R4 Million

blunomore

blunomore

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If you were to receive approx R4 Million, and invested it, what would be the approximate interest you would receive per month on that amount? I know the banks' interest rates differ, but let's look at best case scenario.

Thanks
 
Depends where you put it. Money markert you would get max of about 7% p.a. It'd be unwise to just let that kind of money sit in the bank though.
 
You could get 5.2% on an Investec smartrate 90 day notice deposit...

About R17k per month, before tax.
 
blunomore said:
If you were to receive approx R4 Million, and invested it, what would be the approximate interest you would receive per month on that amount? I know the banks' interest rates differ, but let's look at best case scenario.

Thanks
Click to expand...

Blu, these guys are the best Brokers in Jhb for financial planning IMO.
They have served my family very well for a long time now and we have seen the visible rewards.
Please give them a call...
http://www.frontfin.co.za/
 
How much interest will R4 million receive? Well, probably the only time people will be interested in you :p
 
If you invested it in a Allan Gray aggressive fund, you could withdraw about R 15000 a month and still be ahead at the end of a year. But you don't want to put your eggs in one basket so spread it between several funds, not necessarily Allan Gray, but Coronation, Investec, etc.

The other plus is that if you are making regular withdrawals from your fund, this is not taxable income, but the capital gain at the end of the year is, plus the re-invested dividends.
 
chrisc4290 said:
IBut you don't want to put your eggs in one basket so spread it between several funds, not necessarily Allan Gray, but Coronation, Investec, etc.
Click to expand...

It's not in one basket if it's in a unit trust like this. paying double monthly fees would be stupid, no added risk of putting it into only one unit trust if the said trust has the same risk as another one you want to put it in..

If it was me I'd handle the money as a business and not pay management fees (0.75% of R4m is R30 000 a year...)
I would buy shares that pays good dividends and diversify by buying listed property and even gold if you like to diversify that far..
 
Sinbad said:
You could get 5.2% on an Investec smartrate 90 day notice deposit...

About R17k per month, before tax.
Click to expand...


5.2% return is barrel scraping. you can get at least 10% without much risk. so you're looking more at something like R400k a year / 12 = R33k pm... but you want to compound so leave ~R8k pm ... resulting in R25k pm.. minus tax of about R4.5k = ~R20k pm in your pocket.
 
Re83L said:
It's not in one basket if it's in a unit trust like this. paying double monthly fees would be stupid, no added risk of putting it into only one unit trust if the said trust has the same risk as another one you want to put it in..
Click to expand...

Why would you be doubling your fees? Most funds charge you a percentage of the investment amount/fund value as costs. If you invest R4mill with one manager at 0.5%, or R2mill with two companies at 0.5% each there is no difference.

In saying this, some fund managers charge fees on a sliding scale dependent on the amount invested ie. 0.5% on the first R1.5mill and 0.2% on everything thereafter. You also needn't invest directly with different asset managers anyway, you could invest on a platform that gives you access to the different asset managers. Often the costs do not work out much more than investing directly but with the added benefit of convenience and diversification.

And there is a reduction in risk to a certain degree. Each fund manager, even within the same classes, make investment calls based on their perceptions on what the market will do. They do not all have the exact same holdings. One could decide against holding Anglo American while another decides to hold a fair share of it. This decision could effect the returns.

If it was me I'd handle the money as a business and not pay management fees (0.75% of R4m is R30 000 a year...)
I would buy shares that pays good dividends and diversify by buying listed property and even gold if you like to diversify that far..
Click to expand...

How can you provide advice like this when you do not even know what the source of the funds is, the liquidity needs of the investor are or the time horizon?
 
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I should have taken my chances with blu when she joined myBB. I would be smiling all the way to the bank now. Eish.
 
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