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The most likely scenario for South Africa is that the central state is going to keep failing and get weaker, and that as it does so more and more communities will come to take over for themselves the things the state once controlled. That will happen across every sphere of society, as it already is, from resilient middle-class communities controlling their own water, electricity, education, healthcare, and security within self-contained private estates, to the zama-zamas of South Africa’s illicit mining industry taking over the shafts and tunnels that came to lie abandoned after the state nationalised mineral resources 20 years ago.

The Common Sense has covered this trend extensively across its various podcasts and social media channels, and has said throughout that the middle classes can have great and fulfilling lives in the enclave future that awaits. That has in turn led to many questions from our members and subscribers about what they need to do to thrive in that future. That is a good thing, because this is a journey we want to travel with our readers as a Common Sense community of sorts, and the staff and analysts who work on The Common Sense have spent a lot of time figuring out the strategies middle-class families need to be successful. Those are set out in this special report. You might think of it as a guidebook to the future of sorts.

What an Enclave Actually Is

An enclave is a geographic or institutional space in which the functions of the state have been substituted by private, communal, or hybrid provision, and which therefore performs at a standard the surrounding jurisdiction cannot match. Estates that generate their own electricity, ratepayer associations that repair their own roads, business improvement districts that fund their own policing, private schools and semi-private former Model C schools, medical schemes standing in for public hospitals, and firms that build their own water storage and their own logistics around a failing rail network are all enclaves in this sense.

The clearest measure of the scale involved is security. By 31 March 2025 the Private Security Industry Regulatory Authority recorded 637 675 active security officers working for 17 146 active security businesses. The South African Police Service employs a little over 180 000 people, and that number includes administrative staff. South Africa has, on these figures, more than three private officers deployed for every person the state employs to police the country. Nobody legislated that. It assembled itself, transaction by transaction, as households and firms bought back the service the state stopped providing.

And when South Africa blew up during the KwaZulu-Natal riots of July 2021, it was those security people, and ordinary citizens, who came together to restore order after the police and the army had fled. That was the most acute demonstration yet of what we mean by an enclave future: the private security industry and the citizenry handing the country back to the government after the government had lost control of it.

The same trends are to be seen everywhere. The government ran out of electricity, but not the middle-class citizens and private businesses who built their own power plants.

All of this happens because the African National Congress (ANC), and now to an extent the Government of National Unity (GNU), govern the country according to an impossible contradiction that can only conclude in the collapse of the state and the fragmentation of its politics. Government policy taxes capital, threatens to expropriate what is not taxed, dictates that race override merit in public and private sector appointments, and pursues green-energy objectives that will never produce the electricity needed for industrial growth. As a consequence, investment rates are half what they should be, economic growth is just a quarter of the rate of our emerging-market peers, and the unemployment rate is over 30% when the world average is nearer 5%. That is why South Africa is where it is.

We do not read this as a decline story, although it is of course that too. Rather, we see it as an evolution story. South Africa is evolving away from the old Union of 1910 and will break up, as the state loses more and more control, offering well-briefed and dynamic private communities the chance to carve out a future for themselves in South Africa on terms they will control.

The Organising Principle Is Optionality First

In most civilised countries the primary objective of a middle-class family is accumulation: accumulation of skills, investments, assets, and family. That can be the primary objective because such families can be reasonably sure, from one generation to the next, that the nature of the society they live in, its organising principles, and the broad rules of the game will remain fairly stable. Accumulation will remain a primary objective for South Africa’s middle class too, but because of the unique nature of the break-up of the state, and the fact that the rules and organising principles could be completely inverted from one generation to the next, South African middle-class families must pursue an even more primary objective above that, which is optionality.

You can think of that as creating as many choices as possible.

To help with that, think in terms of a matrix with four quadrants. Into the first of those put your wealth, your investments, and your other assets that have a financial value. Into the second put your income, as distinct from your investments. Think of this as the cash you generate from your job or your businesses that funds your lifestyle and allows you to accumulate assets. Into the third put your geography, in terms of where you live, both in South Africa and beyond its borders in the rest of the world. Into the fourth you put your children.

The chart below sets that out.

Take each of those quadrants and ask yourself two questions: how many choices and options do I have in this quadrant, and how could I increase them?

The key is to develop as many options and choices as possible. The more you have across each quadrant and cumulatively, the more resilient you will be in a future South Africa.

We can go quadrant-by-quadrant and set out some of the detail.

Wealth: Diversify Across Asset Classes and Jurisdictions

The objective in the wealth quadrant is complete diversification across asset classes, currencies, and jurisdictions.

If an American, or a Spaniard, or a German came into US$1 million and went to see his or her investment adviser, and the adviser told him or her that the best thing to do with that money would be to convert it all into rands, then put it in the Johannesburg stock market, and use some as the deposit on a home in Johannesburg, the person in question would get another adviser. And so should you.

South Africa’s economy accounts for less than 1% of global GDP and is growing more slowly than almost anywhere else, while the government has passed a law that would allow the state to seize any fixed or movable asset, from a farm to shares in a company to your pension fund, for less than its market value. And that government has a habit of doing such things, is promising to do more of them, and is wholly corrupt.

But the United States (US) dollar is also under pressure, as The Common Sense has written on in particular detail and at length. And the US stock market is very expensive. Britain is going nowhere. The Middle East is as wild as ever. China has a lurking debt problem, as The Common Sense has also written about at length. And it remains very unclear what artificial intelligence (AI) is going to do, or how high something like Bitcoin might yet go.

So it is not a simple matter of cashing out of South Africa. Not at all. The Common Sense has also written of how, once it is rid of President Cyril Ramaphosa, the ANC may be freed to drive the reforms he has held back on, how that might get the investment and growth rate way up, and how if that happens South Africa could boom. That is not our base scenario, enclaves is the base scenario, but we give the upside 20% odds or so.

And then there is the question of the cost of living. The Common Sense’s main podcast panel did a great show out of London on how expensive and difficult it is to live in the United Kingdom. Young Americans cannot buy homes much anymore and many live with their parents. A good steakhouse in Sandton is nickels on the dollar compared with eating out in London, or New York, or Brussels. Property is dirt cheap compared with what you might pay in Los Angeles for a nice beach apartment.

So how do you deal with all of that from a South African perspective?

You diversify across multiple currencies, and you use those to buy into multiple asset classes across multiple jurisdictions, including in South Africa where there is a bargain and the analysis on the investment is sound.

It may take time, but the ideal point you want to get to is where, if SA Inc sinks and the rand collapses and inflation goes to something crazy, your net position strengthens because the relative value of your non-rand denominated assets has taken off. At the same time you want to retain enough of a buy-in into South Africa, because it is dirt cheap, from the stock market to a beachfront apartment in Port Elizabeth to a cattle ranch in wherever, so that if South Africa turns up you do very well, regardless of what the appreciation of the rand has done to the rand-denominated value of your offshore assets.

It takes time to get there, but if optionality is the primary objective, above even accumulation, a very strong position ensues. Only people who have not done that, out of naivety, or ignorance, or a false sense of nationalistic bravado, will find themselves in a position where something gives and they then have to hold a fire sale at bargain basement prices to try to get some limited dollar diversification in the final throes of some great future South African crisis.

And it does not matter how rich you are. Compounding is the most wondrous thing in the world, and a youngster fresh out of school can make this the foundational philosophy of their investment life with the same confidence as would apply to an established high-net-worth family.

Income: Be Small, Nimble and All-In on Intellectual Capital

The wealth quadrant is about what your family holds. The income quadrant is about where it gets the money that allows it to live month to month and to use any surplus to build its wealth quadrant.

The rules here are simple. There are three.

1. Stay well clear of any business or job that depends on the South African government. The state will get poorer and more corrupt, and you will not want to live with the stress of that or with the consequences.
2. Nor should you build, as your first choice, a career in a large corporation in South Africa. These will enforce ever more racial and related edicts on their staff on behalf of the state, and will also look to cut head count as vastly as AI allows.
3. Rule three is to steer clear of a business or profession, as your first choice, that is built around a lot of fixed capital investment in buildings, plant or equipment and the like, as these are all things the state can regulate, prohibitively tax, force you into an unwanted political partnership over, or ultimately expropriate.

Of course there will be exceptions, but out of the gate these are the rules.

So what is left?

The best career is to work for yourself, or in a small business, or something between the two. Think of being a workerpreneur, with people who share your values, where your clients are not the state and not primarily large corporates, and where the business is built on intellectual capital and know-how more than on fixed capital. Then be in a field the state cannot easily regulate, or may not bother to, where forcing you into a political partnership with some corrupt tenderpreneur is unlikely or impractical, and where you do not have many staff and certainly few full-time ones. AI will be your ally here. You want that business to be mobile, so that you can pick it up and put it down anywhere, and the very best case is if it can also service clients outside of South Africa, as you would then be getting into the holy grail of enclave living, which is a hard currency income financing a life in South Africa.

If you get this right your family income should be self-directed, or close to it. The test is this: what would the government have to do to put my business or my job in a position where the people who pay me say they cannot, or may no longer, do so?

Foreign exchange earning deserves particular emphasis for South Africans. The professional services that can be delivered across a border have expanded enormously. Software, design, data work, financial analysis, technical writing, accounting, legal research, architecture, engineering consulting, teaching, and specialist advisory work of almost every description can be sold to a client in London, Dubai, or Austin from a desk in Johannesburg. The rand-cost base against a hard currency revenue line is a real and durable competitive advantage, and the households that have discovered it are among the best positioned in the country.

Geography: Live Where the Community has Taken Responsibility

Again, in a civilised society the geography question would come down to affordability and lifestyle. That matters in South Africa too, but what matters more is resilience, independence and state-proofing.

The primary filter is not suburb prestige, school catchment, or price per square metre. It should rather be whether you are moving into an environment of like-minded people who know, not guess, that they will increasingly supply their own water, electricity, roads, security, refuse removal, access to healthcare, and access to education, and do so independently of the state.

Water security will ultimately come to mean storage, boreholes, and a treatment arrangement that does not depend on a municipal plant with a poor compliance record. Electricity means generation or storage at estate or household level, with grid supply treated as a supplement rather than a base case. Security means a funded, professional arrangement, from emergency response to crime prevention and detection. Roads and refuse mean an active ratepayers’ association or business improvement district. Healthcare means private facilities.

That is the ultimate positioning, but again, as with your career, there are no absolutes. In the Western Cape the urgency is less than in Johannesburg, where without private water and electricity your supply would be interrupted weekly. But even in the Western Cape, demographics raise questions about how and where the Democratic Alliance’s hold might be breached, and there is therefore no guarantee that the province or the city continues to outperform.

A private estate in the Western Cape would tick a lot of boxes. But a private estate in Gauteng with the right management and mindset would not be far behind, while a highly organised farming community with strong community ties also works. There is a lot of grey on the fringes here, and while the absolutes are the ideal, they are not necessary conditions for success.

Domestic geography is only one axis. The other is your contacts and residence status offshore.

Start with foreign contacts. Cultivate these on a social and a professional level, which simply makes sense once you have read the part about workerpreneurs in South Africa servicing offshore clients. From there, start establishing firmer ties, at the low end of which might be a foreign bank account, a foreign brokerage account, and membership of a professional network or association.

The next step up is to be in a position to secure foreign residency or work status, should you choose, or need, to activate it quickly. A very large number of South African families hold unexercised claims to European, British, or other citizenship through a grandparent and have simply never filed the paperwork. And many thousands more hold skills much in demand in the rest of the world.

The point of securing that status is not to use it. In most cases it will never be used. The point is that a family that can leave and chooses to stay is in a fundamentally different position from a family that stays because it cannot leave. The first is exercising judgement about relative risks. The second is going to roll with the risks however they play out. This option applies to your children even more than to the parents, given the peace of mind that such optionality will assure.

And a lot of what a South African family is looking to achieve here overall is peace of mind: to know that whether it is your wealth, or your career, or your home, nothing can happen beyond your control that will wipe you out, and that it would in fact take an extraordinary series of domestic, global, and technological events to deprive you of the standard of living you would like to enjoy.

Children: Build the One Asset That Cannot be Expropriated

With your children it is all about education and skills, because that is the only thing the government cannot expropriate. This is also the quadrant with the longest lag but the highest return.

Get your child into the best school you can afford. That does not mean South Africa’s “Ivy League” private schools, which are not at the standards they once held and have become corrupted with all sorts of silly ideology. The top state schools and commercial private schools are often a better bet for the money you will invest. After school, encourage your child to train at the best post-school college or business they can, and ideally out of the country for a time, because that is where they will make the international contacts that are so important and may even secure residence status they could later choose to use or not.

There is vast demand for South Africa’s best school leavers around the world, and a global understanding that South Africa’s affirmative action laws cause its larger corporates to reject some highly skilled people. You will note that we said school or business to train in, a subject we will explore in more detail over the years ahead as questions about the value of a university education rise and the merits of learning something practical as a skill become much more prominent. And there is, of course, an AI angle to all of that.

The thing to realise here is that, in addition to the wealth you are investing to accumulate and to hedge in case SA Inc fails, a nearly as great priority must be to build the intellectual capital of your children. The investment you apply to that therefore justifies being considerable, as it will be the most robust and resilient inheritance you leave behind.

Wrapping this up

The chart below sets out each quadrant and the basic rules that attach to it.

We are confident that a family working towards those rules is improving its odds of a long and successful future in South Africa, and that if they reach their quadrant goals then in most key respects they will have done everything they can to live out long and happy lives in peace in what was once the “Union” of South Africa. There will doubtless be many questions on this from our members, and we will answer them all.

This report is, The Common Sense hopes, the beginning of a very exciting journey we will take with our members as the country evolves ever faster from union to enclave federation over the next number of years. There are some bright people at The Common Sense with good data and real global understanding, but this is a new world for them too – and they are also navigating it, just as you are. We therefore see this journey, and in fact the whole of The Common Sense project, as a partnership, a two-way street, with this newspaper acting as a forum, and later a network, from which the members learn the best strategies from each other. The best ideas and what works will float to the top and the bad ideas will sink, and as that happens a community will be built of well-informed people, who think for themselves, have access to the better data and information than anyone else, and who see the change process South Africa is now going through as exciting, positive, full of hidden opportunities, and who know that the success and prosperity of each individual family now rests more on what they know and what they do with that than on anything the government may decide to do from Pretoria.