Investment Advice

[Lindabro]

When he suggested " Sygnia's Fourth Industrial Revolution Fund ", you could google it to see where it takes you. Hint - it is most likely the first link.

I did do that and also a few other suggestions; however, when I open the site it says that you manage your own money... THAT SCARES ME!

 

[Sideshow Bob]

I did do that and also a few other suggestions; however, when I open the site it says that you manage your own money... THAT SCARES ME!

Well, find a honest financial advisor and let him manage your money at a cost. There are always options.

 

[RandomGeek]

Well, find a honest financial advisor and let him manage your money at a cost. There are always options.

Honest and financial adviser in one sentence?!? Just kidding there are some good ones out there, the problem is finding one who is not a "polis smous". Try word of mouth. I personally wouldnt recommend my own and have started to self-manage my finances more and more

 

[Sideshow Bob]

Honest and financial adviser in one sentence?!? Just kidding there are some good ones out there, the problem is finding one who is not a "polis smous". Try word of mouth. I personally wouldnt recommend my own and have started to self-manage my finances more and more

Indeed there are honest FA's. Those are the ones who bought their houses via honest estate agents.

 

[Rumple4skin]

Thank you very much. Had a look at the S&P500 tracker but then I have to trade and I am clueless financially. Have all of this covered:- First off, make sure you are debt free. After that, make sure you have an emergency fund that will last 3 to 6 months in case of redundancy/accident/hospitalization/etc. After that you can then start to invest.
But to invest I need to find a Broker of sorts?

I am not sure which broker(s) would suit you best as I do not currently live in SA and thus am not familiar with the scene there.

It will be worthwhile to spend a few months researching and educating yourself regarding different brokers and investing in general before you jump in, as you mentioned you are financially clueless. While investing is not hard, you can definitely get burned if you don't know what you are doing.

 

[SafariTin]

Thank you. Excuse the ignorance, but where would I find a TFSA?

I see in a post lower down from this one that you mentioned being scared by the decisions and choices. There are two ways to get over this, either find an advisor that you trust (harder than you think) or educate yourself. It may take a month or six to do the latter, but it will be worth your time.

The Just One Lap website answers all these questions. With regards to a TFSA, most banks and brokers offer them. The pitfalls being the charges and the investment types. A lot of people recommend Easy Equities as being the cheapest, but if you feel more comfortable doing it with your bank or say Sygnia/Alan Gray/<insert other broker> than do it that way, the fortunate part is that you can move it at any time once you've found who you are comfortable and has the right charges.

The second consideration is investment type, a lot of the early TFSA product only invested in cash thus only earning you interest. Most people nowadays invest in some kind of equity (ie shares or stocks) - personally I invest in ETF's.

I hope this helps and gives you a starting point.

I'd say your next step is to read more on the topic and to make sure to invest this year's R36,000 allowance before 28 February 2021. (if you don't it lapses and you can only start in the 2022 tax year for which you can also only invest R36,000 - you can't suddenly do R72,000 in order to catch up)

 

[abudabi]

Just a reminder about the lifetime limit of R500k for TFSA contributions. At current 36k annual contributions that's just shy of 14 years' contributions before it has no more tax benefit. So if you are disciplined and retirement is still far off, I'd work on paying off current debt like a bond as much as possible (AS LONG AS YOU DON'T GO MAKING MORE DEBT AFTER THAT'S CLEARED).

 

[yozzi]

Earlier in the post there's someone saying about paying fees to brokers over a 30 year period which is a hell of a long time but if I gave a broker R100K and he turned it into a very decent amount over a certain period of time then I wouldn't mind paying an agreed upfront performance fee. The 30 year figs quoted of paying R400k & R700k are actually quite reasonable for that type of return when you work it out over such a long period but most long term investments are usually around the 5-10 year period.

 

[Rumple4skin]

Earlier in the post there's someone saying about paying fees to brokers over a 30 year period which is a hell of a long time but if I gave a broker R100K and he turned it into a very decent amount over a certain period of time then I wouldn't mind paying an agreed upfront performance fee. The 30 year figs quoted of paying R400k & R700k are actually quite reasonable for that type of return when you work it out over such a long period but most long term investments are usually around the 5-10 year period.

If you can find a broker/advisor that does actually beat the market consistently then that would make sense, but it has been proven that the vast majority of them underperform the market in the long term. Buffet took a 1 million dollar bet in 2008 that a S&P500 tracker would beat hedge funds over a decade and won by a mile.

It would also make sense to give your money to someone else if you are scared or not financially literate and can’t/don’t want to change that for whatever reason, but I do not believe that is the best way to go about investing.

 

[zerocool2009]

Just a reminder about the lifetime limit of R500k for TFSA contributions. At current 36k annual contributions that's just shy of 14 years' contributions before it has no more tax benefit. So if you are disciplined and retirement is still far off, I'd work on paying off current debt like a bond as much as possible (AS LONG AS YOU DON'T GO MAKING MORE DEBT AFTER THAT'S CLEARED).

Why is everyone scared to make debt after you paid your debt off?

I can say 10 years ago I reviewed my savings. Paid my house off at that stage. In the last 10 years my main drive was property. And I can retire on 40 if I want to! (Think about that).

 

[Rumple4skin]

Why is everyone scared to make debt after you paid your debt off?

I can say 10 years ago I reviewed my savings. Paid my house off at that stage. In the last 10 years my main drive was property. And I can retire on 40 if I want to! (Think about that).

I would say a bond is an exception as it is not "bad" debt.

 

[themba990]

Read The Total Money Makeover by Dave Ramsey.
Alternatively watch some of his videos on YouTube where he advices people that are in a similar situation you are in.
Alternative 2 check out his video on the seven baby steps.
Good luck.

 

[Lindabro]

Thank you to everyone for your time and consideration. Much appreciated.