Need investment advice

[Wag]

Months away from retirement. Sold the holiday home for 2.1 m, in the process of selling my primary residence as well. Will use the lion share of the 2,1 to build retirement home in Bettys Bay. Advice on where to invest around 2.8m. Need the interest to compliment my small pension. The plan is to leave the capital amount as inheritance for the kids.

 

[LPCPT]

Will be there in a few years. Interesting to see the advice offered.
Looking at 10x.co.za at the moment.
Some time back I got some advice about living annuity, maybe something you should look into. Will be a tax benefit as you pension payouts (monthly) will be taxed.

 

[Papsak]

If you want serious advice, you need to give serious figures.

How much do you need to live on.
how much does the pension give pm
total cost of the new house
expected sale price of the current house

Reading again - after building you expect to have 2.8?

 

[JStrike]

If you want to have the capital remain after your death, you can follow the 4% rule. Which means you can draw down 4% each year.
On R2.8m, that is R112 000 per year, which is R9300 per month

 

[HavocXphere]

You're not going to be able to preserve capital throughout - as per Jstrike there will have to be drawdown

 

[LCBXX]

My spouse is a Financial Planner who specializes in retirement amongst other options. PM me if you are interested.

 

[Josh B]

Have a look at SA retail savings bonds. Link is https://secure.rsaretailbonds.gov.za/Rates.aspx

The interest is 8.75% for 5 year fixed investments. This will equates to interest of R245000 per annum or R20416 per month on a investment of R2,8 million.

 

[JStrike]

Have a look at SA retail savings bonds. Link is https://secure.rsaretailbonds.gov.za/Rates.aspx

The interest is 8.75% for 5 year fixed investments. This will equates to interest of R245000 per annum or R20416 per month on a investment of R2,8 million.

That barely beats inflation, and if you are using the interest, inflation will eat away that cash in no time.

 

[Hamster]

My spouse is a Financial Planner who specializes in retirement amongst other options. PM me if you are interested.

This ^

 

[Thor]

Have a look at SA retail savings bonds. Link is https://secure.rsaretailbonds.gov.za/Rates.aspx

The interest is 8.75% for 5 year fixed investments. This will equates to interest of R245000 per annum or R20416 per month on a investment of R2,8 million.

Bonds sucks. Use Sygnia's robo advisor.

My spouse is a Financial Planner who specializes in retirement amongst other options. PM me if you are interested.

If the robo advisor does not satisfy you, then speak to this forumtee's spouse.

 

[Eti1]

Advantage of bonds is low risk. Not a bad option for someone looking to preserve capital after retirement. Yes there are potentially more profitable options, but risk...

 

[Thor]

Advantage of bonds is low risk. Not a bad option for someone looking to preserve capital after retirement. Yes there are potentially more profitable options, but risk...

SA bonds. Do you trust this government?

(but yes, bonds are generally save. But so is DIVTRX)

 

[Tomtomtom]

Satrix is launching an inflation-linked bond ETF, which looks good. https://satrix.co.za/news/article?id=63

...but it's a total-return fund so it doesn't produce cash flow. Depending on your tax situation, this might be preferable though, i.e. selling shares for capital gain rather than interest/dividends.

An inflation-linked bond by definition protects capital against inflation. It will beat inflation by exactly the floating real interest rate.

 

[Magandroid]

Have a look at SA retail savings bonds. Link is https://secure.rsaretailbonds.gov.za/Rates.aspx

The interest is 8.75% for 5 year fixed investments. This will equates to interest of R245000 per annum or R20416 per month on a investment of R2,8 million.

I'm following this thread with keen interest as my knowledge on investment is very little and I am also looking to invest some money somewhere. Based on what the OP has said above with regards to a fixed investments over 5 yrs, I see that Capitec Bank offers investment of up to 5 years at a rate of 10.05%. How would the Capitec investment compare to the SA Retail Saving Bond and would it be a better option?
https://www.capitecbank.co.za/global-one/save/single-deposit-fixed-term-savings-account

 

[Tomtomtom]

How would the Capitec investment compare to the SA Retail Saving Bond and would it be a better option?
https://www.capitecbank.co.za/global-one/save/single-deposit-fixed-term-savings-account

Confusing is this bullet point: "You choose how long you want to invest for (from 6 – 24 months)" which implies you can't choose the 60-month term. Not sure if that's a typo, but if not it's very cheeky.

In general, I'd give bank "investment" accounts a miss. It's not the core business of retail banking. It's an upsell for them. A bit like buying a funeral plan from Telkom...

 

[akescpt]

i reckon the kids will need to pull finger. why are you making do with a small pension in order to make your kids more comfortable? with living costs escalating rapidly, how will you survive on that small pension? groceries and medical aid alone...

 

[Jehosefat]

In general, I'd give bank "investment" accounts a miss. It's not the core business of retail banking. It's an upsell for them. A bit like buying a funeral plan from Telkom...

It has very much become core business with the new liquidity and funding regulations...

 

[diapason]

Important to note those are annual compounded rates, i.e. they assume you reinvest the interest. So 10% is actually a ~9.56% rate of return if it's paid out.

Also confusing is this bullet point: "You choose how long you want to invest for (from 6 – 24 months)" which implies you can't choose the 60-month term. Not sure if that's a typo, but if not it's very cheeky.

In general, I'd give bank "investment" accounts a miss. It's not the core business of retail banking. It's an upsell for them. A bit like buying a funeral plan from Telkom...

Those are not the compounded interest rates. I have the 60 month deposit at 10.25% (now advertised at 10.05%).

Regarding the possible typo - it looks as though they are updating their website with new charges, etc so maybe that will get fixed.

 

[Thor]

If you do go bonds have a look at this -> http://www.rmb.co.za/globalmarkets/weTrade_Commodities_Dollar_Custodial_Certificate.asp

 

[Tomtomtom]

Those are not the compounded interest rates.

Looks right. Redacted original.

It has very much become core business with the new liquidity and funding regulations...

Interesting. Still, I have in-principle concerns around keeping money with institutions that need liquidity regulation to stop them from blowing up in the first place. I try to limit my involvement with them such that they're solving my liquidity problems, not the other way around.