What do you do with money you have saved and extra income in SA?

[jisun]

I am a 19 year old in South Africa and have about R60 000 saved up in a fixed compound account (7.70% nominal). Making, give or take, R15000 per month. Monthly expenses are R2000 food and R1400 petrol.

I know this may feel like i’m overreacting but I am really stressed about being in my 20s soon with the way people say the world is going and silent depression talks and living a much longer life span and all of that. (I understand that life is going to get a lot harder when i’m older and all that but i’d really like to get a head start if i can, especially with a retirement fund.)

So does anyone have any advice for investing accounts (thinking about Allen Grey and PSG?). Should I be looking into stocks? Should I keep some in the bank? Crypto? Bitcoin?

Any advice and maybe what to expect and returns would be really appreciated please

 

[sdhampton]

@jisun Omg 19 years old .....you are already way ahead of the curve

 

[san422]

@jisun Since you're asking all the right questions, and seem very sensible, here are some thoughts from a 57 year old CFP.
1. You have free cash flow, so put 20% of income into a unit trust RA. You get a tax break on the contributions and tax free growth. Your investment will be locked up until you 55, but that will be your base investment and accessible even if you immigrate.
2. Biggest destroyer of wealth is a car. Save until you can afford to buy a reliable run around cash. Then save whatever you would have paid for a snappy new car for 3 to 5 years. Then buy a car 2 levels lower than your status for cash. Keep saving the amount you would have spent on a snappy car for your status for 5 years. Repeat. Never pay finance on a depreciation asset.
3. While you are young and energetic, find passive income. Whether it's a laundromat or an online blog, set up an income stream in addition to a salary. Use that second income to fund a third passive income or invest all of it to allow for compound growth.

Don't fuss too much about the investment choices in the first 5 years. 5% difference in returns will have far less impact than the commitment to save. After 5 years, either you will have developed your investment acumen or connect with a suitably qualified and experienced advisor and make more strategic investment decisions.

On your journey, always reward yourself with holidays and treats so you don't feel your slaving away. Good luck!

 

[jisun]

@san422 Thank you!! this is the most helpful thing I have read, definitely going to be using this )

 

[chabe_mom]

@jisun TFSA! all the way. And in 5 years time. Long term investments. You have more money than most 30 year Olds. You have 10 years on them

 

[vancouverguy]

@jisun Do you have a particular goal for this money and timeline?

Are you working towards further education or in are you already in a field that will be sustainable and have a salary progression that meets your requirements?

 

[pottershands]

@jisun First thing you should be doing is maxing your TFSA, which is R35k-ish per year

 

[valarielynn]

@pottershands Annual TFSA contribution limit is R36000

 

[theoseeker]

@jisun You have the most important thing on your side: time!

Read 'how to manage your money like a f* grownup' and you'll be good to go.