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Anonymous needs advice

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Patrick:
Good feedback so far, I was hoping our (very different) retirees would pop in. Orca you're retired too, any thoughts? I won't ask jaDEB because he might suggest putting it all into one share or onto the roulette wheel :P

I have some more info from the sender

--- Quote ---From a rough budget that has been done it appears that R10k would be the monthly amount needed to cover:
Accommodation
Medical Aid
Gap cover
Insurance
Car running costs
Food
Personal items
Plus a small discretionary surplus
and Tax (my calculations after deductibles show close to breakeven for full tax year)

My rough calculations are as follows:

Assumptions           
   Investment   Draw   Per Annum   Per Month
Annuity   2000000,00    4,00%   80000,00    6666,67
Deferred   375000,00    4,00%   15000,00    1250,00
         95000,00    7916,67
      Yield per annum   Per Annum   Per Month
Other??   900000,00    7,50%   67500,00    5625,00
7 day a/c   100000,00    6,35%   6350,00    529,17
         73850,00    6154,17

The Pension is currently with Sanlam (Her company's choice for staff) but split in (I believe) two different investments of her choice.

The question really is :
- Should one leave it at Sanlam (Life or Living annuity) or move it elsewhere to reduce costs (to the best of my knowledge Sanlam insist on a financial advisor and charge admin fees)
- Where to put the R900K (R1mil-R100K)

--- End quote ---

jaDEB:
"I won't ask jaDEB because he might suggest putting it all into one share or onto the roulette wheel"  :wall:

Believe it or not, I would suggest if it is "3,3m" she should go and see 2 independent financial advisor, and actual pay a small fee for good advice. That is how I feel about people that is at retirement phase, I would want her to have a good, no stress years ahead.

Or of course she can buy NPN  :LHST:

Orca:
I do not have enough money to invest in RA's, pension funds or REIT's as they have low returns and I have not investigated or interested in them. I also do not like the property stocks.
At a quick glance of TEX and FFB REIT's showed the following for a R1M investment.
TEX. Dividend = R5 700.00 pm.
FFB. Dividend = R3 100.00 pm.
Now, it is important to realize that these "dividends" are not subject to the 15% withholding tax but is added to your other income and taxed as income. The reason for this is that the company pays all it's income as dividends to shareholders and does not pay tax on this income. It is up to you to pay it.
This may be great if Gordhan increases dividend withholding tax to 25% next week or adopts the British sliding tax scale.
I still prefer ETF's like the one's we have discussed for the capital growth but one needs to sell some shares from time to time for the income. This might be a problem for her though.

Patrick:

--- Quote from: jaDEB on February 18, 2016, 11:48:16 am ---"I won't ask jaDEB because he might suggest putting it all into one share or onto the roulette wheel"  :wall:

Believe it or not, I would suggest if it is "3,3m" she should go and see 2 independent financial advisor, and actual pay a small fee for good advice. That is how I feel about people that is at retirement phase, I would want her to have a good, no stress years ahead.

Or of course she can buy NPN  :LHST:

--- End quote ---

You know I was kidding right? I had a feeling you'd be rather prudent for someone at that stage of life, but your advice of seeing two independent advisers is an excellent one. How do you make sure they're proper advisers, and not just product salesman. The only one I know of is Warren Ingram? Perhaps his company, Galileo Capital, might be a good place to find another.

jaDEB:
Of course I know u were kiddin, she must see a advisor, not a salesman. Have no idea how u find them.

But she must make it clear that she does not want products (i.e. Pension @ Company A), but only advice Cash %, Pension %, sell Merc and buy Corsa, Sell property buy Caravan, buy NPN and so on.

PS. watched Crime channel, in USA u can sell your Life insurance upfront for cash, then use the money and when u move on the company that owns u life insurance gets the pay out.

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