In November 2001 the first Ipod went on sale at a price of $399 which was around R3300 at the time. If instead of buying the Ipod you had bought shares in Apple (the American company that produces the Ipod), your investment would be worth $26 000 today! That is around R197 000 at today’s exchange rate.

And if you think Apple is a rare example and that no South African company can compare to the genius of Steve Jobs who brought us the Ipod and Ipad, think again. If you had invested R3 300 in Capitec shares on the day it listed in 2002, it would be worth around R388 000 today; that beats the Apple example hands down.

Why do you think Apple and Capitec have done so well? Because people bought Ipods and Ipads in droves – the minute the new version was released the old one was discarded as they lined up to be the first to have the latest gadget to impress their friends. Capitec’s profits have come from lending money at extremely high interest rates to people who have to borrow money to buy the latest Apple gadget to impress. These companies make money because people spend their money which is fantastic for shareholders, but not necessarily for the customer.

So the question you need to ask yourself is whether you want to be a customer or a shareholder, in other words do you want to be a saver or a spender? Do you want to buy the latest Ipad or invest that money instead? Do you want to take out a loan or save your money until you have enough to buy what you need?

It is often difficult to find the motivation to save. We work hard and the money we earn we use to buy stuff to justify why we work in the first place. It is difficult to see the money as having any value unless it can be converted into an item or experience. So why should we save?

Apart from having an emergency fund for unexpected crisis, the real reason we save is to create more money so that we can experience an even better life. By buying shares in Capitec in 2002 rather than buying an Ipod you could today buy a really nice car for cash or put down a large lump sum on a house. We also save to give ourselves choices that allow us to stop working one day or to give us the opportunity to start our own business.

When we spend rather than save, we give up on the opportunity to really improve our lives.

This article by Maya Fisher-French was first published in City Press