Following on the impact of my previous #DearDarkie letters, especially those dealing with investments, I have received a flood of inboxes from friends asking for my opinion on the new MTN Zakhele Futhi shares and whether I will be buying them or not.

Just to give you a bit of background, in 2010, MTN launched a BEE share scheme called MTN Zakhele, offering qualifying black individuals a share in the company through a discounted price of R20 per share (the main MTN group share was trading at R117 in 2010). That scheme will be coming to an end in November, giving investors a growth of over 400% growth with the price trading in the R77 region currently.

To answer all your questions, No, I will not be buying the new mtn zakhele shares, for the following reasons:

Firstly, 20% discount is too little in the equity market. Before the Nigeria scandal broke last year in November 2015, MTN shares were trading at R214, today they trade at R125, a massive fall of over 40%. Who knows what could happen tomorrow?

Secondly, the lock in period of 8 years is honestly not worth it for 20% discount. You’re better off buying the main MTN share directly from the market and managing the risk yourself.

Thirdly, raising almost R10billion through a BEE scheme just sounds too suspicious for me, for a company that recently took a knock of about $1.4billion (do the maths) due to regulatory scandals in Nigeria. Sounds like fund raising to me.

Finally, let’s face it, these kind of share schemes are not meant for the already squeezed middle class or the poor. Poor people don’t have R2000 (minimum required investment) lying around to buy shares, they are hustling for bread. And for middle class people, even if they can scratch around and come up with R2k or even R10k in a space of 1 month (12 September to 21 October 2016 which is the period in which the offer stands) that will hardly make anyone close to wealthy, after 8 years, even if we assume growth of 400% based on previous perfomance.

So this scheme, like many other so called BEE schemes, is only going to empower those who are already empowered, who can put down a R100k or R1mil even, without missing bread.

When the original Zakhele shares, or Multichoice Phuthumathi , or Sasol inzalo shares launched, their offer price was really hard to resist, but this current offer, I’m sorry but I’ll pass.

In conclusion, my dearest darkies, the short answer, NO, I will not buy MTN Zakhele Futhi shares, I’ll rather invest monthly, as little as R300 into an index tracker through a tax free investment account, after 8 years, I bet I’ll still come out tops than a fellow middle class black person who invested R10k once off into a non-diversified MTN share.

Disclaimer: Remember, I’m not a financial advisor. This is not advice. Just opinion. Please contact your financial advisor.

I’m not a big fan of the whole #BuyBlack #SupportBlack. I think it is rather narrow and counter revolutionary. There’s a whole world out there to trade with. Just imagine if you could just crack into the Asian market.

Don’t get me wrong, I’m not anti-black, I buy a lot from black owned businesses, but I don’t just buy because it is black business, but rather because they provide services and products I need. No Lerato Tshabalala vibes here.

Actually, let me take this moment to mention just a few black businesses that I support, and I can vouch for.

– BlackSugar by Jabu makes nice male fashion accessories.

– Weshu by Dolly makes the freshest fashion accessories, from beads, to funky headwraps, to colorful clutch bags, and custom-made clothing. They also recently opened a trendy in the bundus of Tsimtown.

– Capekapa check out their t-shirts and sweaters, unique stuff.

– Thunderstorm a bit out of my league but when I’m big I’ll definitely buy from this business.

– Joel makes the best kota in Alex, finish and klaar.

– Pirara if you want pork trotters, tribe, chicken-anas this is your joint, in Centurion.

– Vukster I haven’t tried this one yet, but I have seen the pictures, mouth watering pork trotters.

– Thulani Ngwenya Faya Pele-pele hottest tastiest home made chilies sauce.

– Motlatso kiddies parties, jumping castles, cakes, deco, enegetic MC for the kids, you name it.

– Mathapelo rips at R75/kg these are the juiciest marinated ribs you can get, I’ve been a loyal customer for over 2 years.

– Lesego sells the most innovative name tags for school kids, buy a package for your children.

– Julia house hold cleaning detergents, bleach, pine gel, foam bath, the works, she got them at reasonable prices.

– Danny organises the dopest events in the village, you’ll swear you’re at the SunDeck in Sandton, while you’re in fact in Mogalatsane Village. He’s also an excellent photographer and graphic designer.

– Vincent for all your moving needs, big or small, he has about 4 or 5 trucks.

– Yende Carwash I see your work, if you were not 50km away, I’ll be there every weekend

Black brands like maxhosa by laduma, David Tlale, to mention just a few, are big globally, sharing catwalks with the Guccis of the fashion world. I don’t see them asking for black people to support them.

Black business should provide good service, good value, they must compete internationally, and then they’ll prosper, without needing anyone buying their services or products out of pity.

You know that ‘plastic?’ attitude service we get at Checkers/PickNPay cashiers versus the tenacious service you receive from those old Magogos when buying their fruits&veg at Tshakuma market or marabastad? That’s exactly why we must support black and boycott your Wiese’s and Ackerman’s of this world.

When the telephone was first invented, it took 75 years to reach 50 million people.
It took Radio 38 years.
TV took 13 years.
Internet was just 4 years.
Facebook did it in 2 years.
IPhone took 3 months.
Angry births space took 35 days.
Pokemon Go was released just over 2 weeks ago, it has already reached over a billion people, over-taking Twitter as the most used app.

Wena you’re are busy pity-selling your business to your friends and family and guilt-tripping them to support your business while the whole world is open for business, a market of 7 billion potential customers.

tldr: English is not my first language, I hope I don’t get quoted out of context here, in summary, if you continue supporting bad mediocre business, just because it is black owned, you are doing a disservice to both parties, and the advancement of black people in general.

Vuka Africa.

Our country is plagued by perennial protests, from service delivery, xenophobia, labour unrest, demarcation disputes, and lately, just political turmoil currently going on in the Tshwane region. I have observed that mostly, when these protests turn violent, it is usually unemployed people burning and vandalizing state property.

Currently, employed people are stuck, unable to go to work, because their means of transport were burned overnight. Employed people can’t burn the very buses they drive (or ride to get to work), or the very clinics they get their medicine from or the very schools they teach at or send their own children to.

The burning and vandalizing of property, and looting, must be labelled as a crime, arson, theft and be treated as such by law enforcement. Accusing factions or invisible third forces is not getting us any closer to the solution.

However, It is a well established fact that unemployment is one of the leading causes of crime. Sadly, not all of us can be absorbed into the formal employment sector, especially in the current tough economic outlook.

Solution, entrepreneurship. But first we must get rid of the notion that running a business is the ‘suit and tie’ picture of men in high rise buildings signing deals, or winning government tenders. Business is messy, it is tough, and is on the ground.

So today, I want us to brainstorm business ideas, and share them with people who might need them.

I’ll start:
1. Start selling fruit&veg on corner of your street. If there’s someone already doing it, do it anyway, offer some competition, sell home grown organic vegetables. Vodacom. MTN, CellC all essentially sell the same thing, but they co-exist in the same ‘street’.

2. Sell Makwinya and Coffee/Tea in the morning/afternoon to train commuters.

3. Sell boerewors rolls on Saturdays.

4. Offer services to deliver fresh bread and milk, and newspaper to a few houses around your hood, especially to older people who stay alone and could use such services.

5. Extend point 4 above to also do chronic medication delivery in the township.

6. Offer services to safely walk young children to school, if their school is within walking distance. Their parents will save on expensive transport costs.

7. Buy and resell things online, gumtree, bid or buy, olx.

8. Start a chisa nyama.

9. Breed and sell live chickens.

10. Sell Atchar.

11. Provide an on-foot/bicycle delivery service for Sphatlo/Kota ko kazi ya gago.

12. Become a mobile voucher re-seller for airtime, electricity, etc.

13. Start a grave digging/filling service.

14. Provide hand dish washing services, target funerals, weddings, parties etc ko kazi.

15. Add your ideas.

What other business ideas you have that people can easily start today, with little or no capital in the townships instead of burning buses or waiting for mavuso?

Dear Africa
vol. 7

Today I want to address my fellow brothers and sisters who are unemployed or employed but seeking new opportunities.

Unemployment is no joke, but while we wait for the government to deliver the jobs they keep promising, we can also do some small steps to improve our prospects.

First things first, if you have a CallerTune on your phone, remove it. Just do it. No buts. No one is going to hire you if the first thing they hear when they call you is ‘ngud’ or ‘stok’saLekgowa’.

Also, while you’re at it, setup a proper voicemail, like “Hi, this is Paul, I can’t take your call right now, please leave your number, I will get back to you soonest”

Stop buying 3 newspapers every Sunday to look for jobs. Save the money to buy data bundles. Register a profile at LinkedIn, Careerjunction and pnet. Most jobs published in Sunday newspapers are also posted online, and besides, online you will get much more jobs than can be printed.

Keep your CV short and relevant, anything over 5 pages long is going to bore off a potential recruiter, unless you already have 50 years of experience. Keep it short.

If you are going to drop off your CV in a big box with thousands other CVs, you’re better off playing the lotto. Use recruitment agencies, let them do the searching for you.

There is a difference between being unemployed and unemployable. If you are youth and unemployed today, it is time for some introspection. Do you have skills, or busy acquiring skills? Do you have formal education or busy getting one? Do you have talent or currently perfecting it? If you answered NO to all 3 questions, sorry, you are unemployable.

If everything else fails, start a business, soon enough you’ll be employing people.

So I’ve been getting it a lot of fanmail, people asking me why have I stopped writing the dear africa series. Unfortunately, I don’t always find time to jot down all the ideas that flood my head, life just seems to get in the way of my writing.

This evening I have a moment to spare, so here it goes.

Dear Africa
vol. 6

Why don’t you take yourself and your small business seriously?
Why don’t you register a proper domain for your business, it is less than R9 pm with some hosting providers. Then you’ll get a proper business email, like yourname@yourbusinessname.co.za and stop using the funky Gmail one you created when you first heard about email.

While you’re at it, also get a professional looking website done for you, if you can’t afford it, grab a free template on WordPress.

Get onto the social media bandwagon, create a Facebook page, twitter account and instagram. And use them to get your name out there. That’s free marketing and advertising, until you can afford that freeway billboard or proper radio/tv ad. Some of the biggest companies today don’t even use any of the traditional advertising methods, they exclusively do it online.

Why don’t you register your business with the dti, and SARS? Even if you sell tomatoes on a street corner, if you have hope of growing the business, you’re better off registered. Don’t be put off by paying tax, there’s great incentives for small businesses, with zero tax for low turnover brackets. If your business is not registered, you can’t get any funding or partners.

Open a proper business account, separate your personal banking from your business banking. That way you can track if your business is really making money or losing. If you need money from the business, pay yourself a salary. Don’t be a blesser with a business account, one day when you need to be audited, it will be very hard to explain why you bought icetropez or moet with the business account.

Take yourself seriously too, call yourself by the designated title. You’re a CEO, stop playing small.

Dear Africa
vol.4
(Damn, Thabo Mbeki is already on vol.9, I need to catch up)

Today, I want to touch on a very sensitive topic. Property. This topic can divide renters and owners like region divides believers and atheists. Like region, discussing the pros and cons of owning vs renting property is not my favorite subject. And just like religion, those who worship a deity strongly oppose those who don’t, and vise versa. Fortunately, with property, there’s numbers to backup arguments.

To set the record straight, I am pro renting. I’ve been working since 2006, I’ve never owned a property. I have toyed with the idea of buying a few times, but, fortunately I have never signed the few OTP papers that I have applied for. I have read many articles and books, and crunched lot of numbers in my spreadsheets over the years. I am now convinced that I will never own a property.

There are 2 types of properties. There’s primary residence, and there’s investment property. The biggest lie of the century is banks telling us that owning your primary residence is an investment and society giving us some fake “Mama I made it” status. Liars. The banks are the ones benefiting out of this scheme. Charging you double the price of the house in a 30 year period. Have you ever wondered why a Gti costs R500k and takes 5-7 years to pay-off, but a small home of the same value takes you 30 years with negligible differences between the installments? That’s some serious organised and perfectly legal white-collar crime.

So, I’ll give you 2 reasons why I’ll never own property, primary residence or investment property:
1. Flexibility
2. I’m lazy

Flexibility because I’m just not ready to settle down in 1 geographic location and 1 house for the rest of my life. When an opportunity comes up in Australia with 10 times my current salary or when I take my startup to Silicon Valley, I want to take it with no delay of trying to sell a house or finding tenants. I just want up and go, with my family in-tow. I think I will only ever be ready to settle down when I go to an old-age home and wait for the inevitable, and by that time, I should have enough money to buy the whole old-age home and charge you ex-homeowners to your grave. Evil smile 🙂

And for an investment property, I’m lazy to chase after tenants and fix broken geezers. I’ll much rather just wait for my dividends to be paid, automatically, without first employing red-ants to evict tenants. And instead of owning just 1 or few properties in a couple of places, through my investments in property funds, I literally own portions of multiple properties all over the globe. I literally have small but growing stakes in Menlyn Shopping Centre, Sandton City, W&A Waterfront, just to mention just a few.

Having said all of this, I know owning a property can also be a lifestyle thing for some people. They understands all the costs associated with owning a property, and are quite happy to pay the price. Because of the feeling of having a place you call ‘home’. They want to tend their garden, and mow the lawn, and hang their family pictures on the wall with nails, slaughter a goat to appease the ancestors. That feeling is priceless. If you fall into this category, I will not argue with you. Enjoy your home, you deserve it.

I know this will ruffle a few feathers. For all the pro property owners who want to attack me without giving valid counter-arguments, I invite you to read the following articles before you jump on to the keyboard:

1. http://jlcollinsnh.com/2013/05/29/why-your-house-is-a-terrible-investment/
2. http://investorchallenge.co.za/the-last-house-ill-ever-own/
3. http://investorchallenge.co.za/whites-cant-own-land-in-zimbabwe-excellent/

***This reminds me, I must call my landlord to come a fix a few things at the house that are broken 🙂 at no extra cost***

Dear Africa
vol.3

Why do you invest your hard-earned money in pyramid schemes like Kipi/MyDeposit/MMM or whatever the latest Russian fraudsters comes up with? Why?

Relax, I’m not going to ask the hard hitting questions again, by popular demand, today’s letter is meant to be educational. I want to share my little knowledge about etfs.

Exchange Traded Funds (etfs):
an etf is an investment product that tracks the performance of a basket or group of shares or other commodities like oil or gold. Etfs are self managed, which makes their administration costs very low. At worst, no companies should charge more than 1% for an etf product. This admin charge is called TER(Total Expense Ratio), always look out for that percentage when you choose an investment.

etfs are also very highly diversified by their nature, their risk profile is very low, but surprisingly, they always beat the inflation, and in most cases also outperforms a lot of (expensive) highly-managed products by quite a margin.

An example of an etf is the top40, there’s different variants of this etf, but fundamentally they track the performance of the top 40 performing companies in the market. When a company is not doing well, and it drops out of the top40, the etf will also automatically drop it, minimizing losses. There are many etfs on the JSE, the last time I checked there was about 38 of them, I stand to be corrected. So you have plenty of options. They range from property to gold, to government bonds, to global markets and sectors.

Another great advantage of etfs is there’s no barrier of entry, anyone can buy them with very little money. I personally recommend easy equities for anyone who wants to start. But there’s plenty of other places where you can buy etfs. FNB has the Share Saver and Share Trader accounts. Absa also has a stoke broking account, you can ask for etfs only account. Satrix, etfsa, and plenty others. Do your homework.

Not to be confused with efts. He’s a challenge, from next month, out of the many efts that you do per month, make sure that at least one of them is going into an etf. Deal?

Don’t be put off by any jargon, I also didn’t study accounting. I use this website whenever I come across a term I’ve never heard before. www.investopedia.com/ as the name suggests, it is the Wikipedia of investments.

So vele, why did you put your money in Kipi? Want to get rich fast? We all do, but it’s a pity that only superstars, entrepreneurs or lotto winners have that luck. So unless your surname is Kardashian, Messi, Mayweather or Zuckerberg, you have to follow the slow process of accumulating wealth, same old one used by Buffet, otherwise you can leak your nudes, start playing sport or start a Facebook rival app.

Disclaimer: I’m not a financial advisor.