Fynbos method

For young professionals at the start of their careers, saving and investing should be an exhilarating journey of discovery. For the first time they have some disposable income and can start to lay the foundations for the future of their dreams.

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Yet for many savvy young South Africans the anxiety of doing it wrong holds them back from getting started at all. Every day wasted, overwhelmed by where and how to get started investing, has a compounding effect on their future wealth.

Those with an employer, that provides them a pension, often have no insight into the performance of the fund, or the fees they are paying, or whether these are fair or competitive.

Confronting perverse incentives

The financial services industry has evolved to the point where its incentives are poorly aligned with the best interests of early young investors. Fear, uncertainty, and doubt are used to market financial products that are over priced, over complicated, or simply inappropriate for investors with investment horizons measured in decades.

We are at risk of creating a lost generation who will retire in poverty. All the while, the financial services industry, predominantly owned and managed by older generations, has reaped huge profits from unfair fees earned off their investments.

Our method

At Fynbos we are breaking through the complexity, jargon, and information asymmetry by empowering young people to take ownership of their future wealth.

We believe in a simple framework for setting up, and building, a solid savings and investment portfolio for young professionals without wasting money on unnecessary fees and avoidable taxes.

Our method is based on simplicity, low fees, tax optimisation, a long term focus, and using technology to build, track, and stick to a plan.

We contest that every cent spent on anything more complex, in the early stages of a multi-decade investment plan, is money wasted.

Who is it for

Our method is focused on young people, early in their careers, with uncomplicated personal finances. They are graduate professionals, excited to be earning their first pay check but overwhelmed by what to do with their money, now that they have some to spare.

With a multi-decade investment horizon, low income tax rates, and few expenses, young professionals are in the prime of their financial lives and should be laying the foundation for great prosperity in their futures.

Why is it needed

Financial literacy is at an all time low and information asymmetry is at an all time high.

The most powerful long term investment tool, the Tax Free Savings Account, is poorly understood and badly misused when in fact it should be the centrepiece of any young person's investment plan until they can afford to invest more than the TFSA allows.

How does it work

The Fynbos method follows simple best practices on the assumption that our users are investing for multiple decades.

We follow these core principles:

  • Don't waste money servicing unhealthy debt
  • Build a solid emergency savings fund
  • Maximise your tax free investments as early as possible
  • Aggressively pursue the lowest fees you can find
  • Invest offshore
  • Diversify but keep it simple

Our technology platform makes it easy for a young professional to build a financial plan according to these principles, and then use our tools to track, manage, and stay motivated to stick to that plan.

Our goal is to clear the fog of uncertainty, be absolutely transparent in how we work, and give our users peace of mind that they have control over their financial future.

Our only income is a flat subscription fee for the use of our tools so we can remain unbiased in our evaluation of the products and platforms we review.

What about financial planners and advisers

We hope that our users feel empowered to build their own financial plan with the help of the tools we are providing them, but we recognise that they may wish to consult with a professional financial planner to help them.

There are excellent planners who will do this for a fixed fee and we'll never discourage our users from seeking out these planners to assist them. But, we are on a mission to save our users from perpetual AUM-based advisor fees or commissions.

Ramit Sethi says it best.

We stand by our principles and especially our belief that paying a perpetual advice fee to an advisor based on the total value of assets under management is a perverse incentive.

We welcome evidence from any advisor or planner that can show this to be untrue.