Haha, the liquidity is not such a big issue. Good returns and relatively safe investment are the key factors (I am still younger than 30 thus I can afford to have a tad higher risk profile on an investment imo).
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Haha, the liquidity is not such a big issue. Good returns and relatively safe investment are the key factors (I am still younger than 30 thus I can afford to have a tad higher risk profile on an investment imo).
UnUnOctium
Expert Member
Let me rephrase that better:
Positive returns, short investment duration, safe investment. Choose any 2
Phone anyone at Accenture, Allan Gray, etc. and ask them what the real killer is. 90% of the time it's people pulling their money out prematurely. If you want to invest money, make sure you won't be needing it before the investment duration is up.
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Faetsa
Active Member
WOW... I wouldn't take some of those advices posted here! If you go bonds you basically sign a contract for say 5 years, if you do SATRIX and the moment you need your money and the markets are down you will actually lose money.
For a short period of time and small amouts like that put your money into your savings account and that's it. Think about interest this way: if you make 5% per year and you put in R6000 in 6 months and then withdraw them you would have made a R150 if you deposited the money as a lump sum, so my advice is put the money into saving account and don't risk getting out less.
I work in that industry I know what happens when people need money.
For a short period of time and small amouts like that put your money into your savings account and that's it. Think about interest this way: if you make 5% per year and you put in R6000 in 6 months and then withdraw them you would have made a R150 if you deposited the money as a lump sum, so my advice is put the money into saving account and don't risk getting out less.
I work in that industry I know what happens when people need money.
Check out the Capitec website. They have fixed deposit saving accounts also, earning little over 6% interest for amounts larger than R10k.
Then don't...
No two people are the same, and thus no two risk profiles are the same. Working in the industry you should know that.
The fact that you run the risk of lower return (eventually) when you go for something like SATRIX is tied to the fact that you stand to gain better. The OP is looking for a longer-term investment.
At the moment it's not a savers' market, and you can tell me I'm wrong. Slapping your money in an account that's going to give you R150 for your R6000 investment, which is likely less than the management fees of that account, reallt just doesn't seem worth it.
To the OP: You have to decide, do you want to a) save money, i.e. put your money in an account and have it sit there and do nothing until you may need it for a rainy day and MAYBE get some return on your investment that's enough to cover your annual/monthly management fees, or b) start building wealth, which coincidently isn't exclusivbe to the multi-gazillionaires out there, but something every person can (and should) do.
I am by no means a financial advisor, nor do I stand to gain anything from any advice I give you. Use it, don't use it.
The OP is looking to get the money out within 6 to 9 months. This is classified as a short term investment. The recommended investment horizon for an equity based like what many of you are suggesting is 5 - 10 years. That way, the risk associated with higher volatility is reduced over a long time period. Unless the OP has some degree of flexibility with regards to when he needs the money, such a fund will not do. It may take a huge dip just before you need it, only to recover when it's too late.
For your situtaion, IMHO, money market is the way to go.. or a conservative unit trust that invests in bonds and money market instruments. that way you still get the active management and the costs are low. for example, the Stanlib Income Fund is classified as conservative.. consistently earns earns between 7.5 - 9% based on historic performance.. and the charges are 1%
..my two cents.
For your situtaion, IMHO, money market is the way to go.. or a conservative unit trust that invests in bonds and money market instruments. that way you still get the active management and the costs are low. for example, the Stanlib Income Fund is classified as conservative.. consistently earns earns between 7.5 - 9% based on historic performance.. and the charges are 1%
..my two cents.
Agreed, it's easy to set up because you can do it at your bank (i.e. Stanlib at Std Bank), and you can get your money out anytime.
One thing that rarely gets mentioned in these discussions is how CGT, the tax exemption on interest up to R22800 P.A, and other various taxes related to dividends, onshore/offshore income etc. impact the bottom line.
After a broker, SARS and more than likely a tax consultant have had their fingers in your pie, an investment that looks far better than cash (ie: simple interest earning instruments) may actually be returning similar or only marginally better returns for considerably greater risk.
After a broker, SARS and more than likely a tax consultant have had their fingers in your pie, an investment that looks far better than cash (ie: simple interest earning instruments) may actually be returning similar or only marginally better returns for considerably greater risk.
Freshy-ZN
Executive Member
Broker- If you dont like paying their fees invest by yourself then. But you will still be paying someone fees except you wont be getting any advice for it.
SARS- Only worry about paying more tax than usual when you start earning more than R22 800 local interest a year. Other that that no getting away from SARS....
Tax consultant- not necessary with E-Filing and even using one normally pays for itself according to all the people who happily pay a few thousand every year to them.
As an aside- over the last 30 years local equity funds have given about an 18% annualised return on investment. Compare this with money market returns?
That's the point I'm trying to make. The OP isn't looking to invest over 30 years, and he's not investing anywhere near enough to exceed the R22800 interest exemption, and the equities market isn't particularly hot right now - there's no reason to think it's going to come anywhere near your annualised 18% over the next 3 or 4 years, and if he's buying shares a R1000 at a time even the cheaper options are going to shave 1-2% off the top right off the bat, and lastly when he does cash out, calculating his capital gains will more than likely drive him into the arms of a tax consultant (obviously if he already uses one this is a moot point).
Feel free to disagree, but personally I find the thought of jumping into the equities market right off the bat for a short term, low value investment isn't the most sound advice in this situation.