Saving for my nephew's education

Nefertiti said:
What about an endowment policy? You get ones that you can use to invest for 5 years at a time (starting of with R500 deposit and R500 a month can be done) and you can reinvest that money. No sure if its any good as it got mentioned by a friend and I still need to do research.
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Thing is he won't be getting R500 a month, so I can't make use of that policy.

I emailed Satrix about FICA requirements if I am to open an account in my nephew's name. Their response is quoted below:

Good day,

Thank you for your email.

We would require your nephews parents FICA details. The other option is that we can have the application in your name and then have your nephews name in brackets and then you would provide your FICA details.

Should you require further assistance, please do not hesitate to contact us on 0861 100 670; alternatively at [email protected].


Regards
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I think the second option is the best.
 
IzZzy said:
I think the second option is the best.
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Yes. The purpose of this fund is to help pay for your nephew's education thus I would also put that in my will if I was you, should anything happen to you.
 
Devill said:
Yes. The purpose of this fund is to help pay for your nephew's education thus I would also put that in my will if I was you, should anything happen to you.
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It would mean finally having a reason to draft one (even though I draft wills for other people ;). I would have avoided that had I been able to open an account in his name, but then it seems his parents would have signing rights.
 
IzZzy said:
It would mean finally having a reason to draft one (even though I draft wills for other people ;). I would have avoided that had I been able to open an account in his name, but then it seems his parents would have signing rights.
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I would not have advised that. As if something was to happen to you and he was, lets say 15 years old, do you think he will use that money to buy a motorbike / blowup doll or spend it on his eduction?

As long as you are alive I would advise you to keep control, only upon your death does the money go to him :p
 
IzZzy said:
It would mean finally having a reason to draft one (even though I draft wills for other people ;). I would have avoided that had I been able to open an account in his name, but then it seems his parents would have signing rights.
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State in your will that a trust should be established for the benefit of your nephew and specify that the money must only be used for his education.
 
Devill said:
I would not have advised that. As if something was to happen to you and he was, lets say 15 years old, do you think he will use that money to buy a motorbike / blowup doll or spend it on his eduction?

As long as you are alive I would advise you to keep control, only upon your death does the money go to him :p
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Agree entirely.

senyetse said:
State in your will that a trust should be established for the benefit of your nephew and specify that the money must only be used for his education.
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Also agree. Though the only rider I would add is that should there be any money left over after his tertiary education, or if he chooses not to study for tertiary education, then the balance remaining only vests in him once he turns 30. This creates a disincentive for him not to study, because he would have a very long wait to get the money.

You should also add that any money received from your estate will not vest in or accrue to the beneficiary's spouse.
 
What about putting R100 per month somewhere, less of a monthly financial knock and the kid gets an extra R200pa.

Also then going from R100pm to R150pm is quite easy and then the capital increases dramatically, the trick to good investing is not finding the absolute highest interest rate, its putting as much as you can into it.
 
have a look at the fundisa program (http://www.stanlib.com/Individuals/Pages/Fundisa.aspx)
not sure about the minimum requirements, but the gov does contribute up to R600 per year(25% of ur contribution) and you can take it out with most banks. Only thing is that I think its a monthly investment option, but I think its the best option especially if you saving a small amount for university
 
M3mPh1z said:
What about putting R100 per month somewhere, less of a monthly financial knock and the kid gets an extra R200pa.

Also then going from R100pm to R150pm is quite easy and then the capital increases dramatically, the trick to good investing is not finding the absolute highest interest rate, its putting as much as you can into it.
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Thanks, but the last part of your advice is incorrect. It's no good putting R1million into a savings account that will yield 1% interest, and I lose 4.77% each year due to inflation.
 
lucifir said:
have a look at the fundisa program (http://www.stanlib.com/Individuals/Pages/Fundisa.aspx)
not sure about the minimum requirements, but the gov does contribute up to R600 per year(25% of ur contribution) and you can take it out with most banks. Only thing is that I think its a monthly investment option, but I think its the best option especially if you saving a small amount for university
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I see from their website this important catch:

Fundisa is a unique savings product launched in South Africa in November 2007 and is intended for households that earn an income of less than R180 000 per year.
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I earn more than that, so I wouldn't qualify. Not sure if my brother earns more than that though, but I don't want anyone else to have access to this money.
 
lucifir said:
have a look at the fundisa program (http://www.stanlib.com/Individuals/Pages/Fundisa.aspx)
not sure about the minimum requirements, but the gov does contribute up to R600 per year(25% of ur contribution) and you can take it out with most banks. Only thing is that I think its a monthly investment option, but I think its the best option especially if you saving a small amount for university
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Fsck, wonder if my SO will qualify for this seeing as she is doing her articles and earns less than that.
 
IzZzy said:
Thanks, but the last part of your advice is incorrect. It's no good putting R1million into a savings account that will yield 1% interest, and I lose 4.77% each year due to inflation.
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I said not absolute highest, not lowest. Anyone investing in a non-inflation beating account is an idiot
 
IzZzy said:
I see from their website this important catch:



I earn more than that, so I wouldn't qualify. Not sure if my brother earns more than that though, but I don't want anyone else to have access to this money.
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Devill said:
Fsck, wonder if my SO will qualify for this seeing as she is doing her articles and earns less than that.
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You guys may want to double check that, as while they aim it at that market, I do not think you will be disqualified if you earn more than that. I know that I earn more than that and have not had the issue, and it is with stanlib, but I did start this a while ago and they may have changed the rules since.
 
Interesting. Here's some articles I found:

http://www.fin24.com/Money/Investments/Is-Fundisa-right-for-you-20100530-2

http://www.moneyweb.co.za/moneyweb-...e-they-of-any-benefit?sn=2009+Detail+no+image

Also, from the website of FUNDISA:

As from 1 March 2013 a means test of an annual household income of R180 000 or less will apply to the families of all learners who are made beneficiaries of a Fundisa Fund account. This means that anyone can open a Fundisa account, but the learner who benefits from the investment must come from a family that does not earn more than R180 000 a year.
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IzZzy said:
I see from their website this important catch:



I earn more than that, so I wouldn't qualify. Not sure if my brother earns more than that though, but I don't want anyone else to have access to this money.
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The 180k is applied to the family of the learner not the investor
 
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