What to do with 20k

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jamacouve

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Hey guys , Im 21 , I have about 20 grand lying around which I want to start an investment/savings with and would like opinions of more experienced investors.

I want an account that I can put this money in, still be able to put money in every month but I want it to be flexible , so 500 this month 2000 the next 1000 after that etc.

Any input will be appreciated
 
You're young, probably don't have people dependant on you. I would invest in an Equity fund like Coronation Top 20. Equity funds have high returns with high risk. Therefore you should be investing that money (and adding to it as you see fit) for at least 3 - 5 years.

Hope this helps.
 
FNB's Flexi fixed deposit isn't bad, I'm getting over a R100 a month on 30k, and I have the flexibility to deposit at any time. I'm sure others will chip in here as well.
 
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What your looking for is too put that money into the highest earning account.
What the highest earning account is a debate that can last for years.

But rule of thumb pay off debts first, as these accounts can cost 10% to 30% per year
(Edgars accounts, home loans, car loans, etc).

Next prepare for future debt, for example you probably wont be driving the same car,
or you might be saving up for a house to move into. You can start saving for something like that.

If its money that you dont need ONLY then can you put it into the markets, because what happens
if you plan on using the money for a car in 2 years and suddenly the stock markets go through a 4 year bear market?

So my tip is, pay off loans first, prepare for future loans, and third in the chain is to invest it into some type of investment
 
bchip said:
What your looking for is too put that money into the highest earning account.
What the highest earning account is a debate that can last for years.

But rule of thumb pay off debts first, as these accounts can cost 10% to 30% per year
(Edgars accounts, home loans, car loans, etc).

Next prepare for future debt, for example you probably wont be driving the same car,
or you might be saving up for a house to move into. You can start saving for something like that.

If its money that you dont need ONLY then can you put it into the markets, because what happens
if you plan on using the money for a car in 2 years and suddenly the stock markets go through a 4 year bear market?

So my tip is, pay off loans first, prepare for future loans, and third in the chain is to invest it into some type of investment
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I have paid off my car, I plan to buy a house next year sometime. Thats why I want to make sure that once I can afford a bond Ill be able to chop and change the amount I put into this.
 
jamacouve said:
I have paid off my car, I plan to buy a house next year sometime. Thats why I want to make sure that once I can afford a bond Ill be able to chop and change the amount I put into this.
Click to expand...

Considering your initial comments the only options you really have are to put it into a fixed term deposit.
It could be anything from a 7-day notice account to a 32 day account, or if your more flexible a 6 - 12 month account.

Whatever you do dont put it into the stock markets. Stock markets are not for quick investments that just grow,
despite what the forum makes you believe.

And if you are planning on buying a house, just budget for more interest rate hikes, so if you cant afford
the repayments at prime at 12% dont buy the house.

Currently repayments on a R 700k house is already around R 7000 per month.
This could potentially move further up, eg 9,000 - 10,000 per month if interest rates get hiked further.
You need to be prepared for the possibility.

http://www.property24.com/General/B...20,000&AdditionalPayment=0&Years=20&Post=True
 
Asha'man X said:
FNB's Flexi fixed deposit isn't bad, I'm getting over a R100 a month on 30k, and I have the flexibility to deposit at any time. I'm sure others will chip in here as well.
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100 / 30,000 * 12 = 4%

This is just standard money market rates...not necessarily the best deal
 
jamacouve said:
Thanks for the help man.

What do you think about something like this?

https://www.fnb.co.za/rates/InvestmentAccounts.html?productName=Money Market Accounts
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Pleasure

I would rather go with the 32 day notice account.

https://www.fnb.co.za/rates/InvestmentAccounts.html?productName=32 Day Flexi Notice

When you dealing with houses and cars the whole process tends to take more time than your realize. You never really need the money within a day. 32 day is a good balance between returns and still giving short notice.

A seller will generally allow a month for the money to come through, plus you also generally need to give
your place a months notice as well...just saying the whole thing takes more time than you realize.

I wouldnt go for more than that (6month+) and less than that (7-day notice) could cost you if you dont find a
house worth buying for (eg) 3 years.
 
Open a Call Money Fund account with Investec. It's not a transactional account, so no card, etc. but you can withdraw with 24hrs notice via email. I don't think you can open directly with them - you need to go through someone like PSG or Incompass (who are good for forex transactions btw). I'd suggest contacting Investec directly to find out how to open the account and what conditions, if any, there are.

Currently the interest rate on my account is 6.53% pa and there are no charges.

The above is if you think you will need relatively short-notice access to the money. If not, a potentially higher yielding option is Allan Gray - you can invest directly in one or more of their funds.
 
HApyM3al said:
What about a tax free savings account? seems like decent returns.

https://www.fnb.co.za/invest/tax-free-accounts/cash-option.html

or maybe easyequities?
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TFSA locks that money away for a very long time.

Didn't read whole thread, but it depends on when you'll need the money. If it is for retirement an RA/TFSA is sort of obvious.

If you are looking for something like 5+ years I'd say equities (EasyEquities is the cheapest, FNB's ShareSaver if you are scared you may mess things up.)

Shorter than 5 years - I dunno. Everything bar maybe a Fixed Deposit sucks.

This is all assuming you have no debt, because if you do pay that off first.
 
Hamster said:
TFSA locks that money away for a very long time.

Didn't read whole thread, but it depends on when you'll need the money. If it is for retirement an RA/TFSA is sort of obvious.

If you are looking for something like 5+ years I'd say equities (EasyEquities is the cheapest, FNB's ShareSaver if you are scared you may mess things up.)

Shorter than 5 years - I dunno. Everything bar maybe a Fixed Deposit sucks.

This is all assuming you have no debt, because if you do pay that off first.
Click to expand...


No debt, just want to save , timeline is +- 5 years
 
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