AllanGray RA + general financial advice

[TheBadMadMan]

Hello

So I need some insight / help from those more knowledgeable than myself with these things .

First off, I'm a 22 year old graduate (ND only - slight shift in career goals, will be studying further in the near future). I have been working for many years - while in school for pocket money and while studying full time to pay off all my study fees each and every year. So no study dept. I believe I manage my $$$ very well, at least the little I have.

I am starting to research various RAs and it seems AllanGray is the most recommended one. I am a bit confused as to what is required from my side to get the ball rolling with AG. Any tips and information would be greatly appreciated.

EDIT: I'm looking at a monthly of R500-1000 into the RA for now.

PS. I have a 3 year Personal loan that I took in the beginning of 2014 - needed transport ASAP, I am literally pushing ALL extra money into this to get that interest down (As you can imagine a 22 year old with no credit record, the interest rate was not pretty AT ALL! ). I have paid almost 50% of the capital amount thus far and cut my monthly minimum to 60% the initial monthly minimum amount. I expect this to be settled by the end of this year (hopefully - will this increase my credit score? )

I have also started managing my credit and what not by having various accounts where I purchase things I know for a fact I will be able to pay off within the interest free period. At this point in time I have a credit score of 881 according to TransUnion and 773 according to credit4life. ( Is this good or bad for someone like me? )

Any input would be greatly appreciated, thank you.

Disclaimer: I understand that financial advise given to me here is simply opinion and I take full responsablity for my own actions with my $$$

 

[CharlieM]

Alan Gray is easy to set-up, you shouldn't have any problems. Are you saving towards a specific goal, or would this be savings towards retirement/financial independence? Either way, to have such focus at 22yrs old is fantastic, and if its possible to save these funds for 25yrs+ then compounding would reward you greatly. Good luck

 

[TheBadMadMan]

As it is now, I want to start saving for retirement, but what do you mean by financial independence? I thought RAs only pay out after 55? Also would R500 a month really be that much after +-30 years? Could someone calculate this for me?

For now I will firstly be pumping all my extra money into my loan, once that is done i will actively start with my RA. i also then want to dip my toes into SATRIX and the likes.

 

[Freshy-ZN]

Starting an RA at 22 is nice and early, probably at least 5 years ahead of the average so yes you will be well rewarded within the confines of the platform. What I mean by that is you would have a very significant advantage over someone also starting an RA but 5 years behind you.

 

[Pakka]

Calculate your RA contributions as a % of your salary. That way it will automatically keep up with future increases

 

[Grant]

they may offer other advice in terms of placing your money.

they are pretty good, i have been with them & investec for years & years

i am hopeless with money, grocery shopping is a challenge !

 

[HavocXphere]

>>I am a bit confused as to what is required from my side to get the ball rolling with AG.

Just fill in the application form and supply all the ID documents & stuff they want.

>>credit score of 881 according to TransUnion and 773 according to credit4life. ( Is this good or bad for someone like me? )

Its on the good side of things but not spectacular.

 

[brianj74]

Why are you set on a ra instead of an after tax investment? Do you have other savings?

 

[semaphore]

>
>>credit score of 881 according to TransUnion and 773 according to credit4life. ( Is this good or bad for someone like me? )

Its on the good side of things but not spectacular.

Wrong.

A credit score like that is very good.

 

[Pho3nix]

>>I am a bit confused as to what is required from my side to get the ball rolling with AG.

Just fill in the application form and supply all the ID documents & stuff they want.

>>credit score of 881 according to TransUnion and 773 according to credit4life. ( Is this good or bad for someone like me? )

Its on the good side of things but not spectacular.

What's a good score for interest sakes? Haven't seen anything higher than 850 tbh.

 

[semaphore]

What's a good score for interest sakes? Haven't seen anything higher than 850 tbh.

Depends on the credit bureau, but those are good scores. Anything about 650-700+ with compuscan is very good as well. Also scores are calculated differently for different sectors, such as home loans, mico finance, etc..

*I speak from being in the industry*

 

[HavocXphere]

Wrong.
A credit score like that is very good.

OK - def not going to argue with you on this topic.

Anyone know what the "default" starting score for transunion is?

What's a good score for interest sakes? Haven't seen anything higher than 850 tbh.

You're probably thinking of another credit scoring system then...because I'm well over that with barely any credit record at all.

The transunion ones come with this graph:

 

[semaphore]

OK - def not going to argue with you on this topic.

Anyone know what the "default" starting score for transunion is?


The transunion ones come with this graph:
View attachment 135616

You start off with a high score, and each item against the score has a weighting and reduces. I.e. judgements knock a ton of points off.

Our scoring engine knocks about 50 points off for defaulted payments, and judgements and adverse records are immediate declines.

 

[HavocXphere]

High score being full marks?

 

[semaphore]

High score being full marks?

Well thats how we do it, but yes full marks essentially. But remember everything counts against it, even the amount of enquiries done on your ID number in a 24/hour period.

 

[Pho3nix]

OK - def not going to argue with you on this topic.

Anyone know what the "default" starting score for transunion is?


You're probably thinking of another credit scoring system then...because I'm well over that with barely any credit record at all.

The transunion ones come with this graph:
View attachment 135616

Shows how often I look at my credit score .
Thanks

 

[semaphore]

Shows how often I look at my credit score .
Thanks

Taking small loans and paying them off actually increases your credit score, defaulting however will screw it over. But i would not advise doing this lots I experimented one month with it and i saw my rating increase then drop and then stabilize again.

 

[HavocXphere]

Would a CC with a low limit (say 1.5k) that gets maxed out & paid off every month have a positive or negative effect? (i.e. Would the paying off outweigh the 100% utilization of the limit)

 

[semaphore]

Would a CC with a low limit (say 1.5k) that gets maxed out & paid off every month have a positive or negative effect? (i.e. Would the paying off outweigh the 100% utilization of the limit)

You will have an alert saying overuse of revolving credit. But if you pay it off its fine.

 

[Pho3nix]

Taking small loans and paying them off actually increases your credit score, defaulting however will screw it over. But i would not advise doing this lots I experimented one month with it and i saw my rating increase then drop and then stabilize again.

Wouldn't paying them off quicker than the loan term while a good thing have adverse effects as the creditors aren't getting their money's worth?