31
Shares / Re: Useful sites for beginners
« on: June 17, 2016, 07:20:27 am »
+1 to czc. JustOneLap didnt exist 10 years ago when I started but I used Investopedia back then but J.O.L is a very good site for the South African Context.
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32
Shares / Re: My investment/retirement plan moving forward - 27 Year Old
« on: May 26, 2016, 09:15:06 am »I made a typo in my post. The first 40k is exempt and not 40%. Nobody even noticed the error.
I understood what you meant
33
Shares / Re: Investment workshop
« on: May 04, 2016, 09:43:43 am »I have found that people tend to show interest, you make time for them. Then nothing, they would rather spend the money on other stuff than actually invest. If someone says to me they would like to learn, I tell them put money in a broker account then talk to me, that usually never happens. I do not waste my time anymore, would rather spend my time on my own portfolio and market research.
I've had the exact same experience as jaDEB. Young people show interest but when push comes to shove they just continue along their current path. If they ask, I'll tell them what I think and give some advice and then I adopt the attitude of Use it, don't use it, and ironically enough many many times they don't use it. To their own detriment I say.
34
Shares / Re: Is buying a house in South Africa a good long term investment?
« on: March 24, 2016, 01:09:04 pm »Rental yields are much lower than that, you also left out a bunch of expenses. Here is a more realistic example:
Price of prop: R550000
100% bond: R550000
Transfer cost and bond registration fees: R30,651.40 spread over 7 years (average time people keep a property) = R365pm
Selling cost: R30k spread over 7 years = R360pm
Rates and taxes: R600pm
Levies: R600
Repayment (interest portion): R4240pm
Repairs and maintanance (1% per year is the average) = R460pm
Insurance: R100pm
Rent at 8% yield: R3667pm
Vacancy rate of 5%: R183pm
Property management company (10% of rent): R367pm
Cash flow: 3667 - 460 - 4240 - 600 - 600 - 360 - 365 - 183 -100 -367 = -R3608
The tenants are clearly not paying your bond. You are losing money and you are taking on a TON of risk. Ouch. The devil is in the details. If you leave out half the expenses it will bite you later on. Been there got the T-shirt
Also, the laws in this country are pro-tenant. It can easily take up to two years to evict non-paying tenants.
I might have understated what it really could cost (though registration isnt applicable in this case). I had a tenant for two years, who looked well after the place, I rarely had maintenance issues so my expenses didnt get close to what you experienced. When he bought his own place, i sold it because as you said rightly MoneyChief, there is a ton of risk and i'd much rather take my chances with the stock market.
35
Shares / Re: Is buying a house in South Africa a good long term investment?
« on: March 22, 2016, 12:14:35 pm »
Rentals that can be fetched in JHB is significantly higher than CPT, especially if you work in Sandton and want to live in the surrounds...
36
Shares / Re: Is buying a house in South Africa a good long term investment?
« on: March 22, 2016, 10:45:24 am »
Explain to me where you save money renting?
Property Value: 550k
Repayment: appx R5000 @ 9.25%
Interest at the beginning (reducing over time): 4k
Rates, levies etc: R2k
Rent: 6k
So you rent a place worth 550k for argument sake at a rental R6k pm. You, as the tenant, cover my R4k interest and Ill gladly cover the capital component (R1k). The R2k goes to covering the rates and levies. And I get to write off the rental against tax (interest, levy, rates etc). So you are still paying someone else's bond, no matter how you slice and dice it. Buy it, pay it off as fast as possible. I've seen what renting does to younger people vs myself who bought at 25 and drove a Shiti Golf for almost 16years.
Property Value: 550k
Repayment: appx R5000 @ 9.25%
Interest at the beginning (reducing over time): 4k
Rates, levies etc: R2k
Rent: 6k
So you rent a place worth 550k for argument sake at a rental R6k pm. You, as the tenant, cover my R4k interest and Ill gladly cover the capital component (R1k). The R2k goes to covering the rates and levies. And I get to write off the rental against tax (interest, levy, rates etc). So you are still paying someone else's bond, no matter how you slice and dice it. Buy it, pay it off as fast as possible. I've seen what renting does to younger people vs myself who bought at 25 and drove a Shiti Golf for almost 16years.
37
Shares / Re: Is buying a house in South Africa a good long term investment?
« on: March 20, 2016, 06:25:40 am »Your primary residence is not an investment but a lifestyle expense.
Could you explain this to me, because I only agree in the following two cases:
1. You have overextended yourself in the house you bought and you can only afford the minimum bond payment, forcing you to pay it off over 20years.
2. You can afford to put in extra into your homeloan but choose to spend that money on other lifestyle stuff?
As I see it, I tell all young guys (early to mid 20s) to get into a property as young as possible! The caveat being, they have to pay it off within 10years as the interest is the killer. If you are renting, you have nothing to show at the end of your stay in that property, you just paid off someone else's property. At least if you sell your property after 10 years, you should get most of your money back, even if you take the capital appreciation and subtract all the costs (interest, rates, levies etc) and made 0% on the property. This is my experience owning property (bought at 550k) for almost 10 years, paid it off in 5, and sold for 700k. If I rented that property I would have paid exactly the same as if I was paying a homeloan, rates, levies and those expenses.
38
Shares / Re: My Beginner's Portfolio Blog(Experiment)
« on: March 03, 2016, 08:02:35 am »
Very insightful post. I like the way you think!
39
Shares / Re: TFSA vs Homeloan
« on: March 03, 2016, 07:59:47 am »
I've been using an amortisation table to see the impact, that's how I got to the question at the beginning of the thread. HL is left at 240K so the payments are quite low but we are aggressively depositing more every month. We could have paid it off last year but we've been taking money offshore as well.
My long term goal is ti earn enough from our investments to replace our salaries,which is a long way off. I have a few longterm high risk bets that I hope pay off towards this goal.
Kids. Haven't made a decision yet. End of the year well decide. It will cause my goal to become significantly adjusted.
Other debt. We have none. I regret buying my 400K car (my first car since 2000) 2years ago. Should have gone cheaper and rather invested the difference. You live and you learn.
My long term goal is ti earn enough from our investments to replace our salaries,which is a long way off. I have a few longterm high risk bets that I hope pay off towards this goal.
Kids. Haven't made a decision yet. End of the year well decide. It will cause my goal to become significantly adjusted.
Other debt. We have none. I regret buying my 400K car (my first car since 2000) 2years ago. Should have gone cheaper and rather invested the difference. You live and you learn.
40
Shares / Re: My Beginner's Portfolio Blog(Experiment)
« on: March 02, 2016, 06:43:57 am »Interesting thread this in the sense that the old adage "different strokes for different folks" I can't recall ever reinvesting dividends received on a given counter back into that same counter, other than some 20 years ago it was quite fashionable for a number of companies offering you an option to take your dividend in shares. However the companies soon learnt that it was a nightmare to control the share register and if a shareholder wished to sell out of a counter it was more difficult to sell odd lots rather than lots of 100's or 1000's.
I get about R 50,000 per annum in dividends and I use these funds to but additional shares or augment an existing holding of a particular counter. This methodology may not work for many, but it has worked for me, and, I have been involved in the JSE since 1967
So the reality is that you need to work out a play that suites your requirements - in my case dividend yields play little part in my particular investing strategy, I am more interested in capital growth over an extended period, the dividend is merely a bi product of that growth.
Further with dividends the first you know of when a dividend is going to be reduced or passed is when the sens comes out which is a bi annual event, so the share price could stagnate and it has an impact on the dividend, you have to then make a decision stay with the company and take the lesser dividend, and live with the stagnated price or sell out of the counter. It also seems that those companies which do reduce their dividends, it takes ages for them to get back to previous dividend payments so you could take strain on both fronts - lack of capital growth and slow or dismal dividend returns
Just my opinion on this matter
gcr, seeing as you have been in the market for so long, and from your comments, do you think you have been better off chasing capital growth instead of dividends? Thus, did you have specific growth margins for your portfolio, ie 15-20% growth p.a over three years and then cycle the underperforming shares out?
41
Shares / Re: TFSA vs Homeloan
« on: March 02, 2016, 06:22:20 am »
The wife and I are going focus on the homeloan. Everytime I look at the AccessBond i see how much interest (and its not really that much anymore), I think that is money the bank is taking away from me... When one thing is done, another comes up, ie saving for my wife's next car (drives a 2005 vehicle with zero issues so far, safety is a concern for her 
). But I can't complain, at our age we are frugal with our money and well ahead of the average 35 year olds I think
). But I can't complain, at our age we are frugal with our money and well ahead of the average 35 year olds I think
42
Shares / Re: TFSA vs Homeloan
« on: March 01, 2016, 09:12:05 am »
Thanks for everyone's input, much appreciated 
43
Shares / Re: TFSA vs Homeloan
« on: February 29, 2016, 06:57:10 am »
Hi guys,
@Mr_Dividend, why do you regret the once off thing?
@gcr, I'm currently 33 but I've been investing in the JSE for almost 10 years already so I understand all of what you have stated in your post. So I have a portfolio of shares in SA and a small one on Webtrader (offshore).
The thing that made me a bit weary is the fact that people say its a no-brainer to use the TFSA. To me it's all about a person's current circumstances, ie current debt (ie homeloan is the only debt I have). So my first instinct is as per Fawkes85, service the debt first and that's the decision I've committed to. I was wondering whether I was missing something blatantly obvious...
@Mr_Dividend, why do you regret the once off thing?
@gcr, I'm currently 33 but I've been investing in the JSE for almost 10 years already so I understand all of what you have stated in your post. So I have a portfolio of shares in SA and a small one on Webtrader (offshore).
The thing that made me a bit weary is the fact that people say its a no-brainer to use the TFSA. To me it's all about a person's current circumstances, ie current debt (ie homeloan is the only debt I have). So my first instinct is as per Fawkes85, service the debt first and that's the decision I've committed to. I was wondering whether I was missing something blatantly obvious...
44
Shares / TFSA vs Homeloan
« on: February 28, 2016, 07:49:17 am »
Hi Guys,
I have an interesting scenario. I need to decide whether I put 30k into the TFSA for my wife or our homeloan. If I put the 30k in the homeloan, the interest component is reduced by R300 (which is reducing but quick calc is about R2800 p.a) which has a significant compounding effect over the lifetime of the loan. Whereas a 3.7% dividend yield (equates to R1100 p.a.) and the hope that the DIVTRX (I want to take advantage of the 15% divvie tax exclusion) does not come close to the interest saved, one must hope that the Divtrx does the growth part. I'd reinvest the dividends back into DivTRX. So this is a principle of negative compounding (paying less interest) vs positive compounding (divvies and share growth). Is there anything I'm missing thinking that makes my argument invalid? SimonB makes it sound like a no-brainer but I dont think it is as simple as that if you have a homeloan?
Your input is much appreciated?
Conrad
I have an interesting scenario. I need to decide whether I put 30k into the TFSA for my wife or our homeloan. If I put the 30k in the homeloan, the interest component is reduced by R300 (which is reducing but quick calc is about R2800 p.a) which has a significant compounding effect over the lifetime of the loan. Whereas a 3.7% dividend yield (equates to R1100 p.a.) and the hope that the DIVTRX (I want to take advantage of the 15% divvie tax exclusion) does not come close to the interest saved, one must hope that the Divtrx does the growth part. I'd reinvest the dividends back into DivTRX. So this is a principle of negative compounding (paying less interest) vs positive compounding (divvies and share growth). Is there anything I'm missing thinking that makes my argument invalid? SimonB makes it sound like a no-brainer but I dont think it is as simple as that if you have a homeloan?
Your input is much appreciated?
Conrad
45
Shares / Re: Anyone here invest offshore?
« on: August 06, 2015, 06:07:05 am »
Thanks for the feedback!
I am a bit unsure on when it would be a good time to move ZAR->USD, but I guess some months it would be expensive & other a little less so. I am looking to possible move R10k pm ( its really depressing that 10k is only worth ~790$ currently ) but I might do it every second month rather to minimise the admin. Its a pity that we can't transfer money in electronically & then just convert whenever I feel like it...
Btw, how did you decide on the SCHD etf? I will definitely only be buying US etfs initially so I am not too worried about the USD/EUR exchange rates.
Cheers
J
This is an interview (http://www.moneyweb.co.za/investing/offshore-investing/the-offshore-etfs-with-dividend-yields/) with Simon Brown on two offshore dividend ETF's. I chose the SCHD one because it was cheaper at $38 per share vs $74 per share. I'm not sure about the HDV, but SCHD pays divi's every quarter. I did look at the holdings and both are invested in Blue chip companies.
Wrt the USD/ZAR exchange rate I can't really comment on, but I'm not seeing the Rand getting better with this political climate...