Decent investment options?

Mike Hoxbig

Mike Hoxbig

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So I just got a pay increase of 23% (backdated to February, which is when my review was meant to have happened), and a performance bonus of about 50k. I don't want to just piss it away, although I'm very tempted to :D

I had a money market account (closed it a few months back) which was a waste of time, as I'd earned about R300 interest in a year. Are there any decent investment options, with relatively quick access to the funds should I need it in an emergency?

Thanks :)
 
Well, it all depends on your risk appetite.

Remember that investor's price risk into the expected return before they invest, and thus there is pathetic returns in the money market. (As it's liquid assets with no real risk)

The best investment you can make is in yourself, so if you ever considered doing that MBA or whatever that will earn you better promotions, then that should be your first ideal.

Other than that, if you want to invest in assets that has higher expected returns, you could either try out:
GOLD (trade with the trend)
SHARES - where a good place to start would be to read up on the forums on www.sharechat.co.za - Some guys there are really committed to buying shares and building a portfolio, so it should make sense to ask for advice there.

If you decide to put your money with an asset manager, you will lose the first 2% anyway as fees, which, in my opinion takes away the incentive.
The big asset managers also have limited options, as they have so much money to invest, that they basically have to be invested in the whole JSE anyway.

If I were you, I'd read up, as for lots of advice, and start your own portfolio of shares... You may lose some money when you start out, but 10 years down the line you'll get much better returns than the guys choosing to invest with Asset Managers.

Good luck!
 
Frag said:
Well, it all depends on your risk appetite.


The best investment you can make is in yourself, so if you ever considered doing that MBA or whatever that will earn you better promotions, then that should be your first ideal.
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+1000
 
very nice advice to get a better education.... i rarely hear that.

property is also good but thats more involved than just a cash investment.
 
+1 for the investing in property. as with anything there is risk involved, but even with all the media hype and the global recession, it remained quite stable. i dont think buy to let is profitable currently at the scale ur looking at, but if u are renting might be worth using the cash to put down a nice deposit and rather pay a bond than throwing money into rent.
 
TheShadow said:
very nice advice to get a better education.... i rarely hear that.

property is also good but thats more involved than just a cash investment.
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Like this one... or else if you young an agressive JSE or overeas stock exchage blue chip shares. In the long term these are winners.
 
Mike Hoxbig said:
So I just got a pay increase of 23% (backdated to February, which is when my review was meant to have happened), and a performance bonus of about 50k. I don't want to just piss it away, although I'm very tempted to :D

I had a money market account (closed it a few months back) which was a waste of time, as I'd earned about R300 interest in a year. Are there any decent investment options, with relatively quick access to the funds should I need it in an emergency?

Thanks :)
Click to expand...

****. I want to work where you work :cry:
 
Residential property in the United States. Cheap as chips right now. Find a good agent, open a bank account there and pay Federal and State taxes as necessary. Your income from rentals will only be taxed in SA if you choose to repatriate it, but make sure first.

This is not pie in the sky. Really good homes can be had for as little as $50,000 (USD). The same type of thing might cost anywhere from $450,000 - $850,000 in Australia where property is currently overvalued. As for the UK, don't even think about it.

The beauty of such low prices is that most people can raise $50,000 - no more than you would pay for a luxury 6cyl motor vehicle - without needing to take a mortgage on the property purchased.

Just a thought ...

With prices that low, US property can only move one way. If the US economy ever bottomed out completely, we'd all be in the k@k, no matter where we live.
 
Isn't that what Julius Caesar said when he first clapped eyes on the Ancient Britons, decked out in little more than blue clay and tartan trews:
"Weeny, Weedy, Weakey". :)
 
Wikkelspies said:
Residential property in the United States. Cheap as chips right now. Find a good agent, open a bank account there and pay Federal and State taxes as necessary. Your income from rentals will only be taxed in SA if you choose to repatriate it, but make sure first.

This is not pie in the sky. Really good homes can be had for as little as $50,000 (USD). The same type of thing might cost anywhere from $450,000 - $850,000 in Australia where property is currently overvalued. As for the UK, don't even think about it.

The beauty of such low prices is that most people can raise $50,000 - no more than you would pay for a luxury 6cyl motor vehicle - without needing to take a mortgage on the property purchased.

Just a thought ...

With prices that low, US property can only move one way. If the US economy ever bottomed out completely, we'd all be in the k@k, no matter where we live.
Click to expand...

I like this idea alot. Another thing Im moving towards is investing in real things like cattle (as an example). If the world economy and markets bottom out anything that isnt based on real and tangible resources or things is gonna be pretty worthless.
 
Mike Hoxbig said:
I had a money market account (closed it a few months back) which was a waste of time, as I'd earned about R300 interest in a year. Are there any decent investment options, with relatively quick access to the funds should I need it in an emergency?
Click to expand...

Thats strange. I made nearly R6000 last year.
 
Apple shares. They're gonna do another monster quarter. Seriously, that company is a cash machine of note.
 
Pay it into your bond .... you reduce your debt (which is a way of saving) and if you arrange a flexi-whatchamacallit, you can have instant access to the funds.
 
Wikkelspies said:
Residential property in the United States. Cheap as chips right now. Find a good agent, open a bank account there and pay Federal and State taxes as necessary. Your income from rentals will only be taxed in SA if you choose to repatriate it, but make sure first.

This is not pie in the sky. Really good homes can be had for as little as $50,000 (USD). The same type of thing might cost anywhere from $450,000 - $850,000 in Australia where property is currently overvalued. As for the UK, don't even think about it.

The beauty of such low prices is that most people can raise $50,000 - no more than you would pay for a luxury 6cyl motor vehicle - without needing to take a mortgage on the property purchased.

Just a thought ...

With prices that low, US property can only move one way. If the US economy ever bottomed out completely, we'd all be in the k@k, no matter where we live.
Click to expand...
That's an interesting thought, thanks :) I'm not yet familiar with the intricacies involved in offshore investments, so would probably need to read up a bit on it.
czc said:
Thats strange. I made nearly R6000 last year.
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I suppose it depends on how much you have invested in it. For the amount I had at the time, there was little return from that account.
SiriS said:
Do you have any long-term debt Mike?
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Yeah a bond. Already put a bit extra (the backpay portion of my increase, about R30k) into it and don't necessarily want to dump everything into it. Reason being that I'd like to have access to some money in an emergency without resorting to taking out a loan and getting further into debt. I figure that I'll invest the performance bonus portion and also have it available in an emergency.
 
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Mike Hoxbig said:
Yeah a bond. Already put a bit extra (the backpay portion of my increase, about R30k) into it and don't necessarily want to dump everything into it. Reason being that I'd like to have access to some money in an emergency without resorting to taking out a loan and getting further into debt. I figure that I'll invest the performance bonus portion and also have it available in an emergency.
Click to expand...

Obviously there are multiple variables to take into account - asset diversity, your specific needs etc. etc. etc.

BUT, and this is a big but, if you have a bond it makes so much sense to put spare cash on an access account facility (where it is available immediately for withdrawal). Look at the sums -

- Say you pay 9.5% on your bond (prime).
- This is paid with after-tax money.
- Whatever you pay on your access facility you "earn" 9.5% after-tax.
- Assuming you are in the top tax bracket that means you are earning 9.5%/0.60 = 15.83% before-tax on that money. The before-tax number is the one you must use to compare against other investment options.
- Where can you beat 15.8% return plus capital guaranteed?
- And we are at or very close to the bottom of the interest rate cycle, so it can only get better from here.

my 2 cents
 
Standard Bank shares is also a good option, it provides steady growth for your money and is quick and easy to sell if you need cash in a hurry, also you can trade the shares yourself so it is no hassle and you are always on top of your funds and the share's performance.
 
perhaps also depends on the the length of time you are looking to invest for.
paying of debt is a very good idea. understandably the temptation to spend the cash is always there.
I've got a number of unit trusts with Standard Bank and do automatic share investing - so I'm rand cost averaging, in the long it should work out quite nicely.
Satrix seems a good bet and perhaps gold/platinum, but with so many options it's difficult to choose.
 
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