Tax-free savings: ETF choices

[Scooby_Doo]

SYGWD would be my suggestion, or something similar.

 

[Scooby_Doo]

Another idea if you are not looking at shares, go for a fixed deposit (that is what I am actually looking at now).

A few firms offer just under 10%, so shop around.

As per the OP the investment is for 15+ years, I hope you are not going to park your cash in a a fixed deposit for 15 years.

 

[zerocool2009]

As per the OP the investment is for 15+ years, I hope you are not going to park your cash in a a fixed deposit for 15 years.

Well, currently with the FNB share saver for 4 years .... 4% growth (after FEES), its a joke actually.

 

[Scooby_Doo]

Well, currently with the FNB share saver for 4 years .... 4% growth (after FEES), its a joke actually.

I know its tough out there right now, but 4 years is a drop in the ocean. I assume you have (had?) a significant amount of your portfolio in SA stock?

Reason I suggested the SYGWD, is that ETF represents thousands of companies from around the world and is well diversified and you will battle to beat it by stock picking. I am concerned with recommendations around high allocations to SA stock, the total SA stock market represents less than 1% of the global market.

In summary don't give up on your strategy based on short term trends, don't let recency bias affect your long term goal. Equity investing is for 5 years+ time horizon, but I usually suggest people to look at it as a 10 years + horizon.

 

[zerocool2009]

I know its tough out there right now, but 4 years is a drop in the ocean. I assume you have (had?) a significant amount of your portfolio in SA stock?

Reason I suggested the SYGWD, is that ETF represents thousands of companies from around the world and is well diversified and you will battle to beat it by stock picking. I am concerned with recommendations around high allocations to SA stock, the total SA stock market represents less than 1% of the global market.

In summary don't give up on your strategy based on short term trends, don't let recency bias affect your long term goal. Equity investing is for 5 years+ time horizon, but I usually suggest people to look at it as a 10 years + horizon.

Currently my plan A is, wait till the JSE comes up to 59000 again, and then move my FNB Share Saver. The dividends paid out is 1/3 on what I could get via a fixed deposit every 3 months.

For guys who wants to open a Share Saver, read the hellopeter complaints about fees (related to this product please)

 

[jman]

I know its tough out there right now, but 4 years is a drop in the ocean. I assume you have (had?) a significant amount of your portfolio in SA stock?

Reason I suggested the SYGWD, is that ETF represents thousands of companies from around the world and is well diversified and you will battle to beat it by stock picking. I am concerned with recommendations around high allocations to SA stock, the total SA stock market represents less than 1% of the global market.

In summary don't give up on your strategy based on short term trends, don't let recency bias affect your long term goal. Equity investing is for 5 years+ time horizon, but I usually suggest people to look at it as a 10 years + horizon.

Rather buy Satrix World. It tracks the same index and costs around half as much (I think like 0.36%)

 

[akescpt]

Another idea if you are not looking at shares, go for a fixed deposit (that is what I am actually looking at now).

A few firms offer just under 10%, so shop around.

wheres the research??

once the ****ing debt is done. going to go shares with my tax-free and cash with the wive's one. eggs in one basket and all that. eyeing that s&p 500 for that one day buy...

 

[zerocool2009]

wheres the research??

once the ****ing debt is done. going to go shares with my tax-free and cash with the wive's one. eggs in one basket and all that. eyeing that s&p 500 for that one day buy...

Take note, this is for fixed deposit TFSA's

https://savetaxfree.co.za/recommended/compare-interest-rates-for-tfsa-cash-deposits/

 

[Gaz{M}]

20% - PTXTEN
40% - CSEW40
40% - SYGWD

Done.

PTXTEN = South African Property?! Madness!

 

[Gaz{M}]

Before anyone invests, make sure you have zero debt. What's the point of earning 7 to 14% returns when you are paying a guaranteed 11 or 12 or 13% interest on your cars and houses?

 

[backstreetboy]

PTXTEN = South African Property?! Madness!

Price is cheap as chips and it pays quarterly dividends.

 

[akescpt]

Before anyone invests, make sure you have zero debt. What's the point of earning 7 to 14% returns when you are paying a guaranteed 11 or 12 or 13% interest on your cars and houses?

i need to get something going with regards to retirement. getting that compounding going. so ideally yes paying off the house is ideal, i need to max out that 33k before i even think about attacking the house. trying to play catchup. but its on the radar to finish before retirement.

but its all pie in the sky until i get rid of everything debt related except the house.

i see no benefit in finishing off a rental property's bond though. since you can offset profit with the interest.

 

[RandomGeek]

Sygnia does offer a range of Unit Trusts with their TFSA. I am generally happy with their levels of service. Costs of the unit trusts may be a bit higher that some of the ETFs mentioned earlier in the thread

 

[Gaz{M}]

i need to get something going with regards to retirement. getting that compounding going. so ideally yes paying off the house is ideal, i need to max out that 33k before i even think about attacking the house. trying to play catchup. but its on the radar to finish before retirement.

but its all pie in the sky until i get rid of everything debt related except the house.

i see no benefit in finishing off a rental property's bond though. since you can offset profit with the interest.

I hear you, but what's the point of compounding on an investment if the compounding rate % is lower than the compounding interest rate on a home loan? You are still going backwards.

 

[RandomGeek]

i need to get something going with regards to retirement. getting that compounding going. so ideally yes paying off the house is ideal, i need to max out that 33k before i even think about attacking the house. trying to play catchup. but its on the radar to finish before retirement.

but its all pie in the sky until i get rid of everything debt related except the house.

i see no benefit in finishing off a rental property's bond though. since you can offset profit with the interest.

I would kill your own house's bond first - given the stock market has run long and hard there is bound to be a correction soon. Killing the bond's interest at ~10% is a pretty good deal.

 

[zerocool2009]

I would kill your own house's bond first - given the stock market has run long and hard there is bound to be a correction soon. Killing the bond's interest at ~10% is a pretty good deal.

If you have a flexi bond, prepaying your bond, you will get easily get 10% savings on your prepaid money.

 

[mr_norris]

I've seen people complain about EE's website. It's not the best, but it's functional. It shouldn't really be a reason to rule them out. On top of their already low prices, you can save even more on transaction costs with their Thrive program.

I've also seen people mentioning FNB Sharesaver. Stay away. I moved when they introduced their monthly fee. I haven't looked back. There is no reason to stay with FNB when companies like EE are around that don't have a monthly fee.

Yes, we are talking about tens of Rands, but every bit counts.

 

[zerocool2009]

Related to the share saver. If the monthly fee is putting you off. Just start a 3 month fixed flexi account where you get interest. And that interest will cover the fees of the SS (in the long run). What puts me off is the small amount of dividends being paid out compared to interest that could have been earned.

 

[Magandroid]

I've started earning, and I want to max out my tax free savings.

It's been suggested to me that in the long term (15+ years), an aggressive ETF is not a bad option.

I'm not 100% sure where to start with ETFs though, some scanning on the forum shows some people recommending STXWDM and CTOP50, would a 50/50 split between these 2 be a reasonable start?

I don't want to fuss too much about this, but I'm also wary of bundles and such, due to fees.

Best advice I can offer is this.
"It's good to ask for advice but rather educate yourself." This was something I heard not too long ago.

- Everyone is willing to offer advice with all good intentions. Problem though is that it can get very confusing and overwhelming for those that are new to investing.
- Start by downloading this little booklet - https://platinumwealth.co.za/forum/ebooks/ - (How to Invest: The Beginner's Guide)
It helped me quite a bit in the beginning. You don't have to buy the ETF's that they propose but it does give you an idea of where to start. (Although I bought the recommended ETF's and they're not doing to too badly )
- Open an Easyequities account and play around with their demo account first to get a feel for it. You don't have to invest your own money immediately. Take your time to understand investing first and see how markets change and the impact it has on your investments.
- Signup to local websites like https://platinumwealth.co.za/forum/ , http://www.stealthywealth.co.za/
- Listen to podcasts from https://justonelap.com/the-fat-wallet-show/
These websites are for our local market and is a wealth of information
- If you decide to open an EE account they automatically offer you a tax free savings account. You can max out the account if you like and leave the money in cash until you are ready to start buying ETF's.
Happy investing

 

[SauRoNZA]

Before anyone invests, make sure you have zero debt. What's the point of earning 7 to 14% returns when you are paying a guaranteed 11 or 12 or 13% interest on your cars and houses?

Ordinarily I would agree.

But running a TFSA when you say only have a home load pending and are already paying isn’t a bad idea for gaining ground in the future with the tax savings.

A car is also often an operating cost and not really a debt, depending on the person.

All other debt should be non existent though.