But that would be 7.5% tax free. Any investment would, worst case be subject to income tax (of up to 45%) or, best case, subject to CGT (up to somewhere around 16% iirc). So you would, at the very least, have to make around 9% after fees to get a better return than your bond.
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What to do with R100K?
- Thread starter CamiKaze
- Start date
A once-off deposit of R100k wil reduce your term from 20 years to less than 15 (or even more) if you keep the monthly premium the same. And if you add that R5k a month also you will repay the bond in about 5 years.
I don't have your bond value but this should still be not too far off.
I don't have your bond value but this should still be not too far off.
supersunbird
Honorary Master
What tax will R100 000 pull? 0%. One can worry about that when one has like R400 000 to save.
If you do not have an access bond, then put your money in the highest interest baring place you can find.
Assuming it is his only interest bearing savings and only generates interest income then your point is correct. Any equity or forex gains would be taxable under either income or capital gains tax.
bwahaha good luck finding a parking space in the CBD for 100k... those go for .5 bar these days
yeah parking bays are well above 100k but you can still find storage spots for that price
here is an outdated ad, I was considering it but I may have my eyes on something else that came up, so I may actually be selling two of my units (in the same building as the ad)
WTF?
really? How did you manage that with no other assets?
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Storage space? This is a new one for me.
Well you are the resident expert
anyway I'm not sure what happened with that pic paste, but its 10m2 storage in the Adderley Park for R95k, a crazy bargain especially since the rental will be atleast R1000pm
SauRoNZA
Honorary Master
So then park it in your home loan since that is your goal.
Odds are the saving in interest will out to most other investments which brings you to your end goal closer.
Not even sure how this is a question if that is the goal.
crackersa
Honorary Master
I can't believe no one said hookerz and blow.
SauRoNZA
Honorary Master
So 8 years to make your money back while sitting on an illiquid asset.
Not exactly what the OP is looking for.
I work at a bank.
I thought that given my low interest rate, there might be some other vehicle I can use to earn more and pay off the house in that manner.
HavocXphere
Honorary Master
Paying off debt is usually the best starting point as it's a guaranteed return. (saturnz will object).
If you're staying in SA long term then investigate the tax deductible options. It's hard to beat the certain return of paying the man less.
If neither of those appeal:
I'd avoid direct equity exposure for the moment - the markets are pretty near historic peaks so that's only going one direction in the medium term.
So park the money somewhere and the pump it all into the stock market when that thing invariably craters. Here's why I'm saying stock market is probably not the smoothest move on a 3-12 month horizon.http://www.multpl.com/shiller-pe/
Well, if you truly have a bond at 7.5% (which, to be honest, I doubt), you would simply make (certain) money by getting a bigger bond and investing in fixed deposits.
Tell us more. 10m2 storage. What are the real parameters? 5x2? In what location in Adderly park? proof of rental income?
HavocXphere
Honorary Master
Thats bank employee rate
SauRoNZA
Honorary Master
After costs probably not depending on how much risk and how liquid you want it.
Also keeping it in one place and focusing on getting the debt gone has psychological benefits.
Only you can decide really.