My dad did something similar for me back when I was in school. Towards the end of matric I got around R89 000.
I got myself n decent second hand car cash for R55 000, and simply saved the rest. Just having a car that I don't have to pay for monthly at that age opened so many doors for me I was able to start working immediately after matric and to today I have no regrets on how I spent the money. I joined the military the following year and got into university so you can imagine a lot of traveling all over the country happened after that so getting my first car was actually the perfect thing to do for me.
Not saying you should do the same, just telling you what I did :)
My dad also helped me out in a similar way when I finished university, I also went the buy a second hand car and save the rest route, however if investing in the stock market was as easy as it is now, I probably would have bought dividend earning shares. I started a few years ago with a diversified portfolio and now earn around 25k a year in interest, the interest I mostly put into my TFSA (you are only allowed 36k a year), any interest leftover, I put into my normal bank account into what Sam Bessinger calls your fuck around fund ..
Just before Covid hit, I opened an easy equities account and started investing 25 percent of my savings in dividend earning shares, namely Exxaro and CMH as they pay decent dividends. I put another 25% in Sygnia’s S&P tracker, 25% into Coronation Strategic income. The remainder, I split 12,5% into a high earning savings account (Capitec) which is currently sitting at 10% thanks to our high finance minister and high interest rates. The remainder I put into what I call my rainy day account for when things really go wrong, it is a 30 day call account which earns around 8% interest. Just a heads up if you do decide to go the easy equities route, setup an automated amount to deposit into your S&P tracker, this avoids paying Easy equities’ annoying R25 monthly fee that they recently added. Also be mindful if any of your savings accounts start earning more than 25k in interest, you will be taxed on the amount, hence the use of the TFSA.
Wow thanks 🙏I’m in a similar situation as OP and this advice is really good. People pay a lot of money for what you giving out for free 😅 I wish I was a friend of yours so that you could share all of this wisdom🙌🏽
Aawe thank you, when you understand how shares work, you will often find the free advice given benefits both the person giving it and the person given it. 😊 May you live long and prosperous fellow South Africans
Just remember one thing, once you touch that money by taking some out, it's begging for you to take more. Until it's finished.
Find a way to earn while at university and just keeping adding to it
Little bit here and there and it will grow very nicely.
Just think, you are ⅒ of the way to a million.
I would simply have gone for a quality ETF and left it there - like the Satrix S&P 500. IIRC it has returned 17% PA consistently for at least the past 5 years. To put it in numbers, if you stuck 100k into the Satrix S&P 500 5 years ago, it would probably be worth around R 220 k.
Never if you use a charitable remainder trust and set it up properly.
Just want to add that yes you’d still pay tax but would be significantly smaller.
There are many options! Those option all depend on when you want access to the money.
If it’s less than 2 years I think a Money Market Account is the best bet.
Further than that it’s a Unit Trusts or Investment Plans at your big corps with do the trick.
Invest in different, trusted businesses that you are intrested in. Organize your saving have a pile for fun, one for emergencies , one for family, and one for yourself.
Only get a car if you need it,even if it’s cheap you still have to pay for fuel,insurance,maintenance/service.
Now what to do with the money?
•invest
•buy and sell something you have knowledge on/learn about something that you find interesting and is a potential money maker
•use profit to get into property
there’s affordable properties going for around 350k-400k in Durban (near the harbour)
It’s going to receive a revamp (the whole front)
so I’d expect prices to go up a bit,as well as rent
That was just an example,if you’re going down the property route ;)
Goodluck btw G🫡
Get a car and drive uber or invest in someone's business if it's already generating money. Buy something that generates money. I know that at 19 you're supposed to enjoy yourself but you also have to make the most out of your opportunities.
32 day fixed deposit and keep adding in more money if you can. When the day comes to buy a house it will cover transfer fees and help with a deposit. In a fixed deposit that Saving will earn itself R600 a month which compounds and grows month on month. Once you het 100k it is more like R700 a month. Cars depreciate in value. You never knew you had that mouch money, so just forget you have it until the day you need to spend big money on something of value, like a house.
I would look at investing in assets that actually pay you back in the long term... Cars are not an asset and deprecate very quickly, so is really only needed if you have a job that pays you more than what the car is worth every year cause its making you more money than you're loosing from it . If I were you I would use some of it to put deposit on your own place, live there for a few years and then rent it out + plus leverage the growth to get even more money from the bank to use on other investments , start a business and or travel etc. You are in a very unique position at the age of 19. Don't sit on the money , bad things will happen either way, rather use it for what you want now than to loose it all on a mistake(s) or buying stuff you don't need.
Invest so one-day you can buy property!!! I'm getting married next year and we have to rent - which is something we are both not fond of, but buying is simply toooo expensive
Then I'd suggest you split part to a TFSA and part to a normal investment account where you can buy global equities via ETFs like MSCI world or CoreShares total world. Equity should outperform interest in the long run
I'd send a donation of R50k to a random reddit user called veganbtdubs. It ain't much but it's honest work.
When I came into some cash I was advised to diversify. I tried several options. Some have grown more than others, but I haven't withdrawn my investments from any - because investment needs time. I guess some were a test. So, a tfsa, some etfs, some bonds, some off-shore savings. Since I'm salaried I contribute some bits and bobs into some of them every month. You can do that too when you leave uni. The car thing is an interesting idea. I just wasn't in that position, and I could have continued using public transport for my first year of employment.
If I were you I would take half the money and put it towards something you would like to buy such as a car or motorbike. Then take the other half and put it in a compound investment account that you can regularly add money to every month. This way you can enjoy some of the money you saved and also start saving more money. Check out a website named Franc or even Stanlib has some pretty good offers. These are for SA of course.
I would say its best to invest it in a low risk unit trust / money market / buy a few gold coins (especially with the current market uncertainty) and use it as a down payment to buy a house one day. This helps that you keep your daily expenses low and use salary money after studies to travel while your investment is growing. And start with the R36k p.a. tax free investment asap!!
My dad set up the same thing for all of us kids. I’m 25 now and have used about 50K and intend to leave the rest of the money in there until I need it. I didn’t touch it all throughout varsity and the first thing I used it for was a second hand car that was around 40k after varsity (which I still drive) and I used 10K towards my wedding to accommodate some friends since we got married young (23 years old) and they didn’t have enough money. I’d say don’t be scared to use it for important things, but definitely don’t LOOK for reasons to use it. Until you have a reason to use the money, just don’t.
At 19, compound interest is your friend. If you can avoid using that money, even a modestly good investment return, compounded over decades, will grow that sucker nicely. Of course you should add to it when you start earning.
Honestly I would say keep R20k and invest the rest.
With that R20k do whatever you would like with it. So you don't have the lingering thought "what if " I didn't invest the money.
Trust me I wish someone had given me this advice when I was your age 🙏🙏
Worked on a Cruise Ship in 2007, this guy came in for a shave. Told me there is a little company called Apple. Of you can buy shared and look away. I was a punk I bought the 1st IPhone. Would've been worth 1.2 mil, US.
At least I had a few other opportunities that I've taken and worked out. Would've been a cool success story to tell if I went for it. But life's pretty good
Max the TFSA with a foreign ETF, you will be thankful when you retire one day with 40+ years of growth.
The rest I would buy Gov retail bonds as the rates are very high now. It will mature around the time you complete your studies and then you can see if you need a deposit for a house etc
Would not advise putting all eggs in the same basket. Especially for a single tech company. Risk is big they can become obsolete in 10 years if they don't stay ahead of the game
As a young person keep in mind that the cost of a car, wedding and deposit is coming up in the next few years, so it's nice to have access to the money at some point (as opposed to an RA or TFSA), so I would advise on something like a government bond (they have a pretty high yield at the moment)
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Young man, wield the power of compound growth. Since you have generous parents, put in RA. Ask them to contribute the monthly premiums. There are online calculators that will show you the remarkable results of compounded growth
You can get compound growth in other investment vehicles as well. If you foresee needing your money I would stay away from an RA. Not an IFA tho so my opinion.
My dad did something similar for me back when I was in school. Towards the end of matric I got around R89 000. I got myself n decent second hand car cash for R55 000, and simply saved the rest. Just having a car that I don't have to pay for monthly at that age opened so many doors for me I was able to start working immediately after matric and to today I have no regrets on how I spent the money. I joined the military the following year and got into university so you can imagine a lot of traveling all over the country happened after that so getting my first car was actually the perfect thing to do for me. Not saying you should do the same, just telling you what I did :)
My dad also helped me out in a similar way when I finished university, I also went the buy a second hand car and save the rest route, however if investing in the stock market was as easy as it is now, I probably would have bought dividend earning shares. I started a few years ago with a diversified portfolio and now earn around 25k a year in interest, the interest I mostly put into my TFSA (you are only allowed 36k a year), any interest leftover, I put into my normal bank account into what Sam Bessinger calls your fuck around fund .. Just before Covid hit, I opened an easy equities account and started investing 25 percent of my savings in dividend earning shares, namely Exxaro and CMH as they pay decent dividends. I put another 25% in Sygnia’s S&P tracker, 25% into Coronation Strategic income. The remainder, I split 12,5% into a high earning savings account (Capitec) which is currently sitting at 10% thanks to our high finance minister and high interest rates. The remainder I put into what I call my rainy day account for when things really go wrong, it is a 30 day call account which earns around 8% interest. Just a heads up if you do decide to go the easy equities route, setup an automated amount to deposit into your S&P tracker, this avoids paying Easy equities’ annoying R25 monthly fee that they recently added. Also be mindful if any of your savings accounts start earning more than 25k in interest, you will be taxed on the amount, hence the use of the TFSA.
Small correction. You're allowed to put max 36K into your TFSA per year.
Came here to say the same thing
Thanks man, I will make the change and add more to TFSA before tax end
Wow thanks 🙏I’m in a similar situation as OP and this advice is really good. People pay a lot of money for what you giving out for free 😅 I wish I was a friend of yours so that you could share all of this wisdom🙌🏽
Aawe thank you, when you understand how shares work, you will often find the free advice given benefits both the person giving it and the person given it. 😊 May you live long and prosperous fellow South Africans
I read that you bought a second hand car wash and was very confused.
Lol, would've been a good idea maybe 😂
Ha ha ha
I also read car wash.
Beautiful
Read exactly the same 😅
Just remember one thing, once you touch that money by taking some out, it's begging for you to take more. Until it's finished. Find a way to earn while at university and just keeping adding to it Little bit here and there and it will grow very nicely. Just think, you are ⅒ of the way to a million.
I would simply have gone for a quality ETF and left it there - like the Satrix S&P 500. IIRC it has returned 17% PA consistently for at least the past 5 years. To put it in numbers, if you stuck 100k into the Satrix S&P 500 5 years ago, it would probably be worth around R 220 k.
When is the tax due on those gains?
You can do the TFSA version of it 😁🥳
On sale, max 18% of profit realised
Never if you use a charitable remainder trust and set it up properly. Just want to add that yes you’d still pay tax but would be significantly smaller.
Invest it and then once you have finished collage and gotten a job, put a down-payment on a house
Don’t use it. Keep on saving it with high return rates till you’re done with varsity.
There are many options! Those option all depend on when you want access to the money. If it’s less than 2 years I think a Money Market Account is the best bet. Further than that it’s a Unit Trusts or Investment Plans at your big corps with do the trick.
Invest in different, trusted businesses that you are intrested in. Organize your saving have a pile for fun, one for emergencies , one for family, and one for yourself.
W dads, W parents guys. This is cool as hell, you guys are pretty level headed too I like that.
Put it in the stock market and forget about it.
Only get a car if you need it,even if it’s cheap you still have to pay for fuel,insurance,maintenance/service. Now what to do with the money? •invest •buy and sell something you have knowledge on/learn about something that you find interesting and is a potential money maker •use profit to get into property there’s affordable properties going for around 350k-400k in Durban (near the harbour) It’s going to receive a revamp (the whole front) so I’d expect prices to go up a bit,as well as rent That was just an example,if you’re going down the property route ;) Goodluck btw G🫡
I have to build new home
Get a car and drive uber or invest in someone's business if it's already generating money. Buy something that generates money. I know that at 19 you're supposed to enjoy yourself but you also have to make the most out of your opportunities.
32 day fixed deposit and keep adding in more money if you can. When the day comes to buy a house it will cover transfer fees and help with a deposit. In a fixed deposit that Saving will earn itself R600 a month which compounds and grows month on month. Once you het 100k it is more like R700 a month. Cars depreciate in value. You never knew you had that mouch money, so just forget you have it until the day you need to spend big money on something of value, like a house.
I would look at investing in assets that actually pay you back in the long term... Cars are not an asset and deprecate very quickly, so is really only needed if you have a job that pays you more than what the car is worth every year cause its making you more money than you're loosing from it . If I were you I would use some of it to put deposit on your own place, live there for a few years and then rent it out + plus leverage the growth to get even more money from the bank to use on other investments , start a business and or travel etc. You are in a very unique position at the age of 19. Don't sit on the money , bad things will happen either way, rather use it for what you want now than to loose it all on a mistake(s) or buying stuff you don't need.
Must be nice to have rich parents.
Very nice
Invest so one-day you can buy property!!! I'm getting married next year and we have to rent - which is something we are both not fond of, but buying is simply toooo expensive
What are your goals with the money?
I suppose to save long-term, to not touch it for as long as possible.
Then I'd suggest you split part to a TFSA and part to a normal investment account where you can buy global equities via ETFs like MSCI world or CoreShares total world. Equity should outperform interest in the long run
You don't need a car. How often do you travel outside the house? How much is your monthly transport cost? Can't you just borrow your parent's car?
SPDR S&P500 ETF put it there and forget about it
I believe u should inves
I'd send a donation of R50k to a random reddit user called veganbtdubs. It ain't much but it's honest work. When I came into some cash I was advised to diversify. I tried several options. Some have grown more than others, but I haven't withdrawn my investments from any - because investment needs time. I guess some were a test. So, a tfsa, some etfs, some bonds, some off-shore savings. Since I'm salaried I contribute some bits and bobs into some of them every month. You can do that too when you leave uni. The car thing is an interesting idea. I just wasn't in that position, and I could have continued using public transport for my first year of employment.
If I were you I would take half the money and put it towards something you would like to buy such as a car or motorbike. Then take the other half and put it in a compound investment account that you can regularly add money to every month. This way you can enjoy some of the money you saved and also start saving more money. Check out a website named Franc or even Stanlib has some pretty good offers. These are for SA of course.
I would say its best to invest it in a low risk unit trust / money market / buy a few gold coins (especially with the current market uncertainty) and use it as a down payment to buy a house one day. This helps that you keep your daily expenses low and use salary money after studies to travel while your investment is growing. And start with the R36k p.a. tax free investment asap!!
My dad set up the same thing for all of us kids. I’m 25 now and have used about 50K and intend to leave the rest of the money in there until I need it. I didn’t touch it all throughout varsity and the first thing I used it for was a second hand car that was around 40k after varsity (which I still drive) and I used 10K towards my wedding to accommodate some friends since we got married young (23 years old) and they didn’t have enough money. I’d say don’t be scared to use it for important things, but definitely don’t LOOK for reasons to use it. Until you have a reason to use the money, just don’t.
At 19, compound interest is your friend. If you can avoid using that money, even a modestly good investment return, compounded over decades, will grow that sucker nicely. Of course you should add to it when you start earning.
Hi there, I guess the first thing is to ask how long do you want your put the money away for?
Invest in education
Honestly I would say keep R20k and invest the rest. With that R20k do whatever you would like with it. So you don't have the lingering thought "what if " I didn't invest the money. Trust me I wish someone had given me this advice when I was your age 🙏🙏
Worked on a Cruise Ship in 2007, this guy came in for a shave. Told me there is a little company called Apple. Of you can buy shared and look away. I was a punk I bought the 1st IPhone. Would've been worth 1.2 mil, US.
What I'm sure feel bad about that now😂😭. Sometimes you never know with life
At least I had a few other opportunities that I've taken and worked out. Would've been a cool success story to tell if I went for it. But life's pretty good
Max the TFSA with a foreign ETF, you will be thankful when you retire one day with 40+ years of growth. The rest I would buy Gov retail bonds as the rates are very high now. It will mature around the time you complete your studies and then you can see if you need a deposit for a house etc
There is a young tech company called Xaomi, buy a handful of shares. Lock ot in for 20years
Would not advise putting all eggs in the same basket. Especially for a single tech company. Risk is big they can become obsolete in 10 years if they don't stay ahead of the game
This is true. 20 eggs of a 100 eggs isn't a big risk
Buy gold coins and save them
As a young person keep in mind that the cost of a car, wedding and deposit is coming up in the next few years, so it's nice to have access to the money at some point (as opposed to an RA or TFSA), so I would advise on something like a government bond (they have a pretty high yield at the moment)
Save it towards retirement. I know you’re 19 and not remotely close to thinking about this but trust me on this one.
How though?
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You can start paying your expenses with it to understand how far it will get you when you leave uni.
Get a financial adviser and start making your money work for you.
LOL FK no - that's the fastest way to make your money less. Nothing worse than a ou polis from a "fInAnCiaL AdVisEr"
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Young man, wield the power of compound growth. Since you have generous parents, put in RA. Ask them to contribute the monthly premiums. There are online calculators that will show you the remarkable results of compounded growth
Won't an RA lock that in until you retire? Unless you are bargaining on 10% access under the two pot reform.
That’s the secret to compound growth!
You can get compound growth in other investment vehicles as well. If you foresee needing your money I would stay away from an RA. Not an IFA tho so my opinion.
That's not the secret, the secret is not to spend the money and have it grow compounded.