Every day thousands of South Africans invest millions of rands in unit trust funds, thanks to the solid reputation the industry has built up with the help of the Association of Unit Trusts. Di Turpin, the chairperson of the association, chatted to us about how she approaches her personal finances.
After 10 years in the unit trust industry, Di Turpin is one of the country's most knowledgeable and authoritative people on the subject of South Africa's favourite investment option. As well as being chairperson of the Association of Unit Trusts, she is external relations manager of Old Mutual Unit Trusts and is married to Anton Turpin, managing director of Prudential Unit Trusts. The Turpin household would be dangerously one-track-minded, in fact, if it weren't for one-year-old Drew Turpin, who insists his parents switch to a very different kind of investment when they get home to their haven on the Groot Constantia wine estate in Cape Town.
I have to pay the gardener, so I have R720 for that, and I always draw R1 000 at a time. I hate drawing small amounts and having to go back to get more. Plus it costs more, and I hate paying more than I need to.
I bank with Pick 'n Pay because it offers the most cost-effective banking. The interest is good and things like stop order charges are cheaper. I do all the day-to-day family finances, accounts and banking, so I also draw cash for my husband at the same time. Anton and I operate joint accounts.
One personal card and one business card. I have two cards to make sure my two lives are separate. The personal credit card is also a joint account because I can't see the point of paying more charges. The banks are strange about credit cards. Our bank insists the joint card has to be in Anton's name, even though I opened the account and I do all the banking. Nedbank provides our card but all the banks are the same.
The other thing that irritates me is that the credit limit on the card in my name is never increased automatically, it is increased every year on Anton's. Women are very much second-class citizens as far as the banks are concerned.
Yes, often. I went through varsity on the smell of an oil rag, taking jobs to finance my way. I certainly did not have much spare cash in my first years of work.
A platinum share called Barplats. I invested R3 500 in my first year out of university. It was a lot of money. I had a hot tip from a friend who was supposed to be close to the industry. I did no research; I believed my friend. When the price went down I thought here was a buying opportunity. I phoned to find out more only to be told the mine had been mothballed ...
There have been two. The first was a house in Tamboerskloof, Cape Town. Property investments do not always work, but sometimes you are lucky. We drove past a dilapidated Victorian semi one day and I fell in love with it. The house was covered with grime. We bought it for a song and tripled our money in three years after a lot of hard work and about R30 000. We used the profit as an investment on our next home.
The second has definitely been unit trusts. I believe unit trusts give the best value for money, in terms of both charges and performance. I have invested in unit trusts on a monthly basis since I was a student. I don't cash them in unless it is for large lifestyle investments, such as deposits on the houses we have bought.
Yes, I regard this as an excellent long-term investment that I can't touch until retirement age. Ideally I would want to be in a retirement fund that gives members investment choices, like a range of unit trust funds!
Yes. I don't like having debt but for most people it is unavoidable, for really big investments such as your home. We are paying it off as fast as we can.
No. We have a holiday home that certainly is not a great investment from a monetary point of few, but it gives our family great pleasure.
The Old Mutual Mining fund. That was the risk-taker in me coming out. But I had been exposed to unit trust investments quite early - my father invested in NGF unit trusts in the sixties. After the market crash of 1969, the funds were taken over by Sanlam and my father shoved them away in a drawer. After my father died, my mother, who was fairly clueless about finances, asked me for help. One day she told me Sanlam kept sending pieces of paper and she didn't know what they wanted. The pieces of paper turned out to be distribution statements.
She was not aware that the R1 200 my father had invested had grown to about R250 000. At the time, back in 1981, she had little money to support herself, so it was an incredible windfall. This was all the persuasion I needed to make unit trust investments and leave them to grow.
With my strong feelings about unit trust investments, it is quite ironic that I landed up in the industry. After graduating with a Business Science (Marketing) degree from the University of Cape Town, I started working in the banking industry. I then worked in life assurance for a short time before moving into unit trusts. It is the kind of the environment I have always wanted to work in. I believe in the underlying principles of the industry and it is easier if you really believe in what you do. Unit trust investments are not a grudge purchase and quite a lot of financial products are.
The lack of transparency. I would love it if every consumer in South Africa knew what they were buying when they bought it. The financial services industry often makes things too complicated. There is too much smoke and mirrors and too many complex products. Most people need only one or two products, but they have things that are subsets of each other and combinations. Investors need to understand the purpose of each product and whether it suits their needs. For example, people need to buy life assurance, but they do not necessarily need the investment portion. Investment should be separate.
A common mistake people who are worried about their financial security make is buying products indiscriminately. They end up with 10 or 15 different products they don't understand when they only needed one or two.
The industry is fairly well regulated in South Africa, particularly when compared with the industries in other emerging market economies. Consumers know they have a fair measure of protection. The market is also not over regulated by government.
Definitely not! You don't need to be a mathematician to know the system is against you. I don't like odds of one to how-many-million against me. I don't like throwing money away. I am far too cautious with money. As a child I once went into a casino with my sister, who gave me Zimbabwe$20 and I doubled the money. I immediately stopped. I am happy for those who win on the Lotto, but I don't need to contribute my money.
It is a difficult choice when you have more than 300 unit trust investments and 30-odd management companies. I would first read up as much as I could on unit trust investments. Then I would select a management company that I felt I could trust and that would give me a range of choices. For my first investment I would limit myself to a general equity fund that invests across all sectors of the stock market, or a managed flexible fund, which invests in all three asset classes of cash, bonds and shares. I wouldn't select specialist funds until I had more experience.
No, statistics show women are paid substantially less than men - and not just in South Africa. In the United States, women earn a quarter of a million dollars less than their male counterparts in some circumstances. Because we are the ones who bear children, women expect to break their working lives - for a few months at the very least, but sometimes for a few years. This affects earning capacity as well as the attitude of companies towards women.
Often women are passed over for promotion because they go off to have children. In some ways, I sympathise with companies, because women going off to have babies can be disruptive.
Against this, is the fact that every woman who goes back to work gives 110 percent. Women who are past their children-rearing days are very dedicated and contribute a great deal.
Women can be their own worst enemies because they are often only too grateful to be able to work and run a home at the same time. They undervalue their own skills and do not market themselves like their male counterparts, who will aggressively tell the whole world how good they are. I know I am guilty of that.
I love being outdoors, so hiking is a favourite past-time. I try to walk every evening with Anton and Drew. I really enjoy swimming, aqua-aerobics and tennis, although I do not seem to be able to get around to doing them as often as I used to.
This article was first published
in the January 2001 issue of Personal Finance magazine. See what's in our latest issue