Financial planning in the Townships

by Tony Copple

This article is based on a talk that Tony shared online with a GIG Zoom meeting, on 26 July 2020

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1. There’s a problem in Personal Financial Planning industry worldwide.  Advisors are well compensated for working with the already rich, while the ones who really need help are the poor.  The reason for this is to maximize the income of advisors and the profits of their organizations. But shouldn’t an ethical business be more concerned with providing service to customers than compensating their employees?  Sometimes the cost of an hour’s consultancy with a fee-for-service advisor is prohibitive for the poor.  This problem helps the rich get richer and the poor stay poor.  
 
2. In South Africa there is a majority of extremely poor citizens without money or skills.   In an effort to relieve poverty the government provided free housing in townships and grants for those with no work.  While this stopped starvation, it also reduced the need for the poor to solve the problem themselves with small businesses, as is the case in India for example, and today we see able bodied people standing around on street corners rather than looking for jobs or starting businesses.  Without work experience it is very hard to keep a job. The exception to this were the criminal elements, natural business leaders.  Inevitably gangs were formed to exploit the defenseless with drugs, targeting children with free drugs and leading them into gangs, and sooner or later into prison.  
 
3. What could make a difference to this situation is financial literacy, which is not taught in schools or even universities. You can learn from books, or from financial advisors, or even some government programs.  I was an advisor for 25 years and as a Christian I attempted to help people in debt and other troubles as well as advising the middle class and the  rich. Coming to SA in 2017 as a missionary to children and prison inmates, I also hoped to offer financial planning advice to the poor.  We often gave small amounts of money to children, but when the parents started asking for larger amounts, I would say ‘no’ unless they would take a 1-hour course in simple budgeting and saving.  But no-one was interested. Until I met David.
 
4. David has a whole chapter written about him in Erena van de Venter’s wonderful book ‘From the Guttermost to the Uttermost.’  It describes his life as a gangster, until he did some YWAM courses and has been a strong Christian since those days.  Though he never again had money after leaving the gangster life, he has never used illegal methods for earning a living.  One day he asked me to lend him some money, as he had before, and my condition was that he would let me have a financial planning session with him and his wife. 
 
5.  Not only did they enthusiastically welcome this session, they even let me record it for our Internet radio station, CWCP.  It went out on 21 February 2019, and I strongly recommend listening to it in full.   Here is a 10 minute segment which illustrates key aspects. 
 
6.  Tony plays the audio clip.  This story is an edited version of the #50 Worcester Report (which is on the CWCP page). Here is the link to the CWCP page: 

Click to hear CWCP Podcasts!

Click here for the Zoom presentation: 

7.  There are some basic financial skills mentioned in this interview.  First that when expenses exceed income, that leads to misery.  Second, that there are always potential solutions that will help to some extent if you can just find them. Third that advice is necessary because financial tactics are not common sense. Forth that the first discipline to curb expenses is to record all of them.  And that’s just in 10 minutes.  There are so many other things that our brothers and sisters in the townships should somehow be taught, but no-one is taking the trouble. For example: understand that money is not just for spending, avoid payday loans, start saving a percentage of any income received when you receive it, don’t just look for a job and be at the mercy of an employer, instead become a business owner, don’t start a payment plan that you won’t be able to keep, and remember that those who don’t work don’t eat.    The fact that poor people don’t attempt to learn financial planning merely shows they are the same as others all over the world, who haven’t been approached by a financial planner. But once their eyes are opened, they could be ready to attend a micro-business course and start saving.  Our YWAM here in Worcester runs such courses, and many other personal development courses, and not just faith-related – though as we know, all you need to run a business is in Deuteronomy!  
 
8.  One thing that attracted me to GIG is the free membership route, offering financial literacy.  When free satellite wifi arrives, smartphone users will have access to it.  There are plenty of smartphones in the townships, many being stolen goods,  but Mobicel has one at R399 – the Glo, which is excellent.  But users can’t afford data and air time and there are no wifi hubs.
 
9.  In my experience, there are a few individuals in the population, some as young as 14, who have been born blessed with an entrepreneurial spirit.  Trevor Noah is an example. This is not a product of school education.  If one can seek out and find these people while they are still teenagers, they can lead their families to a better life, even possibly a multgenerational better life.   By extension of this phenomenon, God has distributed natural smartness more or less equally throughout the world’s  population.  Smart people are not only found in affluent communities.   The rest of us have to work hard to become smart. 
 
10  So here’s the challenge for you my friends.  As you learn basic principles from GiG and other sources, spare a thought for those bright kids in the townships.  They could be future business and political leaders for this country.  But most of them don’t even know they are smart because no-one ever told them; certainly not their parents. It takes one to know one.  Among the township families I have got to know, the children are far more resilient than children in affluent society, and the teenagers are uniformly smarter and more determined than their parents (or parent).   Sadly, in the townships the smart ones will get recruited into the gangs, who recognize smart.  I have met many of them in the Youth Centre in Brandvlei Correctional Centre, and it is so sad they are locked up when with the skills I see in them they could be building businesses.  The attitude of the middle class towards township dwellers in South African towns is never to even think about them.  That’s economic Apartheid.  And unless it changes, watch out for another revolution.   GiG clubs can be run in townships, but not many middle class citizens would go inside homes in formal settlements, let alone informal.   
 
11  Now I’m not making a plea for you to become missionaries to the townships.  But as some of you set up GiG clubs, why not make enquiries from social service departments to let them know that you might be interested in having some folk from townships to learn entrepreneurship and financial planning.  You may even have to subsidise their membership fees, but it would be worth it.  It could turn around not just one individual, but their family, their children, and their grandchildren.             
Thank you and blessings!