two funds: one with a total expense ratio of 0.06% and the other with one of 1.12%.

The wide expense ratio spread used in Sharpe’s calculation compares with the one that Wiercycka published in 2015 for her sample of eight asset managers (0.45% to 1.79%), which displayed a significant disparity between active and passive funds. Sharpe did his arithmetic and calculated the terminal wealth ratios. The probability of a low-cost fund delivering a higher terminal wealth in thirty years’ time is much greater than for active funds, even when the gross returns are the same. Sharpe determined that a frugal investor who opts for low-cost passive funds stands an even chance – about 50/50 – of having over 20% more money available for retirement compared to someone who invests in active funds. While a long- term investor might find a high-cost asset manager who can outperform benchmarks enough to cover their fees, the truth is that active management fees are extremely high compared to readily available passive options. The maths vindicates Julia in her decision to stick with index funds. The simplest things are often more effective than more complex strategies, even though most people believe otherwise.

Julia’s story displays the opposite of procrastination, the human trait that afflicts most of us. Many people can give an account of how procrastination caused problems in their lives. Charlie Munger is not one of them.

In early November 2023, a journalist from the Wall Street Journal sat down with ninety-nine-year-old Munger, Warren Buffet’s business partner for almost five decades, for what we now know was to be one of his last interviews. Financial journalists seized every opportunity to tap into the insights of one of the sharpest investment minds of all time.

When asked how ordinary people should invest, Munger responded that most people should probably just invest in index funds. Passive funds are a sensible option for those who do not want to spend much time thinking about investments and do not have any special skills in picking stocks (Fox, 2023).

Even at his advanced age, Munger could vividly recall his childhood, conjuring up images of intimate moments shared with his grandfather, during which the older man imparted invaluable lessons that Munger eagerly absorbed. Although this wisdom was learnt during a life of endless hardship, Munger’s grandfather often reflected that with hindsight, the challenges he had faced were actually manageable. In the moment, however, they had been incredibly tough.

One of the lessons Munger remembers learning from his grandfather is this: procrastination is the enemy; it prevents people from seizing life’s rare opportunities. He further observed that a deep-seated fear of using debt often intensifies prevarication and procrastination, adding that leverage is key in the appropriate circumstances.

Munger’s advice to readers of the Wall Street Journal was crystal clear: when life offers you a genuine opportunity – one that does not come around often – you must act decisively. He likened it to being invited to the pie counter only a few times in life. When that moment arrives, it is foolish to settle for a small slice. The challenge, of course, is knowing when the time is truly right, which is not easy. However, the worst outcome is letting fear or hesitation cause you to miss out altogether. Even legendary figures such as Warren Buffett have only had a handful of these moments, and their success hinged on recognising them and taking a bold step forward. Remove just ten of those pivotal moments from Buffett’s journey, and his record would be unremarkable.

The lesson here is clear: when life offers you a chance, don’t just nibble; take a hearty bite, for the extra risk is often minimal compared to the potential gain (CNBC News releases, 2023).

8

Shades of later: Now … now-now … just now …

Language is not only a medium for communicating between humans; it also reflects the culture of a people. In the South African lexicon, citizens use linguistic quirks such as ‘now’, ‘now-now’ or ‘just now’ when talking about when they will do something. Foreigners and tourists visiting South Africa or dealing with South Africans for the first time often find the use of these words both amusing and confusing. The phrase ‘just now’ is expected to intimate urgency, intent and instant action; that is the universal meaning of these words. But in the South African context, the linguistic quirks turn out to mean ‘varying shades of later’, or even ‘gimme a break, I have much more important stuff to do’.

Putting off those things you can do today and promising yourself that you will attend to them at a later date is a bad habit. It is one of the main reasons why so many people across the globe reach old age without having accumulated the money they need to live comfortably, even after many years of working. The extent of the problem differs between countries, but the difference is only in the scale. According to the National Treasury of South Africa (2014), only ‘… 6% of South Africans are able to maintain their lifestyle and replace their income fully at retirement’. A large share of the responsibility for this uncomfortable statistic may be attributed to the scourge of procrastination, which bedevils humans.

Julia’s investment journey reveals several psychological factors that are crucial in the realm of investing:

• Procrastination awareness: Successful investors are often those who recognise and combat By creating a plan and adhering to it, they take proactive steps towards their financial goals.
• Autonomy in decision-making: Even when seeking expert advice, it is key to maintain control over investment decisions. This autonomy allows investors to stay aligned with their personal risk tolerance and financial objectives.
• Cost-consciousness: Being mindful of investment costs and their impact on net returns and capital growth is a sign of a savvy investor who understands the long-term implications of fees.
• Long-term perspective: Investors who are able to maintain a long-term view, like Julia, are better equipped to weather market volatility and avoid reactive decisions based on short-term market movements.
• Emotional stability: Keeping calm during a financial crisis is a testament to an investor’s emotional This resilience is essential; without it, investors will not be able to adhere to their investment strategies during turbulent times.
• Consistent investment strategy: Persistent investment, especially utilis- ing strategies such as dollar-cost averaging, helps in smoothing out the risks of market timing and can lead to more stable returns over time.

In essence, the psychology of investing involves a blend of self-awareness, strategic planning, emotional control and consistent execution. Julia’s example shows us that success in investing is not just about knowledge and timing but also about psychological readiness and behavioural discipline.

This chapter has featured the experiences of a few people who went on to be successful beyond measure, but who always remained wary of procrastination.

Just before she turned thirty, Julia fought this human failing by putting together a plan that she stuck to. She sought financial advice from experts, but she also kept control over her investment decisions, navigating two global financial crises along the way. Julia is fussy about the negative effects of investment costs on net returns and capital growth, maintains a long- term view of investing and keeps calm during financial crises. She invests persistently to take advantage of dollar-cost averaging.

It must be possible to avoid the prospect of being excluded from that 6% statistic of retired people who are able to support themselves financially. Julia is proof of this.

Daniel Gozo is a Chartered Management Accountant (CMA) and Chartered Global Management Accountant (CGMA) with advanced degrees in commerce and business sciences. With over 35 years of experience as a seasoned finance executive, he has held leadership roles across diverse industries and served as a financial director at a leading South African university. His 20 years as a board trustee of a major retirement fund further underscore his expertise in financial strategy and governance.

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