The Rugby World Cup vs financial planning: Make sure you are part of the winning team

Feel free to reach out to PSG Wealth adviser Richus Nel directly.

The game plan
For any contest, one of the most important aspects of success is the game plan, and the discipline to stick to it. In 2019, Rassie Erasmus demonstrated that sticking to a good game plan (hoists from Faf de Klerk) helped South Africa to constantly play in the opponents´ half. A game plan creates a rhythm and order and restores calm for all role players during setbacks. Game plans can change, but only when objectives change.

A sound financial plan creates this order and calm to weather storms in your life or the market. Such a plan includes a well-structured will, investment and succession plan. 

Equipment required: Make sure you have the best kit

Head/shoulder protection is essential to reduce player injury. In financial planning, this protection can be compared to sufficient (long- and short-term) risk and medical cover for life´s eventualities. An emergency fund (3-6 months of net earnings) is also part of the everyday protection.
Rugby boots ensure that players are agile, can create opportunities and remain grounded to attack or defend. A well-diversified investment portfolio ensures the highest probability of retaining `investment traction´ throughout the game. Charlie Munger attributes long-term gains to consistency in returns, rather than `individual, unsustainable brilliance´. 

Intrigues of the game

Dietary prescription ensures the correct nutrition for rugby players. They have to maintain a high level of discipline regarding their diet. Similarly, we must have a financial budget in place and adhere to it.
Playing the game - you cannot win a game from the sideline, by talking about it over a braai or by not finishing it. You must play the full game, according to the rules, to stand a chance to win. When times are tough, you have to stay patient and stay the course of your original investment plan, time horizon and risk appetite. 
Kicking for post - be sure to take the `easy´ points when presented, e.g. diversifying effectively, focusing on cost structures, tax-efficient investing, estate planning, etc.
Avoiding unforced errors - Warren Buffett´s # 1 rule is: `Never lose money!´ We have all seen rugby matches and even tournaments lost due to bad discipline.

• Handling errors - not contributing enough, withdrawing or spending your retirement funds
• Kicking directly to touch - panicking during market corrections and moving to cash
• High tackles - speculative investments are 100% avoidable 
• Yellow/red cards - not being tax conscious regarding investment decisions/vehicles

Continuous unforced errors can permanently cost you.

Winning teams/players mostly attribute their success to their mentors/coaches. It is always a team effort, so lean on the expertise of your coach/adviser.