Financial help

The_Mowgs

The_Mowgs

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Hi guys,

My brother has R400k that he want to put away as an investment. He wont be contributing to this money each month, he only has this R400k.

Any advice from the people in the know? I told him to spread it out and not keep all of it in one place.

Thanks in advance for any help.
 
If this R400k is all he has then he should be conservative with any kind of investment.

Best I can think of that is safe and conservative is Capitec. On that amount he will get 8.5% or about R34k a year in interest if invested for 48 months or longer.
 
This is money he inherited from our grandfather. So no coronation or satrix etc?
 
He is 30 now. I think he just wants to put the money somewhere so it might be for retirement or when he wants to buy property in the future.
 
The_Mowgs said:
This is money he inherited from our grandfather. So no coronation or satrix etc?
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Dont listen to the Capitec thing for now, one has to determine some other details first based on your brothers details like, age, intention of investing the money (home deposit, long term savings that shodul be accessible, retirement), before giving you an idea on what to investigate.
 
If he thinks he will need the money for property within the next 5 years then perhaps the capitec deposit idea is not bad. If he wants to keep it for retirement or longer term (10+ years) then I would recommend opening up a stock broking account and putting the money into diversified ETF's such as Satrix DIVI or Nedbanks Betta Beta.
 
Spoke to him now. He says he would like to use the money some day for a deposit on property but would also like to have access to the money within 30-40 days if there should be a need.
 
The_Mowgs said:
Spoke to him now. He says he would like to use the money some day for a deposit on property but would also like to have access to the money within 30-40 days if there should be a need.
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Money market account maybe?
 
I dont know anything about money market or capitec etc so I would rather someone tell me where they would suggest the money be put and why they make that specific suggestion.

But thanks for all the opinions and suggestions thus far.
 
I'm leaning towards a 50/50 split in my pondering. Half going into lower risk (money market and bond fund) which will grow yet keep R200 000 (10% deposit of a R2 mil house) save and the other half into more higher risk funds (50% SA equity, 25% listed property and 25% foreign equity) for diversified growth.
 
Thanks for the advice. I dont really know what the equities are that you speak of. Will that not be a lot of admin? He just wants to put the money somewhere and sort of forget about it.

Is coronation etc a bit too risky? I really like the idea of splitting the money into 2 or more portions, just dont think he would like it if there are a lot of admin or things involved.

Thanks again fot everything thus far.
 
The_Mowgs said:
Thanks for the advice. I dont really know what the equities are that you speak of. Will that not be a lot of admin? He just wants to put the money somewhere and sort of forget about it.

Is coronation etc a bit too risky? I really like the idea of splitting the money into 2 or more portions, just dont think he would like it if there are a lot of admin or things involved.

Thanks again fot everything thus far.
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No, you can do most of this through one provider and just a few forms and then it can be almost forgotten about (twice a year check that it is going where it should) until it needs to be accessed. When accessing normally able to withdraw portions or all of it in less than 7 day.

An example:
R100 000 - Coronation Money Market Fund
R100 000 - Coronation Bond Fund
R100 000 - Coronation Top 20 Fund - (SA Equity)
R50 000 - Coronation Global Managed Fund - (Foreign Equity)
R50 000 - Coronation Property Equity Fund - (Property Fund)

You can use Coronation or Allan Gray (can pick and choose between Coronation and also have others funds) or other LISPs similar to Allan Gray or you can compile a similar portfolio with ETFs/ETNs on www.etfsa.co.za.

Compile perhaps 2 or 3 different options and run this past a financial advisor for a fee, just to look it over and explain any pitfalls or errors or such.
 
Another option that could take care of the house deposit while also preserving some of the money exclusively for retirement in a RA is the following:

R75 000 - Money Market Fund or ETF
R75 000 - Bond Fund or ETF
R25 000 - SA Equity fund or ETF
R25 000 - SA Property fund or ETF

And then putting the other R200 000 in a unit trust based RA (all growth in it will be tax efficient and not accessable until 55). This RA could be at one of the providers already mentioned or others (with a fund selection of your choice or just using a balanced fund) or perhaps with www.10x.co.za (low cost and uses index tracking and is diversified like a balanced fund)
 
supersunbirds recommendations are sound.

I am a financial advisor. The selection of units trusts can provide growth to the capital. At the same time you have easy access to the investment. Just factor into account capital gains tax.
 
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