Soon after graduating from the AAA School of Advertising, he gained acclaim for the self-published S’camto Dictionary of Township Lingo and Township Talk Dictionary. These proved instrumental to copywriters and won him two Loerie Awards.
Today, he is the MD of mass market research and strategy firm Foshizi, which generates revenue of R10 million a year and employs more than 30 people. Motshegoa wasn’t satisfied with starting just one business, which is a characteristic he shares with serial entrepreneurs like Sir Richard Branson. He was involved in numerous businesses, including a publishing and marketing concern. He left or closed these businesses, but not without securing a healthy profit first.
A defined approach
Motshegoa understands the importance of being goal-orientated when growing wealth. “In every business quarter, you need to achieve certain strategic goals. The same is true of personal wealth. Commit to and go after these goals with a level head. To succeed, you need to take it seriously.”
Motshegoa also aims to make every cent count. “In the same way I need to work hard for my buck, so do suppliers. I always ask for tenders so I can choose the supplier who represents the best option. I eschew unnecessary policies. A wealthy person once told me that if a policy does not have an immediate effect, it is a liability. If it is not doing anything right away, cancel it. It is important to watch the rands and cents.”
Motshegoa prefers to invest in partnerships. He believes the best way is to find someone who has been in business for a few years and can expedite his plans. People like this have already paid their dues and know what they are doing, he explains.
Wants vs needs
Motshegoa is frank when distinguishing between his wants and needs. “Interrogate your bank statement. Constantly ask what you can cut down on. South Africans have a very different attitude towards debt. When assessing their wealth, they include what they can get from overdrafts and credit cards. If you come up with R5 000, for example, you should be looking for ways to cover the other R4 000 of your living expenses. Most people look for credit to cover the shortfall.”
Motshegoa also follows this philosophy when it comes to buying luxuries. Draw a distinction between spoiling and rewarding yourself. “People are quick to spoil themselves, but you can’t do that if you have debt. Rather set a target and reward yourself for achieving it. Don’t spoil yourself just because you have surplus money. Spoiling and rewarding yourself are two different things. Be clear about what you want and what you need.”
Motshegoa once received advice from a taxi driver that he continues to live by. “Don’t brag about your wealth. Many people like going to the trendy places to show off. Rather keep your wealth to yourself.”
Motshegoa believes not having enough money is something to react to long before you see the red light. “Even if you have enough money, always think of yourself as broke. I have seen businesses which only have one big client. When they lose that account, they’re in a fix. Being broke is avoidable. Constantly hustle and never think of yourself as comfortably off. Something out of your control can always happen, so diversify your income streams as much as possible.
“Entrepreneurs need to demand the most out of employees. If you feel a particular employee may not be necessary, they’re not bringing in money. You must also ensure cash flow is not locked in by clients or projects. Often, if a client owes you money, by the time they pay up, you’re already in debt.”
One step further
With the help of lawyers and business advisers, Motshegoa ensures his wealth is protected. “My worth is safeguarded by good lawyers. Their role is to make sure my worth lives beyond my life by providing for my family. I also surround myself with advisers who are not part of my business. Their mandate is to protect my wealth. This is especially true for my rainy-day money. I need a certain amount of money to use as running capital should something go wrong. This ensures I am safe for at least a year. Only once these bases are covered, can I consider rewarding myself.”
Motshegoa started saving for his pension when he started his first job and cautions millennials against forgoing a retirement fund. “They are ruled by instant gratification and want their money now, assuming that there is no guarantee they will live long enough to retire. I used some of my pension to start my business, but I paid it back.
“You should rather reconsider your pension savings. You can design your pension without using a third party. Take the dividends, reinvest them in different places and double the profit. Take a firm stand for your future self. When you are old, you won’t be able to do the things you can do now.”
Motshegoa is an entrepreneur at heart. Yet, at the same time, he understands the basics of building and protecting his wealth no matter what happens to his businesses. The lessons he has learnt should serve him well along the way.
Motshegoa’s wealth-building tips
- Buy, don’t lease. You are in business to make money for yourself, not someone else.
- Read as many financial magazines and newspapers as possible to learn more about financial management.
- Don’t involve emotions: business isn’t personal.
Originally published on: www.destinyman.com