How do you make financial decisions?

[Jascha]

Financial planning and financial decision making skills have such a big impact on everyday life! So how do you make financial decisions, from the very small ones on daily basis, to very large ones?

Me and a team of researchers at Columbia University in New York are working on studying financial decision making across 70 countries worldwide. As South Africa is one of the countries we are working with, we would be very grateful to hear from you about your financial decision making. We have a quick 5 minute survey prepared and it would be great if you could help us by filling it out:
https://cumc.co1.qualtrics.com/jfe/f...OVlvslB9vKCUvk

Let me know if you have any questions about the study!

Thanks so much for your help!

[Dave A]

An interesting survey.
It would be interesting to see the results. Any chance of that?

[ians]

I started the survey ... however stopped after the 5th question.

I am self employed ... I would take the R3k or R30k right now ... invest it in my business ... the beuty about being self employed is you determine the growth.

I must be the worse self employed person when it come to financial decisions ... I dont follow any of the rules of business ... yet 30 years later I am still sitting here in my office.

The part which confuses me ... all the expert advice out there ... you must draw up a business plan ... you must this and you must that ... yet the fail rate is 75 % in the first 5 years and less than 2 % are still operating after 10 years ... throw in a bit of BBEEE ... covid ... looting ... hectic crime rate ... hijackings ... house invasions and all the other joys of living in SA ... yet 30 years later I cannot keep up with the work flow.

The bank manager at Nedbank told me that I wouldnt last 5 years ... yet within 5 years I already had million rand contracts and was growing faster than any other company ... and something else to point out ... I hear and read comments about how you should specialise in a product or service ... maybe that is half the problem ... maybe you should open your mind get out the little box you live in ... take off the blinkers and experience life ... who cares if you fail 1 twice or 10 times ... I would rather have an interesting story to tell than some boring same ol same ol story as everyone else.

[Dave A]

I started the survey ... however stopped after the 5th question.

I am self employed ... I would take the R3k or R30k right now ... invest it in my business ... the beuty about being self employed is you determine the growth.

So if you get an extra R3k cash into your business today, you will turn it into an extra R30k cash in a year's time that would not have been made anyway if you had not put in that extra R3k?

[ians]

So if you get an extra R3k cash into your business today, you will turn it into an extra R30k cash in a year's time that would not have been made anyway if you had not put in that extra R3k?

It all talk ... like the insurance company that I invested in at 16 years old ... everyone said buy insurance ... buy life policies ... yeah right ... all it took was one crooked salesman to take a multimillion rand policy shuffle a few things around ... add a bit of life cover ... a motor vehicle accident a few years later and man did all that money disappear faster that I could say Jack Frost.

Come on Dave you of all people should know there is no such thing as a free ride.

By the way if I put R3000 fuel into my vehicle I make a lot more than R30k profit in a month

[Blurock]

Investing in a business or product that generates a residual income is ideal.
After many years of R&D, trial and error and being done in by unscrupulous shareholders, I now have a product that does just that.
A small amount generated every month adds up as the business expands.
However, there is no free lunch. You still have to work at it to see that systems work 100% and that customers are satisfied.
They are the ones attracting more customers for me.

As a conservative investor, I would previously have patiently waited for the interest to add up to the higher amount at the end of the period.
I have since realised that my pension would never be sufficient to live on, so I invested my pension in a business and today I am reaping the benefits.
I will continue working until I'm 100 but I am enjoying it and I discover and experience new things every day.

The alternative would be to sit on a stoep of and old age home and worry about the bank's interest rates.
I just cannot imagine myself in that situation.

[Jascha]

Hi Dave,

thanks so much for your reply and interest in the study! Yes, I will be happy to post results here and answer any questions that the community might possibly have about the implications of results for their own financial planning. Obviously with 70 countries involved, this is a very large project which will take a bit to fully complete. We hope to conclude data collection and analysis by the end of summer and then it will go out journals for publication. If everything goes as planned, we should be able to officially report results by the end of the year. I will put a note down that folks in this forum would be interested to hear about it once it is out!

[Jascha]

We hope to conclude data collection and analysis by the end of summer and then it will go out journals for publication.

With summer I meant the UK summer by the way, so end of August / September - though given the weather we get here one can easily forget it is summer!

[ians]

By the way I have experienced some of the most difficult challenges in life and still keeping my head above water.

One thing I have noted with people experiencing difficulty in life ... they dont know when to step down ... which results in total crash or dangling from a piece of rope.

[adrianh]

Done.