The Best Bits of The Money Show: Your Freedom Number and Gary Kyriacou Insights

Episode Transcript
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Speaker 1 (00:00):
Seven two. You're listening to the best of The Money Show.

Speaker 2 (00:05):
The Money Show. Welcome to the best bits of The
Money Show are digestive some of the most important insights,
thoughts and comments from the show this week. If you
want to hear more, you can go to our website
or your podcast app and search for The Money Show.
And as always there's often a story and insight. I
thought a comment that you think might be valuable to
someone you know, someone you work with, someone in your community,

(00:27):
a good idea to share it with them and really
just to help them along their financial way. To start.
Some of the news stories that we thought were important
from this week and the World Economic Forum their annual
meeting in the Swiss resort city of Davos, inevitably somehow
dominated by the US President Donald Trump and his speech,

(00:48):
but I think overall his comment that he would not
use force to take greenland that of course led to
the taco trade. Trump always chickens out and had a
big impact on markets around the world through the week.
Arsenal Mottile South Africa saying discussions with the IDC have
gathered pace, offering renewed hope that three and a half
thousand jobs in Quasillintel and Hearting might in fact be saved,

(01:12):
and the ranfirming going below sixteen dollars twenty to the
dollar at one point this week, its strongest level in
more than three years. Tonight we bring you a mix
of stories from the world of money from the week
that was in this week's edition of Personal Finance, the
certified financial planner at Galileo Capital, Warren Ingram, exploring the
concept of financial freedom, unpacking how to calculate a personal

(01:36):
financial freedom number, and then how you can take practical
steps to make sure that you get to the number
you want to get to.

Speaker 3 (01:45):
I mean, I know, it's my favorite topics. I think
I could talk about this all day every day, but
I think the start of the year is a very
good time to have a conversation like this because it's
not just about housekeeping. It's also I would hope for
a lot of us maybe a little motivating to figure
out where we are, you know, compared to where we
were a year ago. Have we made some progress, And

(02:07):
especially after year like twenty five, twenty twenty five where
the markets were good to us, you know, one hopes
that actually you've got a bit of market growth, and
it wasn't all just down to your savings. So to me,
it's a little bit like true North for our planning.
You know, where are we and where are we going?
And a lot of the time when I speak to

(02:28):
people about about their money, if they feel out of
control and they feel but aimless about their money, it's
almost literally because they have no aim, they have no goal,
they don't know what their number is. So I think
it's a good one to understand. And you're right, it
is very simple to me. Even I can work it

(02:48):
out on my calculator on my phone. So I think
it's something we can all do for ourselves once a
year without you know, launching big AI apps or big
Excel spreadsheets.

Speaker 2 (03:00):
So then how do you begin to calculate this? And
I suppose what we're asking about is the factors that
we use, which is about how much we earn, but
it's about how much we're going to spend, right.

Speaker 3 (03:12):
Yeah, I think a lot of the time, you know,
we start in the wrong direction because we focus on
what we earn. And the reason that's not very relevant
is you know, your list style is not determined by
your income. And I know sometimes people think that but
actually your list style is determined by what you spend,
and so it's a crucial number and it's one that

(03:34):
you have some control over. So when you're doing your
financial freedom number, to me, the thing you start with is,
you know, if you don't know what you spend in
an average month and maybe therefore in an average year,
then look back at your banking app or your you know,
if you do have, if you don't use cash, then

(03:55):
certainly on your banking app and your credit cards, look
at what you've spent over the last three months, because
it's probably a good average, and you need to include
everything in that expenditure. In other words, what you've spent
on holidays, what you've spent on you know, if you
own a property, on your rates, and if you don't,
what you spend on rent and gifts and all that stuff,

(04:16):
car maintenance, everything. Put it all together and get to
a monthly number, and then multiply that by twelve. The
reason we're doing that is we want to get to
what it costs you to run your lifestyle over a
typical year, and just to do the simple mass. If
you're spending forty thousand a month as an average, then

(04:38):
that means you're spending four hundred and eighty thousand a year,
and that's the key number. That's your lifestyle costs in
a year. And from there, the simple part is you
multiply that by twenty five and you are now at
your financial freedom number. It's the number of the amount
you need in investment assets to fund the last style

(05:00):
that you're currently living.

Speaker 2 (05:02):
Okay, so I mean your financial freedom number there would
be about twelve million Rand and that's the four percent rule.
What is the four percentral? Because that's crucial to this.

Speaker 3 (05:12):
Yeah, So once you've got your number, the twelve million,
if you took twelve million and you worked out what
four hundred and eighty thousand is as a percentage of
twelve million, it's going to work out to four percent.
And four percent is kind of a magic number because
if you look at for example, you know, typical balanced

(05:33):
to unit trusts, over a long period of time, they
will generate a return of about ten percent of the
last thirty years, so ten percent a year of the
last thirty years. So if you're drawing four percent a year,
that means that you're leaving behind six percent a year
to be reinvested and if you look at our inflation rate,
I know it's relatively low now and let's hope it

(05:54):
stays that way. But if you look at inflation over
a longer period of time, it's been around that six level.
So six plus four gets us back to ten. So
if you can draw four percent from your investments and
you leave the balance behind to be reinvested, it means
that the buying power of your money is either staying
the same or it's growing, because the balance that you've

(06:17):
left behind is the part that gives you the capital
growth to match the cost of living increases. And so
for me, that's why four percent is a very important
number when you're looking at this to say, I don't
want to start and you know, let's say hit financial
freedom and spend my four hundred and eighty thousand around
a year, and I've forgotten about the creep of lifestyle costs,

(06:41):
and in ten years time, I'm still spending four hundred
and eighty thousand around a year, but it can't buy
me anything like it it was buying me ten years before.

Speaker 2 (06:50):
Okay, And then obviously you've got to see what your
investments are doing, because at four percent, if you're taking
out four percent, they might still be growing significant clean
you might actually be okay for quite a while.

Speaker 3 (07:03):
You can and I think you know, it's also why
we can exert some control over our financial position, because
in a very good year, for example, last year, you know,
if balanced funds were generating twenty percent and you decide
to maintain your withdrawal of four percent, it means you've

(07:23):
left a lot of growth on the table to stay invested,
to give you some protection against the bad years. And
there have been years, you know, if we think about
twenty twenty and before that two thousand and eight when
the markets lost money, and it's the protection against those
kinds of years where what is why you don't want
to draw all of the growth out of your investments.

(07:43):
You want the good years to kind of build up
that leeway and the cushion and the safety net in
your financial planning. And I think if you stay disciplined
and you continue to draw the four percent, if you
do that every year, sometimes your portfolio will be down
and drawing four percent, it means that you might be
spending a little bit less than you did the year before,

(08:03):
but generally, over a long period of time, you'll actually
find that your lifestyle will continue to grow and improve.
It won't just be stagnant as it was when you
hit your financial freedom number. So for me, a lot
of the time when we have these conversations, people always
go yes, but you know, yes, I had an emergency,
or you know, food inflation has gone up much faster.
And that's true over you know, one or two or

(08:26):
three year period. You don't know exactly what inflation is
going to do. And this kind of a rule doesn't work,
you know, perfectly every single year. It works very well
over a typical decade, and that's why you've got to
be careful about controlling your expenses. But it is possible
for us all to get there.

Speaker 2 (08:43):
Okay, and we need to sort of really get on
top of the idea that is not how much we're earning,
it's how much we spend is actually the big variable here.

Speaker 3 (08:54):
Yeah, and you know, I did three examples just to
show you how powerful you or your spending is in
this equation. So for someone who spends an average of
fifteen thousand round a month, their financial freedom number is
four and a half million. So you spend fifteen you
need four and a half million of investments. If you

(09:14):
spend fifty thousand a month and you leave the balance
to or you need a balance of fifteen million of investments.
So suddenly you see, you know, it's a huge jug.
And then a lot of high income earners are probably
spending around one hundred and twenty thousand a month, and
they'll tell you that they can't get by with anything less.

(09:34):
And for someone in that position, if you're spending one
hundred and twenty thousand a month, you need thirty six
million rounds worth of investments. And a note, we haven't
spoken about your income here. So someone who's earning very well,
you know, potentially earning one hundred thousand round a month
and is only spending fifty thousand a month, they're going
to get to financial freedom very quickly because they are

(09:55):
saving a huge amount of money and getting themselves on
that to position where their assets are going to cover
their expenses. The fact that they earn much more than
that doesn't matter to them because they're getting to that
financial freedom so much more quickly, and then they can
make different decisions about how they work, whether they work,
whether they want to spend a bit more in luxuries

(10:17):
because they've reached their financial freedom goal. But it's going
to take someone a very long time to get to
an investment value of thirty six million to fund lostyle
costs of one hundred and twenty thousand a month, and
that's the thing you can control. You're not obliged to
spend one hundred and twenty thousand a month.

Speaker 2 (10:34):
So okay, this in a way, it's quite a personal
decision because I know some people and you know, you
know them as kids, and they're the ones who still
have lost Easter's easter eggs, you know, the chocolate when
the next Easter runs around, and they're able to actually
limit their spending and they get the economic freedom quite quickly,

(10:54):
and there are plenty of others will say, you know, yes, dad,
and by lunchtime it's all gone. And in fact they
they're kind of happy, I suppose until they get a
bit older.

Speaker 3 (11:06):
Yeah, it's it's true. And I think you know financial freedoms.
I mean, the reason why I would talk about financial
freedom versus retirement is at some point retirement gets imposed
on us.

Speaker 1 (11:16):
If you work.

Speaker 3 (11:17):
For the large banks in South Africa, they usually kick
you out at round about age sixty two or sixty three.
I'm not sure of the number, but you know, many
other organizations would say age sixty five, and so you
might hit retirement. But but you're not financially free. And
for me, that's quite a scary position to be in
because you know, a rule, you know, a contract, has

(11:37):
decided your financial future. It's not that you've taken control.
Someone has exerted control on you, and and and what
over you. And that's why, you know, for me, I
particularly don't want to be told what to do. You know,
I have that that flaw in my personality that I
don't want anyone to tell me what to do. So
I'm going to work incredibly hard to get to financial

(11:58):
freedom so that I can be the more of my
own destiny or my own disaster either way. And so
I think, you know, when we're talking about financial freedom,
it is important for you to say this is important
to me. It's something that I want to achieve. I'm
prepared to make some trade offs to get there as
quickly as possible, or you know, if you're happy. Let's
say a sort of classic case, someone who works in

(12:20):
an academic institution and they know that they're going to
do this job for the rest of their working lives
that they might say, I'm going to save a reasonable amount,
but I'm going to spend significantly more because i know
I've got a good position. I know I've got an
irreplaceable career. I'm not sure if such a thing exists anymore,
but maybe you believe that. And I'm happy in the
job that I'm doing, and I'm happy to do it

(12:41):
until sixty five or seventy or something like that. And
so for someone in that position, freedom is not as
important as you know, living day to day. And so
for them, they need to save, but they don't need
to necessarily be as aggressive in their saving.

Speaker 2 (12:56):
Where does your home fit into all of this, because
I think a lot of us think of our home
as kind of part of our investments.

Speaker 3 (13:04):
Yeah, and you know, I think, you know, sort of
financial planning. One or one would say that it's not
a bad idea at retirement to have a paid off
house in which you live, because it's a it's a
cost then that you don't need to carry you if
you were comparing ownership versus rent. And you know, I
don't have a problem with that idea, but it doesn't
form part of your investment.

Speaker 1 (13:25):
Assets.

Speaker 3 (13:26):
So back to the example of someone who spends one
hundred and twenty thousand a month, they need thirty six
million rands worth of investments to generate an income for them.
And your house in this instance is not an income
generating asset unless you've got a whole lot of extra
rooms on the side or something that generates you, you know,
additional rent. But if it's a normal home and the

(13:46):
only thing you do is live there and it doesn't
generate you any income, then you need to ignore it
for the purposes of your investment assets. And so it's
an additional asset that sits on the side. In fact,
it should be part of your last style costs, because
it's going to cost you need to pay the rent
or sorry to pay the rates, pay the maintenance, pay
levies if you stay in a body corporate, and so

(14:06):
it should be part of your expenses. But certainly something
you ignore as an investment asset.

Speaker 2 (14:12):
Okay, a couple of WhatsApp messages coming through, and let
me sort of put them to you to give you
a chance to muld them over if I can. Warren
Lolly says, I've ten years of work left my savings
and pensions have been depleted for various personal and work reasons.
What do I do now until I'm sixty five? Okay,
so ten years of work left there for Lolli? And
then as Stefano was saying, if I at seventy seven,

(14:35):
can the four percent increase to say six percent? And
I think that's the question about how much life is
left and how much you can spend Warrent, I all right,
some questions for you tonight. LOLLI whatsapping saying I've got
ten years of work left. I don't have any savings
left for various reasons. What do I do now until
I'm sixty five? I mean, Lolli's in a tough place, Warren,

(14:55):
but actually probably reflects where so many people are.

Speaker 3 (15:00):
Yeah, I think that's very true. And I mean the
one thing to say, Elie is you've got ten years
which if you're careful now, you know you can make
a massive difference to your financial position. So firstly, I think,
I mean it sounds obvious, but you do need to
take a full control over your expenses and see how

(15:20):
much you can cut your expenses down now, because you
don't want to be doing this at retirement age when
you don't have an income, and you can't adjust to
a new reality. So if you haven't cut your expenses already,
you know it's time to take a hard look at
what you're spending and make sure that you're pairing it
down to the necessities now. Unfortunately, you know, with ten

(15:42):
years of work to go and no savings, it means,
you know, luxuries are not on your radar at the moment.
They might come back into the future, but for now,
pare down your expenses as much as you can. And
then you've got to save like crazy, and you've got
to make sure that nothing gets in the way of
your saving now. And I think you know, try and
build up your retirement savings as much as you can,

(16:04):
and you know, use the retirement fund exemptions that SARAS
gives us for making contributions to our pension, provident and
retirement and newity funds and see what you can do.
And then don't forget that you have by the time
you hit to age sixty five, that's not the end
of your usefulness to society or your ability to earn
an income, because you need to make sure that in

(16:26):
the next ten years you stay you know, you stay
current You've got time and you've got experience, and that
can be hugely valuable to people who might not need
you full time, but maybe they can use you part time.
So start thinking about what you can do to add
value to to other businesses and other people with your
time and your experience. So I think, take action, and

(16:47):
then don't don't feel hopeless that you stop earning everything
after age sixty five. That's not the case.

Speaker 2 (16:53):
And lovely, if I may say, don't for don't for
prey to scammers because you're desperate. Just very words. Wren
Ingram there the certified financial planner at Galileo Capital, sharing
some important insights on financial freedom along with how you
get there and then how you stay there.

Speaker 1 (17:10):
The Best of The Money Show on two.

Speaker 2 (17:16):
Our shape shift to this week Gary Kiriako, the CEO
of Marble Hospitality, talking about his career journey in the
restaurant industry, but also looking at his experience with business startups,
discussing the leadership philosophy he's developed and he's had a
very interesting business life.

Speaker 4 (17:35):
There was something missing in Joe book. I mean we
just had our standard restaurants, small formats, no sense of arrival.
I always said you know that there's no way for
women to go to, you know, to get dressed up
and experience something different, you know, at bar, something elegant.
And I came back to South Africa. I've got the
concept right, Marble was born, but I needed a partner

(17:59):
to bring this to life. And one day I went
to David Higgs, my business partner. I walked into the
Saxon there and I said, David, I have this crazy idea.
A large format restaurant, a thousand square meters are on board.

Speaker 5 (18:13):
He didn't even flinch. You say what I mean and
the rest is history.

Speaker 4 (18:16):
We just created this amazing space that's for everyone, celebrations, birthdays, anniversaries,
business travelers, and you know, we were blessed this year.
We ten years down the line as Marble Hospitality and
Marble that were we started, and you know, we've we've
adapted and we've we've grown into different avenues of hospitality.

(18:39):
We opened Saint two years later, then Zoo, and then
the crazy thing happened called COVID that made us rethink
hospitality and that's where the pantry was born.

Speaker 5 (18:51):
You know, it was through COVID.

Speaker 4 (18:53):
We got such a fright that we said we were
left in the doll drums of nothingness. Basically as as hospitality,
people couldn't come to our restaurants. So we thought, like,
let's bring hospitality to a different sect.

Speaker 5 (19:08):
Of the market.

Speaker 4 (19:09):
And you know, the the garage downstairs close down because
it wasn't working, and we thought, look's reinvent what convenience is.
And we thought backwards. We thought, you know, let's open
a convenience store that sells petrol, not the other way around.
And that was us philosophy. And four years down the line,
we've got we basically four puntries. Now we're opening out

(19:32):
our fourth store tomorrow in Personia, so you know, we
we're moving along.

Speaker 2 (19:39):
So I mean, I mean, I've always thought that it's
interesting because joe Burg, you know, the idea of a
twenty four hour city, joe Burg isn't that, not yet,
but but but a big step towards that are things
like the pantry.

Speaker 4 (19:52):
You'll be surprised our our customers that come through at
two o'clock in the morning. And I noticed that just
the party people, yeah, the doctors, the people coming from airports,
the guys that are going home from late shifts. I mean,
the city never sleeps. You know, we think it sleeps
because we're sleeping.

Speaker 5 (20:10):
Yeah, you know.

Speaker 4 (20:11):
But you know when I drive past at two o'clock
in the morning just to have a look and see
what's happening. That's humming in Rosebank, and sometimes I wonder
where do people come from? But the city is alive.

Speaker 2 (20:23):
I've always thought a business like that at twenty four
our business, and now I've worked in a twenty for
our business my whole professional life, and there's certain sort
of challenges that it brings. You have to have staff
all the time for you. It brings I thought two
interesting challenges for me. The one is that you have
to have the same level of service no matter what
time of day it is. You probably can't have an
air shift in the B shift. It has to be no,
we've got a shifts, so yes, yeah, And you need

(20:46):
to make sure that everything that you sell is there
all the time, at the right quality.

Speaker 4 (20:50):
And every time. I mean, if you walk at the
pantry two o'clock in the morning or four o'clock in
the morning, you will get served. And you know, we
have chefs that work night shifts. We have managers that
have night chifts that rotate, so there's always someone there
looking after you. And I mean that's where hospitality comes,
and people have forgotten that no matter what you do,
you need a sense of service and hospitality to greet

(21:14):
your customers, you know, coming into the stores at that
time of the morning.

Speaker 2 (21:18):
One of the interesting things about it is there's a
sort of premium. Now if you look at, for example,
what happens in the supermarket sector, Willworth's has I'm going
to get very boring for a moment, but they sort
of internal shop inflation is about five six percent, shop
right is about one and one point two, sometimes below
two percent. People go back to will Worsk because they

(21:39):
know what they're going to get. Never forget WhatsApp we
received by someone saying, yes, I can buy two others
for the checkers for the price of one at Willie's,
but the one at Willies I know will be ripe
and I can eat it. And what you're talking about
is what people are prepared to pay for quality and
knowing it's a certainty that and you would think, well,
maybe Joe Brick doesn't have a market for a ripe

(22:00):
ever two thirty in the morning, if you've got the
right quality, Kelly that market is there.

Speaker 4 (22:05):
The market's huge. I mean we you know, Joebik's aspirational.
You know, we've changed. You know, we live we live
in the cloud Instagram and I don't care which LSM
you come from. You always want to be at the
one better. So you always want to improve yourself. So
you know, that's what the Pantry is. You know, we
we we so we fancy, but we easy. So we're
trying to take that sense of marble and just give

(22:27):
it to everyone. You know, So we want to give
that class and that you know, when you walk in,
you won't to be proud and you want to be private.
You're from Joebick and Pantry is from Joebig, so you
know it's it's it's Pantry's hours.

Speaker 5 (22:38):
Yeah, and that's what.

Speaker 2 (22:39):
People feel like, John Nathan, I hope you're listening. There's
some other things you did before all of this, and
you you actually ran several SPA supermarkets. That's connected that
was at the time connected to your family.

Speaker 5 (22:53):
Is that right, Yes, that's right.

Speaker 4 (22:55):
In the nineties and two thousands, we were retailers. To
be honest, I got bored of that. There was no
innovation in that sector and I just moved on. I
just went into printing and advertising, and I did so
many things before I got back into hospitality and in
retail again. But I think it taught me a lot
on how to be a retailer and how much retail

(23:18):
has changed. And I think as an entrepreneur, you learn
along and you learn your skill and you will hone
your skills through different businesses.

Speaker 5 (23:27):
And that's how Marbile became and came about. It's just.

Speaker 4 (23:32):
The life experiences of being in business.

Speaker 2 (23:34):
Your your heritage is Cypriot, I think you said, is
there and I mean here, And I can think of
examples in other places too. There's a strong sort of
heritage of entrepreneurship in some families from that island. Is
it the same for you?

Speaker 5 (23:49):
Exactly the same.

Speaker 4 (23:50):
I mean my parents or immigrants that came to South
Africa years ago, and you got no choice, then you
just become an entrepreneur. And as kids of immigrants, you
just learn that that's the only.

Speaker 5 (24:03):
Choice you have. There is no other choice.

Speaker 4 (24:04):
You either go and you become a doctor or a lawyer,
or you study a big common you go into business
and that's your path in life. And I suppose sometimes
it works you know, and it is hard being entrepreneur.
You know, there's there's no there's no rule book when
you when you start like that, you know you have
to be in the big world of business and and

(24:26):
work it out.

Speaker 2 (24:28):
When you were at school, was that what you were
you know, was entrepreneurship something you were going to do.
I call it entrepreneurship, but you know, running your own
businesses it was in It was.

Speaker 5 (24:37):
In that blood. You know.

Speaker 4 (24:38):
You grab and you join your dad's business and you
go and try something.

Speaker 5 (24:44):
That was how we were brought up. There was no
go work.

Speaker 4 (24:49):
For someone and hope for the best.

Speaker 2 (24:52):
Several I mean we we we. I've spoken to several
people who started businesses and you know who are sitting
in the chair you're sitting in now, And some of
the kind of went the university route, did the becom
and then worked and then had a flash of insight
and they thought, I'm going to do this. Some of
them actually have their first business before they even left school.

(25:13):
Which category do you fit into?

Speaker 4 (25:15):
I mean, were you I was selling computers at school,
you know, so I was trying to do something, you know,
and selling hard drives and repairing computers and in standard six.

Speaker 5 (25:27):
But you you you just want to go there.

Speaker 4 (25:29):
You got that itch insiders to go and and and
create and do and as in my mom has always
been to have fun what I do and if I'm
not having fun, And you know, Supermarkets was when I
decided that this is not this is not for me.
And we were sold out and we left it. And
it took me a few years to just settle and
see what we're going to do. And I'm enjoying myself

(25:51):
now hospitality. You know, I just want to have some
fun and enjoy it. You know, it is nice giving
back in that field.

Speaker 2 (25:58):
Yeah, no, I can imagine. And I read somewhere that
you and I think you mentioned briefly that you were
in the property business at some point and did that
lead in some way to you meeting David Higgs.

Speaker 4 (26:10):
Yes, so I was involved with Century twenty one South Africa.
I was a shareholder there and we sold his house,
of course, through the agency.

Speaker 5 (26:23):
And I called.

Speaker 4 (26:25):
One of the agents and I got David's number and
I said, can do you have his number on file?

Speaker 5 (26:31):
I need it?

Speaker 4 (26:33):
So I don't know that we didn't have the Poppy
Act then so I could do that. So I got
his number and I called him and I and it
was a five minute conversation about marble and he.

Speaker 5 (26:43):
Was my partner in a business partner.

Speaker 2 (26:45):
So you you cold called him out of the blue.

Speaker 5 (26:47):
Out of the blue. I just said, I just need someone.

Speaker 4 (26:50):
And you know, just by speaking to someone you get
a sense of who that person is. And when I
went to the Saxon and I said and opened my
laptop and I said, David, this is the concept I
want to do. And he said, well, I mean we
shook hands and I walked to Art and that how
was That's how the deal was done in cheap five minutes.

Speaker 2 (27:10):
It's quite something. Do you still follow property? I mean
I think some people I know are fascinated about property,
and once they're in it, they never stopped thinking about it.

Speaker 5 (27:17):
I still do.

Speaker 4 (27:18):
We've still got I'm still involved in Century twenty one
in Santin.

Speaker 5 (27:22):
You know that's as a shareholder.

Speaker 4 (27:24):
I've got some property around in a commercial property, but
you know, you know, as investments, but not really like
I mean when we had the spas then we used
to do the developments and own the shopping centers as well.
So you know, you I've done everything, you know, so
there's been in business and you know, just moving along.

Speaker 2 (27:44):
We're speaking to Gary Kiriako. He's the business brains behind
the Marble Group. He's your shape shifter. Tonight you with
the money, show the money show shape shifters. Gary Kuriako,
the brains behind Marble, the Marble Group. Yeah, as your
shape shifter, Gary. I mean, one of the things that

(28:05):
clearly you have as an entrepreneur is a sense of ambition.
A lot of people might have started their first restaurants
is kind of a smallish thing. A thousand square meters.
That's a big room. I mean, I've been inside. It
is a very big room. You have to fill it.
You have to make you have to get you know, turnover,
you have to get people going. You have quite a

(28:26):
large staff compliment. Those early days were they easy.

Speaker 5 (28:30):
It was as simple as everybody rushing in.

Speaker 2 (28:33):
It was a bit more complicated than that.

Speaker 4 (28:34):
A little bit more complicated because it was so big.
I mean, the market consensus was, what are you doing? Yeah,
there's a standard formula in restaurants, stick to it. Banks
used to say, when I went for a loan there,
they said, no, you know, whoever starts a restaurant, you know,
the biggest risk and red flag in our lending criteria.

(28:55):
So there were a lot of negatives. But you know
when you travel and you've been in business, so you
get this gut instinct that says, you know what it
feels right, I want to do it. I want to
prove that we can do it. And South Africa was
right for changing the restaurant landscape.

Speaker 5 (29:11):
And I think through.

Speaker 4 (29:12):
Marble a lot of our fellow restaurant tears have changed
their way of thinking of how they open restaurants. So
we've we've elevated the market as well, so we all
work together and we've improved hospitality and tourism in South Africa.
You know, our clientele at Marble is international and Cape Town,

(29:35):
and you know that will compliment us how well and
how above we are to.

Speaker 5 (29:39):
The rest of the world.

Speaker 4 (29:40):
You know, they was telling us please open the Marble
in London or Dubai.

Speaker 5 (29:44):
And we said no, we had right, were happy, we
are thank you, don't do it.

Speaker 2 (29:47):
The record of the track record of South African companies
in London is not great, unless, of course, your Nando's,
But that's not your vibe at all. What is it
about hospitality that's so attractive.

Speaker 4 (30:00):
It's really fun, you know what I mean, it's really rewarding,
you know, just.

Speaker 5 (30:05):
Working with all the all the creative people out.

Speaker 4 (30:08):
There, seeing smiles, you know, on kids' faces at the
pantry when they're having an ice cream, it's really rewarding.
It's it's it's it's not a boring industry. Yeah, you
know sometimes weple say it's a boring industry.

Speaker 5 (30:22):
It's finance. It's this.

Speaker 4 (30:24):
This is really exciting. You can create, you can do,
you can change. So you know, we we're very dynamic.
So you know, it's it's like a helicopter goes in
in all directions, and that's what hospitality is.

Speaker 2 (30:37):
Is there a people element to it that attracts you.

Speaker 4 (30:39):
Yes, I mean you're dealing with with all our staff,
all the guests.

Speaker 5 (30:44):
That come in.

Speaker 4 (30:46):
You know, like, I'm quite privilege that I don't have
to report to shaholders. I'm the shoulder, and David's a
shelder and mother partner, Dinner's a shoulder. So we just
have to impress our guests and our staff to make
things happen, and so it makes it easier for us
just to focus our energy on those two.

Speaker 2 (31:05):
Gary Kuriako there, the CEO of Marble Hospitality, talking about
his journey and his love for hospitality.

Speaker 1 (31:12):
Seven you'll listening to the money shows the best bits.

Speaker 2 (31:17):
Fighting for Your Consumer writes Your Consumer Ninja Wendy Nola
this week, it's an astonishing tale about legacy garage cards.
I'm sure you don't know anyone who still uses a
garage card, and yet Standard Bank has been charging people
one hundred ruand a month for these cards for a
very long time. Wendy Nola explains the latest.

Speaker 6 (31:38):
Hi, Stevenya, that's sort of the point of the whole story.
So back in the day, being before two thousand and nine,
you needed a special garage card a fuel card to
buy fuel on credit. And then after that, after two
thousand and nine, any debit or credit card worked at
the pumps.

Speaker 7 (31:54):
So loads of people stopped using them.

Speaker 6 (31:56):
But he has the thing many of them are ventured
to say, most of them didn't cancel. And I'm talking
specifically here about Standard Bank garage cards. At that time,
there was no extra fee for the garage card. But
in twenty fifteen, at a time when very you know,
far less people were actually using them, Standard Bank began
charging a fee for secondary credit cards, so garage cards

(32:18):
as well as supplementary cards people got for their sparses
and whatever, to cover, as they put it, the cost
of providing and administrating and maintaining all the value added
services and features associated with the card. Reminders, I said,
many thousands of them were no longer being used at all.
I'm talking specifically about garage cards, And since twenty fifteen,
the garage card feed has escalated. It went from sixty

(32:43):
rand in twenty twenty two to ninety rand the following year,
and then to one hundred rand I think that was
twenty twenty four, And that's equivalent to the monthly fee
levied on the bank's top credit card, which is titanium.

Speaker 2 (32:58):
Sure, okay, but then you would know there was a charge,
and then at some point, you know, the card would
expire and you would get a new one. Wouldn't the
bank sort of tell you're getting a new one.

Speaker 6 (33:11):
Well, you think so, because that's what happened with your
ordinary credit card, because they want to tell you how
to get your replacement after five years, because your old
one is now expiring, because they want you to keep spending.

Speaker 3 (33:22):
Right.

Speaker 6 (33:23):
But in the case of the garage card. They never
said a word. They told me that they don't inform
card holders about renewals. If the card has been inactive
for three months, it's on the customer to request renewal.
I was told, which many people didn't do because they'd
long forgotten all about them. They weren't the pieces of

(33:43):
plastic point in their wallets and persons anymore. And yes,
the thing, Stephen, this is what I've been on about
with them. On the credit card statement, on your normal
standard bank credit card statement, it will just say service fee,
and that one hundred rand was bundled in with the
fee for the ordinary credit card, right, so it would
just said what it was. No, there was no no line.

(34:08):
It said garage card one hundred rand. And I was like,
if you're not come on, if you're not going to stop,
if you're not going to phone people and say, hey,
you see you haven't used your card for ten years,
at least put it on the statement that they're paying
one hundred rand for the piece of plastic that they're
not using. And they were like, that was August twenty four,

(34:28):
was the first time I asked them. And then they said, oh, yes, no,
well we'll get to that, and then I asked them
four months later. It was oh, it's quite complicated, actually
a lot of hoops to jump through.

Speaker 7 (34:40):
We'll do it at the end of quarter one five.

Speaker 6 (34:43):
And then I went back to them and I was like, oh,
it's actually quite a technological challenge. And so it went
and I kept people, you know, kept writing to me.

Speaker 7 (34:55):
Not a huge deluge, but you know, a.

Speaker 6 (34:57):
Steady stream of people writing to say, oh, I found
out by accident when whatever.

Speaker 7 (35:01):
I saw your story and wow, I've been paying thousands
for years.

Speaker 6 (35:06):
And then they would get maybe fifty percent of three
years fees and told okay, there you go, off you go,
we'll pay you this.

Speaker 7 (35:16):
So yeah, should.

Speaker 2 (35:18):
I mean, it looks it looks frankly deliberate. It looks
like a cover up in a way. So what's happened now?

Speaker 7 (35:24):
Okay, so our last wrote a story about this.

Speaker 6 (35:28):
In December, I went, I'd got I've seen another complaint
from Marius and Portuval. His wife discovered they were paying
two hundred both of them met carriage card Stephen. So
they're paying two hundred red between them for cards I'm
used since twenty twelve, so we're talking thirteen years and
they were refunded not thousands, but seven hundred rand because

(35:48):
they were told queries must be within thirty days of
the statement. Okay, so what's changed is I wrote the
normal story saying in December saying we still know answer.
They're still saying it's a technical issue. You what on
earth do they need technical help?

Speaker 7 (36:03):
Is they? Is this deliberate? Anyway?

Speaker 6 (36:07):
Last week the bank had one of those let's chat
moments and they said, actually, in early twenty twenty five,
a few months that is, after I started badging them
about the issue, they decided to prioritize stopping fees on
unused garage cards.

Speaker 7 (36:20):
In May, they acted, and by September of twenty twenty.

Speaker 6 (36:23):
Five, fees were stopped for ninety percent of customers in
the cases where they hadn't used their cards for over
a year. They reviewed the legacy products, they told me,
and they saw that boats using it, something that I
could have told them, and so then they acted in
customer's best interests, even though the contracts were still valid
because these people hadn't actually canceled them. So there's ten

(36:43):
percent left and they either have balances that they need
to pay or they actually are still using the.

Speaker 5 (36:48):
Cards this last month.

Speaker 7 (36:52):
No. Well, I said to them, well, why didn't you
tell me this?

Speaker 6 (36:54):
If you told me this in December, that column would
have looked a bit different.

Speaker 7 (36:57):
And they said, well, you know, time of year.

Speaker 6 (37:00):
There were stand instant I was asking about, you know,
why aren't you putting this on the statements, which incidentally
they said they're still going to do where they didn't
see the big picture picture and say well, actually, you
know we've done something better.

Speaker 7 (37:14):
We've actually stopped. No one thought to tell me that.
But anyway, the main thing is it's happened.

Speaker 6 (37:19):
And there was millions every month in an you know,
fees that were for nothing. So for me, it's a
pretty big deal and I'm really happy that it's finally happened.

Speaker 2 (37:31):
Okay, so balance me here. I just want to make
sure I have this right. People stopped using garage cards
right now. Remember that when that happened and everybody could
use their credit card, Standard Bank kept charging people one
hundred rand for a month for cards they could see
were not being used, and then they failed to remind

(37:52):
those people that they had them at the time they
would have normally reminded them in the past. I mean
I hate to be this guy, but that really does
look like a cover up to me. And they made
a fortune in the process.

Speaker 7 (38:05):
They did.

Speaker 6 (38:05):
They did your words, but yes, and I couldn't believe
how they kept kicking the can down the road and
saying it was so difficult to put it on the statement.

Speaker 7 (38:14):
Maybe it was, and it would have been lovely if
they'd said to me.

Speaker 6 (38:19):
Sometime last year when they decided, maybe we should look
at this, maybe this isn't okay. They didn't tell me
until last week that that's what it happened, and anyway,
it's now stopped. But yeah, it was not a good loque.

Speaker 2 (38:34):
No, Like Wendy Noler, our consumer Ninja there highlighting the
fight for your consumer rights and just looking at this
long running battle over legacy garage cards.

Speaker 7 (38:45):
Seven notes.

Speaker 1 (38:46):
The best of the Money Show from this week.

Speaker 2 (38:49):
This week is How I Make My Money guest Amber Penny,
the co founder and chief retail officer at Farah, talking
about how she came up with the idea, the people
she's worked with, and how Farah was born from this
idea of identifying opportunity in the global fashion wastage area.
As a result, you're starting to see real changes, someone's

(39:11):
really spotted a gap.

Speaker 8 (39:13):
So we look to buy the overstock from brands kind
of globally and locally, so a little bit of a
distributed model there, and we essentially buy their overstock or
the product that's you know, from last season or often
actually from the current season that hasn't sold yet, so
it's still you know, great, a brand new stock. But

(39:35):
of course, with this you know, the rise and the
global overstock crisis, brands are really really in trouble with
the overproduction and the over manufacturing of garments to keep
up with fast fashion trends. And so we come in
and offer them a you know, kind of cost price
for the good cover their base and obviously then allows
us to pass that serving onto the customer. So we

(39:57):
essentially import or kind of as I said, purchased locally
from brands and we redistributed through our stores at an
out left price. So kind of global brands like Zara,
a lot of intertext brands, Zara Pullinbert Berschker, so those
European brands we struggle to get you at an accessable price.
And then also top sports brands, you know, like Adidas,

(40:19):
et cetera, et cetera, and we essentially sell that through
our stores at an outlet price.

Speaker 2 (40:24):
I have so many questions about this business model, and
my first is why is there an overstock crisis?

Speaker 5 (40:30):
Is it just because they Is it because.

Speaker 2 (40:33):
They price themselves out of the market, because too many
of us are feeling that that material and going no,
but not a chance?

Speaker 8 (40:41):
No, I mean yes. But also to be honest with you,
I mean, if you think about fast fashion, right, so
think about the way that trends are moving through the
world at the moment. So I mean you think about
the most recent trends of you know, those kind of
pump or ballet slippers for women. I mean those have
been in for a season and they already move out
in terms of trends. And so what these big post

(41:03):
fashion retailers are doing is they are having to manufacture
goods at such a large scale in terms of quantity
to be able to distribute enough product but keep up
with a trend that is only available for a season.
And so if you aren't manufacturing at a rapid speed
and distributing enough product, you losing out. But then on
the flip side, there's obviously a huge amount that is

(41:25):
over manufactured and when the trend goes out of season,
they left with a bunch of stock that is you know,
so now, for example, the stuff that they haven't sold
of the pump flats, those are brand new, beautiful garments,
so Zara pump flats that would have absolutely flown in
the previous season because they were in trend. Now they're
sick with a huge amount of overstock and they can't

(41:47):
do anything with it, so the brand loses money as
well as you know, a lot of the problem with
these past fashioned brands is that they end up incinerating
the stock or sending it to the landfills, and so
instead of them doing that and using money after the
garments an extra life cycle and a market that probably
couldn't afford the full price. So we're giving people accessibility
to these global brands, but it's also product that would

(42:09):
have just been gone or gone to complete waste. So
it's crazy. And obviously with the rise of e commerce
as well, so if you imagine, you know, there's such
a trend overseas of buying for example, online, you buy
a jersey that is a medium and at large, and
you because you want to try it on, but it's
the same jersey. So you buy the jersey, you try
both on, and you return the one. Often that return

(42:29):
garnment goes into the overstock tile, so operationally to put
that back into the kind of mainstream stock tile is
super tricky. And so these the kind of return stock
and overstock just grows and grows and grows, and so
you know, as this e commerce trend is growing, so
is overstock. So those two things combined it's just, let

(42:51):
you know, leading us into the fashion industry being a huge,
huge problem for the environment.

Speaker 2 (42:56):
Amber. I mean to hear you describe this industry as
to remind me of a very old American expression that's
a heck of a way to run a railroad. In
other words, it's all a bit mad. I'm slightly surprised
in a way that these chains haven't found a way
to sell it themselves. And I realized that you've provided
that solution for them and for your end customers. But

(43:18):
I would have thought that, you know, they would just have,
you know, because they're all owned half of them are
owned by multinationals. Anyway, they will just sort of send
it down the chain, down their own chain rather than selling.

Speaker 5 (43:27):
It to you.

Speaker 8 (43:29):
Yes, although I think you know, the problem with that is,
so there's there are also other other stuff kind of
distributors global So obviously you know the likes of tkmapps,
TJX in the US, and then there's obviously their own
sort of branded artlets. But again you can only reduce
the price so much in your own artlet before you
start kind of you know, absolutely cannibalizing your own markets.

(43:51):
So if there's a distribution channel that isn't within your
own market, So for example, you know, Zaro Global would
much rather solve their product through our markets where they
feel it you know, quite a fresh market that probably
couldn't afford a large percentage of the stock in itself,
rather than send it to the UK where a huge

(44:13):
percentage of that market is buying Zara full price as
it is, So it's sort of cannibalizing their own their
own market that side. So I think that that new
channel of distribution is definitely quite a big selling point
for US and seemingly has landed quite well with the
brand in terms of being able to tap into a
market that they feel they haven't really managed to crack.

Speaker 2 (44:32):
The full uh to sort of spot a gap like this,
I mean, have you described as co founders. So I
presume there's another co founder or co founders. How would you,
I mean, how would someone even know that this is
all happening. You would have to have some experience, and
I suppose key to that then is the relationship with

(44:53):
the person you're buying the stuff from.

Speaker 8 (44:56):
Yes, yes, totally. And I think it was quite had
a crazy journey in the way that Sarah started. I mean,
so my co founder David Thorne, I have really had
been plugged into the kind of you know, global of
stock crisis for a while, and I think we had
been hearing of these companies globally that had tried to
solve this again and again and again and failed. And

(45:18):
I think we were at the time raising capital for
a different business, and I think, you know, through the
network of our investors as well as just kind of
conversations with people in the industry, we really started to
identify a gap where the distribution and a new channel
through the use of a lot of technology as well,
is very kind of optimal for this model. And so

(45:39):
I think it was really through a series of conversations
and just like taking the plunge, I mean, I can't
say it was a light bulb moment. I think, you know,
it was multiple conversations digging into different industries, understanding, you know,
why the brands globally had failed previously, how we can
do things differently, and then rarely working on those relationships

(46:00):
in terms of bringing on the right people. So since
it's in section in twenty twenty, I want to say
in twenty twenty two feels like a lifetime. But we've
brought on two other co founders, So William mccaren from
the UK and then a guy called Chris mccanner who
was at Superbolous before us, and he's really kind of yeah,

(46:21):
just shaped the company in a in a way with
a lot of retail experience, and so I think between
the four of us, you know, Dave and I being
predominantly from a startup background, and then Will and Chris
having a little bit more retail experience. Will had previously
started a second hand clothing business in Kenya, and so
there was a lot of expertise that kind of came

(46:42):
together to the table, and then through investor relations, really
just opened up a world of supply and I think,
you know, initially obviously conversations are wholesalers and were third parties.
And I think the more we started to dig, the
more we realized the demand is direct from the brand
and we can actually kind of cut out that middleman.
And and now you know, a huge percentage of our

(47:02):
stock it comes direct from the brand themselves. So really
kind of forming those relationships to figure out how this
can be a mutually beneficial partnership for their man, for
us and for our customers.

Speaker 2 (47:15):
Of course, there's certain things so you kind of need
to make both ends work. So you need to make
sure that you get the product that you need. Okay,
spotted the gap there, but you also need to have
places where you can sell it here, and you would
have had to set that up, you would have needed
capital to do that, you would have had to know
where to do it, and that can be quite interesting.
I mean, I know, I don't know if Sentence City's

(47:38):
the right place for a thing like this. Maybe it is,
I have no idea.

Speaker 5 (47:42):
What was that like?

Speaker 2 (47:42):
Because you can't just put a store like this selling
originally high end but now at a better price stuff everywhere.
You've got to be quite strategic about things like that.

Speaker 8 (47:55):
Yes, yeah, totally, And I think you know, we have
to also be careful as to where we operate, so
we don't you know, step on chowders with our with
our local partners. I think we really are about making this,
as you said, you know, beneficial for all parties, and
so we are very cautious. And we've obviously got kind
of very good relationships with our local distributors and good

(48:16):
agreements as to where we can and can't operate, and
so we really are kind of cautious with that. I
think the honestly one of the biggest challenges and big
learnings was figuring out how to set up these kind
of locations at scale because essentially, to give you an
overview of the challenge, I mean, the nature of the
inventory is largely one of the kind. So you aren't

(48:37):
bringing in an item that has skew depth, So you
don't have size and curves of one item, right, So
you're bringing in maybe as our jersey that's medium, but
it might be the only one of that jersey. And
so if you imagine that in a store space, it's
quite tricky because every store location has different inventory. Firstly, secondly,
you know, finding the right the exact right customer probe

(49:00):
far for us when I think our product largely appeals
to a big kind of percentage of the population, as
well as trying to appease a very FoST rollout that's
sort of been you know, agreed upon with our investors.
But also you know, internally we've got a very sort
of aggressive growth plan. So trying to marry all of

(49:21):
those things while you know, trying to find the right
locations has been honestly, really really challenging. I think we've
made a lot of mistakes along the way, and I
think rarely where we're at now is we've opened. I mean,
we started twenty twenty four with no twenty twenty five
with four stores. So last year we started with four stores,
we ended with eighteen. So just in last year we

(49:43):
opened twelve stores. So I mean someone who were opening
four stalls at a time. So with that, I mean
you can imagine only having operated for a year before that.
We rarely had to sprint before we could walk. So
I mean we made a lot of erarors. We learned
a last STI where the prime locations are, and I
think we've had enough distribution where we can see exactly

(50:04):
where the sweet spot is, so I think now we've
got a really good kind of concept of the locations
we're looking for, and we've been lucky in the sense
of they have started to really kind of open up
for us. And I think we're now building the right
kind of partnerships with the landlords and et cetera. But honestly,
the beginning was just a lot of trial and error
and a lot of talking to network and figuring out

(50:25):
what might work and what might not. But again, you know,
when you're moving this fast, it really is largely trial
and error and going with your guts.

Speaker 2 (50:34):
And I mean you also need to you need to
sort of educate the customer. I suppose that this kind
of thing is available, So you're advertising the way you
tell people that you can't just say best brands are
cheapest prices. It's going to maybe be a little bit
more almost subversive, is that the right word. You don't
want to irritate the big brands.

Speaker 8 (50:56):
No, we actually haven't found too much red tape in
terms of the market. I mean, there is some sort
of very tepe obviously with global partners, and we need
to be we need to, you know, stick to certain
kind of agreements and things. But I would say, actually,
you know what we found as a brand, And I
suppose this also comes from who we have internally. We
rarely do stand for and want to stand for transparency

(51:20):
and authenticity. And I think something that we've seen fashion
brands and where we've seen fashion brands go wrong is
they're highly curated. You don't rarely understand you know, what's
under the rug if you lift it up, like what
is their manufacturing process, what materials are they using. I
think there's a lot of there's a lot of mistrust
that's developed in the fashion industry, and so for us,

(51:40):
we really want to build a brand where people can
ask all the questions they want. So, you know, initially,
I think it's a little bit better now because we've
got a lot of like, you know, more stores. But
in the beginning, you can imagine someone's walking into Promenade
more and seeing a Zara puffa jacket for four hundred
brand and they're going, no, no, it doesn't seem legitimate,
Like where these guys getting their products. I've never seen

(52:02):
this store before. Is it real? Is it not? There
was a lot of doubts in the beginning, and I
think through consistent communication and also just through growth and
kind of you know, organically showing people, you know, ask
the questions, we can tell you the detail, like there's
there's nothing to hide here. I think that's rarely helped
with the word of mouth, and I think has rarely

(52:22):
helped people actually connect with the brand and feel like
they're almost building it alongside us. I mean, it's really cool,
like our social media and we always chuckle internally because
our social media is just filled with d ms of
like suggestions on how to run our own so it's
like and not necessarily like returns policies, but like, hey, guys,
I raally think you should try to get this brand
or like, you know, it just feels like customers because

(52:45):
we also use customers and a lot of our our
marketing content.

Speaker 4 (52:48):
I think they.

Speaker 8 (52:49):
Feel almost like they work for fair, like they're part
of us building this company, like they've seen us from
one store to eighteen, and so there is this close relationship,
and I think that gets fostered more transparent we are
about what we do, and I think that's really the
thesis of our marketing and our advertisings, just being as
explicit as we can be so that people don't don't

(53:10):
have this kind of doubt.

Speaker 2 (53:12):
In the brand, andber Penny there, the co founder and
chief retail officer at Farah, just explaining to you how
she spotted a gap and what she's been able to
do with it. You've been listening to the bespits of
The Money Show. A digestive just some of the most
important thoughts from the show this week. If you'd like
to hear more, please go to our website or your
podcast app and search for The Money Show. Thanks for

(53:33):
being with us this week. We're back with you again
on Monday at six o'clock. Have a good weekend.

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