Noob investment help

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millennium_845

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Howsit going guys, sorry if there's already a thread discussing this.

I'm managing to make an extra R1500-2000 to invest monthly while studying, so I won't need access to the funds for at least a few years.

Where would you guys think the best place to put this is. Would this small of an amount even be worth putting in a Satrix fund or another type of etf? I was also thinking of just buying gold or silver in small denominations and just keeping it for the next 20 years or so. Would really appreciate your input as I'm not too knowledgeable in this area.

Thanks in advance.
 
Not your TFSA unless you plan on using it closer to retirement. If that is the case then in a TFSA.

Regardless: with those amounts you are ruling out most Stockbrokers due to cost except for EasyEquities and ABSA's ETF only accounts. You'll be able to invest into ETFs there but it'll require discipline from your side.

Another very good option since you are a "noob" is to make use of FNB's Share Saver. You give them the money every month via debit order and they invest it for you into the top 100 companies on the JSE. Cheapest option by far if it is on "autopilot".

Other than that - unit trusts. But check the costs.

If I was in your shoes and already an FNB client - Share Saver. I used it for a few years myself.

If not I'd go to EasyEquities and buy a top 40 ETF like NFSWIX and DBXWD (50/50 each)
 
Run a mile from Alan Gray or any other unit trust (except sygnia if you really want a UT). I'd stick it straight into an easy equities/ABSA stockbrokers TFSA account and buy some ETFs there.
 
CamiKaze said:
What made you leave Share Saver?
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Well as time moved on I learned about more ETFs and wanted greater control. I also didn't like their weighting mechanism which didn't favour midcap enough. But then again the top of the midcap is full of losers that didn't make the top40.

Regardless, considering the All inclusive cost of 0.1% and what you are getting in return it us the perfect product for "noobs".
 
patrick said:
Run a mile from Alan Gray or any other unit trust (except sygnia if you really want a UT). I'd stick it straight into an easy equities/ABSA stockbrokers TFSA account and buy some ETFs there.
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Problem is that if he doesn't know about ETFs and decides to buy weird ones. Unit Trusts might work if if the costs are higher.

OP, a good option if you do go and buy your own ETFs through easy equities/ABSA is to look at MAPPSG. I forgot about it but it already diversifies your portfolio into 75% equities, 20% bonds and 5% cash. All you need to do is buy into one share.
 
How does ETF return compare with Share Saver compare with a 32 day deposit account (roughly)?
 
halfmoonforever said:
How does ETF return compare with Share Saver compare with a 32 day deposit account (roughly)?
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Share Saver to notice deposit, roughly this:

compare.jpg

Notice deposit being the red, guaranteed but barely inflation beating.

Share Saver consists of two ETFs - RMBT40 and RMBMID (they were renamed to Ashburton T40 and Midcap recently). Comparing them to STXIND, DBXWD, DIVTRX etc and you get a very different view. But those all specialise in some way (offshore, industrial, dividend yielding etc). The Top40 and Midcap combination gives you the top 100 regardless of sector and auto-adjusts based on what the economy is doing.
 
Hamster said:
He wants the money out in a couple of years so no.
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I see where you are coming from, but 20 years is a long time..... why not make use of the vehicle now?

maybe 10 years down the line when there is more disposable income, that can be invested elsewhere and he would have 10 years of tax free growth in the TFSA
 
bro-da said:
I see where you are coming from, but 20 years is a long time..... why not make use of the vehicle now?

maybe 10 years down the line when there is more disposable income, that can be invested elsewhere and he would have 10 years of tax free growth in the TFSA
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Compound growth? The last years is where the most growth happens.

If you invest R30k per year and it grows on average by 15% annually, in 10 years time you will have roughly R610k (from R300k deposit). Leave it another ten years with only another 6 years of deposit and you have roughly R2,900,000 (from R480k deposit). So doing it your way you are losing almost R2.5 mil.

And that is why you open your TFSA as soon as you can and leave it for 30 years which gives you R11,800,000 for the R480 you deposited.

Don't WASTE your TFSA!
 
Hamster said:
Compound growth? The last years is where the most growth happens.

If you invest R30k per year and it grows on average by 15% annually, in 10 years time you will have roughly R610k (from R300k deposit). Leave it another ten years with only another 6 years of deposit and you have roughly R2,900,000 (from R480k deposit). So doing it your way you are losing almost R2.5 mil.

And that is why you open your TFSA as soon as you can and leave it for 30 years which gives you R11,800,000 for the R480 you deposited.

Don't WASTE your TFSA!
Click to expand...

Good reply Hamster, i misread initially :D

I fully agree
 
millennium_845, 2 of the Satrix unit trusts might be perfect for you, maybe choose one of the local ones and then the MSCI World Index one, or do similar with Sygnia Unit Trusts or EE and ETFs. 50%/50% local foreign split.

As to the TFSA issue the others are discussing, the TFSA should be the savings of last resort (since you can't replenish the lifetime limit). So have savings/investments outside of the TFSA as well.

So maybe consider something like the following:

So for example if investing R1500pm and no other savings to rely on:
R500pm into local index unit trust or ETF in a TFSA
R500pm into foreign index unit trust or ETF in a TFSA
R500pm into a savings account with bank (Capitec a good option)

So for example if investing R2000pm and no other savings to rely on:
R750pm into local index unit trust or ETF in a TFSA
R750pm into foreign index unit trust or ETF in a TFSA
R500pm into a savings account with bank (Capitec a good option)
 
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