STOKVELS
A T R A T S O T T N A W SO YOU ? L E V K O T S Y T R E PROP asons why you should
Here are some great re
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hile property stokvels are hot topics at the moment, they’re hardly a new idea, and you might be asking why you should take an interest? Many have tried before and not always been successful, so why should you consider this particular type of investment club?
Let’s start with the obvious: • Economic inclusion South Africa is a country still plagued by massive inequality and one of the best ways to level the economic playing field is to encourage access to land ownership. But how do we go about creating this economic inclusion, you ask, when property is such a huge expense? This is where collective buying power comes in. We truly can do more, together.
• A vehicle that keeps pace with (or beats) inflation Stokvels are traditionally vehicles of consumption. Members make their contributions but the funds are depleted at the end of each year or eaten away by inflation from lying in the bank. To change this, stokvel
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clubs need a change of mindset: to shift from a consumption mindset to an abundance or wealth-creation mindset. This is crucial for a successful investment stokvel club such as one involved with property management.
• Access to more properties, faster A property investment stokvel club provides members with a means to own a share in a larger property portfolio and to do away with a 20year home loan. Group buying power means properties can either be bought and paid for cash or purchased in a much shorter space of time than the typical 20-year term. There are some pitfalls, of course, to watch out for in order to make sure your stokvel club succeeds as an investment vehicle for property ownership, but there are already examples of South Africans making it work. Let’s take a look at one:
Nicolette Mashile – Financial fitness bunny Well-known TV and radio personality Nicolette Mashile, who hails from Bushbuckridge, is also carving out a niche for herself as a blogger (www.nicolettem.com) who talks about
financial fitness and wealth building. She’s recently been outspoken about her plans to start a property stokvel club. Says Nicolette: "The stokvel club is a way of people coming together and finding a way to start (fund) a real-estate business. The company which the members of the stokvel (shareholders) own would hold the title deed for each property.” She emphasises that this is an idea that she’s put on the table within her online community – as yet, they don’t have all the answers and that there are still legalities to work out. She says it is a means to creating generational wealth because the shares in the property company can be left to club members’ children. “Imagine leaving shares to a company with a portfolio of more than 20 properties for your children,” says Nicolette. This is merely one more example of young South African selfstarters mobilising towards the property trend through the collective buying power of the traditional stokvel. Okay, you say. It sounds good. I’d love to own shares in a property investment company that is earning rental income each month and accruing value as the properties appreciate each year, which I can also leave to my children one day. But it sounds complicated. Where do I even start?
