@apparition Hey - not a financial expert by any means - and by any means I REALLY mean - I guess.
So 20k for a 22 year old even in SA is a lot of money - it took you a long time to earn. I am also extremely risk adverse so have only recently started venturing out to more "risky" assets.
I think the advice from Ramble_don is right - and you need to make a choice - but in saying that - you are young - and you take more risk when you are young as you have a longer time to make up for it.
What I have done:
- Kept most of my bulk savings invested as cash in an interest bearing account.
- I took 20% of my savings, and put 10% into various self chosen Equities on EE (Easy Equities)
- I took the other 10% and put them in Crypto.
The reason I only risk 20% is if I make a mistake - and an investment goes belly up and I Lose 100% of it - Ive only risked 20% and the rest of my capital is safe. The gains are smaller I realise - but like I said - I am risk adverse.
Now the equities I pick - complete guessing - shoot me down if you guys like - but I have 0 knowledge on stocks, shares, forex etc - I put money in the more "better known" companies - and so far its been good - Ive been beating the interest rate offered by my bank. I did so well on an initial stock, I doubled my money, withdrew my initial investment, and left the other half in the stock - this way the money I am risking I treat it as like its something I never really had in the first place.
Crypto I am keeping for the long term - the very long term. I put in R700 a month (500 into btc, 100 into ltc 100 Eth).
I suggest opening up a TFSA (Tax Free Savings Account) - what kind is up to you - I chose a cash TFSA - it allows you to invest R36 000 a year, with up to a total of R500 000 (excl. interest) allowed in yoru lifetime, so it will take you +- 15 years to get to the R500 000, at R35k a year.
Keep in mind however that (for simplicity sake) you get to R500 000 in savings (excl. Interest), you have an expense and you withdraw R10 000 - bringing your new total to R490 000 (excl. Interest) you CANT put back that R10 000.
So I treat this as a dirty fund to supplement my retirement one day - I put in 36k a year - in 15 years I will have close to 800k - +- R220K of that was interest, and tax free - and you let it grow.
So things I suggest you do:
- Keep majority of your savings available - maybe a call account or immediate access account - they have lower interest rates but you have immediate access to your money.
- "Risk" a % of your savings you would be "happy" with losing if worst came to the worst -an amount that would be bitter to lose, but not put you into financial ruin.
- Regularly save into something - be it a TFSA, Crypto - maybe you put in a few hundred in Equities for you to play around with.
- Expand your portfolio - something I only started doing late - because I am so risk adverse I kept all my money in cash in an interest bearing account - but I think they call it dead money or lazy money. With current interest rates so low you are technically losing money because of inflation.
- Pay off your debts first - I have a car that is financed, the monthly interest I get from my cash account I put into my car - I build up a small sum, then get a capital reduction done on the outstanding value, this reduces my monthly payment, I then use the amount my monthly payment has reduced by and put that into my car too - to further increase how much I am paying off. The positive sums I put into my car bear interest too so in a weird skewed view - its paying its self off too.
Again this is not financial advice and I am just telling you the path I took. Is it right? no.... but it seems to be working for me.