From Dreams to Financial Freedom: Mapping Out My Journey at 23

Picture this: You're 23, full of dreams, but your financial strategy is basically "hope for the best." That was me until one conversation changed everything.

My first manager asked a simple question: "Do you know what a unit trust is?" I didn't. He explained it as a pooled investment vehicle that could help me achieve my goals.

The problem? I had dreams and timelines, but no actual investment strategy. I was clear about one thing, though – I wanted my finances to reflect my vision of what a successful black woman in financial services should look like.

The Exercise That Changed Everything

We mapped out eight important life areas, with finances taking centre stage. I thought 23 may be too early to worry about money, but those principles have transformed my life and those around me.

Step 1: The Foundation.

We started with a budget – income versus expenses. Simple, right? But here came the game-changers: pay yourself first and always budget for fun. We initially allocated 15% of my income to savings with no specific goal. This "aimless" saving later funded major asset purchases.

Step 2: Dream Mapping.

Then came the exciting part – turning dreams into financial goals with real timelines:

Short-term wins:

• Monthly self-care budget (because you can't perform at your best when you are drained)

• Annual overseas travel fund (my non-negotiable law for my life)

• Buy first property by 25 (will need a deposit)

  
  

To achieve these short-term goals, the Prescient Money Market Fund is ideal for short-term investments as it is a liquid, low-risk money market offering with enhanced yields.

Alongside my short-term goals, I needed to consider the medium-term goals and the appropriate investment vehicles to achieve them.

Medium-term targets:

• Set a one-year horizon to fund my studies (or look for funding)

• Build an emergency fund in 3 years

• Eliminate my car debt in less than 5 years

  
  

The Prescient Income Provider Fund, with an investment objective of CPI + 3% a year and an aim to provide capital preservation over any rolling 3-month period, and the diversified Prescient Balanced Fund, which invests across a range of assets, including equities and interest-bearing instruments, both domestically and offshore, are suitable for medium- to long-term investment horizons.

Long-term vision:

• Save up for a mid-life crisis fund – 20-year horizon

• Pay off property in less than 20 years

• Start working towards a comfortable retirement immediately – a 40-year journey

  
  

Looking at long-term funds with exposure to growth assets, such as the Prescient Core Equity Fund, would help me achieve these objectives.

My manager had the foresight to add three crucial goals I had not considered: a will, life insurance and a retirement annuity.

The Reality Check

Looking at this list terrified me. I genuinely did not think I had enough money to fund all these dreams. But here is what I learned: start with what you have.

I made "paying myself first" a non-negotiable budget expense. Today, I also make use of my Tax-Free Savings Account, setting aside R36 000 a year, which is completely tax-free.

Finding Financial Freedom

What started as a conversation about unit trusts became a blueprint for my financial freedom. The key was not having a lot of money; it was having a system that aligned my spending with my dreams.

Your dreams deserve a financial strategy, not just hope. Whether you're 23 or 43, it's never too early or too late to turn your financial aspirations into an actionable plan.

Your homework: List three dreams, attach timelines, and match them with appropriate investment vehicles. Your future self will thank you.

Article Written by: Simnikiwe Thutha, Client Director at Prescient Investment Management

Disclaimer

Prescient Investment Management (Pty) Ltd is an authorised financial services provider (FSP 612). Collective Investment Schemes in Securities (CIS) should be considered as medium to long-term investments. The value may go up as well as down and past performance is not necessarily a guide to future performance. CISs are traded at the ruling price and can engage in scrip lending and borrowing. A schedule of fees, charges and maximum commissions is available on request from the Manager. A CIS may be closed to new investors in order for it to be managed more efficiently in accordance with its mandate. Performance has been calculated using net NAV to NAV numbers with income reinvested. There is no guarantee in respect of capital or returns in a portfolio. A Money Market portfolio is not a bank deposit account and the price is targeted at a constant value. The total return is made up of interest received and any gain or loss made on any particular instrument; and in most cases the return will have the effect of increasing or decreasing the daily yield, but in the case of abnormal losses it can have the effect of reducing the capital value of the portfolio. The yield is calculated as a weighted average yield of each underlying instrument in the portfolio. Excessive withdrawals from the portfolio may place the portfolio under liquidity pressures and a process of ring-fencing of withdrawal instructions and managed pay-outs over time may be followed. Where a current yield has been included for Funds that derive its income primarily from interest bearing income, the yield is a weighted average yield of all underlying interest-bearing instruments as at the last day of the month. This yield is subject to change as market rates and underlying investments change. Prescient Management Company (RF) (Pty) Ltd is registered and approved under the Collective Investment Schemes Control Act (No.45 of 2002). For any additional information such as fund prices, fees, brochures, minimum disclosure documents and application forms please go to www.prescient.co.za.

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