Prof Dilip Garach: From Apartheid Barriers to Building Wealth - A CA's Journey

What does it take to break through systemic barriers and build lasting wealth? Prof Dilip Garach shares his remarkable journey from being thrown out of university registration for refusing to wear a tie, to becoming South Africa's Financial Planner of the Year.

In this candid conversation, Prof Garach reveals why most professionals - including doctors and dentists - struggle to build real wealth despite high incomes. He shares invaluable insights on tax planning, wealth preservation, and the critical mistakes healthcare professionals make with money.

Episode Highlights:

• The untold story of Indian professionals during apartheid
• Why selling time will never make you truly wealthy
• The 70% tax trap facing high earners in SA
• How to structure wealth for generational success
• The inside story of transforming SARS
• Why SA's financial literacy crisis threatens our future

About Our Guest: 

Prof Dilip Garach is a Chartered Accountant, former Head of Tax at UKZN, and founder of Garach Corporation. Named Financial Planner of the Year in 2004, he served 16 years on the SARS Advisory Board and advised ministers Trevor Manuel and Pravin Gordhan. He specialises in high net worth wealth management.

Connect with Prof Garach: Website: www.garach.co.za Email: dilip@garach.co.za

This episode is essential listening for any professional serious about building and preserving wealth in South Africa.

DISCLAIMER:

The information provided in this podcast episode is for general educational and informational purposes only and should not be construed as financial, tax, legal, or professional advice. Prof Dilip Garach shares his personal experiences, opinions, and general insights based on his expertise and background.

Every individual's financial situation is unique. Before making any financial, tax, or estate planning decisions, viewers should consult with qualified professionals including chartered accountants, financial planners, tax advisors, and legal practitioners who can assess their specific circumstances.

The hosts and guests do not accept any liability for financial decisions made based on information discussed in this episode. Tax laws, regulations, and financial planning strategies are subject to change and may vary based on individual circumstances.

Views expressed by guests are their own and do not necessarily reflect the views of the podcast hosts or producers.

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Transcript

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SPEAKER_01 0:00

Welcome back, everyone. Our next guest is not a doctor. He's one better, he's a prof. Sorry. Not a medical background. Prof. Dilip Garach. Welcome. Thanks for joining us.

SPEAKER_03 0:11

Thank you very much, Yash and Yak for inviting me.

SPEAKER_01 0:14

Yes, thanks. I mean, I'll thanks to Yak for organizing this. I think he's your contact, close contact. So I I was going to give Yak the reins and let him run the show today, if he wants to.

SPEAKER_00 0:25

Yeah, but I I would be the worst person running this episode because I'm pretty poor at financial planning, amongst other things. But we'll get into it.

SPEAKER_01 0:34

Look, Pro Prof. Dilip Karaj, for those who don't know, uh was the head of the tax department at the School of Accounting at UKZN. Correct me if I'm wrong, you were once a financial planner of the year at South Africa. That's correct. So I, in my mind, my perception is you're the money guy, you're the tax guy. I mean, you're a prof, so clearly you're quite eminent as a thought leader in that space. How did you end up getting there, prof?

SPEAKER_03 1:01

Yes, yeah, it's uh it's actually amazing. Uh uh would like to just give you as a background of how I, in fact, even became a professor, because uh I think it's more by default that I landed up at the university. Uh but just some kind of background of myself. You know, I just grew up like any Indian boy that would grow up in in the Grey Street complex. That's where I lived. That's Durban. That's in Durban. And that's it, town. That's in town. That's Grey Street, the common commonly known Kashpa area. Uh grew up there and went to schools there. So nothing uh extraordinary or nothing unusual to the normal schools that we that we uh that were there in that area. And uh over a period of time, uh whilst I was still in school, in fact, uh something that struck me, somebody came with a little book uh when I was around about uh uh grade ten, uh with and this book was all about chartered accountancy. And uh where on the cover itself, it had this guy stand at the bottom of a building, and he said, with this qualification, you can get to the top. And uh that attracted me. And um I actually took the book home, I had a look at it, and I realized that uh becoming a chartered accountant is actually quite a it is a very good qualification, good financial qualification to have. But at least that I realized at that point in time, being a little Indian boy, you know, our chances of really uh sort of getting into that profession was not great because it was very limited. There were very few Indian chartered accountants around at the time. And uh just what time is this? Well, this was very in the 70s. Okay. In fact in the 60s.

SPEAKER_01 3:00

So almost the height of apartheid almost.

SPEAKER_03 3:02

Yes, yeah. So it was very much uh a white profession, so to speak. And uh we were very limited in even getting training. So you could well at that time I didn't realize that you know you go and go to university, go and do a BCOM, and then thereafter you have to do training, and that training is so important uh for you to go and write the exams, which ultimately allows you to qualify as a chartered accountant. So at that point in time, uh it just struck me that it was something that I would like to do. I was quite good at maths and the arithmetic and and accounting, and I was studying accounting at the time. But I thought it was a good thing for me to look at rather than the traditional become a doctor or become a lawyer. That was typically in the Indian community. You know, everybody was only looking towards becoming doctors or lawyers, and failing those two professions, people became teachers. So um uh becoming a chartered accountant was something that struck me at quite an early age. But I didn't know the difficulties of becoming one. And I'll go through how the kind of challenges we faced at the time when we when we realized that you know we needed training, but training was just not available and so on.

SPEAKER_01 4:18

Did did your parents have any influence or any input?

SPEAKER_03 4:21

Well, look, traditionally I came from a family of doctors. Okay, many doctors in my family, and uh my dad was a jeweler, so it wasn't it was more so uh being influenced to become a doctor where something was part of the family. But uh, you know, it's it's all about having a flair for something. So I had a flair for numbers and not so much for the sciences, and therefore I I think I I was not influenced by any member of my family. And uh I would have been the first person in my family was thinking of following an accounting career.

SPEAKER_00 4:57

Were your parents quite supportive then? Because I think you said that it wasn't one of the traditional career choices. Yeah. Which is, I mean, we would assume right now that it is quite synonymous with our heritage uh accounting. Like I don't think back then it was uh probably an option. It was doctor or lawyer or teacher. But now it's probably accounting has fallen within that scope of most definitely.

SPEAKER_03 5:21

No, well, I think in their case, they probably thought that becoming an accountant would be becoming a bookkeeper. And a bookkeeper had a sort of uh a tainted sort of uh image, uh which I think that uh that no you know, when when I even suggested to my father, look, I want to become an accountant, and he actually, in his mind, he thought that I was going to become a bookkeeper. So, you know, at that point. Basically an unqualified, correct. She was not a professional. Trevor Burrus, Jr.

SPEAKER_01 5:50

But that is the layperson's persp per perception, right? Accountant bookkeeper. It's like when you talk about an engineer, people think you're a mechanic. You know, you work on engines. Okay, but he was supportive, and uh who did they support you in your you know, finances for studying and things like that?

SPEAKER_03 6:04

Well, certainly they did. Yeah. And so so I completed my my metric, and at that point in time, uh we didn't have too many options to go to university. It was if you wanted to do a BCOM, uh you either went uh well, it was at the time when I uh completed my metric, uh it was uh Salisbury Island uh was the option, but uh within a year uh it was the University of Durban Westfall because they were just changing from the old Salisbury Island where Indian people went to university. That was Salisbury Island.

SPEAKER_01 6:42

I've heard my dad mention Salisbury Island. It's a real actual island where they ferried you off for the first time.

SPEAKER_00 6:48

Is it an actual island that you take a boat of?

SPEAKER_03 6:50

Although I never went there because by the time uh in fact it was the first year uh that we that they hopped across from Salisbury Island, the University of Durban-Westwell opened.

SPEAKER_01 7:02

Okay.

SPEAKER_03 7:03

So we went straight to University of Durban Westwell, and that was like the year it was 74.

SPEAKER_01 7:09

Okay.

SPEAKER_03 7:10

Uh 73, 74. That is when the university moved across from Salisbury Island. So everybody doing the typical uh commerce, engineering, all Indian students. So it's primarily Indian students studying at Salisbury Island, and if they did study at Salisbury Island, they literally like had to take the ferry across uh from land to the island. Just to keep you separate. Yeah, very much so. Yeah. I suppose that that was probably uh yeah, it was like the Howard College was the white university. That's at UK is it on on land. That was well, right now it's it's like two campuses, the Howard College, which is now traditionally uh the Berea area of Durban, and Durban-Westfall is the Durban, it's the Westfall area. So, you know, they're two separate areas and obviously two separate locations. But those are two universities, but now I think they've expanded it even further. They have something in Pinetown, which is like the teachers' training college.

SPEAKER_00 8:15

And in Maritzburg as well.

SPEAKER_03 8:17

Yeah, Maritzburg was. Well, in fact, Maritzburg and Howard College was traditionally the white university. Okay. The one in Berea.

SPEAKER_01 8:25

So you had a flair for accounting and numbers and things like that, I'm assuming breeze through uh campus days or very much so.

SPEAKER_03 8:32

Yeah, it was uh well look, I mean, because I enjoyed doing numbers and so on, it was quite easy. But I'd like to uh I'd like to sort of, you know, my first day at the University of Durban Westfall when we were just about to register, it was actually quite interesting because we were like all Indian students standing in a line. Yeah, that were going into uh into the University of Durban Westfall campus, the Durban Westfall campus campus. So uh we were all in a queue getting ready to register, and you know it was traditionally uh the lecturers were Afrikaners mainly. The administrators were all Africaners, it was the Bruderborners at that time. It was very much they were run in control of everything. So, like my first day to go and register, uh I already had an incident. So I stood in this queue and uh the register uh uh was uh Africaner, and uh it was my turn, so he had like a like an office that each person would have had to go individually into his office, and he would then sign the form to admit you as a student. So um I walked into his office and uh he put my form on his desk, he looked at it, he looked at me, and he said, Do you realize that here you must wear a tie and collar when you come to this place? So I looked at him and I said, So he asked me, Are you happy with that? And my immediate reaction to him was no, I don't think so. He took my form, he threw it on the floor. He said, Get out. These were his exact words, get out. So, like I was I was a bit shocked because I mean I never expected that kind of response. So anyway, he said, next. So the next student walked in, and my form was lying on the floor. I then picked it up, went out. He allowed three students to come through, and then he called me again. He said, Come back. So I went back. So he said, Now what do you think? Would you wear a tie and collar? I said, Yes. Very obedient, had to agree, and that's how I landed up with a number. My registration number was 6666. I held on to this number. A lot of people envied me with this number, but they said, you know, it's like the devil number, it's also a very uh auspicious number. Uh, but I had good luck all the way through with that number.

SPEAKER_00 11:08

Also, just now when you pulled up, I really thought you were wearing a uh suit and tie, but it looks like your shirt has this black column down the middle that looks like a tie. So it's been ingrained in it.

SPEAKER_01 11:20

Yeah, that's yeah. But that's I mean, that's a that's an interesting story. I mean, but but did that set the tone for campus life going forward? Was it always this sort of antagonistic relationship between it was a very good thing?

SPEAKER_03 11:33

You see, there's the the basically the administrators and the academics and all of that were Africaners. And they were all Bruderboners, they all belonged to the Bruderborn group at the time. And uh the whole idea was, you know, to sort of Indian students make sure that you sort of keep them at a level, keep them out of at the high level, and so on. And black, were there any black students? Uh at the time when we were there, no, there was not a single black student. It were Indian students from the so-called Transvaal Kauteng and from Durban. So uh, you know, it was a group of, and obviously hostel was was part of the uh Westwall campus. There were several hostels there. So those hostels were occupied by students mainly from the Transvaal.

SPEAKER_02 12:18

Okay.

SPEAKER_03 12:18

And it was ourselves. So, you know, traditionally, I mean that set the tone for us uh being at the university, we we were not treated well as students.

SPEAKER_01 12:29

I can imagine that even like, you know, your marks and getting uh graded and things like that might have been a bit or were they at least fair on that?

SPEAKER_03 12:37

It wasn't like Well, look, I mean the thing is they were w the kind of lecturers that you got were not really interested in ensuring that students uh progressed and did well and all of that. They were there with the theme. You know, we are part of the Bruderborn group, we take instructions, and that's how the university ran for a number of years.

SPEAKER_02 12:57

Okay.

SPEAKER_03 12:58

You know, it changed over a period of time. And you know, y you may know because you guys come from a dental background, J Ram, it was only when J Ram Reddy, he he was obviously from the in fact, what really happened was uh if you go back, it was a house of delegates at the time, and Raj Bansi was in control, and he wanted to introduce the dental faculty uh away from University of Western Cape, introduced one at the University of Durban Westfall, and Jram Reddy, who who is still around at this point in time, must be in his 80s, well into his 80s now. But I mean, he was uh a dentist and uh he was a lecturer at uh Western Cape University and he was called upon uh by Raj Bansi to introduce a dental faculty at the University of Durban Westpow, and he came in there, and uh the next thing is he suddenly got drawn into the administration and he became the vice-chancellor in the early 1990s. And that's when things started to change. But otherwise, prior to that, there always was an Africaner uh vice chancellor at the university. Okay. And he was in control of you know of the university, and he that's how they made the uh appointments at the university. And they had a they they had a theme that they followed. That the idea was Indian students uh should not really progress. It's sad, but I mean it's a statement of fact. And what I'm telling you is exactly how we were treated, and that's how we felt. My postgraduate studies, strangely enough, I did at Howard College. And even for that, uh I was the first student, first uh group of students that was admitted into Howard College as Indian students. We had to apply to the Minister of Int, I think it was Interior at the time, to get permission individually to get a to get a place to study at Howard College. So I did my postgraduate studies, some of it at at Howard College, but we had to apply. And we had to get permission.

SPEAKER_01 15:07

Just because you were not white.

SPEAKER_03 15:09

Correct.

SPEAKER_01 15:09

Now now, in spite of these racist dynamics and all that kind of thing, you still thrived, you still made it. So undergrad, you you did it in how many years? Four or five years?

SPEAKER_03 15:16

No, I did it in three years. Well, it's a three-year course. Okay. It's like, you know, I I did very well at the undergraduate level. So um I did my three-year studies uh at the University of Durban-Westville. Uh and then uh I had to go and get training. Uh though though the that that is what we call the articles.

SPEAKER_01 15:36

Okay.

SPEAKER_03 15:36

So I had to get articles. So for the articles itself, because I did well at my undergraduate level, um they we obviously all strive to get to the big four firms. The big four firms I can name them. Please do. That's a private private entity. That's yeah, th those are the uh can the accountancy firms. The uh Price Waterhouse Coopers, uh Ernest and Young, the um Deloitte and KPMG. Those are the four firms. Big four. So the big four. They call them the big four. So I got training with one of the big four firms.

SPEAKER_01 16:14

Okay. Oh, so at least you had that opportunity. I I was thinking apartheid times, probably nothing. You couldn't.

SPEAKER_03 16:18

No, no, no. Because fortunately, you see, limited number of us graduated. I think in in the year that I grew completed my uh the three-year, three of in the in the three-year group, I think there must have been about thirty or forty of us that came through in that group. And then we all tried to get into obviously these big four firms. But the big four firms, you know, I mean, I won't tell you which firm I go I was trained trained under in, because I'm going to give you some stories about this particular firm. Uh, you know, I mean, like having completed a BCOM and uh having applied to all four of the big four firms, uh before I even get there, uh at that point in time, Indian chartered accountants that were practicing in firms, there must have been not more than three or four firms uh that were on. So anyway, we three or four chartered accountants. Yeah, chartered accountant firms. I mean, when I when I there wouldn't be there wouldn't have been more than 30 or 40 Indian chartered accountants in South Africa.

SPEAKER_02 17:22

Okay.

SPEAKER_03 17:23

So that's how few in number we were.

SPEAKER_02 17:25

Right.

SPEAKER_03 17:26

So anyway, I go for my interview to this firm, and uh, you know, the guy calls me in for the interview, the staffing partner, uh, big firm. Uh you know, during the interview, uh the guy kicks off by saying, Oh, you know, we normally take thirty of we normally take 30 people as trainees. Uh uh of you, we only take two. Of you. That's you that's the language. And uh, you know, we have quite a choice. But uh we've asked you to come. So uh anyway, he says to me, I'm feeling a bit tired at the moment, but uh I want you to come for another interview or let one of my other partners interview. So he spent about 10, 15 minutes with me. He asked me uh a couple of questions which I even found pretty odd. Or where do you uh do you live in a cottage? So I really thought, Where where does this guy expect me to live?

SPEAKER_00 18:22

This is one of the partners now.

SPEAKER_03 18:24

This is one of the partners, yeah. Um so because then, you know, what happened was I also had another interview with one of the other big fours as well. So I had to tell him at the end, look, I've got another interview on Wednesday. He said, No, no, no, don't go for that interview. Tomorrow I want you to come in again. I want one of my other partners to interview you. So, anyway, I finally ended up getting articles with this particular firm. So having joined the firm, yeah, it was a great firm, you know, uh lots of experience. Uh I had I spent five years with them, uh qualified as a chartered accountant while whilst I was with them. I had to do some postgraduate studies as well, which I did at Howard College. And uh qualified as a chartered accountant. You know, during my training as well, I went through some nasty experiences because uh obviously working for a listed uh working for a for a firm like that, you get involved in a lot of listed company audits. And then when you go out to the audits at that point in time, this is like middle 70s, uh up to early 80s, uh, you come across uh difficult clients. Uh you go to premises where even if you want to use the toilet, there's a non-white toilet which you have to go. You know, you go with a group of people. I remember becoming a manager of that firm and then going out and doing listed company audits, and then suddenly you get the payroll, and then they say to you, uh, you know, as a manager, I'm supposed to be reviewing the payroll. And they say, no, no, no, you're a non-white, you're an Indian, you can't look at the payroll. Because that's only meant for white people to look at. What a time. I would get a I would get a junior staff of mine to do the payroll. So it was a difficult time.

SPEAKER_00 20:12

Aaron Powell The reasons behind that were do you think the the pay grades were different comparative to race?

SPEAKER_03 20:19

Aaron Ross Powell Well it was it was based on race. Because I mean, really you find that Indian people working for these companies were grossly underpaid compared to the whites. When you compare, you see, at our level, we were able to compare the skills mindset and and you know the kind of people that work over there and to say that there's a junior white person who's earning much more than an Indian person who should be getting a lot more. So obviously they didn't want us to expose, uh they wouldn't didn't want to let us expose, get us ourselves exposed to those kind of things, because then we start talking about it. So, you know, we experienced all of those kind of things. But having qualified as a chartered accountant with the firm and uh being at a level where I was involved in quite a few listed companies in charge of the audits and all of that, and we had managers at my level. So after I qualified and like uh two years into post-qualification, uh I found that my peers uh managers with me, uh, you partner, Joberg office, you partner, Cape Town office, and I used to just sit there, and after a couple of months, I thought about this thing and I said, this doesn't look right. So I went to the uh managing partner and I said to him, uh, you know, I've just noticed that uh this is what is happening, and I'd like to know uh what is my position in the practice. And the guy said to me, July, you are a chartered accountant. Yes, you've achieved. But remember you're an Indian and we have no Indian client. So he said any Anyway, what I'll do is uh there were like in that practice, there were about 35 partners. So they used to have monthly partner meetings. And he said to me, I'll discuss it with my partners because you work for several of the partners in this practice, and you have worked for some of them, and you're still working because I was doing on I was on several listed companies. So it was like working for a few partners, about seven or eight of them. So he said, Look, we'll do I'll discuss it at the meeting and I'll come back to you. So about a month later he came back to me, he said to me, Dilup, you know, uh I discussed it at the meeting, and the guy said, Look, everybody says you work very well, but I'm gonna make the point again that we don't have any Indian clients. So I said to him, Well, you know, if that is the case, I have to move. I can't sit here. I can't sit here and wo and see what is going on and accept it. Because that was now in the early 80s. So uh and this particular firm that I work for now does the CEO of the African operations is an Indian person. Okay. So currently. Yeah. But anyway, you know, that is how we that is what we were left with. And what happened was at that time I was uh uh there were some opportunities. Well you see, I had to also sit back and say to myself, do I sit here and stay on as a manager and continue to work for this firm? Do I go out and practice on my own? And if I do, I will just become like other Indian chartered accountants, do bookkeeping work. Because that's exactly what because those Indian firms that were set up, there were about three or four of them. All that they were doing is literally doing bookkeeping work for Indian clients, for small businesses. So do I really want to do that? And you see, also becoming a chartered accountant, uh I only realized that after I qualified, is that amongst whites, you'll find that uh up to about two-thirds of the whites that qualify don't go into practice and practice as auditors, but they go in and become they go in as financial accountants in listed companies and large corporates, and they build themselves into becoming financial directors and then CEOs of the companies eventually. So that opportunity was never open to us. We as Indians were never allowed to go into commerce. So, I mean, I d I was very limited, but there was an opportunity at the university. So they like there were some changes that were being that were being made at the University of Durban Westpow. UCT people were getting involved, and so they reckoned to me, you know, why don't you come to the university? They, in fact, they called me and they said, why don't you join the university? And so I thought about it and I said, maybe I should just go to the university and see what scope there is over there, and then perhaps take it from there. So I then joined the university, and I was very lucky in that within five years I became a professor. Okay. That's great. So that's quite quite a young age. I was only 32 when I was appointed as a professor. So yeah, so this is the 80s.

SPEAKER_01 25:19

This is the 80s. When is this?

SPEAKER_03 25:21

Uh eighty-seven I got appointed as a professor. Okay. I joined the university in 82 and became a professor in 87. So uh and then How does that happen? I mean, is it because you just super You see, fortunately, uh I because I did some postgraduate studies in the interim, so you know, after I qualified as a CA, I specialized in tax. And tax is a field where uh it's a scarce skill. Yeah. So at the university it was a scarce skill. So fortunately, my peer professors at the time said to me that what you need to do is at the interview, you tell them very clearly that if you don't get the job as a professor in tax, you will leave. Okay. So and they realized being a scarce skill that they couldn't find somebody to sort of take the position. So that's how I ended up and at the interview, I tend I actually did tell the panel there were about 18 of them in the panel. Eighteen. Yeah. So I said to them that if I don't get the job, I will leave. So uh so they so so they just had to give me the you know point to. Did you have a backup plan? What if they they call your bluff plan? If they call my bluff. I would imagine Yeah, I I would have imagined that uh I probably would have stayed there for a short while, but but maybe it would have been a good thing if if I had left. Because I really believe that stay staying at the university was not the best thing for me. Why? Because post-1994, there were lots of changes that came around. And I would definitely have done something else. I I would not have done what I did. My career path would have been a lot different.

SPEAKER_00 27:01

So how long did you stay there for?

SPEAKER_03 27:03

Well, I stayed there till 2009.

SPEAKER_01 27:05

Aaron Ross Powell Okay. That's a long time.

SPEAKER_00 27:07

It was a long time. It was 28 years. Wow. You did get your well, the professorship.

SPEAKER_03 27:11

Yeah, I did get the professorship and then you just carried on and then uh So what do you do?

SPEAKER_01 27:16

Do you lecture and you teach? You you you bring up up-and-coming CAs?

SPEAKER_03 27:21

Yeah, normally you see, we were running uh a postgraduate specialist course in tax. So you become a tax consultant.

SPEAKER_02 27:29

Okay.

SPEAKER_03 27:29

And generally when you become a tax consultant, you join the big four, or you join a uh uh legal firm.

SPEAKER_01 27:35

Aaron Ross Powell Highly sought-after skill, then correct.

SPEAKER_03 27:38

It's a highly sought of uh sought-after skill, or you join SARS. So it it was it was actually uh it was a call a master's in tax law. In fact, I've got a master's in tax law as well. I have an honors in tax law and and a master's in tax law. So it was highly sought-after skill. Trevor Burrus, Jr.

SPEAKER_01 27:54

I mean tax. I used to work at a big five law firm, and I remember we had a tax department, and all the tax lawyers were a different breed. Like they they thought differently. They were super I always, in my mind, I'm thinking they're super smart and intelligent because I have no idea what tax is about. And tax law is so complex and you just don't want to touch it.

SPEAKER_03 28:12

Trevor Burrus, Jr. Yeah, because it keeps changing, and you know, there's case law, and you know, you've you've a lawyer yourself, so you you know those kind of things. So yeah, yeah, it's it's a highly sought-after skill. And looking at accounting and management uh accounting and auditing and tax. So so those are the four principal disciplines to become a CA. And the most sought after is tax, definitely. And fortunately, I was just pushed into tax and I ended up doing all those postgraduate qualifications, and that's how I ended up becoming a professor. So then I then that is why I stayed at the university. And look, and in the meanwhile, I was very fortunate in that uh I was allowed to uh to have my own practice. So I started a practice. While being uh While while being in being at the uh at the university. And that's how the practice grew.

SPEAKER_01 29:05

And so over time. And uh is it was it did it was it able to grow because it things changed and it didn't necessarily mean that in order to grow you needed Indian clients or how did that Well you see a lot of it came after a period of time, once when you you know, the fact that I had uh uh my uh my my main source of income was the university salary.

SPEAKER_03 29:30

I thought maybe starting up a sideline practice and let it grow on its own, you know, generically. Yes. Or actually more from an organ organic point of view. I thought it would be a good thing. Uh and then I could make a decision over time whether I should just hop over to the practice or stay at the university. Uh, you know, make a decision there. So fortunately I had two of my brothers who were also accountants, not chartered accountants, but they were accountants. So I could get them to join me and then they could run the practice. And that's how the practice grew. I mean, today we have a staff of nearly 50 people in the Durban office. So it's quite it's actually quite a big thing.

SPEAKER_01 30:10

The Durban office is there, um Schlanga or Lalusia Ridge? Yeah, that's one in Lelucia. It's what's it called Garage Corporation?

SPEAKER_03 30:16

Yeah, now it's called Garage Corporation. And that's something that we'll touch upon a little bit later. But uh it's a multidisciplinary uh practice with both uh financial as well as fiduciary skills. Okay. In a practice which is very unique. So in fact, it was because of my background that I was able to set up such a practice uh with lawyers, uh CAs, tax consultants, financial planners.

SPEAKER_01 30:41

You see You see, most of our viewers are either in the healthcare field or considering a career in healthcare, and I speak for myself. When uh when the accountants and the finance guys use all these terms, I just get lost, right? Can you can you explain it to me like I'm five years old? What do chartered accountants and what do people like you, the finance guys, actually do? Like what do you specifically do?

SPEAKER_03 31:04

Okay, you see, the thing is, it's uh normally one thing about chartered accountancy, it allows you to broaden your s your scope of what you can do. So in my case, if you ask me what I do, I actually advise high net worth individuals and families. Okay. And you you see, accountants are good at doing accounting work and so on. So it's nice to have accountants and and and auditors doing that type of work for you. But when you become a high net worth individual, if you're a businessman and you're running a big business, it's good to have accountants and your auditors. But it goes way beyond that. Once when you start amassing wealth, where do you park your wealth? Wealth is terribly important. And how you actually do that, and hence the fiduciary aspect comes in, though. Things about how you draft your will, how you set up a trust, how you actually acquire wealth, and where do you put that wealth and how the wealth must grow for you. So, and and tax plays an underlying sort of uh uh aspect of all of these things. So if you are a uh high net worth person, if you're a wealthy person, tax will bother you the most. Because over a period of time, you'll amass a lot of wealth, but if you don't put the wealth in the right place, you'll find ultimately it'll come back and bite you in the form of tax. Okay. So tax plays quite an and then growing your wealth is also important. So you ask me what do I do as a chartered accountant? I've actually evolved over a period of time. I became an and became a chartered accountant, I did auditing. Those skills uh have now, over the years, I would say that I've defocused on those skills. And I've moved on because I actually believe advising high net worth people is not about accounting skills and about uh auditing skills. But it's all about how you park your wealth, how you s make sure that your wealth grows for you, and how you make sure that you minimize on your tax. Because when you die, unfortunately, tax hits you badly. And the two wealth taxes that hit you is capital gains tax when you die as well as estate duty. And if you take those two taxes, estate duty at at a high net worth level is leveled at 25%. Capital gains tax for a high net worth individual is 18%. So if you take 25 and 18 gives you 43 percent. Plus other forms of taxes, almost half of your estate can go in the form of taxes when you die if you don't plan properly. On the other hand, if you plan, if you park all your assets in a trust, then you'll find that when you die, a trust never dies. Trust continues for generations. That is why you find the Oppenheimers and people like that have trusts that have been set up over a hundred years ago. And these trusts continue to operate generation after generation.

SPEAKER_01 33:58

Aaron Powell So let me let me give you my simple dentist slash lawyer's understanding of what you just said in simple terms. And to correct me if I'm wrong, and I'm gonna be blunt about it. So you help rich people stay rich, grow their wealth, and make sure it lasts for generations to come. Exactly. Okay. See, I can understand some things, yeah? Some things I can understand. Now, again, on the topic of you know, doctors and healthcare people watching this, right? And let me let me give you some context as to why I want to ask this question. I used to have one of my senior uh colleagues, uh doctor, used to say to me, Yesh, I don't need to buy a fancy car because I just need a car that gets me from A to B, right? And even if I'm driving a little scoro scoro, the public are gonna think, uh, this guy's a doctor, he's got money, he's probably got his money saved elsewhere. So I don't even need to put out that I'm rich by means of a car.

SPEAKER_00 34:56

Just by association.

SPEAKER_01 34:57

Just by association, just the fact that I'm a doctor, right? Now, why I'm mentioning this is because the general public, even amongst ourselves as professionals, we tend to assume that doctors, dentists, healthcare practitioners, they're sorted financially. You know, and actually I don't even want to say sorted. They there is also a perception that they're well off, they're rich, right? Now, I'm I'm assuming, based on your career and the work you've done helping rich people get richer, you will have intimate knowledge of different types of professions, incomes, and the real the reality. You know, not what we put see on Instagram or what we see on Facebook, us driving around with fancy cars. All of that is to say, my simple question is are doctors and dentists rich?

SPEAKER_03 35:41

All in a Well, I think before we can even answer that question, being a professional, you'll never be rich. I can tell you that. That's the sad thing. Whether you're a doctor, or you're a lawyer, or you're an engineer, or you're a chartered accountant, being professionals, you're selling time. And there are only so many hours in a day. And there's only so much that you can do. So by and large, you'll always find that professional people, they you'll you'll invariably find that they'll drive a fancy car, they'll live in a good house, the children will have a good education, and that's where it stops. Whereas on the other hand, if you're a businessman, while you sleep, you make money. It's an idea, a concept that you probably has evo you have evolved, you're manufacturing, you're doing whatever, and you make money. So, you know, I I think this perception, if I was to relive my life, being a chartered accountant is good. That's why I indicated that being a chartered accountant, you have many career opportunities. Uh I would never become a professional myself. Okay. Because at the end of the day, you end up selling time. And there's so many hours in a day. And unfortunately, and I have this so with my own clients. I mean, a client will tell me, I want I want to see you at seven o'clock in the evening because I'm signing a deal. Uh I want you to go through these documents, sit in the meeting, and advise me. At the end of the day, you know, you go to that meeting, okay, you would charge the guy, even if you charge him 5,000 Rand an hour, he would have signed the deal, which invariably will probably earn him 20 million. And you sit there and you sit there for three hours and you charge him 15,000 Rand, but meanwhile, he's made 20 million out of the deal. So you can see uh the disparity uh that uh becoming a professional person and practicing a profession as opposed to uh becoming a businessman. Because you're not selling time. Yeah.

SPEAKER_00 37:35

I mean, it's given you the opportunity to get into the business of chartered accountancy. Because I mean, right now, wouldn't you say that you're currently running a business? It's not so much so about it's wealth planning.

SPEAKER_01 37:50

What would you call your business in like a nutshell? Like wealth planning?

SPEAKER_03 37:52

It is it would be wealth planning, yeah. The type of business that we run ours is wealth planning.

SPEAKER_02 37:58

Yeah.

SPEAKER_03 37:58

But I mean, it invariably there as well, you're basically selling time because you're governed by certain rules that uh that apply to your profession. So it's all time-based. So if I'm there's so many hours in a day. If I'm a high net, how do I know I'm high net worth? Yeah, that's a good question. Yeah, we we generally in uh in our you know, in our books, we normally uh say that anybody who has an asset base of more than 20 million rand.

SPEAKER_01 38:25

Rand. Okay.

SPEAKER_03 38:26

Yeah.

SPEAKER_01 38:27

So is that basically dollar millionaires?

SPEAKER_00 38:28

Asset base, you're not liquid.

SPEAKER_03 38:30

Yeah, we're saying a dollar millionaire would be asset-based, correct.

unknown 38:34

Okay.

SPEAKER_01 38:35

This is why you you you contacted the act and not me. No, not really. Uh, I have to have a dig, I have to have a dig there. Sorry. No, but no, but that's um it's interesting because I like to I like loved your quiz your answer about the professional thing. Because remember, there are some high school students that are thinking, I want to be a doctor, and a lot of us just think, okay, I'll be sorted. I'll get a I'll get a job, I'll earn well, my kids will go to private school, all that stuff that you mentioned. But I wish there were people that told us this when we were thinking of our careers, you know, just to dispel the myths and the rumors that it's not necessarily you'll be okay. But if you really want to make money and be a high net worth individual, think carefully.

SPEAKER_00 39:17

Yeah. On that note, I don't know if there was a question in there, but my question to you, Prof, is you do you think that the current level of education in this country, both at like tertiary level and at high school level, uh is the population being taught well enough about tax? I personally don't think so. But also why is that? Why don't we have like a small tax segment in in our academia to teach us about these sorts of things?

SPEAKER_03 39:45

Oh, they're most definitely. You know, I uh one of the things that uh that uh I've been trying at the university and I failed, uh is to try and introduce a money management uh course for every university student to do. So whether whether you do law, you do medicine, whether you do uh uh engineering, whether you even do commerce, or you do whatever uh uh there must be a a course, a compulsory course uh which must teach you about money management. Because once when you exit the university, and as you know, you all have skills which is in respect of your profession. So when you're a doctor, you're a dentist, or whoever you are, uh you have skills in respect of that profession which you can manage. However, when it comes to money, because I mean the moment you go into practice, the first day as a dentist, I mean you have to open a bank account. You have no idea how to even do that. You don't you you you have to you must understand you can become a sole practitioner, you can incorporate your practice. There's so many different things you can do. Now, those are the kind of things I was trying to introduce into a course, into a course. Uh medical school uh UKZN actually invited me uh to to do a module at uh the master's level. So in other words, not the undergraduate level, it was the master's in family medicine. They had a module. While I was there for about five years, uh I was uh they uh I did a module and then they actually wrote a wrote an exam. So it was an examinable examinable uh just a CPG thing, yeah. Yeah. So uh and um you know I've been trying to hammer that because you have to do a course like that. You know, even to the point where we're gonna talk, I guess, maybe not in this uh juncture now, but I think one of the problems in this country is that we don't have enough entrepreneurs. Okay. And therefore, entrepreneurship should be a course introduced at a school level.

SPEAKER_01 41:56

Why don't we have enough entrepreneurs? Because we've got creative people and people that want to make money.

SPEAKER_03 42:00

I know, I know, but but you know, you have to to be an entrepreneur, to be a um let's say, uh to be anything, to be a mechanic or to in other words, anybody running any kind of business must undergo some kind of skills training to understand the different segments, whether it's finance, management, human resources, for them to grow their business. I mean, you know, everybody is running their small business with one one him as a sole proprietor, maybe two people employed. But that person, if he does get the relevant skills, uh he he gets trained in those skills, he'll be able to expand his business.

SPEAKER_01 42:40

This this point that you make, I I fully agree with, and it probably explains why you can get because let's balance things a bit. We've, you know, you mentioned the thing about you wouldn't be a professional if you wanted to be a high net worth, right? But the reality is there are some rich doctors and dentists out there. They are. And that would- I'm I'm guessing, and you correct me here, that might explain why you get the rich doctor and you get the, you know, average doctor, and you even get the poor doctor. In your experience Firstly, I think you've confirmed it that you do get rich healthcare professionals, high net worth professionals, but what are the mistakes that us healthcare professionals are do making and what are those high net worth individuals doing correctly that you wish, you know, that you would want to tell people that are in healthcare?

SPEAKER_03 43:24

Well, well, certainly uh I think that unfortunately, uh, once when a doctor goes, uh healthcare professionals in particular, when they go into practice, they obviously see their peers. And they all see them driving fancy cars, you know, having maybe one or even two homes and so on. And they they sort of immediately get the impression as though they can get there pretty quickly. Uh how those others got there, it's it's a different story altogether. Uh it's their own story that they would be able to tell you. But I think immediately. Immediately, the bank managers in particular, I've noticed, they make funds freely available because you're a doctor. Or you're a healthcare professional. You have the ability to earn a lot of money. And you immediately find you you get into debt unnecessarily. By driving a fancy car, you want to do all of those things when you haven't really got there as yet. So, in other words, you suddenly find if you look at your balance sheet, your assets are very minimal, but your liabilities are fairly, fairly large because you're borrowing and you're consuming. And you know, unfortunately, you get into that trend of of uh getting into debt and to and then that continues your whole life and you suddenly realize that you'll constantly be in debt. I mean, I see uh two weeks ago I saw two specialists, husband and wife. I just couldn't believe the kind of debt that they are in already. They're in their forties, but the kind of debt that they are in is unbelievable. They're earning well. I mean, both of them are earning two million rand plus each.

SPEAKER_01 45:04

Yeah. But if you look at their debt, it's unreal. But I'm guessing this is not uncommon. B because I mean, yeah, can you read a balance sheet? Do you know how to like do we know how to do these things?

SPEAKER_00 45:14

I mean, definitely not. But I mean, just to your point there, Prof, with regards to the like professionals and I would call it ir irresponsible lending by the banks, not just the banks, like Mercedes-Benz, for example. They give doctors and uh dentists uh a discount on car financing. And uh or if you actually just buy it off completely. But why is that? Why would Because they know that you have got probably a steady source of income, so you would want to like I mean, allocate a portion of that to some form of repayment. Trevor Burrus, Jr.

SPEAKER_01 45:45

I feel like you you're saying this from a perspective of a healthcare professional, right? You're trying to blame somebody else for for for our uh shortcomings. No. But is it a bit of both, or it's just that we can't do that?

SPEAKER_03 45:54

I would say it's it's it's a bit of both.

SPEAKER_01 45:56

Okay.

SPEAKER_03 45:57

It's the aspirations of healthcare professionals, and on the other hand, it's the people who, the service providers who then service these healthcare professionals, sort of give them the impression that look, I mean, you're gonna be making big money so you can spend. So we can make credit available to you, and on that basis you get into debt. And once when you get into debt, that debt never ends because you want to live up with the Joneses and that that story never ends, unfortunately. I was playing. And then also I just want to cover this aspect. Remember, as healthcare professionals and in particular as doctors, you earn a fairly high income, but your expenses are very limited. So whatever your gross fees that you earn, you probably find that the maximum expenses that you can make up in your practice, you'd be surprised if it's more than 25%. So 75% is more or less of your gross fees is actually income to you. Okay. And therefore, your tax burden is high. Oh. And you don't realize that. Okay. It sounded good to me. It sounded good to me until you sound like you would think that you have a lot of disposable income. No. Because if 75% is what is good for you, you're going to find that your tax bill is pretty high. And you know, often doctors tend to procrastinate for the first couple of years, they they they tend to neglect their tax obligations. And that creates a big problem for them down the line. See, that is why I've done a I've done a video. I mean, I've done a uh uh uh a video recording of uh it's called Tax and Wealth for Healthcare Professionals. Okay. So, you know, certainly it'd be good if uh uh as part of this discussion.

SPEAKER_01 47:46

Is it available online? Yes. We must link to it. We must put a link to it in this thing because I feel there's a there's a huge gap, I hate to put it this way, but there's a gap in the market for it because two weeks a two weekends ago I was playing paddle. Uh, you know, it's like you know what pedal is. Um for the first time in my life with a group of finance friends, like all these high school friends that I hadn't seen for years, and they're the first group of friends where there was a non-medic or non-healthcare professional there, and they were all literally in finance. So an actuary, a couple of people working at the big um insurance companies and things like that. And I said to them, I feel like, you know, you you guys know a lot about money and things, and you're probably earning big salaries and all that stuff. But I feel like there's a gap in the market for some sort of individual. And I said to them, I wish we had a friend who is just a financial planner that can just, I can go to them and say, hey, whoever, look at my stuff. Just look at everything. I have no idea what's going on. I'm earning a good salary, but can you just make sure I'm not doing anything that I shouldn't be doing and optimize? Now, is that what you guys do? Is that exactly what you do?

SPEAKER_03 48:49

That's exactly what we do. Okay. Yeah. So our focus is on high net worth individuals, and in particular uh the healthcare professionals. And exactly what you're saying, that's what we do. We just look and see. I mean, typically five or ten years into earning income, we'll see where you are in your life. And then make sure that planning is in place in respect of the different aspects.

SPEAKER_01 49:11

Aaron Powell And then what do you say? Because I know a wealthy guy who always says to me, Yesh, nobody else is going to make you make you rich. You must make yourself rich. Now I can understand that sentiment because you've got to sort of educate yourself and be involved and don't just sit back and let somebody else do it.

SPEAKER_03 49:27

I agree with that.

SPEAKER_01 49:29

But for the skeptics out there that are just thinking, look, wealth creators are just there to make themselves rich, also how does it work?

SPEAKER_03 49:35

I don't know. I I think that uh, you know, the thing is you have to be involved as an individual in your personal things. Uh but at the same time, you need guidance by somebody who's a professional who knows how to do it. And that that is why you can't go, you see, that this is why the insurance industry always had a bad name. Because they had these insurance agents who all they used to do is just sell policies.

SPEAKER_02 49:59

Okay.

SPEAKER_03 50:00

And you know, you sell, you buy a set of policies today, and then two years later somebody else comes along and says, no, that's rubbish. Buy these uh new sets of policies, and you just carried on in that way. You're not you're not building any wealth. So you're being poorly advised. At the same time, you don't understand what's going on, and you're relying upon somebody else. You can't be in that position. Okay. So therefore you have to be involved. At the same time, you help you have to be guided by people that are professionals.

SPEAKER_01 50:30

Coincidentally, yeah, uh on this point.

SPEAKER_00 50:34

Like this is what like Prof. But I think at one stage you were probably you were the financial planner of the year at at uh when was that?

SPEAKER_01 50:43

I think 2004, I think. Is that correct Chat GPT? Trevor Burrus, Jr. No, I was gonna I was gonna say that coincidentally, on the point of you know staying on top of it but also using professionals to guide you. Coincidentally, I was listening to Warren Ingram's podcast this morning. It's called Honest Money, and they were talking about estates and planning and how important it is, and how most of us, especially us with kids, you can't procrastinate on getting a will and things like that. But going to the policy bit, like I was thinking, if I die, who is going to actually know that I've got this policy here with this company and I've got this there and get that all together and make sure it's it's optimized. You know, is that also some some kind of things that you guys do?

SPEAKER_03 51:24

No, no, definitely. That that is something because I mean to create this electronic file about your life and all your documents and put them together is something that we do.

SPEAKER_01 51:35

Oh, is that the thing?

SPEAKER_03 51:36

In fact, I call it the smart file. All right. We have an electronic file called the smart file, where you electronically file all your things so that you know it it's uh everything. In other words, your IDs, your marriage certificate, your antinuptial contract, uh title deeds, all of those things, how important that is. Because when a person dies, just to get hold of those documents, it can take months. And and you know, this is why coming to an office like ours, being a wealth management practice, uh, you know, all of this information is there already. So when we draft your will, you see, you and also your will must talk to your insurance policy beneficiary nominations. I mean, yesterday I was sitting with a client where typically the will is saying one thing, but the nominations are saying something else. So what happens is that all the beneficial nominations is outside the estate, the person's got a serious estate duty problem. He has to pay about 15 million rand in estate duties, but no money is coming into the estate. The policies are being uh directed directly to the beneficiaries, and it's so difficult then. The money, okay, when the person dies, the money goes directly to the beneficiaries. But the problem is that you're suddenly now sitting on an estate with a couple of properties, and therefore there's a lot of estate duty to pay, and even those policies are dutable. So now there's there's an estate duty liability that you're sitting with, which amounts to like 15 million Rand, but the policies have all been paid out to the beneficiary. Now you say to the beneficiaries, you know what, this estate duty is partly due to the policy that you've received. So therefore, can you contribute your portion to pay towards this estate duty? And they tell you, no. My dad made me the beneficiary. This is my money. I'm not prepared to part with it. So what then happens? The estate stands in limbo, all the properties don't get you can't close the estate, and everything comes to a standstill. So never.

SPEAKER_00 53:36

Seriously. Because I mean those properties can't come to them.

SPEAKER_01 53:39

This is fascinating. Um So you're dealing with a lot of rich people, right? Um, which leads me to my next question. What's the hardest part? I mean, rich people are difficult. I know this. High net worth individuals are difficult. What's the hardest part of your job?

SPEAKER_03 53:52

Yeah, it's uh the hardest part of the job is to get them to all sit together. The hardest part is when you draft, when you're sitting with, for example, the father typically in a family. Uh you're sitting with a father, he's in control of everything. He wants the world to be drawn the way he wants it to be drawn, you know, and exactly what he wants to be done. And then you sort of say to him, okay, we've got everything in place, got a proper estate plan, there's sufficient money from the policies or whatever will come into the estate, we can manage all of those things. But now you're giving those uh company shares to son A, and you're giving those, that property or that insurance policy to daughter B, etc. Can we not now, having done all of this thing, it's done well, can we get the whole family together and can we have a discussion? No, no, no, no. That's not my problem. You need to discuss that with them. When I die, you need to tell them all of these things. Wow. That is the most difficult part. We have that all the time. And you know what? Before the body can even get cold, in families, people are already fighting. Wow. And you know, the the from a coming from a fiduciary and a wealth management practice, I'm doing fiduciary now for almost 40 years. I tell you what, in high net worth families, it's a problem 90% of the times. People don't stop talking to each other. They have fights and then, you know, I mean, I've had like people that walk out of my offices, having read the will, uh, don't agree with things. It's a serious problem. Fascinating, huh?

SPEAKER_00 55:27

Yeah. But and but you think the dad doesn't want to do it and be transparent while he's alive because he knows that that's what's going to happen inevitably. So rather him die and someone else.

SPEAKER_03 55:36

Then somebody else worries about it. That's very true. Well, this is why what we trust starting to do, what we what we're starting to do now is we're starting to record these people and say, okay, we'll record you and you tell your family exactly. We'll play the video. Wow, that's cool. Yeah, video. That's a bit creepy though, also, because the guy is dead now. I mean, but at least we've got we've we've got we've got a couple of recordings of high network individuals already. You know, when a person dies, he doesn't want to discuss it with his family. Okay, we'll we'll play the video recording.

SPEAKER_01 56:07

It's amazing, yeah? I mean, uh Warren Ingram, or his guest, actually used the term ruling from the grave. You don't want to have be ruling from the grave in your world like uh he gave an example of, you know, um they somebody owned a farm in in in Zimbabwe and said this farm must never be sold. But then because of the the change in the regime and you know the expropriation of of farms, the whole family ended up actually screwed over by this request in the in the world that it never gets sold because nobody So ruling from the grave. So do lots of people want to rule from the grave in their will and things like that.

SPEAKER_03 56:42

Yeah, yeah, no, certainly. Some people, you know, like impractical kind of uh rulings you put in your will, uh directions that you give, uh intentions.

SPEAKER_00 56:52

Yeah, you sorted your wool out. Not yet. Yeah, sorted. But sorted out. Yeah, I needed to transfer it. It doesn't sound very it's also it's it's dynamic. Like a wool is something you quite.

SPEAKER_01 57:02

It's almost like We only did our will in COVID. We only did our will in COVID because we thought we were gonna die. Like seriously, that that's the time.

SPEAKER_03 57:11

And you see, you see the pro the the there's a small problem with the wool, and you generally find that look, without not labeling the banks and insurance companies, you know, people go and get their wools drawn by banks and uh uh with banks. But there's a serious problem with that because generally the kind of world that they draw up for you, they they conclude that you're not gonna be coming to them again. So you could often find that a wool has been drawn that's probably like 20 years old, it is totally not applicable, and then the person dies, and then they then they realize that they do have a copy of the world, but it's the bank. Then they go to the bank and they realize that, you know, that the children are now overseas, uh, that the wool is totally uh it's it's actually it doesn't really direct what should be what should happen. So therefore updating your will on a year-to-year basis is important. And that's what we encourage with high network clients. That they every year, or if circumstances change, then you may have to do it earlier.

SPEAKER_01 58:12

I mean you mentioned the electronic file thing, which is brilliant because I was thinking morbidly, you know, if I die, who knows my passwords for this one password. Is it on Google Drive, or did I keep it on iCloud?

SPEAKER_03 58:24

Or no, we have that problem with clients all the time, eh? Sure. Of people who don't give us the information and come to us. Fascinating. Serious problem.

SPEAKER_01 58:34

All right. Yeah, you what what did you were gonna say something, I interrupted you.

SPEAKER_00 58:38

Yeah, we were gonna go back to um the financial planner of the year in in 2004. So what was that? Do you want to tell us more about that? What was the criteria for that? Did you have to be nominated?

SPEAKER_03 58:50

Yeah, well, what would uh first the financial planner of the year? In fact, they had just introduced it at that time. That was um 2004. So it actually was first introduced, I think, in 2001. Uh the financial plan, and it still runs now. They have a financial plan of the year, which is by the uh uh uh by the Financial Institute. It's run by the Financial Institute. Um what they do is that they get you through a rigorous process process. So you get nominated, and then what then happens is that you're meant to come up with a when I did it, uh we had to do a financial plan of a client of ours without giving the details of the names, etc. And then we then submit it, and then it gets reviewed, and then they come to our practice and come and have a look at what we're doing and how we run the practice. And then the third level was uh and then they start to reduce the the numbers. Then they have a panel of about six people uh that interview us. And uh yeah, from that interview uh they choose the financial planner of the year. So uh it is quite a rigorous process that you have to undergo. And the Financial Planning Institute, FPI, Financial Planning Institute, they actually run this thing. So uh Yeah, I actually won it in 2004. And it's actually amazing at that financial planning at the time in my winning sort of speech that I gave, I said ten years into democracy, I clearly remember my words. I said to them financial literacy is going to be critical for South Africans. And I still believe up to today that is where the problem lies. The government has not spent and I made a plea to the government at that time that they have to get involved. And the government has not got involved. And that is why financial literacy, especially amongst black people, is a serious, serious problem.

SPEAKER_01 1:01:02

When we say black, you mean black, Indian people of color. People of color.

SPEAKER_03 1:01:05

People of color, yeah. Because I mean they have absolute they've they're they've never been exposed. You see, with white people, and especially high-net with well uh white people, because they've had exposure for, you know, have had money and money.

SPEAKER_01 1:01:19

Generational generational wealth sometimes. Correct. Yeah.

SPEAKER_03 1:01:22

So their families automatically get exposed to these things. But when when we as black people come into money, we are not exposed to any of these things. We don't know anything, any of these things. We don't know how to manage it, we don't know how how to m grow it, all of those kind of things. Yes. So it's critical. And uh look, I mean uh I think that that uh financial literacy is critical. And the government still hasn't taken heed uh, you know, of of this thing about financial literacy. Okay.

SPEAKER_01 1:01:57

Prof, uh on the topic of you know financial literacy in the country, right? It it's made me think, because you mentioned you know, speaking to the government and encouraging them. It's made me think of something that a lot of close friends and family have sort of tried to nudge and encourage me to do and say, Yesh, you've got a young kid now. Think of immigrating. You know, what are your thoughts on you know, the country, the economy, the outlook going forward? I mean, you you have quite a bit of insight into this kind of things, I'm assuming.

SPEAKER_00 1:02:28

Before we even get there, Prof. I wanted to also just touch on a personal aspect of um I mean you've got three daughters as well. They've all gone into the same, if not directly associated with your practice. Am I correct?

SPEAKER_03 1:02:42

Yes.

SPEAKER_00 1:02:42

Yeah. Did you encourage them to get into this uh into uh accountancy?

SPEAKER_03 1:02:49

Not really. I think they they made the decision on their own. My eldest daughter uh is involved in tax with SARS, and you know, she's other team. Yeah, she's a CA. She did a master's in tax law at Fitz. Uh she um and my youngest daughter's also CA. She's um uh she's in London now. Uh she also made a decision on her own to do become a CA. She wanted to become a doctor, and she changed the very last minute to become a CA. Oh, she didn't waste the brain. She didn't waste the brain.

SPEAKER_01 1:03:26

She didn't waste the brain. I always say, like, why waste a good brain on medicine? But but also that's funny you mentioned this, right? I learned this two weeks ago. Yeah, I don't know if you know about this. But the CASA degree is apparently like one of the top four or five in the world. Like it's a very sought-after degree.

SPEAKER_00 1:03:45

Like And allows you to travel.

SPEAKER_01 1:03:47

Yeah, apparently in London, the the potential employers will you know give precedent to somebody coming with a C A S A than somebody you know, even in the UK. Yes. I didn't know this. How come is that what enabled?

SPEAKER_03 1:03:58

Well it's uh Well it's uh regarded as the C A, the South African CA. Yeah, C A-SA. Yeah, C S A. Yeah. It's actually regarded as uh the top three qualifications for a very long time. It's always held that position in the world. So How come? It because I think the the process has always been very rigorous. To become a CA, it's n it's not a it's not an easy qualification. I never knew this, eh? I never knew this. Because you remember there's also this we write public exams, although I I know that in medicine you don't really write a public exam. I always write the university exams. But uh with the CA, because there's a public exam involved, and that public exam, the standards are kept at a very high level. And uh I suppose in South Africa they've always maintained a very high standard. That's why South African CAs are sought after throughout the world. And yeah, we don't have to write any other exams. That's so cool. That's very cool. Other than you know, maybe a local law exam that we would probably have to do. Okay. Uh commercial law, maybe and uh and tax if you go into another country and you know. But by and large, the skills that you acquire uh they're well sought after throughout the world.

SPEAKER_01 1:05:14

And then you guys become CEOs eventually of big companies.

SPEAKER_03 1:05:17

Well you see, you remember that's what I I pointed out, that becoming an auditor is not such a good another great thing. Right. Becoming a CEO of a listed company as a CA, you have a very good chance that you'll get there. So if you I I can't remember the stat now, but I used to give it a stat before. Of the top hundred listed companies on the JSE I'm subject to correction now. I used to give it a stat before. I think it's about sixty percent of the directors in the top hundred companies are CAs. It opens doors, right? It does, it definitely got the qualification open. Takes you there. Yeah.

SPEAKER_00 1:06:03

Because I mean Kanita that allowed allowed her to move overseas or like work wherever she wants to actually work. And even one of our cousins as well. I think she's at PWC or Deloitte, one of the two.

SPEAKER_01 1:06:15

But um Yek and I are quite pro-South Africa. Like we even named, I even named this podcast, Why Did I Become a Doctor, South Africa Deliberately, because I still believe in this country. I think we've got fascinating people, amazing weather, food, all that stuff. It's just that we need to realize it ourselves, and we've got to be part of that change. So let's go back to that question. What are your thoughts?

SPEAKER_03 1:06:40

Yeah. I think that, you know, peep uh I think South Africa is a great country. There's no doubt that if you look at the history of the country, it underwent apartheid rule for a very long time. Uh and then post-1994, uh, we had democracy in the country. And certainly I think the ANC government, with true intentions in 1994, identified the three uh the actual triple curse that they call it, which is poverty, inequality, and unemployment. I mean, that triple curse they identified in 1994, and they worked with it. I admit that South Africa went through a honeymoon phase for the first ten years. Now I consider it as a honeymoon phase. Not that they were great and that they that the government did anything great. The whole world looked at South Africa, and you're right. South Africans generally are well recognized throughout the world in many things. Elon Musk, Musk would be an example of somebody who was who is South African, but there's so many of those South Africans that you you can identify with. So certainly uh uh uh uh I think that it is a great country. I think what is most important is South Africa is is one of the richest mineral resources countries in the world. I want to repeat that statement because a lot of people don't realize that. It is one of the richest mineral resources countries in the world. There's no point in being rich below the ground and above the ground the people are poor. It just doesn't make sense. It's absolutely and you would think 30 year years into democracy the government would have done something to change the lives of people. They haven't done that. And I think that that is the serious problem that we are facing. The government of this country has not done the job it's supposed to have done. All it has done is enrich the few minority people at the expense of the majority. And you know that sadly is driving people away because they believe the people who are going away either had an experience in some form or the other, like crime or whatever it is, or believe that there will be a revolution in this country. Because the majority who will somewhere down the line will say that we can't tolerate this anymore.

SPEAKER_01 1:09:07

I agree with what you say about the minor I mean, you just the minority being enriched. Yek and I worked in rural areas for a few years and we saw firsthand that they are poor people. Because you can live in these big cities and you you might get detached from reality and think everything is great. Like I walk around Santon and I think, wow. But when we used to work in Standerton and Folklist and things like that, we would see poor people, like proper poor people. And uh fully agree.

SPEAKER_00 1:09:32

As in like no infrastructure, no electricity, no running water. But uh you know, healthcare, no access to healthcare. But the majority I think of like how media interprets that is it's not it's not transparent. We no if you if you just watch TV and you watch the news or you watch a movie or series or anything that's based in South Africa, it's Santin, Cape Town, or like Durban Promenade or whatever. Bitford view. No one showing like the Daha Kral areas or where we used to actually go and work, whether it come from a hut to get an extraction done and they had to wait like one month for the But we've still got a future, right, Prof? I mean, there's the future.

SPEAKER_03 1:10:12

Certainly, you know, there there is a future, there's no doubt about that. I mean, they you can't run away from the fact that they are still good things in South Africa that that one would enjoy. But I think that uh there has to be a change in in the management by government of the resources of the country. I think that's where uh they I mean typically, you know, we see i in South Africa, you know, they have no value for money spending, the government itself. Okay. They don't understand how important it is when you spend money to get value for what you're spending. I mean, you know, you talk about the uh wasteful, uh inefficient, uh fraudulent kind of expenditure. I think Zondo Commission clearly highlighted that. But despite Zondo's Commission's recommendations, we don't see enough prosecutions. And I think that that certainly uh doesn't all go well for this country. Okay. So uh you know, I mean, typically you take the state-owned enterprises, I mean they they even the way these state-owned enterprises are being managed, it's sad that uh that there's no control whatsoever. I mean, taxpayers' money, hard-earned money. And coming back to high net worth individuals, I want to just come back to this very point about uh about the government and how they spend, etc. So I want to go back to high net worth individuals who want to leave this country, who believe that uh I mean, you know, they they draw this parallel. There is such a thing as tax morality.

unknown 1:11:42

Okay.

SPEAKER_03 1:11:42

For for the money that I earn in this country, and I have to pay the tax, what do I get in return as a high net worth individual? Let's face it, I have to pay for my own pension. I must pay for my own healthcare, I must pay for my own children's all of this with after tax money. Securities, policing. Policing, all of this with after-tax money. In other words, I pay my tax in this country thinking that the government will be securing me in terms of, as you're saying, whether it's the police, whether it's the health, whether it's the education, you go to the other countries. Water. Water, basic, electricity, all of those things. You're doing all of that with after-tax money in your personal capacity. Yet when you look at many of these other countries, yes, the tax rates are high. And let's face it, in this country the tax rate is not low. I mean, you're paying Is it a lot lower, you say? No, it's not low. Not low, not low. Okay. I mean you're paying at uh if you're a high network individual, you're paying 45% tax uh in in your in based on your normal income that you earn. You see if you sell any property, you're paying capital gains tax at 18%. You're paying estate duty when you die at 25%. You're paying when you you're buying property, you're paying transfer duty at 10%. You look at all of these and you and you total them all up as a high net worth individual, by the time you finish off, you're probably paying 70 to 75% of whatever you earn of your wealth in the form of tax. So it's grossly unfair on those people. Now you're giving your money in good faith to government to say that look, you must sort out all these other things. So that everybody you see in South Africa, and unlike India, if you draw a parallel, I mean in India in the last ten years, what you've found is that there's an emerging middle class of people. You have a population of 1.4 billion people, but presently they quote a number of between 500 to 600 million people that have become middle class. That's huge. Ten years ago, that wasn't so.

SPEAKER_00 1:13:53

From poverty coming up, not the other way around.

SPEAKER_03 1:13:56

And then and then therefore, you'd find that those are the people who are now what they're doing. They're buying an apartment, they're buying a car, their children are going to schools. All of that is contributing to the economy. That's not happening in South Africa. Why? Because the government is poorly managing whatever small taxpayer base, which is now reducing year on year, that are contributing to the fiscus, these guys are literally burning the money that taxpayers are contributing to the fiscus. Now, if you take, for example, take the state-owned enterprises. You take uh state-owned enterprise like let's take Prasa and take SAA. Okay, let's take SAA as an example. SAA is not regarded as a strategic state-owned enterprise for South Africa. All these years they've been contributing towards taxpayers' hard-earned money towards SAA. Look at where SAA is today. It was one of the prime 20 years ago, it was one of the best airlines in Africa. Today it's not even regarded as an airline. It's not even running international uh routes.

SPEAKER_01 1:15:09

How come SARS is so good though? Well, are they so good? I've I've heard I've heard they're very good.

SPEAKER_03 1:15:14

Well, look, we we'll we'll talk about SARS just now. But let's go back to this SAA story. Yeah. Does South Africa really need that's not a strategic SOE to it. It doesn't need to happen. It's an airline. It's an airline. You can privatize that airline and in in fact allow Emirates, for example, to take over SAA.

SPEAKER_01 1:15:35

We've got unemployed doctors, for goodness sake.

SPEAKER_00 1:15:38

Is the airline really that No, but but to the example that you did give, I mean, as an example, the rot with SAA, I mean, from my interpretation was it was instantaneous. It was poorly managed by the government instantaneously by one particular controversial family that were intentionally stopping roots with that. Yes. So that's I mean, that seems something that was very it wasn't like an erosion that happened. That was kind of just very acute. It was and it was devious.

SPEAKER_01 1:16:09

Yeah, very much so. Without getting into the nitty-gritty, the the point that Prof. Rich people are paying taxes, expecting the government to spend that in good faith and responsibly, and that's not happening.

SPEAKER_00 1:16:25

But I I understand that, Prof. But at the same time, they got and my interpretation is they've got to keep this tax high for rich people because poor people are also not paying tax. So where is the tax gonna come from? It also falls like the morality also falls on the burden of like the poor people as well to at least contribute. But the for me it's like the rock just keeps getting deeper and deeper.

SPEAKER_03 1:16:47

Well you see, these you see this thing about identifying the triple curse, inequality. The inequality is gone it's gone bigger now compared to 1994. So the whole idea is that you want to sort of try to ensure that the poor people get get money in some form or the other. It goes back, you see, that the third curse, which is unemployment, the idea is to create the employment so that more people can form part of the mainstream economy so that they will then be contributing to the fiscus and in that way narrowing the gap of the inequality. Poor people then become obviously middle class.

SPEAKER_02 1:17:28

Yeah.

SPEAKER_03 1:17:28

And then I'm giving you the India example. I mean, typically that's how you grow the economy. That is why India is growing at 7 and 8%, and we are growing at a dismal rate of 1% for over a decade, you will never be able to grow this economy. And then look at the wealth that we have of mineral resources. Now marry all of that. So strategically, these politicians are not thinking well at all. So it's all about management, basically. Of course, it's all about management. It's a management of the resources of a country. So now if you if you were to draw the parallel with, let's say uh let's t l'est take these uh BRICS nations. You take Dubai, which is part uh UAE, China. You take all of those countries and have a look at 30 years, the past 30 years, because we can draw that parallel with South Africa in the past 30 years. Look at where the way these countries, I mean, oil was only discovered in Dubai in the late 19, I think early 1990s. The same time that we became uh you know, we achieved this democracy in our country. And look at where Dubai is today and compare that with South Africa and draw the parallel. Okay.

SPEAKER_01 1:18:42

So how come SARS uh was a different was an outlier?

SPEAKER_03 1:18:44

So so let's come back to SARS. So you know, SARS, I can tell you that uh as far as SARS is concerned, in 1997 SARS became autonomous.

SPEAKER_02 1:18:55

Okay.

SPEAKER_03 1:18:55

So 1994 became democ uh we democracy was achieved. And in 1997, SARS became autonomous. So it's not previously was part of government. SARS was part of government. It became autonomous in 1997. There were eight of us, and I was one of them, that got appointed on the SARS advisory board. Okay. Right. So we eight of us were appointed on the board to now steer SARS away from being part of government to become an independent organization and then effectively to collect money and to become a good administrator from that from that point of view. So we got involved in 1997.

SPEAKER_00 1:19:38

But not privatized. Sorry, Prof. But not privatized.

SPEAKER_03 1:19:41

No, it's not it's not privatized. Uh it it still has certain, you know, arms or organs of government. You know, when you speak about government, you speak about the institutions, you speak about uh treasury, you speak about the judiciary, you speak about SARS. So SARS is still an organ of government in that form. Uh yeah, so so we were appointed. Eight of you. Uh the eight of us got appointed at that time. And we stayed on for ten years. In fact, I was the only guy who stayed on for uh I stayed on for sixteen years. Uh I was the only guy that stayed on beyond the ten years, ten-year period. But there were there were eight of us appointed for a ten-year period. And what we did was we uh we then um appointed there was a team that was set up that went internationally to all the countries, uh developed nations like Australia, New Zealand, uh, US, Denmark, uh, UK, and they picked up all these administrative uh things that were happening there from a collection perspective, brought it to South Africa, and so we were the team, we were the independent board that reported to the Minister of Finance at that at that time it was Trevor Manuel. And uh and so we were the interface between Trevor Manuel and then Praveen Gordon got appointed as the commissioner. Uh he got appointed in 1999, but we got appointed in 1997. So we we were the interface. And then we saw the SARS through that period, through the period where we changed everything. But then things then changed again when Zuma came on and appointed politically uh people got appointed.

SPEAKER_01 1:21:28

I'm glad I asked the SARS question because I didn't you didn't set me up to ask this. I didn't know you were involved in that. No, I didn't know about that. I didn't know about that. But that's so basically you le you guys learned from the best. You took from the you know the other countries. Correct. You figured it out. But so then why don't you get involved in government elsewhere?

SPEAKER_03 1:21:45

No, but apart from that. Well, well, I was involved in some other spheres of government as well myself.

SPEAKER_00 1:21:50

Because Dr. Praveen got uh his the ministerial position, were you an advisor to to him as well?

SPEAKER_03 1:21:55

Aaron Powell Yeah, where there were there was a time where for Trevor Manuel and for Praveen Gordon, I was I was uh I pushed on the SARS question.

SPEAKER_01 1:22:04

I had no idea that my rudimentary Chat GPT research didn't pull up that you were part of this. Okay. Because we're running out of space, so I I don't want to keep on going. Is there anything but I want to ask you a question. What do you do for fun? What are chartered accountants and wealth? Besides making people rich, what do you do for fun? It's a good question. If anything. If anything. I can't remember whether it was my lawyer friends or whether it was my doctor friends. But they said to me, um what is a chartered accountant's uh birth control uh and if their personality. I'm keeping that a wow. Yeah. Mrs. Garachi's uh not gonna be happy with that. So what do you do for fun, bro?

SPEAKER_03 1:22:45

Yeah, look, I mean, it's it's uh actually I keep Pasha busy all the time. Yeah. I'm actually quite a busy body. Uh look, I mean, I I uh I read quite a lot. Um I used to play golf, but I stopped playing golf now. Uh I should I should get back to playing golf. Uh I mean you used to play on and off. Okay. So play it and then stop play it, play it and stop play. But I I mean, you know, golf is a game, you have to be at it all the time. You can't you you can't be like uh occasional golfer. That's the unfortunate part. So yeah, I mean uh other than reading and listening to music and movies. Good question. I'm 70 now.

SPEAKER_01 1:23:27

70? Okay, well you don't look good for 70. Yeah. With the viewers. Because we have listeners and we have viewers. Good for 60. Yeah. Yeah.

SPEAKER_03 1:23:36

Well done. Okay. Um, look, I mean, uh it's it's it's actually it it's a good question. Uh I do plan to retire. Obviously, I have to retire. But uh I think I have a very active mind. My body is telling me to slow down, but my mind is very active. Okay. So as long as my mind stays active, I think I will still continue to work.

SPEAKER_01 1:23:55

I mean, AI, I've been thinking about this uh recently a lot. Like AI can do a lot of what I do in my job, which is advising people. Do you ever see that AI is going to become, you know, personal finance gurus for each individual person? Ever thought of that? Not not yet.

SPEAKER_03 1:24:12

Well, well, the you look, I mean, people will be using AI to try and get a lot of information, find a lot of solutions. But I think that it still needs to be interpreted further to individuals to meet their personal tastes and so on. I don't think you're gonna get AI to do that.

SPEAKER_01 1:24:29

Right. And we always ask this question, and I'm gonna put it to you this way, because Yak mentioned you've got kids. So I just maybe in 20 years' time, if you ever have grandkids or whatever, and they come to you. But I've got five grandkids. Oh, do you have five? Oh. Five. Oh, goodness, okay. Five grandkids. What do they call you? Dada or Nana or Dada. Dada. So if they come to you and say, Dada, I want to be a doctor. What do you think? What would you say to them?

SPEAKER_03 1:24:54

I I would say to them, think again. Definitely think again. Yeah. Because uh I would steer them into a business direction.

SPEAKER_02 1:25:04

Okay.

SPEAKER_03 1:25:04

I mean, even if you get a professional qualification, move it if you can convert that business qualification, uh rather the professional qualification into a business, it'd be a good thing.

SPEAKER_00 1:25:15

Which is what you've done. You've taken you're in the business of finance, of accounting. Because he's got his own firm.

SPEAKER_01 1:25:22

He's in the business of making people wealthy. That's I I like that. It sounds nice, doesn't it? I mean, do people come and you know, send you gifts and thank you that you may you know or is it a thankless job? Uh like yak is in private practice. I think patients once in a while they appreciate you. Most of the time, they're like it's a grudge purchase. I get gifts though. But do you get like really happy? How do how does that work? No, they do. Mrs.

SPEAKER_00 1:25:44

Garas brings me, sends me gifts.

SPEAKER_01 1:25:45

Oh, as as a okay. No, they they do. Yeah, they do. So you do get grateful.

SPEAKER_03 1:25:50

Yeah, you people appreciate the effort that you put in.

SPEAKER_01 1:25:53

And you don't regret not doing medicine all those years ago or something like that?

SPEAKER_03 1:25:57

No, I don't.

SPEAKER_01 1:25:57

No, it's brilliant. Anything else you want to talk about, Prop before we go for today?

SPEAKER_03 1:26:01

No, I think I think today we've discussed a lot of things. Yeah. I'm sure that the viewership or listen listenership would appreciate some of the comments.

SPEAKER_01 1:26:11

I found it a fascinating discussion.

SPEAKER_00 1:26:12

Oh, yeah. Definitely. Yeah, we could have gotten a lot deeper because there's a lot I also want to know about you know from a financial planning perspective as a as a business owner.

SPEAKER_01 1:26:21

Good point. I want to link to that and in in the video description that that clip of yours on on. Okay. And you know, I'll put your details of where people can contact you. If there's any high net worth uh viewers on uh and listeners, firstly get in touch with me because we need sponsorship. And secondly, we'll get in touch with prof. All right, prof. Thank you so much. Thank you very much.

SPEAKER_03 1:26:41

Thank you.

SPEAKER_01 1:26:42

Thanks, Prof. Thanks, uh that was fun.