Financial Mail - Investors Monthly
YOUNG professional
Jabu, 34, is on the management fast track in a large broadcasting company.
He earned R1,6m last tax year and his wife, Trudi, an accounts clerk at a franchising firm, earns R20,000 a month. They are married in community of property.
Jabu’s only investment is his company pension scheme, to which he has contributed for five years. Trudi has no savings and neither of them has wills. They rent a house in Morningside.
The young couple lived a carefree, extravagant lifestyle until they learnt that Trudi is pregnant. Jabu also took fright at the new higher income tax bracket at 45%. They have decided to start channelling all excess cash into investments with a priority being a quality education for their child and buying a house.
Jabu recently bought a new Range Rover and owes R550,000 on it, which has a book value of R650,000. He loves it and is reluctant to sell but concedes he might have to. They owe R90,000 on Trudi’s VW Golf.
By cutting excess expenditure, they believe they can afford a bond for a new house of about R15,000 a month, but they have no cash for a deposit.
They also want to put something extra into an education fund for their child, and plan to have another as soon as possible.
They admit they know little about markets and investing and need advice on the way forward.