No. But investing in unit trusts short term is basically a waste of time. 3 years at least is the assumption unit trusts require to work to some extent. The LISP product only aims to encurage you to invest montly over a medium period of time by slapping you on he wrist when it coms to what access you have to your money. It does allow you to withdraw witout penalty. And yes, there are tax incentives.Originally Posted by ClintZA
Agreed. That's a straight forward endowment in a super conervative fund. I would never recommend such a product to a client looking to build rather than preserve wealth. I'm only here to argue the remarkable power of unit trusts over the medium to long period. I have a pp presentation that shows you how investing a paltry 250 per month into such an investment can add millions to your early retirement in todays value in far less time than you might think. I would put it up but that would seem like Im fishing or clients which im not as I haven't been a broker for 4 years.
My short answer is yes. Putting money montly in unit trusts when you're so young, provided you can afford it, will always be a good move for later in life. You may think or life is over at 30 but trust me it's just beggining and you will really enjoy that money when the time comes. I bet you won't miss the 10 beers a month it will afford you in the meantime.
Say what you like but OM is the top asset managament company going around for consistancy and their funds have a long,proven history of performing very well.
Last edited by baxter; 09-08-2012 at 04:13 PM.
Much better. You are buying units on a monthly basis. If I buy 10 units for 1 rand for 3 months I have 30 units worth 30 rand. No growth in short term. Suddenly the value per unit worth goes down to 50 cents each. Now I am buying 20 units a month for what used to by 10 for. If the status quo remains I will have 90 units in 6 months for 60 rand but worth only 45 rand. I lose in he short term.
But....what if then the unit recovers back to one rand per unit again (which is what happens with markets over time typically) ?
I'll have 90 units worth 90 rand for 60 rand. Work out the interest. Now what if the units gain value to 2 rand per unit in the long term ?
180 rand worth of units for 60 rand. So nobody knows when markets will go down or up all we know is in the long run they tend to go up. So you ride the up and down waves and compound the value in the long run.
Comprehende ?
Last edited by baxter; 09-08-2012 at 04:24 PM.
You are sounding like a salesman...
R250pm for 30 years, increasing at 6% per annum, in an investment returning 10% per annum, would give you a future value of R924k (R53k present value). What assumptions are you using on your presentation?
Legally you are only allowed to project 10% per annum in a sales pitch. I don't think that matches reality. 1 or 2% better yield over time compounded makes a vast difference in results. I assume closer to 15%.
And I was a salesman of this stuff for many years and put my cards on the table from the get go. I have no agenda to overstate the benefits. I am no longer involved with O.M or any investment house so nobody will benefit from contacting me to invest money. Especially not me. But I stand by my opinion that young people will do well to invest in unit trusts for a long period of time. Do you disagree ?
You assume closer to 15%?
From a Unit Trust?.... I think you are smoking your bloody socks... only really really good unit trusts get those kinds of figures year on year...
Haven't I been clear ? Not the fund the compounded return on investment. If you don't know what I mean I can't help you.
You by law need to have a letter of your compliance with you when seeing a client. This can be a certified copy of your rep certificate or and official letter from the company you represent. This is if you are asked for it.
I suggest you contact your compliance officer.
cANCer - "The problem with socialism is that eventually you run out of other people's money." -- Margaret Thatcher .
i worked in the industry in the introductions into fica etc. i had a degree and had to fulfil minimal compliance course. i was never instructed to carry a certificate by my compliance officer. i had to get brokers notes signed etc. things may have changed but that's neither here nor there.
back on the issue why are people even practicing as brokers if they don't see the value of what u are selling? i couldn't sleep at night.
The concern is not with encouraging someone to save but rather the possible investment exaggerations that are used to help make the sale, as well as the recommending of a specific product due to additional commissions paid.
No need for a 10 year tie in with penalties when you can still happily invest for 10 years in a normal unit trust, using the same, or better portfolios, but without the penalties if tough times force you to stop.
It is also wrong to sell a product with "promises" of 15% returns pa. There is a reason there are legally imposed limits placed on illustrative returns.
A bit of devils advocate. Remember a unit trust you pay cgt but an endowment is almost tax free.
At the investment amounts mentioned CGT is hardly an issue surely? And the tax payable within the endowment would possibly be more than the individual's personal rate.
Just something to consider. Everyone situation is different.
The whole regulations and requirements have changed and FSP's need to be more "compliant" the any cANCer member ruining the country. Count yourself lucky you don't have to go through all this cr@p that is meaningless as there are still plenty of sharks and idiots giving wrong advice.
cANCer - "The problem with socialism is that eventually you run out of other people's money." -- Margaret Thatcher .
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