WHERE CAN I in­vest AS A STU­DENT?

CityPress - - TENDERS -

TANDUXOLO WRITES:

Iam a 22-year-old stu­dent cur­rently do­ing my in-service train­ing, which will end in Fe­bru­ary. I have to­tal dis­pos­able in­come of R2 200 a month. Through City Press’ ar­ti­cles, I have been in­tro­duced to the world of in­vest­ment and I want my money to grow. Should I in­vest in property and what is a fi­nan­cial ad­viser?

CITY PRESS REPLIES:

It is great that you want to start us­ing your dis­pos­able in­come for in­vest­ing – the ear­lier you start, the better. How­ever, you need to have a holis­tic plan in place. Here are some points to con­sider:

Put money away for an emergency: Good in­ten­tions can be ru­ined when one is faced with an emergency. This is one of the main rea­sons peo­ple take on debt, so you should start by put­ting some money into an emergency fund.

Try to save at least R10 000 in a high-interest bank ac­count where there is no risk to your money.

Build­ing up a nest egg: Property can be a great in­vest­ment and we will be fea­tur­ing a reader who has started a suc­cess­ful property busi­ness next week, how­ever, you need to know what you are do­ing – and you need to do your re­search. You also need sig­nif­i­cant cap­i­tal to start.

Once you have built up your emergency fund, con­sider in­vest­ing in a low-cost, tax-free sav­ings ac­count for the next five years.

This will help you build up cap­i­tal should you wish to buy a property or start a busi­ness – or you may just want to keep ad­ding to the in­vest­ment.

A fi­nan­cial ad­viser: The right fi­nan­cial ad­viser can be a great part­ner in helping you for­mu­late your fi­nan­cial strat­egy and con­tinue ad­vis­ing you over time as your plan grows and changes.

In­creas­ingly, there are fi­nan­cial ad­vis­ers who work on a fee ba­sis so that they can give you ad­vice ir­re­spec­tive of how much you have avail­able to in­vest.

These ad­vis­ers un­der­stand that this is a longterm re­la­tion­ship and not just based on a one-off commission sale.

The Fi­nan­cial Plan­ning In­sti­tute of South­ern Africa is a good place to find a re­fer­ral (fpi.co.za).

Be care­ful of schemes: When you are young, there may be the temp­ta­tion to in­vest in a scheme that your friends say will make you rich overnight.

These are in­vari­ably scams and, in the end, you lose all your hard-earned money. Money is made over time through in­vest­ing and through hard work.

No one can of­fer guar­an­teed re­turns above that of the cur­rent interest rate.

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