Understanding that money is a useful but finite asset that requires considered decision-making has been one of Nkareng Mpobane, chief investment officer at Ashburton Investments, biggest money lessons.

Speaking to Sowetan Money in our Money Habits series, Mpobane recalls how she had to miss school once and had to skip a year at university because there wasn’t enough money, but for her a strong family support structure outweighs everything.

Taking us back to her early years, Mpobane says as the youngest of three children, she spent the first decade of her life in the highlands of Lesotho and Maseru in "the luxury of warm loving family”. She explains that her parents, both academics, were fortunate to be exposed to career opportunities not available to other black people at the time, but that did not mean things were always easy. 

Her parents divorced when she was still young, and for the next 10 years she and her family lived in Queenstown in the Eastern Cape with her mother’s family. It was here where she learned the most valuable money lessons from her extended family.

“We faced some pretty challenging hurdles financially and my mom leaned on her sibling a lot after the divorce. This taught me the importance of a strong support structure, even if it’s not your immediate family.”

Mpobane recalls how the family structure helped each other stretch limited resources and make money go further by prioritising for the next goal. 

“I remember not going to school one Thursday morning because there was only enough transport money for two of us. My brother and sister were older, so they went to school. Looking back, I see now they were the priority at the time.” 

Mbopane attended Queenstown Girls’ High School before heading to Wits University to obtain a BCom Economics, a task she found to be no less daunting than growing up. She was unable to register for her second year due to outstanding fees and had to enter the job market to make ends meet.

“My first job was working as a cashier at Totalsports in Sandton. At this stage, I hadn’t paid much attention to money, nor had I bothered to reflect on the lessons I had learnt in my younger years. So really, the money I earned was all spent. Not necessarily all on myself, but it was not getting saved,” she says.

She did, however, managed to scrape enough money together to resume her university studies the following year.

This experience taught Mpobane the importance of having a savings kitty or emergency fund and spurred her into saving regularly.

Despite this, she says, she still had a relatively skewed relationship with money where she was still just spending when she entered the investment industry as a junior dealer. Money then still centred around all the new things she could afford.

However, with over a decade of experience as a portfolio manager at BoE Private Clients and RMB Private Bank before joining Ashburton Investments, Mpobane says her relationship with money matured as she grew in her career.

“I would say my relationship with money now is one where I am very aware that it is a finite asset that requires considered decisions around how you spend and optimise it,” she declares.

Mpobane says the greater responsibility around governance and making fiduciary considerations on client funds has brought greater focus to her own savings and investments. In her personal capacity, she started appreciating the need to save for a rainy day.

On her best and worst financial decisions made and the lessons learnt, she says her worst is not fully appreciating the power of compounding sooner. “The more you delay in building your wealth, the greater the distance you must cover to claw back. In attempting to do this, I took unnecessary risks in some of my stock selection. I have since learnt that a ‘steady-eddy’ strategy is the best approach and can still get you there, without the additional risk,” Mpobane says.

She firmly embraces tax-free savings into her financial growth strategy, stating that she’s building towards “my maximum allocation in my tax-free savings account”.

“I think since introducing the legislation, all South Africans must ensure that they fully optimise this vehicle – open an account for your spouse, siblings, grandparents and all the children. Throw any excess cash into the account and enjoy the benefits of compounding. 

“In terms of growth, I am mostly invested in equity markets, having concluded that I probably have another 40 years ahead of me. However, when you look at it, cash has actually been a better investment than South African equities over the last 5 years,” she says.

In addition to CIO, Mpobane is also a member of the Primary and Secondary Asset Allocation committees, as well as a member of the Global Multi-Asset Committee. Amid all her work commitments, she says she enjoys spoiling herself once in a while – within reason.

“I kind of have a split approach. If I feel that it is time to spoil myself, I carry out a broader budget that accommodates being a bit spontaneous. In my normal budgeting, I can be quite narrow in terms of ‘spoil’ and do it mostly through travel,” she says.