General finical advice required

[patt]

First off I understand a finical adviser would probably beter bet. But I would love suggestions from ordinary people like me.

My goal is one day to live from passive income.

So this is my current situation.
I’m. 24, turning 25. I make 35k p/m.

Around 28k after tax, 29k if I did standby that weekend.

My current living costs are as follow.

5,700 to rent (water and electricity is free if i spend under R700)

2,100 student loan (70k left)

1,500 for internet. (R500 of that goes to my parents)

600 for fuel (I have a hybrid work style, and I car pool with someone from my work)

400-600 for a cleaner to come in ever 2nd week.

The follow 4 will clear up within the next 5 months.
And im not planing on getting a new phone, my current one still works fine.

1,000 for phone + insurance.

1,500 for the inverter. (I was sick of Loadsheding)

1,300 for my computer. (This was a requirement I need my computer and the old one was trash)

3,000 for a friend of mine studying over seas for some food. She should be back in may.

500 credit card.

Food, it’s inconsistent. Some months I would just live of Noodels. Which is around R500
But I can’t cook to save my life so other months I rather just buy something each night with is around R100-150

This should be resolved when my friend comes back. Her food is amazing.

These are my short term goals:

In February to move into a 2 bedroom house/apartment.
I currently own a bed, 1 fully built pc. And a 70% done 2nd one. Which will be hers.
So i need to buy a few more things. In the next 5 months I’ll need to buy the following.
Another bed,Graphics card, washing machine. And some general room decor for her.
I estimated rent would around R8,500 and the deposit also.
So with my bonus I’ll place the money for the deposit aside. As well as pay off the credit card to open R500 more a month.

As for my long term goals

I need to buy a car. This is the most important part.

Also a savings account to place some money into for a vacation to japan in 3 or so years.

And the left over money I would like to invest into something that can generate me some passive income. Investing sounds like a fun thing to play around with but I know nothing about it

Edit: health insurance also something i want to get

So if anyone has any advice on my short /long term goals ill appreciate it

 

[loyaljw]

@patt You keep on bringing up your friend and what you'll be getting her etc. If she's studying overseas her parents have disposable income or she's there because she's qualified for a bursary. Why then do you have to cover for her? My suggestion is to let she(or her parents) take care of her and what she needs and rather use the money you would have spent on her to reduce the outstanding amount of your study loan.

Friendship/love isn't always compatible with monetary affairs.

Or I'm just trying the situation wrong and will excuse myself.

 

[patt]

@loyaljw It is a really complicated relationship I’ll admit lol.

She got the opportunity to study free at the university. But food and housing is on her. She got a job that covers her housing. But its extremely awful Living conditions. But housing is just so expensive it’s insane. And I’m covering her other needs like food and transportation.

She doesn’t really have family. And she was reluctant to go. But I told her I’ll cover the extra cost. She hasn’t had an easy life. And I wanted to do something for her to help her out a bit. She honestly deserves it. And thats why I also wanna build her a room which she will feel happy in. Considering the shitty circumstances she is living in now.

So no, I refuse to drop that expenses.

 

[loyaljw]

@patt You're a good person. I wish you great success!

 

[outlook2018]

@loyaljw Great Success! - My name-a Borat (brought to you by Borat Bot)

 

[james238]

@outlook2018 Wawaweewa KingintheCastle

 

[bill1969]

@patt Just a random question, would it be possible in this universe for her to be using you? For you to be what’s referred to in “toxic” guy conversation as “wuss” or “puss”,

you’re probably a good person (on paper), to me you come across as “too nice” and i get suspicious of people who’re too nice, Coz maybe it’s an overcompensation. trying a bit too hard.

Please understand it’s hard to put this comment in the way I’d like, and also I’m a lil high

 

[patt]

@bill1969 Happy cake day, and also no I understand lol.

She has had an insane impact, without her i would have never been where I was today. I would probably be a good for nothing that just barely passed H/S. it’s because of her that I passed with my grades which I did in university.

I went from someone who took math lit in high school at grade 12 because i was constantly getting around 25-35% for normal math.

To someone who got 86% in university maths in computer science. I went from a 53% average high school kid to a 84% With 24 distinctions.

All because of her, she helped me countless hours to study and learning hoe to study out of her own free will. She was a pretty average looking girl. And after few months i swear she became the most beautiful girl to me even on her bad day’s.

And the more, and more I want her to just be happy.

When I landed my first job she drove me to work and back everyday for 4 months. She lived a half hour away. I only learned later what an insane impact it had on her finically because her work at that time paid maybe 8k p/m and it was around R200 per day for her.

So ye maybe she is using me but that 1% chance. Will come back im 6 month’s and let you know if if the endless spiral of depression has began

 

[celino]

@patt Seems like you are living comfortably and have some wiggle room.

Definitely get some medical aid or a hospital plan if you don't have anything of the sort as that will cripple you if you have to start seeing specialists or going for treatments.

Then you need to save 3 months of your monthly expenses for emergencies - a lot of people suggest 6 months, which would be great if you can achieve it.

Now that we have that out of the way see what's left to invest into a TFSA investment account (easy equities for example) - you want to max out your yearly contributions which is limited to 36k p/a.

This money you should never ever withdraw until you retire, so it's a good start to a retirement plan.

If you still have some spare cash, then consider purchasing a property if this suits your lifestyle or some medium-term investments in funds like Sygnia/Allan gray, etc. But worth noting property is not a great investment but will give you security as you get older.

 

[patt]

@celino Can you maybe give some more insight on TFSA, Im honestly not up to date with anything related to investments. I do have a EQ account which I played around with when I was bored with R30(lol)

Or any resources, I don’t mind reading

 

[celino]

@patt Here you go

https://support.easyequities.co.za/...2256-what-is-a-tax-free-savings-account-tfsa-

There are other options I am not promoting them but it is what I have experience with.

 

[patt]

@celino Thank you will read through it now

 

[patt]

@celino I think the link on mobile might be broken, will retry once I am home tomorrow

 

[celino]

@patt I shared a different one, have a look

 

[patt]

@celino It works thanks so much, I’ll start reading through it

 

[james238]

@patt My advice is based on the presumption that you want to set yourself up towards financial success while still maintaining a decent lifestyle.

You seem to have a few extra bucks to place towards something without the need to shave off from your main expenses, so don't alter your "fun" expenses and enjoy your money.

However, I'd say don't worry about investing right now as your loans probably carry a higher interest rate than what you would receive on short term investment accounts (TFSA's etc.). I suggest sitting down, tabulating all your debts with their respective interest rates. Start paying off the debt with the highest interest rate or alternatively start paying off the smallest debt making only minimum payments on the rest. Once that debt is paid off, repeat for the next one on the list but contributing the amount of the previously paid off debt to the next debt like a snowball effect.

Once you have your debt under control you can look at investments and buying a car, preferably a smaller modest vehicle of which the capital amount will not exeed R200 000.

You're still young and earning a decent amount to start with. You can set yourself up for great financial success if you do the big stuff correctly. However, you're only young once and should live the youth lifestyle you think you deserve.

Don't sweat the small stuff but work on the big stuff.

 

[gifford26]

@patt Debt must be gone for you to focus on any kind of passive income, unless it is a mortgaged home loan that you’ve gotten for an excellent price and rental income covers those payments.
As someone else said further up, pay off what has the highest interest rate first. Stay with your parents if you’re going to continue giving your friend 3k a month. What exactly is the expectation from your side when this is over? What has she promised you? As a life coach and person who has dealt with many people in financial distress, most of it stems from being emotional when you spend your money.

 

[patt]

@gifford26 Most of my debt will clear up within the next 6 months.
Where I’ll only be left with a student loan and internet as my only real debt.

Once she is back, I’m considering throwing that 3k towards the student loan each month.

And I don’t expect anything in return, she had a rough life. Snd i felt she deserved the opportunity to go study further. She got a scholarship that paid for the university. Housing and food is at her own cost. She is working part time also to pay for rent.

 

[patt]

I will say I did waste money like nothing the past 2 years. But I feel like I’m in my 20 and I’m allowed to have some fun. But now maybe is the time to start looking forward

 

[littlesisterinchrist]

@patt yup! i think it’s vital to enjoy the money you make especially when you’re young with no huge responsibility