Wealth Preservation Strategies for South African Entrepreneurs - Series

Ed
6 days ago
1 min read

Updated: 2 days ago

Why Wealth Preservation Is a Must for Entrepreneurs

As a business owner, your wealth is tied to your hustle—your company, investments, and personal assets.

Diversification: Don’t Bet the Farm on One Horse

What’s the vibe? Spreading your wealth across different asset classes, industries, and geographies reduces risk. South Africa’s economy is shaky—think mining strikes, load-shedding, or rand crashes—so putting all your eggs in one basket (like your business or local property) is a gamble.

How to do it:

Invest globally: Use tax-free savings accounts (TFSAs) or unit trusts to buy offshore ETFs (e.g., Satrix MSCI World). Offshore assets hedge against rand weakness and SA’s economic dips.
Mix asset classes: Balance equities (stocks/ETFs), bonds, property, and cash. Equities grow wealth; bonds and cash add stability.
Avoid over-investing in your business: Reinvesting profits is cool, but don’t let your business be your only asset. If it fails, you’re wiped out.

Real-world win: A Durban entrepreneur had 80% of their wealth in their retail business. When riots trashed their stores, they lost R3 million. Their diversified TFSA (R500,000 in global ETFs) and rental property kept them afloat while they rebuilt.

Pro tip: Aim for a portfolio with 40-60% in equities (local and global), 20-30% in bonds, and 10-20% in property or cash, adjusted for your risk tolerance. A financial planner can fine-tune this.