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Messages - Patrick

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6031
Shares / AEE
« on: November 06, 2015, 11:00:04 pm »
AEE 2.50 cents - LDT: 12 Feb 2016

6032
Shares / ING
« on: November 06, 2015, 11:00:04 pm »
ING 3.50 cents - LDT: 4 Dec 2015

6033
Shares / LDO
« on: November 06, 2015, 11:00:04 pm »
LDO 21.58 cents - LDT: 27 Nov 2015

6034
Shares / RDF
« on: November 06, 2015, 11:00:04 pm »
RDF 41.00 cents - LDT: 20 Nov 2015

6035
Shares / PPE
« on: November 06, 2015, 11:00:04 pm »
PPE 1.25 cents - LDT: 20 Nov 2015

6036
Shares / OCT
« on: November 06, 2015, 11:00:04 pm »
OCT 92.40 cents - LDT: 20 Nov 2015

6037
Shares / MIX
« on: November 06, 2015, 11:00:04 pm »
MIX 2.00 cents - LDT: 20 Nov 2015

6038
Shares / IVTP
« on: November 06, 2015, 11:00:04 pm »
IVTP 371.46 cents - LDT: 13 Nov 2015

6039
Off topic / Re: Retirement annuity - what's the consensus?
« on: November 05, 2015, 04:29:53 pm »
You might want to take a look at the early retirement thread here: http://shareforum.co.za/shares/when-do-you-have-enough/

In my view it doesn't really matter when you can touch the money, as long as it's well invested up to that point. Say you need R15 000 a month to live on, or R180 000 a year. We could fudge some numbers and say you'll need to draw down R200k a year before taxes.

If you want to be reasonably safe you could choose a 4% draw down of all your assets, meaning you'd need R5mil to pull out R200k a year. Now you can imagine that you might have R2mil in an RA and R3mil in a regular account. Technically it doesn't matter how you pull your 4%. If you're only 40 you would have to pull all of it from your regular account. That means you're drawing down 6.7% of that account, and it'll likely eventually be emptied.

But, fortunately, while you've been doing this, your RA has still been growing, so that by the time you hit 55, your total net worth is actually far higher than it was at 40, the only difference is that now you have more money in your RA than in your taxable account.

What you need to figure out is what will the tax saving be in your RA, as unfortunately RAs are designed to under perform the market as they can only be 75% in equities. It's hard to say how much it will under perform by, but if you're in a high tax bracket then probably not enough to make you ignore it. You can try run some numbers on erwintr's spreadsheet here: http://shareforum.co.za/shares/tfsa-vs-ra-vs-satrix-calculator/

Anyway, that's all the theory. In practice, I don't have an RA. For some rather complicated reasons, the RA wouldn't reduce my tax burden, so I am an exception. That said, I really do like the fact that I can manage my own money. I personally see RAs as ways to give fund managers guaranteed income. The fees are often ridiculous, and the growth middling. And if you make the wrong call, switching from one to another can be really painfull and expensive.

If I needed one, I'd look at the lowest cost option, made up of passive indexes. I think Sygnia has RAs like this, but I'm not sure who else does.

Out of interest, have you maxed out your tax free savings account yet? I think there's pretty much a universal agreement that those are excellent.

6040
Off topic / Live chat
« on: November 05, 2015, 02:42:08 pm »
Welcome strive, you're part of a very inclusinve club of people to have done that :P

6041
Shares / Interesting presentation from ABSA stockbrokers last night
« on: November 05, 2015, 08:24:23 am »
I went to one of their seminars. This one was called "Build better portfolios using ETFs", so it was right up my alley.
Points of interest:
  • I asked how they were able to keep their ETF fees so low, everyone else is +-0.4%, DBX is nearly 1%, but the ABSA ETFs are +-0.13%. Their answer - "We provide them at cost to encourage investing". Whether or not that's true is debatable, but they are three times cheaper than anyone else.
  • ABSA has launched a new ETF only account. Just like their TFSA it works on 0.2% commission, the best in SA, there are no monthly fees, but it has a R20 minimum, so ideally you would only use it if you trade R10 000 a month or more. The break even point comes in at R8000 a month. Invest more than that in ETFs and you want to be with ABSA, less than that then easy equities wins.
  • The TFSA has no minimum because the JSE offers a discount on their fees for TFSAs.
  • Afterwards I asked one of the ABSA ETF staff when they were going to launch a competitor to the DBX trackers. I said it they could do that, at reasonable fees they'd have people throwing money at them. Apparently it's on the cards. During the discussion he also mentioned that ABSA wants to put themselves into the market as a kind of a local Vanguard. Yes surprisingly they know of Vanguard, and know that the low profit high volume model works for them.
  • And the big topic of the night. If they are to be believed, ABSA will be launching international trading on 28 global markets by the end of November. There will be no additional monthly fees, and trading fees will be based on the destination market. You will first have to convert your Rand into Dollars or Euros, and ensure you don't go over your R1m allowance, then transfer into their foreign currency account, but after that you can buy pretty much whatever you want globally. I'm going to keep an eye out for that one.

6042
Shares / Re: Advice needed for building a portfolio
« on: November 04, 2015, 12:19:36 pm »
The Stanlib SAPY is the same as the Proptrax SAPY, only cheaper!

You're right though MoneyChief, there aren't a lot of options in SA. Sadly no Vanguard like the UK and US has. The majority you're looking for are likely only going to be found in unit trusts, while I think the majority of folks here prefer ETFs.

6043
Off topic / Re: Anyone else place the odd cheeky wager?
« on: November 04, 2015, 08:26:18 am »
Did you have to declare the win as an investment dividend?  :D

6044
Off topic / Re: Picking up the pieces after a divorce
« on: November 04, 2015, 08:24:20 am »
According to information from Statistics South Africa, a male is most likely to be divorced at age 42 and a female at age 38. The largest number of divorces happen in marriages that have a duration ranging from five to nine years. Nearly 55% of divorces involve parents who have children under the age of 18.
In 6 years I'll be 42... And married for 6 years... With a child who is 14  :'(

I'll have to do plenty dishes ;)

Preparing for the worst but hoping for the best. We're completely out of community, no accrual. My SO has a business so it worked best that way, but yes, hopefully it never comes to that...

6045
Shares / Re: Income from REITS
« on: November 03, 2015, 12:13:52 pm »
There seems to be more and more interest in REITs around here lately. Must be your fault Mr Div!

Does anyone feel like doing a guest post on the blog for one of the next few months summarising everything into one place for everyone? I imagine there will be a lot of interest in things like tax, dividends, what percentage of portfolio to invest in REITs etc. I'm sure there are a bunch of other points that we need to know about too.

I'm hoping there will be a volunteer, otherwise I'll have to ask a million questions before I write it. Any takers?

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