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General Category => Off topic => Topic started by: Byron on June 02, 2015, 10:30:21 pm
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Hey all
We are about 5 friends that want to start investing. Electrical engineer, truck mechanic, bank manager, farmer and a SAP consultant. We are not sure how to kick start our journey of investing. We do want to use our bank manager to get special rates from the bank his working and start to invest. We where thinking about starting with property? With the skills we have we can go into anything. Any ideas? We do want to keep our day jobs in the meantime.
How do we go about it, do we need to start a trust fund first?
Thanks
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Hallo Byron
First things first. Don't even think about investing with interest-bearing funds, even at reduced rate.
Remember, you have to make up brokers fees, trustee fees, monthly admin fees and eventually tax before you will show profit on your investment, no need to add interest as well (big maybe, except for property). And you assume your investment will pay off, sometimes they don't, it makes sense not to start with a negative then. Yes?
Don't leave the day job, no seriously you need f-you-money first ( http://investorchallenge.co.za/f-you-money/ ) as Patrick has so eloquently put it. This is just as valid a point for full-time investing in whatever as for job hopping. And if you are thinking about dipping into your pension fund, don't – pension funds should be untouchable and does not exist until you retire.
Now for what you should do: You've already started, you're showing interest and you are investigating possibilities. Keep doing that and you'll eventually find your way, slow and easy – this takes time and calculated moves, don't rush.
You and your friends have interesting and much needed skill sets, why not come up with something on the side which incorporates all your skills, I don't know, a patent for some machine that uses alternative energy on farms which also assists with security. (That is, if the SAP means 'police' and not 'IT-related-SAP'), but you get the idea.
Good luck and don't stop.
I'll stop preaching now. :)
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Personally, would not invest together - to many problems. Rather all open share accounts then meet up once a month to share ideas and have a cold one. More fun and less friction.
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Thanks for the input guys, we have not started with it atm. Only some things we talked about while enjoying a cold one.
We been friends from high school about -+12 years about. We will sure do our homework before jumping into anything. Don't want money getting in the way of our friendship.
Cheers
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Personally, would not invest together - to many problems. Rather all open share accounts then meet up once a month to share ideas and have a cold one. More fun and less friction.
I agree with Mr Div. In the past the minimum fees on most share accounts may have been a good reason to invest together, with ABSA for instance you had to invest R30k at a time to make it worthwhile. Now companies like easy equities and computershare mean there isn't that minimum anymore, so there isn't a financial reason to hold a shared investment account.
The only benefit would be the "forced" installments, but you can still come up with a version of that in your group.
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If you all lump in together, you inevitably find that at some stage one member cannot make a deposit or one that runs into financial difficulties and needs to withdraw from the scheme.
The tax free savings is an option to start with until your quota is full. I think it is R500k max.
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If you all lump in together, you inevitably find that at some stage one member cannot make a deposit or one that runs into financial difficulties and needs to withdraw from the scheme.
The tax free savings is an option to start with until your quota is full. I think it is R500k max.
Is the 500k not braked up into max 30k a year till you hit 500k?
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If you all lump in together, you inevitably find that at some stage one member cannot make a deposit or one that runs into financial difficulties and needs to withdraw from the scheme.
The tax free savings is an option to start with until your quota is full. I think it is R500k max.
Is the 500k not braked up into max 30k a year till you hit 500k?
Yes, only R30k per year, so it would take you 17 years to get to R500k: http://investorchallenge.co.za/lets-all-be-guilty-of-tax-avoidance/
Have you maxed out your RA yet though? It seems to be the best option if you're still working. erwintwr has a great calculator showing the benefit: http://shareforum.co.za/shares/tfsa-vs-ra-vs-satrix-calculator/