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A Fin24 is looking for a flexible investment. He writes:
I need advice on how to invest R5 000 a month. I'm looking for something flexible, should there be a month where I'm unable to save R5 000 or should I need money I want to be able to request it.
Gustav Potgieter of Aurum Trust responds.
The following seems to be the important issues to you:
- No fixed term
- No compulsory premiums
- Liquidity
The parameters above make an endowment policy out of the question and leaves you with the following alternatives:
- Investing in an interest bearing bank account, earning an interest of about 5% and tax on the balance of the interest after the exemption.
This is a very low risk and low cost investment.
- Investing in unit trusts.
The money is available in five working days and you can make ad hoc investments.
There are a lot of funds available and you can structure them to suit your needs.
Unit trusts, in general, outperform the bank rates, but there are costs involved.
If you consider investing over a longer period (two years plus), unit trusts could be the better option.
I suggest contacting a Certified Financial Planner, to assist you in the decision.
- Fin24
Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.
Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers.
Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.
I need advice on how to invest R5 000 a month. I'm looking for something flexible, should there be a month where I'm unable to save R5 000 or should I need money I want to be able to request it.
Gustav Potgieter of Aurum Trust responds.
The following seems to be the important issues to you:
- No fixed term
- No compulsory premiums
- Liquidity
The parameters above make an endowment policy out of the question and leaves you with the following alternatives:
- Investing in an interest bearing bank account, earning an interest of about 5% and tax on the balance of the interest after the exemption.
This is a very low risk and low cost investment.
- Investing in unit trusts.
The money is available in five working days and you can make ad hoc investments.
There are a lot of funds available and you can structure them to suit your needs.
Unit trusts, in general, outperform the bank rates, but there are costs involved.
If you consider investing over a longer period (two years plus), unit trusts could be the better option.
I suggest contacting a Certified Financial Planner, to assist you in the decision.
- Fin24
Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.
Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers.
Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.
