What's new
Carbonite

Welcome to Carbonite! Register a free account today to become a member! Once signed in, you'll be able to participate on this site by adding your own topics and posts, as well as connect with other members through your own private inbox!

Actual books on investments

JollyJamma

Official Forum Dunce
VIP Supporter
Rating - 100%
43   0   0
Joined
Aug 22, 2011
Messages
5,097
Reaction score
1,466
Points
3,255
Location
Calne, United Kingdom
Hi all

So I’ve got a collection of books that talk about investments and trading and I thought it would be a good opportunity to talk about advance concepts of investments.

A lot of people are scared of shares and the stock exchange because the risks are high and investment managers want to keep you in the dark

A lot of books on how to get rich are just general rules of life like paying off debt early or talking about how someone else got rich. The only books these people make rich are the authors

I have money in tax free unit trusts because I don’t have a lot of money to start proper investing and I want to spread my risk over several eggs, including one with international exposure

Here’s a list of books I own and have been highly rated by critics, including investment managers



 

pXius

Sir Cud.
VIP Supporter
Rating - 100%
77   0   0
Joined
Apr 22, 2010
Messages
1,089
Reaction score
391
Points
2,255
Location
Hartbeespoort / Randburg
Cool thread!

Just as a disclaimer to anyone reading or contributing to the thread.

All posts here are the opinions of each poster and should NOT be interpenetrated as investment and or financial advice in any sense if the word.
No one here is claiming to be a financial advisor, stand to benefit from their opinions shared and will not take responsibility for any impact on your financial situation should you do something based off the opinions you read here.


With that out of the way, I'm almost done with The Book on Rental Property Investing and I've enjoyed it.There are no great secrets to success, but it's a great accumulation of most of what you need to know if buying-to-let is one of your interests. It's obviously more focused on the international market but that was part of the reason it caught my interest.

We actually used Intelligent Investor as extra material in my varsity days, awesome book. I'd say you'll only really value the book if you've got some financial background or investment experience. It's not the cookie cutter "Rich Dad Poor Dad" for the masses type of thing.

Security Analysis is also a great book. Again, it's old but the theory is sound and very applicable today. I'd say that the interpretation skills it'll teach you are invaluable regardless of the type of investments you are interested in.
 

JollyJamma

Official Forum Dunce
VIP Supporter
Rating - 100%
43   0   0
Joined
Aug 22, 2011
Messages
5,097
Reaction score
1,466
Points
3,255
Location
Calne, United Kingdom
Yes, don’t go buying shares and then come back to us, crying.
 

PJtheKILL3R

Well-Known member
VIP Supporter
Rating - 100%
51   0   0
Joined
Jun 16, 2011
Messages
961
Reaction score
425
Points
1,935
Location
Tzaneen
And don't go to r/wallstreetbets
I am sorry, I just laugh a little every time I see your profile picture :p

With that out the way, I just want to mention this trading != investing.
Of the books the OP mentioned it looks like only one of them really covers value investing (a good strategy if you have time to burn) the other 2 look like a "How to in equity trading" I could be wrong? Please OP correct me if I am.

Picking winners and losers in the equity market might on the surface of it seem fun, but you will soon join the majority of fund managers that under perform the index, what I have found works better for me is, instead of identifying individual shares I like, I buy ETF's in sectors/regions that I suspect will outperform, and less fancy has always seemed to work better for me E.g : My TFSA only has 1 ETF in it, the Ashburton Global 1200, Why? Because I want to invest my money proportionally into the world, its a amazing rand hedge, why invest the majority of your capital into a country that is less than 1% of the worlds GDP?, and since its in my TFSA I won't pay the premium of inflation when a sell and CGT would come into play.

I think people sometimes forget, inflation is also a tax, government doesn't physically take your money, they simply take the value of it out from underneath you.

It is for that exact reason that I also have a moderate amount of debt, because I know inflation the same tool that the government uses to relieve the pressure of debt is at my disposal too, the key is to know what assets you can buy with that debt that will always beat inflation (hence giving you a real return) and that is where property fits in nicely for me.

I also like the topic! Lets talk money :)
 

JollyJamma

Official Forum Dunce
VIP Supporter
Rating - 100%
43   0   0
Joined
Aug 22, 2011
Messages
5,097
Reaction score
1,466
Points
3,255
Location
Calne, United Kingdom
Also know that investing doesn’t include Bitcoin.

Crypto currencies are not a valid form of investment, they are a gamble, at best.

I’m looking to put my money into offshore linked investments at the moment.

Edit: This is my current main tax free investment account https://www.prudential.co.za/media/29460/prudential-dividend-maximiser-fund.pdf

TOP 10 HOLDINGS* 1. Prudential Global Equity Fund 12.7% 2. Naspers Ltd 8.8% 3. M&G Global Dividend Fund 6.9% 4. Anglo American Plc 5.6% 5. British American Tobacco Plc 5.5% 6. Standard Bank Group Ltd 4.7% 7. Sasol Ltd 4.1% 8. Sanlam Global Financial Fund 3.7% 9. Vulcan Value Equity Fund 3.3% 10. Absa Group Ltd 3.2%

FUND OBJECTIVE: To provide broad-based exposure to shares that offer value and medium- to long-term growth. The portfolio managers seek to invest in companies where returns can be achieved from any or all of growth in earnings, growth in dividends and a re-rating of its share price; however, there will be a bias towards companies offering high but sustainable dividend yields.
 
Last edited:

PJtheKILL3R

Well-Known member
VIP Supporter
Rating - 100%
51   0   0
Joined
Jun 16, 2011
Messages
961
Reaction score
425
Points
1,935
Location
Tzaneen

JollyJamma

Official Forum Dunce
VIP Supporter
Rating - 100%
43   0   0
Joined
Aug 22, 2011
Messages
5,097
Reaction score
1,466
Points
3,255
Location
Calne, United Kingdom
That has quite a steep cost, almost 2% TER you got there.

You get MUCH better offshore exposure with ASHGEQ
And it only has a TER of 0.45%

But this gets into the whole Passive vs Active debate I guess.
Yeah, the TER costs are a big concern of mine and I may move the investment to a new portfolio - I only noted the high costs shortly after opening the account.

Thank you for the input, it's something that has been bugging me about the portfolio for a while now.

Regards
 

Nickslayer

Well Known Member
Rating - 100%
16   0   0
Joined
Jul 24, 2014
Messages
281
Reaction score
168
Points
1,465
Age
30
Location
Witbank, Mpumalanga
It is for that exact reason that I also have a moderate amount of debt, because I know inflation the same tool that the government uses to relieve the pressure of debt is at my disposal too, the key is to know what assets you can buy with that debt that will always beat inflation (hence giving you a real return) and that is where property fits in nicely for me.
I have heard about it but this explained it better. Regarding property investment I have owned a property management company for quite some time (Also family business) and there are so many areas to watch out for when investing in property 99% of the time it is a bad investment.

As a note a majority of the 99% above is people that think it is profitable to buy property through mortgage and think that it will pay off. Something that sales agent allways promises without even knowing the whole story.
 

SauRoN

Fresh Spawn
Rating - 100%
1   0   0
Joined
Apr 22, 2010
Messages
748
Reaction score
391
Points
1,705
Age
37
I think the line needs to be made very clear between trading and investment.

The OP makes it sound like it's all one and the same, but while it's using the same mechanisms/systems the approach is very very different.
 

SauRoN

Fresh Spawn
Rating - 100%
1   0   0
Joined
Apr 22, 2010
Messages
748
Reaction score
391
Points
1,705
Age
37
I have heard about it but this explained it better. Regarding property investment I have owned a property management company for quite some time (Also family business) and there are so many areas to watch out for when investing in property 99% of the time it is a bad investment.
Precisely why I've moved all such notions to the property ETF's and don't have any aspirations any longer to make it my own problem.

As a note a majority of the 99% above is people that think it is profitable to buy property through mortgage and think that it will pay off. Something that sales agent allways promises without even knowing the whole story.
Yup. Golden rule for me is that if you can't pay it off in half the time (10 years) of what the home loan is for then you almost certainly won't see a profit, as compared to putting the money into something else that is.

It's still a better bet than having no investment at all, but people need to cut the delusion imposed by our parent's generation that buying property is the golden investment option that will always win out for you.

And for the love of god don't ever take a 30 year loan.
 

SauRoN

Fresh Spawn
Rating - 100%
1   0   0
Joined
Apr 22, 2010
Messages
748
Reaction score
391
Points
1,705
Age
37
On the topic, I think before anyone reads any of those books they should read Warren Ingram's Become Your Own Financial Advisor first so that they can learn how to have expendable cash and only spend that on the get rich quick scheme that trading so quickly becomes for many people.


Then follow it on with "How to make your first million"


And only once you've actually done that, consider trading as an avenue to generate more money. If you managed the former you shouldn't fall too hard on your face trying the latter.

Once the first million is there it tends to keep rolling on almost by itself.
 

JollyJamma

Official Forum Dunce
VIP Supporter
Rating - 100%
43   0   0
Joined
Aug 22, 2011
Messages
5,097
Reaction score
1,466
Points
3,255
Location
Calne, United Kingdom
It's still a better bet than having no investment at all, but people need to cut the delusion imposed by our parent's generation that buying property is the golden investment option that will always win out for you.
After dealing with all of the costs associated with buying a property and then selling it, I can tell you that it's a fucking nightmare owning a place.
There are only two reasons why you should own a property:
1) When your monthly rent is the same as your mortgage amount each month
2) When the market is going to increase and so if you sell, you make a profit.

I don't see paying interest on a mortgage as a loss of profit if the total bond repayment each month is the same as your rental option. Either way, the same amount of money goes out of your account each month.

The costs that I do see as an expense are new geysers, renovations & improvements that don't increase the value of the property, etc.

My property increased by R300 000 in value over 3 years. That's pretty good but the costs destroy the value so badly that if it doesn't increase and you are forced to sell, you're screwed.
 

Nickslayer

Well Known Member
Rating - 100%
16   0   0
Joined
Jul 24, 2014
Messages
281
Reaction score
168
Points
1,465
Age
30
Location
Witbank, Mpumalanga
After dealing with all of the costs associated with buying a property and then selling it, I can tell you that it's a fucking nightmare owning a place.
There are only two reasons why you should own a property:
1) When your monthly rent is the same as your mortgage amount each month
2) When the market is going to increase and so if you sell, you make a profit.
I would add points
1) When your monthly rent is the same as your mortgage amount each month (EDIT) + Rates and taxes and insurance.
3) Fair wear and tear Repairs and maintenance that you as the owner is responsible for. On some of my courses it was suggested to get a rough estimate and use 2% of the house value on repairs per year but in practice we saw it closer to 1% (over 5 years using properties that followed suggested maintenance to keep a property evaluator happy). That still kicks you one months rental back EVERY year.
4) Over 130 rentals over 10 years, in Witbank, we had an average home stand open a month every 2 years. That also kicks you back 10 months in a 20 year investment.

Also the last 20 years of homeowners growth is not a good indicator of future growth. In Witbank property values in terms of sales has gone down in the last 2 years.
 

JollyJamma

Official Forum Dunce
VIP Supporter
Rating - 100%
43   0   0
Joined
Aug 22, 2011
Messages
5,097
Reaction score
1,466
Points
3,255
Location
Calne, United Kingdom
I would add points
1) When your monthly rent is the same as your mortgage amount each month (EDIT) + Rates and taxes and insurance.
3) Fair wear and tear Repairs and maintenance that you as the owner is responsible for. On some of my courses it was suggested to get a rough estimate and use 2% of the house value on repairs per year but in practice we saw it closer to 1% (over 5 years using properties that followed suggested maintenance to keep a property evaluator happy). That still kicks you one months rental back EVERY year.
4) Over 130 rentals over 10 years, in Witbank, we had an average home stand open a month every 2 years. That also kicks you back 10 months in a 20 year investment.

Also the last 20 years of homeowners growth is not a good indicator of future growth. In Witbank property values in terms of sales has gone down in the last 2 years.
Yeeesh. That sucks.
 

Flex

Contact for Flex Tape
VIP Supporter
Rating - 100%
106   0   0
Joined
May 14, 2015
Messages
5,931
Reaction score
2,907
Points
3,465
Location
Snor City
I don't see paying interest on a mortgage as a loss of profit if the total bond repayment each month is the same as your rental option. Either way, the same amount of money goes out of your account each month.
But when it is your own property you have something to show for it at the end of the day.
Rental option, once contract is up you have 0 to show for all the money your payed each month
 

PJtheKILL3R

Well-Known member
VIP Supporter
Rating - 100%
51   0   0
Joined
Jun 16, 2011
Messages
961
Reaction score
425
Points
1,935
Location
Tzaneen
But when it is your own property you have something to show for it at the end of the day.
Rental option, once contract is up you have 0 to show for all the money your payed each month
Remember even buying has fixed costs for which you get 0 :
-Costs of buying the property in the fist place
-Property tax
-Levies (If Applicable)
-Insurance
-Loan interest

Those are costs, that if you are renting for cheaper than the combined cost of those items and save the difference you will be better of than owning the property.
 

Flex

Contact for Flex Tape
VIP Supporter
Rating - 100%
106   0   0
Joined
May 14, 2015
Messages
5,931
Reaction score
2,907
Points
3,465
Location
Snor City
Remember even buying has fixed costs for which you get 0 :
-Costs of buying the property in the fist place
-Property tax
-Levies (If Applicable)
-Insurance
-Loan interest

Those are costs, that if you are renting for cheaper than the combined cost of those items and save the difference you will be better of than owning the property.
Yes indeed, but even with those "hidden" costs is it still not worth it to have the asset instead of basically paying for someone else to obtain their own asset?

I am in that position now looking at buying, got a nice amount together for the deposit and admin involved. Tired of renting, but as you say there are many more funds involved once buying. So I am weighing up everything before doing anything at this stage
 

JollyJamma

Official Forum Dunce
VIP Supporter
Rating - 100%
43   0   0
Joined
Aug 22, 2011
Messages
5,097
Reaction score
1,466
Points
3,255
Location
Calne, United Kingdom
Yes indeed, but even with those "hidden" costs is it still not worth it to have the asset instead of basically paying for someone else to obtain their own asset?

I am in that position now looking at buying, got a nice amount together for the deposit and admin involved. Tired of renting, but as you say there are many more funds involved once buying. So I am weighing up everything before doing anything at this stage
Once a house is paid off and you are retired, it makes a lot of sense since you can maintain the property yourself, with the odd call for an electrician and plumber.

As your primary residence, yes, it makes way more sense.

My cousin who is a property developer says that property is the worst type of investment.

I wouldn’t buy a property to rent out as an investment, even a big standard savings account from Capitec can probably match the returns you’d see on a good property but without the insane torment of upkeep.
 

Nickslayer

Well Known Member
Rating - 100%
16   0   0
Joined
Jul 24, 2014
Messages
281
Reaction score
168
Points
1,465
Age
30
Location
Witbank, Mpumalanga
But when it is your own property you have something to show for it at the end of the day.
Rental option, once contract is up you have 0 to show for all the money your payed each month
If I may give you some advise on good faith.

Cost of buying per month = Sales Price (includes agent com and transfer fees) + Interest for Mortgage + Rates + Maintenance - rent
Asset Value = Sales price + valuation growth - Agent Fees and Transfer fees
Cost of renting per month = Rental (always cheaper than buying)
Asset Value = Cumulative investment amount over 20 years of difference between Cost of buying and cost of renting.
If you look at the average difference per month and invested that amount in a fixed deposit account at 7% per year then the difference over 20 years is +- R 0.00. EDIT - This is also assuming property growth far higher than actual. I have done this calculation in much more detail a couple of times and it strangely comes out the same. I spoke to an economist about it once and he theorized that this is the equilibrium state that it naturally will drift towards. If it was cheaper to buy more people will do it which will cause rental to go down. If less people buy rental will go up so it will always balance out.

If you sold the house and bought another one just once the difference however is + R 50 000.00 less than the rental because of agent com and transfer fees. The problem is MOST people when renting instead of investing the difference they increase their lifestyle to accommodate and then Mr Flex in 20 years you indeed have nothing to show for it.


So then my advise is as follows. If you plan to buy a house and retire in that house one day or buy another house and then rent out this house when the mortgage is over. Then that is a wise investment since you can not have asset growth higher than in rentals this way. Added benefits are you can change the house in anyway you want with major upgrades available.

Negatives in rentals are indeed something to consider and include-
Rental increases dependent on an the current owner. (We have seen an owner increase with 12% once)
No real security in terms of housing. Owner can refuse to renew contract or sell house to owners who don't want to rent.
The owner can refuse to do maintenance leaving you with costs that was not in this calculation.
No securtiy for future investments.
 

Top Donors

$301.00
$200.00
$155.00
$113.00
Top