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Financial Future. Where to Start...

Just leaving this here - backing up my earlier points- do with it as you may. Short and succinct article and none of that long winded garbage most seem to be spewing out.


Extract

"And yet, one of the best investments homeowners can make is to use any additional money they have available to shorten the repayment period of existing debts, and especially their home loans." The reason is that the amount of interest you will save by paying your home loan off early will in most cases far outweigh the returns you could hope to make by putting your savings in the bank.

What is more, these returns will be entirely tax free, and if you have an access bond your money will be easily available if you should need it in an emergency.
 
Just leaving this here - backing up my earlier points- do with it as you may. Short and succinct article and none of that long winded garbage most seem to be spewing out.


Extract

"And yet, one of the best investments homeowners can make is to use any additional money they have available to shorten the repayment period of existing debts, and especially their home loans." The reason is that the amount of interest you will save by paying your home loan off early will in most cases far outweigh the returns you could hope to make by putting your savings in the bank.

What is more, these returns will be entirely tax free, and if you have an access bond your money will be easily available if you should need it in an emergency.

Did you not read anything about what I said? It's not that additional money cannot be used to reduce the home loan repayment and interest, but that there is an Opportunity Cost to picking that instead of something else--Essentially, the cost of paying off your home sooner is that the most you can make(or save) for the extra money you put into the bond is your interest rate on the loan. For example, if your interest rate is 10% p/a and your house value increases by 3%, but the stock market returns 20% a year, you are effectively missing out on 7% a year in growth compared to the house(obviously accounting for inflation). The converse is also true, especially in our 5 year sideways market in SA.

Yes, there is a tax component to investing, but if you put your 33K into TFSA, then no tax on those gains.

That's literally the point I'm trying to make: opportunity cost is something to consider when prioritizing one thing over the other. It's not wrong or right, just something to consider.
 
Did you not read anything about what I said? It's not that additional money cannot be used to reduce the home loan repayment and interest, but that there is an Opportunity Cost to picking that instead of something else--Essentially, the cost of paying off your home sooner is that the most you can make(or save) for the extra money you put into the bond is your interest rate on the loan. For example, if your interest rate is 10% p/a and your house value increases by 3%, but the stock market returns 20% a year, you are effectively missing out on 7% a year in growth compared to the house(obviously accounting for inflation). The converse is also true, especially in our 5 year sideways market in SA.

Yes, there is a tax component to investing, but if you put your 33K into TFSA, then no tax on those gains.

That's literally the point I'm trying to make: opportunity cost is something to consider when prioritizing one thing over the other. It's not wrong or right, just something to consider.
The Opportunity cost you referring to premised on uncertainty whereas the repayment of the bond creates certainty with the debt being paid off earlier thereby unlocking cash flow in future. Any market related investment is based on uncertainty and comes with no gurarantees... the repayment option is based on an element of certainty with known variables.

Your argument is based on ROI and the other repayment of bond is based on reducing debt. So, long story short, it depends on the lifecycle one finds oneself in that will determine which strategy to follow but the ROI argument is definitely the more riskier option to follow.

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Did you not read anything about what I said? It's not that additional money cannot be used to reduce the home loan repayment and interest, but that there is an Opportunity Cost to picking that instead of something else--Essentially, the cost of paying off your home sooner is that the most you can make(or save) for the extra money you put into the bond is your interest rate on the loan. For example, if your interest rate is 10% p/a and your house value increases by 3%, but the stock market returns 20% a year, you are effectively missing out on 7% a year in growth compared to the house(obviously accounting for inflation). The converse is also true, especially in our 5 year sideways market in SA.

Yes, there is a tax component to investing, but if you put your 33K into TFSA, then no tax on those gains.

That's literally the point I'm trying to make: opportunity cost is something to consider when prioritizing one thing over the other. It's not wrong or right, just something to consider.


Sticking to your guns with this nonsensical long and drawn out garbage you're spouting I see. Like i said, in my post - do what you want the information provided. You choose to ignore the logic, that's okay too.

Read the article - point out the flaws in the logic in a coherent way.

;)
 
The Opportunity cost you referring to premised on uncertainty whereas the repayment of the bond creates certainty with the debt being paid off earlier thereby unlocking cash flow in future. Any market related investment is based on uncertainty and comes with no gurarantees... the repayment option is based on an element of certainty with known variables.

Your argument is based on ROI and the other repayment of bond is based on reducing debt. So, long story short, it depends on the lifecycle one finds oneself in that will determine which strategy to follow but the ROI argument is definitely the more riskier option to follow.

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I never said the return was guaranteed or certain, just that there was a cost to taking one decision over another. Knowing the cost of a bond is a quantifiable cost, which would help reduce portfolio risk. Also, housing prices are not guaranteed. SA housing prices are an unknown return. Essentially I'm saying a repayment amount is a certainty, but the value of the thing you are repaying is independent of the repayment.

As for risk, sure, equity is riskier. But the return is higher over the long term. This is listed property vs equity, so not exactly "house v stocks" Long term real investment returns | Welcome to the Official Magazine of the SAIFM

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Sticking to your guns with this nonsensical long and drawn out garbage you're spouting I see. Like i said, in my post - do what you want the information provided. You choose to ignore the logic, that's okay too.

Read the article - point out the flaws in the logic in a coherent way.

;)

Your article link is simply saying there's a reduction in total interest payable over time using extra payments? This is not a complicated calculation or a compelling argument? There is no flaw in the calculation. You pay off a thing faster, you pay less interest. Yay?

Also, you keep telling me my argument is garbage, and all I've said is that there's this concept called "Opportunity Cost" that you maybe did not consider when talking about paying house debt off faster? Maybe try counter that argument instead of simply repeating "pay debt faster, reduce interest"

Like dude, you seem to be attacking me more than the argument or perspective im putting forward? Maybe dont? You call my argument garbage and nonsensical and yet your reason seems to be "you pay less overall interest and no tax" on extra bond payments.

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Your article link is simply saying there's a reduction in total interest payable over time using extra payments? This is not a complicated calculation or a compelling argument? There is no flaw in the calculation. You pay off a thing faster, you pay less interest. Yay?

Also, you keep telling me my argument is garbage, and all I've said is that there's this concept called "Opportunity Cost" that you maybe did not consider when talking about paying house debt off faster? Maybe try counter that argument instead of simply repeating "pay debt faster, reduce interest"

Like dude, you seem to be attacking me more than the argument or perspective im putting forward? Maybe dont? You call my argument garbage and nonsensical and yet your reason seems to be "you pay less overall interest and no tax" on extra bond payments.

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Going in circles here .

Clearly your doctorate in finances trumps my actual real-world observations and experience.

I concede - take the win. Mostly because your long-winded posts and opinions (which admittedly I've not really read in any substantial depth) bores me and your personality type suggests that you won't stop with all the garbage till somebody acknowledges your superior intellect and praises your opinions. I won't do that, but I will give you the win nonetheless to save the rest of us from more long-winded garbage and opinions pulled right our your ass.

Enjoy the satisfaction of the win though.

And have a wonderful day. 😁
 
Going in circles here .

Clearly your doctorate in finances trumps my actual real-world observations and experience.

I concede - take the win. Mostly because your long-winded posts and opinions (which admittedly I've not really read in any substantial depth) bores me and your personality type suggests that you won't stop with all the garbage till somebody acknowledges your superior intellect and praises your opinions. I won't do that, but I will give you the win nonetheless to save the rest of us from more long-winded garbage and opinions pulled right our your ass.

Enjoy the satisfaction of the win though.

And have a wonderful day. 😁

OH, now I understand what you mean! You are one of those people who believes their anecdotal evidence and experience is a stand in for how the world works! Okay, now that I know the level of understanding I'm dealing with, okay. Sweet, that clears up that little snaffu. I'm sorry for expecting more analysis from a person with this perspective.

Also, again, you seem to attack me and not the argument. So if you cant beat em, join em: I cannot spell it out enough, so perhaps take your vitamins or get your cobwebs cleaned before you answer this you barely functional meat-sack: DO YOU UNDERSTAND WHAT OPPORTUNITY COST IS?

Also, this was never about winning, but about understanding. I asked you time and time again to explain your point of view in more detail, and see if you actually understand the concept of opportunity cost and how it applied to your decision to pay off your house. If you cannot understand my line of questioning, then I'm done dealing with your kind.
 
OH, now I understand what you mean! You are one of those people who believes their anecdotal evidence and experience is a stand in for how the world works! Okay, now that I know the level of understanding I'm dealing with, okay. Sweet, that clears up that little snaffu. I'm sorry for expecting more analysis from a person with this perspective.

Also, again, you seem to attack me and not the argument. So if you cant beat em, join em: I cannot spell it out enough, so perhaps take your vitamins or get your cobwebs cleaned before you answer this you barely functional meat-sack: DO YOU UNDERSTAND WHAT OPPORTUNITY COST IS?

Also, this was never about winning, but about understanding. I asked you time and time again to explain your point of view in more detail, and see if you actually understand the concept of opportunity cost. If you cannot understand my line of questioning, then I'm done dealing with your kind.


:unsure:
😁 😁 😁 😁 😁 😁 😁 😁 😁 😁

We need a facepalm emoji.

I gave you the win - just take it already.

PS: My point of view matches the point of view of the writer of the article. Who actually is in a position to dispense financial advice. Read the article. And like I said - do with it as you may,
 
:unsure:
[emoji16] [emoji16] [emoji16] [emoji16] [emoji16] [emoji16] [emoji16] [emoji16] [emoji16] [emoji16]

We need a facepalm emoji.

I gave you the win - just take it already.

PS: My point of view matches the point of view of the writer of the article. Who actually is in a position to dispense financial advice. Read the article. And like I said - do with it as you may,

As i said, was never about winning. Also, Jesus, his advice is literally an excel spreadsheet calculation. And that's compelling for you. Oh boy.

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Send me your email if you want to sign up with the company I'm using and I'll send you my referral. Very low rates on Retirement Annuities, and they're one of the few companies who are still showing growth in recent times. You (and I) also get a R250 TAKEALOT voucher if you complete the thingamabob.

EDIT: Email, Name, Surname and Cell Number. That's what I need, apparently.
 
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As i said, was never about winning. Also, Jesus, his advice is literally an excel spreadsheet calculation. And that's compelling for you. Oh boy.

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Any advice that is logical and proven in the real world makes sense to most of the population. Especially when the point is conveyed in a cohesive and logical way. People like facts presented in a way that actually makes sense.

Unlike some posts in here, not mentioning any names.

Most of the stuff in this post is just incoherent babbling it appears, not mentioning any names.
Some folks have way too much time to spew nonsensical garbage on public internet forums, once again, not mentioning any names.
 
Send me your email if you want to sign up with the company I'm using and I'll send you my referral. Very low rates on Retirement Annuities, and they're one of the few companies who are still showing growth in recent times. You (and I) also get a R250 TAKEALOT voucher if you complete the thingamabob.
.
 
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Any advice that is logical and proven in the real world makes sense to most of the population. Especially when the point is conveyed in a cohesive and logical way. People like facts presented in a way that actually makes sense.

Unlike some posts in here, not mentioning any names.

Most of the stuff in this post is just incoherent babbling it appears, not mentioning any names.

Jesus. It's like trying to speak to a member of the missing chromosome community.

I cant anymore. Im done. There's no benefit in this conversation with you anymore as you seem hellbent on being an example of deficient thinking.


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Jesus. It's like trying to speak to a member of the missing chromosome community.

I cant anymore. Im done. There's no benefit in this conversation with you anymore as you seem hellbent on being an example of deficient thinking.


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Sure thing.

Thanks for coming - call again. Oh...and ...mind that door doesn't knock you flat on your ass on your way out.

Have a lovely day now. ;)

And also - my name is NOT Jesus.
 
Whats your email address? I'm keen
PM me yours. I'll send you the referral from the company themselves. I have to add here - they're not spammy and they're not scammy. I'm really, really happy with them.
 
Thank you all for the suggestions.

Just as an update from my side. I'm looking at all the scenarios.

We've been fortunate, that my boss has offered to pay for the financial adviser that we will be seeing in Jan. The company I work for will contribute to the fees as well.

Until then I'm splitting my disposable income between a couple of scenarios discussed in the thread.

30% going to my bond
30% RA(Found one on EasyEquities) - We've also increased my wife's RA contribution to the max allowed within her company as they match whatever she puts in.
20% TFSA - For myself
10% TFSA - My sons
10% To my emergency fund


Will follow up as soon as we sit with the adviser.
 
Don't want to create a separate thread.

If I open an RA with EasyEquities, would I still be allowed to go to someone like Allan Gray or Old Mutual etc to open a proper one there.

In short can I have multiple packages from Multiple places?

Is this a worst option than say having everything in on place?
 
January is around the corner - You're probably best off waiting till then to sit down with the adviser. You've seen the sheer amount of garbage folks on here post about their opinions and actual illogical beliefs. Stick with the professionals on this one I'd say.
 
If I open an RA with EasyEquities, would I still be allowed to go to someone like Allan Gray or Old Mutual etc to open a proper one there.

In short can I have multiple packages from Multiple places?

You can have multiple RAs at multiple places, you can also have multiple RAs at the same place.

If you have multiple RAs at the same place you need to retire out of all of them simultaneously.
 
January is around the corner - You're probably best off waiting till then to sit down with the adviser. You've seen the sheer amount of garbage folks on here post about their opinions and actual illogical beliefs. Stick with the professionals on this one I'd say.

I guess some people(Aka, You) lack the capacity to engage with topics they don't fully understand. Let me ask you, to actually put this to bed somewhat with actual exel-fu: what were the details around your house being paid off. What loan amount did you get at what interest rate, and how many years did you take to pay it off. I really just want to calculate if I'm wrong, since you are still claiming the "belief" of accounting for opportunity cost is somehow an illogical one. If I can work out with actual numbers how much you really made or really lost in opportunity, maybe we can finally end this charade of you coming across as knowledgeable.
 
Don't want to create a separate thread.

If I open an RA with EasyEquities, would I still be allowed to go to someone like Allan Gray or Old Mutual etc to open a proper one there.

In short can I have multiple packages from Multiple places?

Is this a worst option than say having everything in on place?

I think the fact that you've started investing is admirable, however, you're quite young and retirement annuities are limited by Regulation 28.

Regulation 28:

Retirement Annuities are required to comply with Regulation 28 of the Pension Funds Act and Exchange Control legislation. Accordingly, the funds require that your investment complies with the following limits:
  • A maximum exposure of 75% of the investment amount to equity investments
  • A maximum exposure of 30% to international investments
  • A maximum exposure of 25% to property

You may want to open a vanilla local unit trust and go into more long-term high risk funds
 
Don't want to create a separate thread.

If I open an RA with EasyEquities, would I still be allowed to go to someone like Allan Gray or Old Mutual etc to open a proper one there.

In short can I have multiple packages from Multiple places?

Is this a worst option than say having everything in on place?

You can have multiple RA's, although I don't know the benefit of really doing so as I've not done the math. Each RA provider operates within Reg 28, so the amount of variation between RA's is within well defined areas so I don't think each would out or under perform too differently from one another, so the biggest differentiation would be the fees they charge. Lower fee should, in most cases, return more, all things being equal.
 
I guess some people(Aka, You) lack the capacity to engage with topics they don't fully understand. Let me ask you, to actually put this to bed somewhat with actual exel-fu: what were the details around your house being paid off. What loan amount did you get at what interest rate, and how many years did you take to pay it off. I really just want to calculate if I'm wrong, since you are still claiming the "belief" of accounting for opportunity cost is somehow an illogical one. If I can work out with actual numbers how much you really made or really lost in opportunity, maybe we can finally end this charade of you coming across as knowledgeable.

I'm not entirely sure what your issue is, I see you're still persisting with this babbbling rant - that's okay.
You want to persist with the insults - that's okay too buddy. The only person coming across as a little fuckwad...is you.

As has been mentioned to the OP on many ocassions - seeking the council of someone that is qualified to give counsil is the best course of action.
The previous advice I had given, based on my opinions and actual real world experience, was backed up by published data. And published data by a professional in the field.


Hope you have an awesome day and keep on keeping on ;)
 
I'm not entirely sure what your issue is, I see you're still persisting with this babbbling rant - that's okay.
You want to persist with the insults - that's okay too buddy. The only person coming across as a little fuckewad...is you.

As it has been mentioned to the OP on many ocassions - seeking the council of someone that is qualified to give counsil is the best course of action.
The previous advice I had given, based on my opinions and actual real world experience, was backed up by published data. And published data by a professional in the field.


Hope you have an awesome day and keep on keeping on ;)

I'd like to point out that the original insult was from you all those posts back. Enjoy being a person who wont back up their claims with evidence, and simply used a webpage of a CEO regurgitating an amortization calculation as evidence of "published data". From that article you seem to want to give a handjob to:

"And yet, one of the best investments homeowners can make is to use any additional money they have available to shorten the repayment period of existing debts, and especially their home loans." The reason is that the amount of interest you will save by paying your home loan off early will in most cases far outweigh the returns you could hope to make by putting your savings in the bank
.

OBVIOUSLY IT WILL MAKE MORE THAN MONEY IN THE BANK. Money market accounts will very rarely pay above prime, and if they do, t's after many many years of compounding. You want actual published data? Fine:



Please, don't take my word for it, read and enjoy. I would like to add, that yes, putting extra money into the bond is a totally excellent way to save money and build up an emergency fund. But to stick all that money in the bond, might not be the best thing *over the long term*
 
I'd like to point out that the original insult was from you all those posts back. Enjoy being a person who wont back up their claims with evidence, and simply used a webpage of a CEO regurgitating an amortization calculation as evidence of "published data". From that article you seem to want to give a handjob to:

.

OBVIOUSLY IT WILL MAKE MORE THAN MONEY IN THE BANK. Money market accounts will very rarely pay above prime, and if they do, t's after many many years of compounding. You want actual published data? Fine:



Please, don't take my word for it, read and enjoy. I would like to add, that yes, putting extra money into the bond is a totally excellent way to save money and build up an emergency fund. But to stick all that money in the bond, might not be the best thing *over the long term*
😁 😁 😁

You're a funny little guy.

Like I said - keep on keeping on buddy.
Also, perhaps take your own advise and stop thrusting your ill informed views and juvenile logic on financial advice you clearly have no qualifications or very apparent knowledge on especially advice that mandates it be given by a qulaified professional.

@Anzarrah - probably best to discard all advice given in here and wait for that professional.
 

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