I need help with growing my extra money

[momofadozen]

Okay so I’m working in South Korea atm and I’ll have about an extra R10k n month (or more) and I have no idea what I can do to actually grow this money into something? I’ve got a one year contract and might do another year with a salary increase….. any advice or pointers on what I can do to maximise growth (with as low risk AS POSSIBLE, obviously there is risk involved in most things)

Thanks

 

[rebekahbell]

@momofadozen @breeb is right, if you want low-risk look at institutional solutions, max your TFSA etc.

More risk would be a balanced fund with Investec or similar

If you want more risk easy equities or their property assets are a good sector.

don't touch crypto if you are thinking low risk.

 

[beautitudine]

@momofadozen If you can purchase a property, get someone else to live in it while you away.

 

[james6771]

@momofadozen No SA investment will beat the theoretical 30% annual interest you would have gained if you had kept your money in USD for the past year and converted it to ZAR now.

 

[leudoca]

@james6771 You’re not wrong on keeping it in USD but a single short term “good return” is not the best example to use. Keeping USD or some other stable foreign currency is just in general better if you are living/traveling overseas.

 

[canada90]

@momofadozen Make an account on Nexo and store it there for interest

 

[rebekahbell]

@canada90 In what world is crypto and low risk the same thing?

 

[canada90]

@rebekahbell Thank you for the downvotes for trying to help.

Nexo is not just crypto, you can hold Euro, USD or GBP there and unlike banks, you earn interest

 

[jayrashman]

@canada90 But what about the rapidly fluctuating crypto prices? Are you not at risk of simply losing money if you store it on a crypto exchange?

 

[canada90]

@jayrashman You can hold cryptocurrency or just euro or usd, there are then some options if you put 10% of your funds in Nexo tokens and lock for a month or more you can get 12% interest. I have my spare cash there

 

[jayrashman]

@canada90 Is it safe? Can you assure rest storing large sums of money there?

 

[canada90]

@jayrashman Their security is great with 2FA and their assets are audited real time unlike some of the exchanges that went down. There’s also a nexo reddit if you want to read more from other people, you can even get a nexo credit card if you want to use it for shopping. I put my money in 12 months lock for max. Return, but then split in 12 parts so if I need money I only have to wait a month

 

[jayrashman]

@canada90 How does it compare to something like a Celsius wallet? And you’re telling me that I can also just store my money in €/$ without the risk involved with investing in crypto?

 

[canada90]

@jayrashman I never had a Celcius wallet so I can’t tell you.
The company behind Nexo is a large payday lender so their solvency is better.

Euro, USD and GBP you get 5% as base interest, but you can increase that by locking it or by holding some of your cash in Nexo tokens - so no you don’t have to buy crypto

 

[jayrashman]

@canada90 Thank you sir

 

[faith4l]

@momofadozen There is more information needed here... What currency do you earn in? What is the end goal for this savings? When you come back to SA, what do you want to do with it etc. etc. What is your definition of low risk - what is your time horizon and do you want to 100% preserve capital or can stomach some fluctuations during a time horizon?

You need to think about transaction costs that are involved here by pushing the money into ZAR each month. Transaction fees on 10k might make up a few % depending on forex solutions and costs you have available to you.

I'm assuming you are earning in foreign currency, best bet would be to look local for options to invest into interest bearing investments for the time being until you know what exactly you want to do with your money or if you want to bring it all back to SA. Moving larger amounts costs overall less.

So depending on what you want to use the money for...

• Build up a sum of money and move that to SA, say every 3-6 months to reduce the forex/transaction costs (depending here on the costs off course).
  • Invest it in interest bearing or low equity funds
  • Please do not use TFSA as a parking place, its goal is 30-40 years investment vehicle with an aggressive allocation aimed at maximizing net growth.
• Keep keep savings in Korea until you know exactly what it will be used for
  • You should be able to find some bank or institution that offers interest bearing savings accounts in your country
  • Look for other offshore institutions that offers interest bearing accounts or investments in your currency. I personally only use Interactive Brokers although for interest bearing their requirements might be a bit high but they have a ton of funds on their platform to choose from in various currencies.

 

[momofadozen]

@faith4l Thanks for the thorough response I appreciate it!

Okay so I earn in Korean Won (currently worth 0.015 to the rand)
I want to grow money for my future, in terms of having money when I need it type of deal, I’ll probably be here for 2 years before I head (or if) back to SA. I’m still young so I have time and I don’t really need the money right now (I’m 24) so the idea is to grow it for as long as possible until I eventually need it to settle down or something.

I want to preserve it as much as possible as I might not get a chance to earn and save this much again for a long time and I’m single and young so being frugal isn’t a problem. By low risk I meant that it would grow, and I don’t have to keep an eye on it too much and since I’m still ignorant when it comes to finances and such. So yeah.

Right now, I doubt I’d send it back to SA unless I have to.

So in short, I’ll have time and a decent (I guess) amount of money to grow that I’ll decide on how to use later. (start a business, buy a house, trading whatever it may be) so I how would I be able to increase this amount with not to much of risk to lose a large sum of it all.

 

[faith4l]

@momofadozen So you have a time horizon of about 2-3 years and you might or might not then return to SA (or who knows where to next). You also not exactly set yet if this is a 30-40 year retirement investment or a shorter terms savings for a house or what knowns. For now, you don't want to send it to SA.

With this is mind, I highly suggest you just get something local in you local currency, something like a money market locally or a low equity fund which is globally diversified.

More global platforms like Interactive Brokers can be an option as well if you don't come right locally. But you need to take fees into account. 10k a month might be a bit low to send as the forex and transaction costs might end up being a high % overall. You don't really want to do transfers to say USD or EUR and pay 1-2% each time. Especially for a 2-3 year horizon.

But overall, start with trying to get something locally. Even a simple savings account can be a start. Don't rush, get in a habit, take time to rather understand what you are doing and broaden your financial literacy.

For example I can say invest 20% VWRA and 80% AGGG or some treasure bills etc. but ultimately you need to understand what it is what you are doing as well as tax implications as well and your options in terms of fees.

 

[momofadozen]

@faith4l I really appreciate the response! Thank you very much I will look into it