The magic of compound interest
This is how big corporate companies, banks and wealthy people make their money: they let their money work for them by earning interest on interest. Otherwise known as 'compound interest'. The illustration below gives you an idea of how effective this is. If you were to pay yourself 1 cent today and double it each day for 31 days, what will you have at the end of the month? The sooner you start, and the longer you stay in any investment, the better the results become over the longer term. It is like a snowball. It eventually runs away with itself. So, start saving NOW and don’t stop for anything. Set yourself goals and go for it. Let's look at another scenario. If you invested R100 000 today at 10% compounded interest, how much will it be worth after 31 years?
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LIVE ON EXPRESSO: Buying to Let
Part 1 [embed]https://youtu.be/6yiM_g1NW6I[/embed] Part 2 [embed]https://youtu.be/Kj6CbaDzR1I[/embed] Part 3 [embed]https://youtu.be/LMp8dYR9oks[/embed]
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LIVE ON EXPRESSO: Teaching Kids About Finance
Part 1 [embed]https://youtu.be/S1ingWiH4uE[/embed] Part 2 [embed]https://youtu.be/xQJUuHhbodw[/embed] Part 3 [embed]https://youtu.be/CHLhkkZhZrM[/embed]
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LIVE ON EXPRESSO: How to buy a car
Part 1 [embed]https://youtu.be/JRTBTdwxMn4[/embed] Part 2 [embed]https://youtu.be/0SUEajfTk68[/embed]
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Gap Cover a non-negotiable today
The event of experiencing gaps between what doctors charge and what medical aids pay is becoming more and more of a reality for us in todays times. I am sure that you, or at least somebody close to you, has been victim to this “GAP” and we know now that some doctors can charge up to 600% (or 6x) of medical aid rates. The last thing most of us can afford is to get caught off guard with a bill that is thousands of rands and possibly more than what your medical aid is prepared to pay. BUT DON’T WORRY THERE IS A SOLUTION TO THIS PROBLEM IF YOUR MEDICAL AID ONLY COVERS YOU AT MEDICAL AID RATES! So let’s talk about the solution to this problem (no matter what medical aid you belong to)! The solution to the problem is called Gap Cover and it does exactly what the name of the product i
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Blair Taberer interviewed by Grant van Zyl
Blair Taberer shares his insight as a successful businessman, discussing the highs and lows of owning your own business, starting up businesses and developing your passions. He shares his wisdom with us, shows the importance of learning from each endeavor and building on your knowledge through every experience that life may throw at you. Blair also discusses the importance of balance and finding your true happiness in life, be it in business, people, relationships, experiences etc. Enjoy this interview and learning from his handy tips.
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Is South Africa that bad after all?
Can you believe that we are in the year of 2015 already and how fast the years seem to be flying by?! I am sure that over the holiday season, you had at least one conversation with someone regarding the state that South Africa is in, and I am sure that that conversation didn’t have a very positive tone to it, after all that South Africans have had to endure in 2014. Let’s have a quick recap of the kind of year South Africa faced in 2014. For starters Eskom taught us how to be way more romantic, with candle light dinners every other night. We have learnt (or at least it seems so) to accept our president for all of his flaws and corruption charges. We learnt that the best way to combat a fire on your property is to build a big swimming pool. We found out that our president has spent ov
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Buying property as an investment
One of the questions I get asked on a daily basis is, whether property is a good investment or not. This answer has so many variables, it’s really something you would have to look at on a case for case basis, but let’s look at some guiding principles that can help you make the right choice. Let’s say you find a house at a MARKET VALUE of R1000 000 and you take out a 90% bond (with a 9% interest rate) on the house, as most banks are not giving a full 100% bond anymore over a period of let’s say 25 years. First off you are going to have the following costs: Transfer cost on R1000 000 will cost you about R33 000 Bond Registration cost of R900 000 will cost about R20 000 Let’s look at the future costs of the house: The R900 000 bond over 25 years at an interest rate of 9%
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Making tax work for you for retirement
Now that we have been through the foundations of investing, through understanding how important asset classes and asset allocation is in setting up the right Unit Trust that will best suit you. We can now move our attention onto retirement investing and what options are available for us all to invest into regarding this. Before I start, I want to just point out that many people start investing or planning for this process without an end goal in mind, and I find this to be counterproductive. The reason being, is if you don’t know how much money you need every month during retirement, how do you know how much money you need to save every month towards retirement. So the first thing I would like to point out in this post is, before you read any more investment advice, first determine in
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Understanding Unit Trusts
Today we are going to discuss Unit Trusts and how Unit Trusts work. If you haven’t read my last 2 articles on Asset Classes and Asset Allocation, I recommend that you have a quick read through those first as they form the foundation for this post and for your best understanding of Unit Trusts. I assure you that understanding Asset Classes and Asset Allocation, will change investing for you forever. I am going to start at the very beginning and break down what Unit Trusts are. Unit trusts are when companies like Allan Gray (Asset Managers) buy Asset Classes on behalf of us in bulk and at a much lower price or a better interest rate on bonds etc. They then take the different Asset Classes and combine them into what we call Funds. For example all Asset Managers will have what we ca
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Investment Value
How do you know if the investment has any value? The value of your investment is determined by the value of the underlying assets in your investment and the asset price change or if you buy or sell off units during the period of the investment. Your investment value can change depending on the underlying assets in the investment When the price of the units you own changes, this can affect your investment in a positive or a negative way. However the scenario that you are optimistic for is for your unit trust to earn returns through capital growth, which will then effect the value of your investment in a positive way. If the underlying assets are volatile, then the price of the units can fluctuate during the investment period. The most important thing to keep in mind is as long as
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Understanding Return & Unit Price
Understanding Unit Trust Returns Maximize your capital growth in your investment Some investments focus purely on getting the best possible capital growth by investing in assets that the fund managers feel will grow over time. How they do this is by looking for assets that offer a great value for money, or that they feel they are getting at a discounted price to what they are worth. The fund managers will then hold onto these assets for some time, until the underlying assets get to a point that they are worth more than what they were purchased for and then sell them off at a profit. Maximize your possible income growth on an investment Certain investments or unit trusts main goal is to not necessarily achieve capital growth, but rather create a reliable or steady stream of income thr
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About Unit Trusts
Key Benefits of Investing into Unit Trusts Investing in a unit trust is a pretty cost-effective option When you invest into Unit Trusts, you are able to put your funds together with other investors in order to purchase units or shares in other companies. By doing this you no longer have to fork out big amounts of money to buy shares and get the same diversification. Asset Managers will also be able to pool all Investor’s funds together and negotiate better rates for shares in companies or the different asset classes. You can spread your investment risk By buying into Unit Trusts you increase your exposure to a wider range of investments at a much lower price. Not only do you get a lower price, but it also simplifies your investing opportunity into various asset
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Become an Investment Specialist Today!
Yes you can become an investment specialist today! After going through Asset Classes last week, there is just one quick thing we need to look at before we move on to investing into Unit Trusts. I touched on Asset Allocation briefly in the last post, so in this post I will go through Asset Allocation in a little more detail so that you can build a better understanding and knowledge base. Asset Allocation: Asset Allocation is how you divide your investments between the Asset Classes. So it is deciding how much cash, bonds, property and equity you want in your investment. Asset Allocation is, in my opinion, one of the most important decisions you make when it comes to investing and achieving your investment goals. Before you go ahead and select which bonds, equity etc you want
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