Author and retired actuary Hendrik Bester has identified what wealthy people do differently, and has distilled these investment and money-management insights into a new book, Chat with Dad – a guide to help ordinary South Africans make smarter financial decisions.
After more than four decades inside South Africa’s financial services sector, Bester is well placed to share his knowledge. His career reads like a tour of the industry’s engine room: portfolio manager at Sanlam Investments, then chief executive in turn of Sanlam Properties, Sanlam Asset Management and Sanlam Insurance, alongside board seats at Sanlam Unit Trusts, Vukile Property Fund and Gryphon Collective Investments. The weight of that experience is reinforced by endorsements from Gryphon Asset Management’s Abri du Plessis and Stonehage Fleming’s Gerrit Smit.
What makes Chat with Dad more than another entry on a crowded shelf is precisely this insider vantage point. This is not a motivational guru theorising about money from the outside. It is a practitioner who has managed portfolios, run asset-management businesses and sat on the boards that govern them turning around to explain how the machinery works for the ordinary reader. The book breaks down personal finance while mapping out, with rare clarity, the key aspects of running a financial life – from budgeting and debt to investing, diversification and, finally, converting a lifetime of saving into a retirement income.
What the wealthy do differently
Bester opens with a conviction that frames everything that follows: that anyone, regardless of background or income, can build a more secure financial future. The starting point, he insists, is a retirement plan – because, as he puts it, “one day, your work will stop, but your needs will not”.
From there, he draws on a career’s worth of observation to identify what wealthy people do differently. They live below their means, invest consistently and keep sharpening their skills. They treat debt judiciously – using it to acquire assets rather than to fund a lifestyle – and they stay curious, adaptable and willing to delay gratification in exchange for future freedom. Many, he notes, begin modestly and build their fortunes quietly over time.
Woven through the practical advice is a set of 10 timeless lessons drawn from American writer Og Mandino. They cover forming good habits, persisting through failure, keeping perspective and humour, multiplying your value, and acting on your dreams rather than merely dreaming them. Bester distils the spirit of it all in a single line: “Success doesn’t require perfection, only progress.”
The nuts and bolts
Where the book is most useful is in how it translates these principles into the mechanics of money management. Bester starts with the unglamorous foundation: a personal budget. “Managing scarce resources is the first step,” he writes, before making the case that time, not income, is the most valuable asset in building wealth, which is why starting retirement savings early matters so much.
Bester is alert to the pitfalls that quietly erode savings. He stresses the need for liquidity and an emergency fund, warns about inflation’s corrosive effect, and cautions against holding excess cash given its low returns relative to inflation. He champions diversification – spreading investments across asset classes such as shares, bonds and property, and across industries and regions – describing it as “your shock absorber”. Capital preservation runs alongside this: protecting the original amount invested from significant losses, because “preserving capital means being careful with risk”.
His sharpest advice concerns the investor’s own emotions. Markets rise and fall, and that is normal; what hurts most investors, he argues, is reacting emotionally – “buying when excited and selling when scared”. Building wealth, his central message, requires patience and consistency, not the pursuit of quick profits. He points to famous investors worth learning from – Warren Buffett, Benjamin Graham, John Bogle and Terry Smith – and argues that a well-constructed portfolio needs essential building blocks, managed by skilled professionals; it “has balance and purpose, not clutter”.
Into retirement
The book’s final stretch is its most distinctive section: what happens at retirement, when accumulated capital must be converted into income. Bester walks readers through the rules and the choices. Up to one-third of the capital saved in a pension, provident fund or retirement annuity can be withdrawn as a lump sum (which is taxed); the remaining two-thirds must be used to purchase a compulsory annuity, whose income is also taxed.
Within compulsory annuities, pensioners choose between a guaranteed life annuity and a living annuity. A guaranteed annuity means handing your retirement capital to a life insurer in exchange for a promised monthly income for the rest of your life – with no remaining capital at death. It can be customised: a joint-life option continues paying a surviving spouse; a minimum-term guarantee ensures payments for a set period; and an inflation-linked option increases the payout annually in line with inflation.
A living annuity offers more flexibility and control, but carries more responsibility. The money remains invested, and you choose where it is invested and how much to withdraw. The upside is that any remaining capital at death passes to your heirs; the downside is that you carry all the investment and longevity risk. “Poor market performance or excessive withdrawals can lead to running out of money in your lifetime.”
Bester’s guidance here is precise. To preserve capital, he advises pensioners to start withdrawing at or below 5% a year from an annuity. He is particularly alert to sequence-of-returns risk – the danger that poor investment returns early in retirement force a pensioner to draw more from capital, accelerating the depletion of savings. He advises keeping a reserve fund of one to two years’ withdrawals in cash or low-risk assets, “to avoid the need to sell growth assets in a downturn”.
Getting going
In all, Chat with Dad is less a manifesto than a steady, practical companion – one that benefits enormously from being written by someone who has spent a career on the inside of the institutions that hold South Africans’ retirement savings. For readers weighing how to budget, invest, diversify and ultimately draw down a lifetime’s accumulation, Bester offers grounded, plain-spoken advice that comes only with experience – and is a useful starting point for anyone yet to begin.
Bester has self-published the book. He is contactable on 082 339 4914 or at mwhenbes@mweb.co.za.
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Top image collage: Rawpixel; Adobe Firefly; Currency.
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