Jimmy: It is personal finance time on a Monday we're going to be taking a look at some wealth creation secrets beyond savings with the team at Novare, I am joined on the line by Dr Theuns Mans, to take a look at this and see what we make of it. Dr Mans, lovely having you on the show thanks so much for taking the time.
Where do we start to have conversations around the difference between wealth and savings? Where does the bridge kind of start?

Dr Mans: Hi Jimmy thank you for having me tonight hello to the listeners as well, that's a very good question and I get a lot in practice, saving is obviously very important and building wealth and I find that so many people focus on building wealth which is fine that's obviously how we develop wealth but, these conversations should happen the bridging these conversations with your family we're talking about generational wealth tonight and you know I find that you know as soon as possible start to have these conversations what going to happen with our family wealth you know if circumstance change you know someone pauses away or someone get seriously ill and while this not necessarily only you know savings, wealth can be a business you know in most cases you work with entrepreneurs this single point of wealth is this massive business that they developed their whole life and worked a whole life for, so it's very important to bridge that and have these conversations as soon as possible.

Jimmy: Dr Mans you touched on a very important topic that it's not just about savings, we should be thinking about wealth in different shapes and forms and in South Africa we know there's no shortage of entrepreneurial activities and businesses being started here. Where do the conversations then break down if we know that businesses have the opportunity to create wealth for families and for generations why then do we have the breakdown that we do when it comes to things like wealth transfer conversations?

Dr Mans: Let me give you an example, imagine my father was a big businessman and he had a very specialized business whatever it might be an engineer or a medical doctor or whatever the case is and he now passes the responsibilities towards me if circumstances change he poses away or whatever circumstances change because I'm his son I'm next in line the next generation to inherit this asset but who’s to say you want that responsibility who’s to say I want to continue with the family business I might have something in totality different in mind for my own life which is not part of the actual family business, that's why it's so important to have these conversations around generational wealth what is gonna happen with this business in this instance say for example I didn't want to continue with the family business because I had something else in mind then it is best for my father to have you know serious conversations in terms of business continuity you know what's gonna happen with the business there is obviously employees in the business that rely on the business that social responsibility part as well and there's a lot of business continuity cases you can go into but can you see where I'm going with this to have this conversation, first my family not just assume because I tick all the boxes I tick all the estate planning boxes I have a will in place I have life covering place, I have abundant savings you know, money doesn't necessarily solve the problem you know. This is a more conversational thing with my family to see you know, are they ready and do they want to take on the responsibility? You know, I strongly believe, you know, a well-funded estate can fail.

Jimmy: Dr Mans it sounds like you're very,  you're talking very much around intellectual wealth transfer not just the physical currency transfers that come through if we are to kind of broaden that conversation and look deeper into that how do we ensure that the right conversations are being had because as you said for some family members they might not want to be a part of the family business they might have their own ambitions and things how do we start to have the conversation so that we can understand the value that is being created or the value that might be lost and basically where the implications could be of these decisions?

Dr Mans: This starts obviously with the head of the firm or head of the family to have these difficult conversations, it's not necessarily a difficult conversation but it's a question to put out there, but in practice Jimmy what really works is to get a proper advisor involved in this a proper estate planner you know, get coordinated advice because most of these guys will have auditor in place they will be audited doing the books, accountant and they will probably be a lawyer involved as well doing all the legal work and contracts and wills etcetera. But to have a proper estate planner involved in this as well as a coordinated point of contact to help you know with these conversations, because most often well qualified estate planner and well experienced estate planner will be able to probe these conversations to pick up and say yeah I hear you on this but did you ever think about this and this and there's a soft side that is that's a practical way of doing this.

Jimmy: Dr Mans let's take a look at first generational wealth those that are looking to start wealth for future generations those that might not have businesses operations and things to inherit but that might say I think my side income or my side hustle could be an avenue for me to explore in the long term what are the building blocks of new wealth creation where wealth didn't previously exist?

Dr Mans: Yeah so savings is obviously the first the first step yeah I mean if you don't save and you don't have wealth you can't really plan for wealth, but I get a lot in practice Jimmy as well where clients ask me you know when is the right time to start thinking about all these generational wealth stuff you talk about all these building blocks you're talking about because you know obviously it's a structuring exercise their might be stuff like trust involved and all this stuff and people usually think I might be I must be very successfully before I can even think about that, and that’s not the truth. You know if think your side hustle you know can pull you through and really develop into something big the best time is to start yesterday you know start as soon as possible with it, it's not necessary it doesn't have to be this massive expensive exercise but to start working with someone and someone that can understand your affairs and how it fits together is powerful over the long run.

Jimmy: Dr Mans, What about making mistakes, often we're told this is the blueprint it has to be a perfect blueprint in order for it to be a successful one but what about the role of being able to make mistakes learn from those mistakes and teach those learnings on to the family to the next generation how much of a role does that play in the mindset and the psychological aspects behind wealth creation?

Dr Mans: Well I think it is massive you know Jimmy, I think most of the mistakes when it comes to generational and family wealth is disputes you know where family members end up in dispute they fight about certain elements and I think I think that's so powerful to learn from these mistakes how we handle certain situations you know you get a lot when especially in the elderly generation where they are sort of private on their on their affairs they don't want you to go there and ask you know the difficult questions serious questions, and that in itself is a form of a mistake because that often results in some form of dispute I've seen it before where it was a massive dispute so to learn from those mistakes and pass it onto your next generation that's powerful it's such a powerful thing to do, to stop these disputes going forward you know because most often when there's emotion involved and there's disputes that erodes wealth very fast, faster than the market will ever do.

Jimmy: Dr Mans before I let you go I want to take a look at the power of collaboration in wealth creation we spoke about the family aspects of it we have spoken about the savings aspects of it, but finding good partners to collaborate with whether it's family members as those partners whether it's external business partners that could also be quite a differentiating factor between the successes and the failures because you're allowed to then build off of each other's knowledge bases and what does that then do for the exponential possibilities around this wealth creation?

Dr Mans: I believe there’s two sets of partners is internal and external. Your internal partners will be exactly like you've mentioned it can be family members it can be business partners that's the people involved in the day-to-day operations you know of a business or a family operation right and, and that's powerful in itself you know because like you mentioned we can leverage each other but also from an external point of view your professional external advisors that's also powerful when those guys can coordinate and work together, and I mean like really work together. When you can phone someone and ask them you know what's going on and that and that in that financial statements why is this like this, you know, that's also a powerful way of working together and if you can align these two breaches internal and external partners that's powerful.

Jimmy: There is a lot that comes through in terms of secrets to unlocking wealth creation some of it doesn't necessarily rely in having inherited the wealth but rather in approaching the thinking differently and that's perhaps where the secret or the biggest secret rather could lie in all of this beyond these savings components we'll have to leave this conversation on that note Dr Theuns Mans managing director at Novare wealth and invest joining us to take a look at wealth creation as a journey and looking at that beyond just savings.