Bursary Buy Out

[Dee96]

Hi Guys

I am in abit of a situation. Basically I just got my CTA this year and will start articles in 2014 to become a CA.

Early in my studies, I was offered a bursary by a huge company and if I serve my articles with them, it will be in the financial management sector.

Now the only problem is that the company is based in Cape town (I am from Durban). I was recently offered a training contract with one of the Big 4 audit firms in Durban.

To get out of my bursary, I will have to buy myself out which is ~R160k which is money I just dont have.

Now the question becomes, what should I do? I am leaning towards taking a loan due to the fact that rent and food is CT will set me back ~6k(I think) or so and in Dbn I can stay with my parents. I might as well use that money to pay off a loan and get much better experience at the audit firm.

As for the loan, my mom has a house and would be willing to take a loan for me as if I go with the audit firm, it will be a 3 year contract.

Now my questions
1) Whats the minimum I need to survive in CT on my own?
2) Does anyone know about taking a loan on a fully paid house?
3) What interest rate/payment can I expect? I did a calculation and R150 000 at 10% for 3 years is ~R4850 a month
4) Any other advice?

Thanks

 

[HavocXphere]

Thats a pretty horrible plan my friend.

Stick with the current fin management company and make that work. Rather take a loan to make CapeTown work. It'll work out way better for you.

Besides...nobody in their right mind swaps a 160k bursary for a training contract.

 

[mr_norris]

How about approaching that firm you have the bursary with before taking out a loan.

I know that you're probably bound to work for them for a while, but explain your circumstances. Perhaps you'll come out better, with a decent salary to support yourself over in CT.

You can't really be expected to move across the country if you can't support yourself IMO.

 

[Dee96]

Thats a pretty horrible plan my friend.

Stick with the current fin management company and make that work. Rather take a loan to make CapeTown work. It'll work out way better for you.

Besides...nobody in their right mind swaps a 160k bursary for a training contract.

Well I have to serve 3 years articles to qualify. The CT job will also be a training contract

 

[Dee96]

How about approaching that firm you have the bursary with before taking out a loan.

I know that you're probably bound to work for them for a while, but explain your circumstances. Perhaps you'll come out better, with a decent salary to support yourself over in CT.

You can't really be expected to move across the country if you can't support yourself IMO.

I tried that. They said their salary is market related. and thats all they will say

 

[Tekken]

So you can do topp in CT and Tipp in durban? From guys I know that did topp the salary is better than Tipp so you should be fine to live decently if you choose CT. On the other hand I did topp and prefer it to Tipp because you are automatically a RAA as well. Although with the changes I'm guessing you might not have to worry about that anymore.

 

[HavocXphere]

They said their salary is market related. and thats all they will say

They all say that. The Fin management one will be higher by about 20%...plus another 10% because its the CPT office. Minus 10% if its one of the lesser fin management route companies.

How about approaching that firm you have the bursary with before taking out a loan.

I know that you're probably bound to work for them for a while, but explain your circumstances. Perhaps you'll come out better, with a decent salary to support yourself over in CT.

You can't really be expected to move across the country if you can't support yourself IMO.

Doesn't work like that in this particular field. No negotiating salaries and yes you are expected to move across the country at your own expense...if you signed a contract in a different city...

Well I have to serve 3 years articles to qualify. The CT job will also be a training contract

lol yes I know...

So you can do topp in CT and Tipp in durban? From guys I know that did topp the salary is better than Tipp so you should be fine to live decently if you choose CT. On the other hand I did topp and prefer it to Tipp because you are automatically a RAA as well. Although with the changes I'm guessing you might not have to worry about that anymore.

RA not RAA...and no its not automatic...needs registration & paying an additional fee which fee do in practice. Plus there are new regulations in the pipe blocking that for another 18 (?) months after articles.

 

[DarkImpact]

I don't think your starting your career of in a good way if your already thinking of getting out of a contract this early on. Taking a R160k knock and getting a lower salary is something to think about. You also need to think about what you are going to do after your 3 year articles as that will determine what experience would be best for you.

 

[Other Pineapple Smurf]

As for your loan, try working out at 21% interest then don't forget the mandatory life cover for the loan and admin fees. And you have your initiation fees.
Your going to be paying R7k pm at the end of the day. The reality of the real world.

 

[Just_Ice]

I'm not sure when the cut-off to move firms is, but there is also the possibility that if you switch firms now that you've completed CTA you'll take a 6 month penalty on your articles, so that would mean doing articles for 3 and a half years before SAICA sign you off as a CA.

 

[Dr Who]

I used to live in Durban and relocated to Cape Town, for future job opportunities Cape Town is much better than Durban as it had many global head offices.

Stick to the original plan, enjoy the cape for 3 years and then review.

 

[saturnz]

Hi Guys

1) Whats the minimum I need to survive in CT on my own?

Thanks

Expect to spend about R3000 on a decent bachelor's flat and this goes up to R6000 the closer you get to the CBD. This would be unfurnished.

Water, electricity and food is another R3000, excluding any social expenses like night life etc.

Transport is variable but if you are living 20km away from where you work petrol can be anything between R800-1500.

Where exactly will your office be when you are in CT?

 

[Other Pineapple Smurf]

....
Transport is variable but if you are living 20km away from where you work petrol can be anything between R800-1500.

Where exactly will your office be when you are in CT?

In Cape Town you can use the public transport system. I spend R500 a month to travel 100km a day.

@Dee96 if you plan to come to Cape Town then look at a place close to public transport. We have trains (even a luxury business express), we have the MyCiti buses and then the normal Golden Arrow Buses. A lot of people commute to work via public transport as driving in with a car is insane. Its quicker for me to travel by bus or train from Somerset West into Cape Town CBD (+50km trip) than to drive in by car in the mornings.

 

[matt_za]

Sorry if this is a complete left. Is there any benefit to going auditing instead of financial management route? Going into CTA this year hopefully and i really want to go financial management route afterwards and yet majority of class mates say they hate auditing but have already signed with the big 4. Am i missing something? Is a CA through a audit firm more prestige than through a financial house? I have no interest in becoming a Auditor and hence why i see no reason to go through a audit firm when i can go through a bank and get exposed to stuff i am interested in.

 

[HavocXphere]

> Is there any benefit to going auditing instead of financial management route?

You get vastly more exposure to more companies from the inside. e.g. I'm somewhere new every 2-3 weeks & thats across all industries (medical, agri, engineering etc). Pretty cool for learning "how things are done". This depends on the division you're allocated to though...there are also guys that spend 6 months stretches working on 1 client.

The training & support structures are also generally more organized.

>Is a CA through a audit firm more prestige

For the most part yes, but there are a couple of fin. places I'd rate higher. Its very subjective & prone to bias though so make of that what you will.

On the whole I'd say go for the fin management route if you feel like it. Each has is pros and cons...but both are pretty solid so you can't really go wrong either way.

 

[matt_za]

Thanks for the information. I heard of getting stuck on some clients. Specially in places like durban where i know someone spent 90% of their time on only 2 clients for 2 years.

Hard to get info out lectures etc as what i understand in the not to distant past the guys that never went auditing where seen to go the easy route as the fin man guys wrote different exams but now everyone writes the same exams in articles. So all CA's i have met went audit route.