Adding to RA - which option is best

zerocool2009 said:
If you break even, its better than something being costless than a fee eating up your savings (that is how I see it).

And you can re-gear (sell and buy normal UT's) every 2 or 3 years

Its something I saw working awesomely with my Allan Gray RA. (but everyone to their own)
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If you're breaking even then rather keep your money in a piggy bank. This strategy of yours is losing money, just stick to the Balanced Fund.
 
zerocool2009 said:
Ag no no no! You are funding the bonus! (Pull a detailed report). Look at your charges. How does it compare to 0.54% in fees?
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Aren’t these loyalty wealth bonuses meant to offset the fees ?
I’m stuck with Sanlam until 2025 when I’m free of penalties but my wealth bonus is currently 50% of the value of my RA
 
Stonemason said:
There are no such things as old school RA's. The rules of investment have not changed. Both these companies offer the same range of investment vehicles in their RA's as any of the other newer companies. I think you are confusing the RA with what the investor chooses to do with the money after retirement.

I am not saying one should invest with Sanlam or Old Mutual and I am also not saying that good investment returns of the past is an indication of future performance .

What I am saying is that one should not move your RA investments from one company to another without being prepared to pay the cost. You lose a lot of money every time you move no matter what the agent/broker says - especially if you are close to the end of the investment period,
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The fact that you mention “investment period” is a firm indicator of the difference between old school and modern day.

There are no “investment periods” in modern RA investments.

They aren’t products that have periods attached, they are simply investments.
 
tRoN said:
Aren’t these loyalty wealth bonuses meant to offset the fees ?
I’m stuck with Sanlam until 2025 when I’m free of penalties but my wealth bonus is currently 50% of the value of my RA
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Just to give you heads up. Your loyal bonus will also hit by "performance fees". I was in exactly the same boat. I waited for my next loyalty payout. When it happened, seeing the "performance fees" which was 60% of my loyalty bonus, I made a section 14 the next day.

You can wait until 25 (but will be disappointed).
 
SauRoNZA said:
The fact that you mention “investment period” is a firm indicator of the difference between old school and modern day.

There are no “investment periods” in modern RA investments.

They aren’t products that have periods attached, they are simply investments.
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Only the inexperienced use investments like a bank account. When you invest you must have a certain goal and that goal usually has a time period attached to it.
 
Stonemason said:
Only the inexperienced use investments like a bank account. When you invest you must have a certain goal and that goal usually has a time period attached to it.
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Interestingly neither of my RAs, my living annuity nor my TFSA have any time periods attached to them. What have I done wrong?
 
Speedster said:
Interestingly neither of my RAs, my living annuity nor my TFSA have any time periods attached to them. What have I done wrong?
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So you just dump money at an investment house without any goal? Do you want to use it for retirement or to buy a car or a house. If so, you definitely have a time period connected to it.

You are trying to be clever but investment is much more than just buying a few unit trusts and then when the markets go down you panic sell.

A real investor has a wide range of investments ranging from base income investments to interest bearing investments, unit trusts, properties and shares both inside and outside of South Africa. As a real investor who exclusively lives on my investment income, I can with great confidence tell you that there is no such thing as old-fashioned investments. An investments is an investment and takes many, many forms . If the investor has any savvy whatsoever, there is always a time period attached to it.
 
Stonemason said:
So you just dump money at an investment house without any goal? Do you want to use it for retirement or to buy a car or a house. If so, you definitely have a time period connected to it.

You are trying to be clever but investment is much more than just buying a few unit trusts and then when the markets go down you panic sell.

A real investor has a wide range of investments ranging from base income investments to interest bearing investments, unit trusts, properties and shares both inside and outside of South Africa. As a real investor who exclusively lives on my investment income, I can with great confidence tell you that there is no such thing as old-fashioned investments. An investments is an investment and takes many, many forms . If the investor has any savvy whatsoever, there is always a time period attached to it.
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Ai ai ai...

 
Stonemason said:
Only the inexperienced use investments like a bank account. When you invest you must have a certain goal and that goal usually has a time period attached to it.
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Your own goals have nothing to do with the investment itself being contracted to a specific timeline.
 
Stonemason said:
So you just dump money at an investment house without any goal? Do you want to use it for retirement or to buy a car or a house. If so, you definitely have a time period connected to it.

You are trying to be clever but investment is much more than just buying a few unit trusts and then when the markets go down you panic sell.

A real investor has a wide range of investments ranging from base income investments to interest bearing investments, unit trusts, properties and shares both inside and outside of South Africa. As a real investor who exclusively lives on my investment income, I can with great confidence tell you that there is no such thing as old-fashioned investments. An investments is an investment and takes many, many forms . If the investor has any savvy whatsoever, there is always a time period attached to it.
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And a policy is not a (good) investment, which is what old school RA’s are which you claim don’t exist.

Again your own goals and investment periods are two different things.

You choose a type of investment based on your timeline goals, but the investment itself shouldn’t dictate that timeline then it’s just a fancy policy.

Obviously not referring to locked in interest bearing cash account here, but equity based investments that are performance linked.
 
SauRoNZA said:
And a policy is not a (good) investment, which is what old school RA’s are which you claim don’t exist.
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It depends on the investor, when you are young and not earning a good income, contractual investments can be to your advantage because it forces you to continue your investment despite short-term shortages of funds. The policy type RA's is just one type of contractual investment. Also, I know of an instance where a person took out a policy type RA for R28.30 per month in 1978 and the funds available at retirement 40 years later exceeded R300 000 - an excellent return.

Speedster said:
Ai ai ai...

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This is just sales talk. This guy takes half-truths and presents them as the only truth. There is a place for every type of investment - it just depends on what you can afford.
 
Stonemason said:
It depends on the investor, when you are young and not earning a good income, contractual investments can be to your advantage because it forces you to continue your investment despite short-term shortages of funds. The policy type RA's is just one type of contractual investment. Also, I know of an instance where a person took out a policy type RA for R28.30 per month in 1978 and the funds available at retirement 40 years later exceeded R300 000 - an excellent return.


This is just sales talk. This guy takes half-truths and presents them as the only truth. There is a place for every type of investment - it just depends on what you can afford.
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I honestly can't think of single reason to select a high-fee, policy based investment over a low-fee, new-generation option. But, clearly what you did worked for you so you keep doing you.

That policy you mentioned has a return of 11.67% during a time where interest rates were over 20% at times. I wouldn't exactly call that earth shattering.
 
Speedster said:
I honestly can't think of single reason to select a high-fee, policy based investment over a low-fee, new-generation option. But, clearly what you did worked for you so you keep doing you.

That policy you mentioned has a return of 11.67% during a time where interest rates were over 20% at times. I wouldn't exactly call that earth shattering.
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I am done arguing with you. All I can say to you is that I hope you retire as a dollar millionaire a few times over and that all your good investment choices bear fruit.
 
Stonemason said:
I am done arguing with you. All I can say to you is that I hope you retire as a dollar millionaire a few times over and that all your good investment choices bear fruit.
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Is it so hard for you to admit that the RA environment has changed and that there are now a new-generation of investment options available?
 
It all boils down to, get the stats what you are paying for. It doesnt help you pay 1% over 40 years .... and when you retire need to live of what they give you. Rather get pro-active, ask questions, and shop around if you are overpaying. From RA's to ANY investment.
 
Speedster said:
Is it so hard for you to admit that the RA environment has changed and that there are now a new-generation of investment options available?
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These so-called new-generation options have been available for a long time in one form or another. Names and descriptions may have changed but they were available. The only real new investment option is crypto currencies but even that has been around for a while.
 
zerocool2009 said:
It all boils down to, get the stats what you are paying for. It doesnt help you pay 1% over 40 years .... and when you retire need to live of what they give you. Rather get pro-active, ask questions, and shop around if you are overpaying. From RA's to ANY investment.
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I agree, only a fool will put all his eggs in one basket. But remember even contract based RA options gives you a sum of money at maturity which you can use in any way you please. You can re-invest it or you can buy a pension with it or you can spend it all in one day should you so choose.
 
Stonemason said:
I agree, only a fool will put all his eggs in one basket. But remember even contract based RA options gives you a sum of money at maturity which you can use in any way you please. You can re-invest it or you can buy a pension with it or you can spend it all in one day should you so choose.
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I fully agree. But do you want to invest in yourself or fund these provider's tall buildings and shiny windows ?
 
Stonemason said:
It depends on the investor, when you are young and not earning a good income, contractual investments can be to your advantage because it forces you to continue your investment despite short-term shortages of funds. The policy type RA's is just one type of contractual investment. Also, I know of an instance where a person took out a policy type RA for R28.30 per month in 1978 and the funds available at retirement 40 years later exceeded R300 000 - an excellent return.


This is just sales talk. This guy takes half-truths and presents them as the only truth. There is a place for every type of investment - it just depends on what you can afford.
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Or it can be a catastrophe of terms and conditions when failing to pay, so not an advantage at all.

It cuts both ways and isn’t really beneficial.

Better financial education and self discipline goes a much longer way than forced investment contracts.

And if the cost of said contracts means a major loss or low performance over alternatives then it makes even less sense.
 
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