What to do with 30k

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TheTwo

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pay into my car or try out something new like investing in the Satrix 40 OR commodoties trading?

Any ideas?
 
Depends on a few factors:

a) are you willing to invest for a long enough term?
b) what is the interest rate on your car?

If the gains from your investment can overtake the interest paid on your car, then the answer is obvious. Make the power of compounding work for you.

If you don't have the desire to invest long-term, then perhaps your car is a better option.

Good luck.
 
Pay into car - guaranteed return. JSE overdue for a large correction. Commodities = roulette.
 
11.5% interest on the so yes, would want an investment vehicle that would beat that over say a 3 yr period
 
Take a look at the total you'll be paying on your car vs. what you still owe. Can almost guarantee it'll be more than you'll usually get from any investment. It's also a guaranteed saving so rather go with paying it off.
 
Unless you can settle the car with this amount and free up the monthly instalment all together I would rather just invest it.

Otherwise I would say settle the car and immediately invest that monthly instalment into a Unit Trust or ETF.

Spoil yourself and take 25% off the current debit order for your monthly spending, invest the rest.
 
SauRoNZA said:
Otherwise I would say settle the car and immediately invest that monthly instalment into a Unit Trust or ETF.
Click to expand...
I would do that - set up a monthly scheduled transfer at the beginning of the month for the value of the car installment. Also forces you to get into the habit of saving.
 
Polygon said:
Depends on a few factors:

a) are you willing to invest for a long enough term?
b) what is the interest rate on your car?

If the gains from your investment can overtake the interest paid on your car, then the answer is obvious. Make the power of compounding work for you.

If you don't have the desire to invest long-term, then perhaps your car is a better option.

Good luck.
Click to expand...

Jokes aside, what Polygon suggested is very sensible. To add on top of his comment, take into account the difference 30K will make on your monthly car instalments and also what you will save in the long run with interest. As take this into account, most investments do not naturally compound over time, unless you actively let your money compound, where as interest on your vehicle actually compounds as the 11.5% stated is not the real amount paid to the bank. If you do not believe this, go apply the PMT function in excel to see what your actual yearly interest rate is.

On a sub note, vehicle finance is considered "good" debt, so if you have shorter term debt like a credit card or clothing account or something of that sort, rather pay that off as the impact will be much greater.
 
some years ago I did the same with a little over double that amount. Settled the car after having it a year and scored R15K+ on interest.


No more cash and only a damned car to show for it. aaww yiss....
 
I sit with a similar problem (and I'm saving for a deposit on a house). My advice - pay of the car (or at least some of it).
 
I've saved up the deposit, and then some, to buy early next year, but now I also really want a new car :(
 
Hamster said:
I sit with a similar problem (and I'm saving for a deposit on a house). My advice - pay of the car (or at least some of it).
Click to expand...

Exactly what I'm doing. First need to pay off 11k to Vodacom this month then increasing my car installment. However, I won't have a deposit for a house, I will start off fresh with no other debt on the side.
 
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