R50 000 investment goal

[oscarlets]

Hi

I need advise, I need like R50k by year end. Is there compound interest investment available in South Africa? I remember in my cost and management accounting class we used to do exercises where someone wanted to go on holiday overseas, the person would need like R1 000 000 to do all the things he wanted to do overseas, then we will do calculations of how much he must save to get R1 000 000.

I have been calling banks but consultants don't seem to know anything about this. They are happy to tell me more about their funeral policies

Is there compound interest investment in South Africa?

Save R100 p.m with 5% interest

Next month it will be 105,etc etc

Your advice is highly appreciated.

 

[piranha786]

Best Option for Interest will be Capitec Bank, however, I'm not a fan of interest as income.

Best way is to rather buy a few things sell it, make some profit etc...

BTW, all normal savings / investment accounts use the principle of compound interest.

 

[Purply]

Yes, pretty much all bank savings/deposit/long term investment accounts work on compound interest.

I personally use the Nedbank JustInvest account for that purpose, you get between 5.50% - 6.75% pa depending on the amount.

 

[JStrike]

Hi

I need advise, I need like R50k by year end. Is there compound interest investment available in South Africa? I remember in my cost and management accounting class we used to do exercises where someone wanted to go on holiday overseas, the person would need like R1 000 000 to do all the things he wanted to do overseas, then we will do calculations of how much he must save to get R1 000 000.

I have been calling banks but consultants don't seem to know anything about this. They are happy to tell me more about their funeral policies

Is there compound interest investment in South Africa?

Save R100 p.m with 5% interest

Next month it will be 105,etc etc

Your advice is highly appreciated.

Every single account by every single back that offers interest uses compounding interest.

Your math is also way off.

R100 invested at 5% interest (The interest rate is generally the yearly rate, even though it is compounded monthly)
Month 1: R100.00
Month 2: R100.42 (5% of R100.00 / 12)
Month 3: R100.85 (5% of R100.42 / 12)
etc etc

 

[oscarlets]

Best Option for Interest will be Capitec Bank, however, I'm not a fan of interest as income.

Best way is to rather buy a few things sell it, make some profit etc...

BTW, all normal savings / investment accounts use the principle of compound interest.

Ahhhh! So let your money work for you is a hoax You didn't even mention satrix 40 that investors on business day tv like throwing around. Hmmm. I was hoping for sth like open x account, deposit x amount pm then come December R50k is guaranteed

 

[oscarlets]

Yes, pretty much all bank savings/deposit/long term investment accounts work on compound interest.

I personally use the Nedbank JustInvest account for that purpose, you get between 5.50% - 6.75% pa depending on the amount.

Hmmm I should check this out.

Ever heard of Satrix 40? And why didn't you go for it? I hear traditional banks don't really offer real investment.

 

[Hamish McPanji]

Is there compound interest investment in South Africa?

Save R100 p.m with 5% interest

Next month it will be 105,etc etc

Your advice is highly appreciated.

Interest rates are quoted for the year, not the month. So your R100 deposited this month will only be 100.4something next month

 

[oscarlets]

Every single account by every single back that offers interest uses compounding interest.

I hear you but which one should I go for? I need to save x amount pm to get the R50k

 

[backstreetboy]

Just make sure you reinvest your interest and not move it to a bank account.

 

[JStrike]

I hear you but which one should I go for? I need to save x amount pm to get the R50k

At that low amount, they are all generally low interest rates of roughly 3%-5%. Go with whatever you bank offers.
Compounding will make almost no difference in such a short time on such a small value.
You will need to invest R4100 per month or so

 

[oscarlets]

Interest rates are quoted for the year, not the month. So your R100 deposited this month will only be 100.4something next month

Hmm so in the real world there's no real investment for small guys.

To get R50k in December I must save R4166,67 p.m

I was hoping for short cut through investment portfolios. Sth like open x account, save x amount then open x account save x amount then in December you will make your investment goal.

 

[JStrike]

Ahhhh! So let your money work for you is a hoax You didn't even mention satrix 40 that investors on business day tv like throwing around. Hmmm. I was hoping for sth like open x account, deposit x amount pm then come December R50k is guaranteed

It's not a hoax. You just need a lot of it over a long time.

 

[JStrike]

Hmm so in the real world there's no real investment for small guys.

To get R50k in December I must save R4166,67 p.m

I was hoping for short cut through investment portfolios. Sth like open x account, save x amount then open x account save x amount then in December you will make your investment goal.

There are no short cuts in investment.

 

[JStrike]

Hmmm I should check this out.

Ever heard of Satrix 40? And why didn't you go for it? I hear traditional banks don't really offer real investment.

Satrix is investing in shares. In such a short time frame, it's a great way to lose money

 

[Thor]

go to the money market.

 

[Tman*]

There are lots of investment vehicles available for what you are describing. Something very important to note tho is capital guarantee.

Lots of endowment type investment vehicles offer no guarantee on capital or return. You might be able to look at historical return of say 9.3% annually, and use that as a guideline (guideline, not an indication), but at the end of the day, you could end up in the -.

With your investment term being so short, I would rather look at a money market type account like Capitec (already mentioned in the thread). Although their return rate is much lower, at least its guaranteed, and your capital is safe.

Moving on to your next question, you can use a simple financial calculator to determine how much you need to invest by using the following:

FV: lump sum you need at the end of the year, being R50 000
i: % return your investment will give you
N: investment term
PMT: ? - you will get the amount you need to invest per month, to achieve your goal.

 

[Hamish McPanji]

Hmm so in the real world there's no real investment for small guys.

To get R50k in December I must save R4166,67 p.m

I was hoping for short cut through investment portfolios. Sth like open x account, save x amount then open x account save x amount then in December you will make your investment goal.

5% is a bit low IMO. You can get savings accounts that pay out more. And if you put it in a notice or fixed term account then you can get more also. You just won't be able to pull it out as quickly

 

[oscarlets]

go to the money market.[/QUOTE

I am listening. Where do I find money market? Care to share links? Please.

 

[oscarlets]

There are lots of investment vehicles available for what you are describing. Something very important to note tho is capital guarantee.

Lots of endowment type investment vehicles offer no guarantee on capital or return. You might be able to look at historical return of say 9.3% annually, and use that as a guideline (guideline, not an indication), but at the end of the day, you could end up in the -.

With your investment term being so short, I would rather look at a money market type account like Capitec (already mentioned in the thread). Although their return rate is much lower, at least its guaranteed, and your capital is safe.

Moving on to your next question, you can use a simple financial calculator to determine how much you need to invest by using the following:

FV: lump sum you need at the end of the year, being R50 000
i: % return your investment will give you
N: investment term
PMT: ? - you will get the amount you need to invest per month, to achieve your goal.

Thank you! Thank You!


Problem is at the bank. Those so called consultants don't seem to understand what I really want. It's like they are programmed to understand only one thing.

What I really need is interest options from all types of investment vehicle.

And why not mention Satrix 40? hmm

 

[JStrike]

go to the money market.

That won't help him much.
On the time span he wants, he is looking for a shortcut to avoid having to save R4100 per month. And there is no such shortcut that doesn't have significant risk of losing his money.