Investment advice

[xplora]

Hi,

I have a investment/police in place, but I am unsure if it's the best available option.
My sister told me if she invested the sum that I had through her independent financial advisor
I would have been better off as far as yields are concerned, although there are risks involved.

The sum I invested was R200 000 and it yields about R900 pm and it has some other benefits like
life insurance built in. It is with Liberty and is over 5 years and guaranteed with a bit of growth.
Sum invested will be paid out after 5 years.

Now I was wondering if there are other options with better yields than this out there for me ?
I know that Stanlib Unit Trusts is good, but it has no monthly payout, which I need from any such
future investment scheme.

Thanks.

 

[Hamster]

That's like 5.4% a year?!

 

[Hendrix]

Sounds like you got suckered into an endowment policy, you are now bound to the rules of the "policy".
I steer clear of things with the word "policy" in them, except car insurance, and medical aid.
There are always hidden costs, and always favor the life insurance company.

You don't specify what the policy details are, or what funds they invested in.
There will always be options with better returns, but that depends on many factors, like your risk appetite and willingness to accept short term fluctuations in your capital.

You should look at reputable asset managers like AG, Coronation, Foord, PSG to name a few, and chat to a FA if not willing to decide for yourself where you'd like to invest.
Life Insurance companies and investments don't mix well, and have a rightly deserved bad reputation of screwing their clients over.

 

[supersunbird]

What's your age? What is the purpose of this investment? To give you income?

And Hendrix is right, and if its an endowment policy you will have to wait the rest of the term out.

 

[xplora]

Ok - It's called Guaranteed Investment Plan with Maximum Income from Liberty Life.
5% annual increase. And oh I see there is no actual Life Cover, sorry about that.
Yes that's it.

I'm 53 now, and Plan started in 2011 and ending Oct 2016.

 

[xplora]

Yes it is supposed to give extra income, for say like insurance premium and property rates.

Oh and they said there would be a penalty payable if I was to end it, don't know how
big though.

 

[Hendrix]

Yes it is supposed to give extra income, for say like insurance premium and property rates.

Oh and they said there would be a penalty payable if I was to end it, don't know how
big though.

You can ask them for a quote, you will then know how much of a "penalty" You will pay ( I suspect 25% of your capital).
You will then have to weigh up your options...
These kinds of policies were once the bread and butter of the insurance industry, but people are getting wiser and seeing their tricks.
General rule, if the policy wording is complicated, walk away, never buy something you don't understand...

Get hold of a good FA, I'm sure the other members on this forum can point you in the direction of a honest FA, or chat to your sisters FA

Good luck, keep us posted on your progress.

 

[Hendrix]

Just another question...

Do you have other forms of income?
Do you need the R900pm? Cause it seems you are paying all returns earned out, hence your R200k will stay R200k, making you poorer each year as inflation eats it up.

 

[BloodBurner9000]

I also made the mistake of investing in liberty's exelcior investment builder, in the property portfolio, back in 2010. Didn't understand anything back then (made it my mission to wise up since then) , thought that since it was done through my FA all is fine. Term was for 5 years. Getting 2.8 % return on investment right now, after fees and taxes. Fortunately, only R1000 pm so not such a costly mistake. Phew.

Completely agree with hendrix, don't mix insurance and investments.

 

[dunkyd]

Without reading after post 1 , take you cash and put it in trusts. 200,000 should give you 4500 /month.

 

[supersunbird]

Wow!!

That's an amazing return.

Please share the details.

I bet that an investment of say 50% into a decent Local Equity Unit Trust and 50% into a decent International Equity Unit Trust could probably have grown an average R4500 per month last year (obviously fluctuating each month, its the average).

Even a regulation 28 compliant Balanced Fund could have done 20% last year translating into R3333pm growth. Then even if taking out R1000 per month, there would have been over R2000 to reinvest each month.

 

[dunkyd]

Allan Gray Orbis funds.

 

[Hamster]

Thanks Marco

 

[Freshy-ZN]

My new investment strategy is to buy sheep.....

They multiply and I sell the lambs and the wool. The foundation flock keeps growing representing "Capital" and the lambs/wool could be seen as "interest or income".

Of course not everyone has the means to keep a flock of sheep but leasing farmland and leasing livestock is actually not as expensive as it may seem.

 

[supersunbird]

Allan Gray Orbis funds.

:erm:

Allan Gray's rand-denominated offshore funds closed (to new business/money):
http://www.moneyweb.co.za/moneyweb-unit-trusts/allan-grays-randdenominated-offshore-funds-closed

 

[supersunbird]

My new investment strategy is to buy sheep.....

They multiply and I sell the lambs and the wool. The foundation flock keeps growing representing "Capital" and the lambs/wool could be seen as "interest or income".

Of course not everyone has the means to keep a flock of sheep but leasing farmland and leasing livestock is actually not as expensive as it may seem.

No theft issues?

 

[supersunbird]

Yes captain obvious. He is talking about the future,

Given the rand weakness it should continue to give good results and a lot of the Top 40 earn overseas income or export commodities that earns dollars. Its much better than sitting with the money in the bank and better than sitting with it in bonds. One has to be in the market or else its a moot point.

 

[Tweebeenvis]

What about the coronation Top 20?

http://www.coronation.com/personal/domestic-funds/needs/CNTF

Here is a noob question , seeing as the risk factor is 8/10, does that mean one can lose your initial deposit? or only that you might have lower growth than expected?

 

[supersunbird]

What about the coronation Top 20?

http://www.coronation.com/personal/domestic-funds/needs/CNTF

Here is a noob question , seeing as the risk factor is 8/10, does that mean one can lose your initial deposit? or only that you might have lower growth than expected?

Its a good fund.

You could possibly loose some of you capital/initial deposit yes, over the short term, as the market fluctuates, as with any share investment. To loose it all the country must be F'd up beyond Zimbabwe style.

 

[Tweebeenvis]

Thanks Sunbird

Was also looking at the fnb global accounts, maybe convert to USD and GBP before the the zar/usd hits 30/1 :O but gonna lose alot and there is no real interest on these accounts + paperwork is a bitch and the eventual "repatriation of funds" is sure to involve some hectic fees.

Me thinks I'll just dump it all in the coronation for 5 years and pray

/Thread un-hijack

Soz OP