Savings

question

Posted by: Chad | 2013/06/29 16:52

I have managed to save R60 000 and need some advice on what to do with the money.

Good day, I trust you are well. I'm a 23 year old male still living at home with my parents, so my expenses are very low. I have been working for just over a year now, and I have managed to save R60 000. I need some advice now on what to do with the money as it is sitting in a Nedbank just invest account. I'm wanting to invest in shares but not sure how to go about it and what shares to get. I'm wanting quite a high return so I could use it as a deposit on a property in 5 years' time. I would really appreciate any helpful advice.

expert answer

Posted by: Simon Brown | 2013/07/01 12:26
Five years is the absolute minimum time frame for investing in the market and even with five year time frame the risk is a modest return. Markets are volatile and the best way to manage that volatility is to give the investment time to grow. 

For somebody starting out investing I recommend Exchange Traded Funds (ETFs)  which are cheap, simple and track the market. With R60k one could build a diverse portfolio of a couple of ETFs tracking the general stock market (BBET40), property via PTXTEN and if you want some spice there is a small cap ETF RMBMID and a number of international and commodity ETFs (DBXUS tracks the US markets while NGPLY tracks the Rand Platinum price).

Search ETF on JustOneLap for details on model portfolios and the different ETFs available.

Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers, and disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site.

user comments

Posted by: Altus | 2013/07/04 22:00
You live at home and you managed to save R 5 000 a month? This means you have no life. Spoil yourself! R 60k will buy you a Contiki Tour of Europe for about 21 days. flights and enough spending money. Or stretch yourself and do a 10/12 day tour for you and your best friend. You work hard (well you have to to save R 5k a month at the age of 23) so live a little! The sensible stuff will come later. P.S. I have a MBA so this is not pie in the sky stuff...
Reply to Altus
Posted by: Anonymous | 2013/07/12 08:41
Did your learn anything about Compound Interest in your MBA program? (I am not talking about CD's only but growth investments) If you did- you need to apply it! This guy is sensible. Maybe use R10 000-00 to spoil himself and invest the rest!!
Posted by: I have an MBA | 2013/07/05 11:14
Everybody stop and listen to "Altus!" HE HAS AN MBA!!! He must know a thing or two. Chad go on a contiki. Altus knows best.
Posted by: Mr.T | 2013/07/04 13:32
@ james yes that my be true about Capitec but my main concern is the Risk, Is your money safe when the market lose the value?
Reply to Mr.T
Posted by: Anonymous | 2013/07/04 13:24
If you're looking to invest in some shares, Assupol has just kicked off their share trading scheme. Its an OTC (over the counter) facility powered by Equity Express. These are the first non-BEE shares to be traded on the platform and are available to everyone to buy. Its incredibly simple so for a first timer its a great way to play around with buying and selling shares. The site is http://www.assupolshares.co.za/. As always, read up about these things first, so give "over the counter trading", Equity Express, and Assupol a google.
Reply to Anonymous
Posted by: Wollie | 2013/07/04 13:10
My advise is to use the money as a deposit on a property and get off your parents backs.
Reply to Wollie
Posted by: rageboss | 2013/07/04 14:59
that would have been my reflex response, but he hasn't stated if he is student etc
Posted by: rageboss | 2013/07/04 08:44
I would say first start off with a course or do some research into markets and shares etc. If you do not know how to go about purchasing shares then you do not know how markets work and you may not be able to actively manage your portfolio. for example, do you know how the FED's current stance will affect your portfolio if they happen to reverse their current stance, do you know what their current stance is? Other issues such as domestic politics etc all matter as well and can quickly affect your portfolio. So I would say use that 60k to invest in a good education, a good economics or finance programme at a top university and the payback you will realise in the years to come.
Reply to rageboss
Posted by: frank | 2013/07/03 13:25
am 62yearold pensioner. , living from income of oldage pension and monthly interest rates from a bank fixed deposit of 400 gees. matuarity for fixed deposit is next month. thinking of putting the 400gees for 5years fixed deposit at 10%int. rates in the finbond mutual bank. Please give me advice. Thanks
Reply to frank
Posted by: james | 2013/07/03 15:55
please consider capitec, they offering high interest returns on capital secured for 5 years.

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