S2 E2 Social Investment and Trade Club – Sitting on gold

SIT club
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SIT Club – we’re sitting on gold but we’re playing with toys

When Lazola Belle and his 5 co-founders began thinking about earning some passive income, they never realised how much they would learn about money, investments and the psychology of it all. They started a social and investment club over 3 years ago with just R 1 000 that has grown to over half a million Rands and growing. What initially became a club about educating themselves about trading on the Stock market, grew in a complete mindset that sees them sitting on gold.

SIT Club

SIT Club

The SIT club members meeting

The SIT club members meeting

Lazola Belle and other members

Lazola Belle and other members

 

Show notes

1:47 Hear more about two of the 6 founders Lazola Belle and Mojalefa Mputi
2:30 Lazola talks about why he left corporate and what he does
3:58 Mojalefa tells us about who is and what he does.
4:40 SIT has recently opened up their club to the public
5:37 Lazola tells us more about SIT which turned 3 years old on 30 November 2016
6:20 Lazola explains why he wanted to trade on the JSE
7:10 They started off by firstly educating themselves
08:10 Lazola talks about how big the Stokvel industry and how it inspired their choice to go with an investment club instead of a traditional Stokvel
08:55 Mojalefa explains more about the difference
10:10 Mojalefa talks about how well versed they are now in investment jargon
10:48 Lazola explains how they began and explains more about investing on the Stock Exchange
11:40 They had some help from Mike Brown from ETFSA.
12:40 Their fund has grown quite significantly from the first R 1000 and now they are looking to invest in small businesses.
13:30 Lazola highlights the non-financial returns
14:38 SIT started out as a platform to drive investor education, but is now growing and changing
15:30 Mojalefa talks about how the conversations have shifted
16:22 They are beginning to become comfortable with moving into the Mutual Bank space, and how it is more inclusive than a traditional bank and how risk is treated, psychologically
18:30 Mojalefa explains how the investment platform for entrepreneurship beyond 2018 will work
18:50 Lazola however explains how joining a mutual bank has a lot more benefits than getting a loan; how its size can amplify benefits.
20:21 Mojalefa explains the social aspect of SIT club
22:43 By opening up, they will get different patterns of thinking – diverse views that can help to address social issues through a deeper understanding
23:20 The change in structure will also help with its growth i.e in EXCO
23:50 Mojalefa talks about how they changed the meeting days to ensure that the investment portion took priority over the social aspect.
24:44 They have now started by running campaigns on Facebook around education around investment; which was used to help identify potential new members of SIT
26:40 The lessons learnt as they started, around investing in the right places and the psychological differences
27:40 Lazola explains the history of Stockvels, and how its psychology varies to that of an investment club.
31:03 Lazola wanted to understand how do they change the whole concept around socialisation beyond just investment and education.
33:00 Lazola explains the psychology of money in South Africa not only for entrepreneurs but also around employees; and how it needs to change to an investment mindset over a consumption one.
35:09 Lazola explains the structure of the club, and the different structures available when starting a club.
39:28 Mojalefa has talked about the natural attrition of running an organisation.
40:38 Lazola talks about the challenges of growing, and the need to educate themselves more about new areas.
42:00 A mindset shift is needed, this is a legacy intervention.
43:45 Mojalefa talks about some challenges that can be solved by technology
44:20 Lazola talks about how a business works differently as a startup and when you are looking to expand. And how technology is a focus for growth.
47:40 Lazola explains how this model has been used to create some big corporates and how it empowers people financially. He also explains how a complex financial system can keep the majority of South Africa dis-empowered, and how actively understanding money leads to better business practices.

Significant Quotes

08:55  “I like to call it Stokvestment”
10:00 “If we start milking the calf before it becomes a cow, it is a bit of a problem.”
13:10 “I think most importantly the educational level amongst the group around the table dramatically changed.”
13:51 “All of a sudden the kind of discussions that people are having of is extremely progressive because there is something of value that keeps you together and it starts to drive a level of confidence in terms our own level of entrepreneurial ability.”
14:49 “So we need to start investing the money. Now, we didn’t have to know how, but we did have to have the money there. Because there is something about risk, once its there, you start to get the knowledge. The motivation.”
16:30 “We do need to start our own institutions that fund our own ideas.”
17:38 “We’re sitting on gold here.”
21:09 “So the social aspect is very important.”
21:58 ” Socializing…you’re trying to find people to help you through life, and to find people to help through life.”
22:19 ” We’re no longer talking about chicks, fast cars and sports.”
23:40 “It used to be heavily social.”
27:20 ” Stokvel is maybe a localised name?”
28:10 “Stokvels are more consumption vehicles instead of investment vehicles.”
29:45 “That’s a very interesting distinction. On the one hand you have the Stokvel which is born out of desperation. On the one hand you have an investment club which is born out of excess, which is abundance. That in itself then dictates what you do in the club. If you are in a Stokvel you have something that dictates that every 12 months I must get something. If you are in an investment club, you understand things like 5 years, 10 years, 15 years – time value of money and that completely changes the dynamics.”
30:24 “The reality is, we are not desperate but maybe we learnt desperation from our parents. So what we ought to start is an investment club and not a stokvel.”
31:45 “Before you go spend your money, this is what you should be thinking about. You don’t spend your money and then save.”
32:40 ” There is a huge psychology around money in South Africa.”
32:58 “There is something about the psychology of money that we are not doing right.”
34:35 “Before we invest in your business, we need to understand that your psychology is the right one.”
41:38 “As you learn these things, you start to realise that this is common knowledge, this is stuff that everyone should know, because its actually profound how much banking impacts us in South Africa and to think that the broader community have no clue. Its actually scary.”
42:16 “The financial benefits are really for our kids.”
44:10 “Technology is a business enabler.”
47:28 “We’re sitting on gold when we’re playing with toys.”
48:20 What keeps the broader majority of South Africa unempowered financially, is that they don’t understand where the money is going.”
49:59 “Lets start understanding the money. Lets be active in the money and that will give us empowerment.”
50:10 “If you want to start running businesses, you have to be active in the money.”

Links mentioned

SIT Facebook:
SIT Club’s website
ETFSA’s website
ETFSA on Twitter
NAFCOC – National African Federated Chamber of Commerce and Industry – an article about them.

About the author, Charlotte

Charlotte, or Charlie as she likes her friends to call her, is what you would call a multipotentialite or a jack of all trades if you must. She been an auditor, an English teacher, a consultant, an executive assistant and product manager. She loves to read, watch shows, learn, tries to exercise, eats a lot, travels and tries out new things.

Entrepreneurship excites her not only because of its capability to bring joy (read freedom) to entrepreneurs, but also because it can vastly improve a country or continent for the better.

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