The JSE and finance forum for South Africa

General Category => Shares => Topic started by: EanBarnard on July 12, 2019, 11:26:23 am

Title: Getting Started Portfolio
Post by: EanBarnard on July 12, 2019, 11:26:23 am
Hi Everyone,

Thanks to the investorchallenge blog and a couple of other helpful resources, I am finally now in a position to start making better decisions for my (and my wife's future). We have a couple of investments (odds and ends) and need to structure it optimally for our future. I would like to hear some thoughts/need some guidance on order of priority around actioning the following:

1. Emergency Fund
2. Paying off debt
4. RA
5. Start other investment activity (SAtrix Indi, Satrix World Feeder, Satrix Divi Plus ETF etc.)

Does that order seem like the best order of priority for where we are now? We are mid 20's and both have strong income streams but have accrued some debt in the past we would like to shake off. I just can't seem to get a final verdict on first paying off debt versus starting to invest. On the one side, does it really help you invest but are paying more interest than you are earning? On the other side, compound interest...

I am not a fundi, am still learning and would appreciate some input :-)
Title: Re: Getting Started Portfolio
Post by: MoneyChief on August 20, 2019, 11:01:52 am
Just my opinion. This has worked for me.

1. Save up one months expenses in a savings account like absa depositor plus.
2. Pay off all debt except home loan if you have one.
3. Top up your savings account until you can cover 6 months worth of expenses.
4. Invest 15% of your pay for pension purposes.
    a) If your company does a match of contributions, contribute to get the full match
    b) Max out TFSA with money that is left to make up to 15%
    c) Contribute to company pension with money that is left to make up to 15%
    d) If no company pension, contribute to RA to make up to 15%
5. Save for a house deposit if you want to buy a house instead of renting.
6. Open a taxable investment account and invest any extra money there. Try and invest globally as the South African market is very small.

Money rules I follow:
Never buy a car that is more than 25% of your annual income.
Never buy a house or rent where the monthly payment is more than 25% of your take home pay.
Never lend money to friends and family, instead give money to them if you can afford it.
Make sure you have disability insurance.
Make sure you have gap cover.
Title: Re: Getting Started Portfolio
Post by: AJ Pretorius on August 20, 2019, 12:57:24 pm
This is some great advice!  :money:

1. Don't wait too long to try and learn everything about investing (I spent more than a year testing out everything and could have gained a year's growth - you can never beat time)
2. Invest in index funds (I have tried my luck with some single equities and have just mostly failed, currently I am sorting out my portfolio to sell off sh!t I bought and convert all to etfs)
3. Don't over diversify with too many etfs (pick a few and stick with them - mostly offshore US, WD etfs)
4. I don't do any RA as working outside ZAR (zero benefits for me) - also have a fear to leave all monies up to the government to decide their fate
5. If you do borrow money from your savings, pay it back with interest as you would with any bank or financial institution (helps not buying stuff you don't need)

Be patient the first couple of years growth will mostly be money saved and invested.